The CEO of
General Motors
’ Cruise has resigned as the robotaxi unit looks to get back on the right track amid concerns over safety.
Kyle Vogt, who co-founded the company and oversaw its acquisition by GM (ticker: GM) in 2016, announced his resignation in a post on X late Sunday. It comes after an accident in early October ultimately led to the suspension of Cruise’s license to operate self-driving taxis in California.
A hit-and-run victim ended up under a Cruise taxi and the vehicle didn’t respond as well as a human driver might have, Barron’s previously reported. The accident led to Cruise pausing all operations, including robotaxis with safety drivers in them, to take time to “engage third-party experts and strengthen public trust.”
Cruise announced earlier this month additional steps to improve safety, including an independent expert to conduct a safety assessment. An engineering firm also is investigating the cause of the incident.
GM stock wasn’t reacting much to the news of Vogt’s departure. Shares were down 0.1% in premarket trading while
S&P 500
and
Dow Jones Industrial Average
futures were flat.
It isn’t a big reaction. But there isn’t a lot of value in GM stock for its robotaxi business. Shares trade for about 4.2 times estimated 2024 earnings.
Ford Motor
(F) stock, for comparison, trades for about 5.9 times, and Ford doesn’t have an operation comparable with Cruise.
Coming into Monday trading, GM stock was down about 17% year to date, and down 29% over the past 12 months. Rising interest rates, a slowing economy, and weakening electric-vehicle-sales growth have all weighed on investor sentiment.
“Starting [Sunday], Mo Elshenawy, current Executive Vice President of Engineering at Cruise, will serve as President and CTO for Cruise. Craig Glidden will serve as President and continue as Chief Administrative Officer for Cruise, as announced last week,” said Cruise in an emailed statement.
GM didn’t immediately respond to a request for comment.
Vogt’s departure is another set back for Cruise and for GM as the auto maker believes Cruise could generate $50 billion in annual sales by 2030.
“Cruise is still just getting started, and I believe it has a great future ahead. The folks are Cruise are brilliant, driven, and resilient,” Vogt said in his post.
GM needs Cruise to be a success. It now needs to get back on the road without the help of Cruise’s CEO and co-founder.
Write to Callum Keown at [email protected]
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