General GM cut funding for its Cruise plan

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When it finishes acquiring the remaining shares, GM anticipates achieving cost savings of $1 billion annually, GM chief financial officer Paul Jacobson said.

Even as other companies reduced their losses, Barra doubled down. She told the annual Consumer Electronics Show that by the middle of the decade GM would be selling fully self-driving cars to regular people. The company will probably fail to meet that deadline. She is sticking to the project despite investors encouraging GM to cut their losses with Cruise. This past year, Barra has directed a reorganization at Cruise, ousting its founders and replacing them with auto and tech industry veterans.

Cruise never quite recovered from the incident, which critics said pointed to a flawed approach to safety. The company paid millions of dollars for the incident to authorities. Nine top executives and company founder and CEO Kyle Vogt left, and eventually GM laid off nearly a quarter of Cruise’s employees. Cruise tested in a number of cities this summer but never offered the service again.

GM found that maintaining a robotaxi fleet is expensive and far away from its core business of building and selling cars.

“Given the considerable time and expense required to scale a robotaxi business in an increasingly competitive market, combining forces would be more efficient and therefore consistent with our capital allocation priorities,” GM CEO Mary Barra said in a call with investors Tuesday evening.

Instead, the Detroit automaker will focus on development of partially automated driver-assist systems for personal vehicles like its Super Cruise, which allows drivers to take their hands off the steering wheel.

Someday, it is expected that GM will sell level 4 vehicles to buyers, which can drive autonomously on some but not all roads. “We know people everywhere love to drive their own vehicles, but not in every situation,” Barra told analysts.

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GM said Cruise has 2,300 employees and will still have a presence in San Francisco. It’s too early to talk about employment levels until the restructuring is completed next year, a spokesman said.

GM will team up with Cruise to improve its driver-assisted systems, according to Dave Richardson, senior vicepresident of software and services engineering.

The move comes less than a month after the company opened up its service to anyone in the Los Angeles area looking for a ride. Waymo also has plans to launch fleets in Atlanta and Austin next year in partership with ride-hailing leader Uber.

Musk said that the company will have cars without drivers next year. He said that robotaxis with steering wheels wouldn’t be available in California and Texas until 2026.

There are reports of four crashes involving Full Self- Driving when it encountered sun glare, fog, and airborne dust. One person was killed in a crash.

The move is another step back from autonomous vehicles, which have proved far harder to develop than companies once anticipated. Two years ago, Ford Motor stopped co-owned with Volkswagen in the Pittsburgh area with its Argo artificial intelligence joint venture.

GM invested billions of dollars in the subsidiary, but eventually bought most of the company from investors and racked up millions in losses.