GM's Struggles Continue: Layoffs at Cruise Amidst Restructuring and Mary Barra's 10th Year as CEO

General Motors (GM) is facing a series of challenges that are putting the company's future at stake. Firstly, the ongoing strikes by the United Auto Workers (UAW) have caused significant financial losses for GM, with an estimated cost of $800 million so far. The strike has also put pressure on the entire US industry, leading GM to withdraw its full-year forecast. Going forward, the company expects to incur approximately $200 million per week in additional work stoppage-related costs [20101401]. Despite these challenges, GM reported better-than-expected third-quarter results, indicating resilience in the face of adversity. CEO Mary Barra, who is marking her 10th year as CEO of General Motors, has been praised for her leadership during these difficult times [001a6903]. Barra stressed the importance of sustainable costs to protect the company's future and jobs, reaffirming GM's commitment to achieving its financial targets in the coming years [20101401].

In addition to the strikes, GM's Cruise robo-taxi unit has been hit by the resignation of its CEO, Kyle Vogt. This comes amid a safety review of the company's US fleet following an accident involving one of Cruise's self-driving taxis and a pedestrian. As a result, all US vehicle testing has been halted. Vogt, after apologizing to the staff for the company's issues, informed the board of his departure. Changes have been made within the leadership, with GM's general counsel and another executive assuming new roles. Despite Vogt's resignation, GM's CEO remains confident in Cruise's mission and projects a revenue potential of $50 billion by 2030 [8982c696].

Furthermore, GM's Cruise is now facing potential fines and additional sanctions for failing to disclose details of the aforementioned accident. The California Public Utilities Commission (CPUC) has accused Cruise of misleading the commission and making misleading public comments. The commission has the authority to fine Cruise up to $100,000 per day, potentially resulting in a fine of up to $1.5 million. This incident has raised concerns about Cruise's transparency and could hinder its efforts to rebuild trust and resume operations in California. GM has taken the matter seriously and has hired an outside law firm to review Cruise's management's handling of the incident and its response to regulators. Cruise has until December 18 to provide a verified statement addressing the CPUC's charges [ec613b3d].

GM's challenges have been further compounded by layoffs at its self-driving subsidiary, Cruise. Cruise has announced that it will lay off about 900 employees, which accounts for a quarter of its workforce. This move is part of a restructuring effort to focus on a narrower path to commercialization. The layoffs primarily affect field and commercial operations, corporate staffing, and some engineers. Cruise aims to enhance safety standards before scaling up and will relaunch its currently paused robotaxi service in just one US city instead of expanding to multiple cities. The company believes that new leadership is necessary and has already parted ways with nine top executives. General Motors has lost $8 billion on Cruise since 2017 and has spent at least $1.9 billion on the company this year. Cruise will now focus on the Bolt platform, a conventional electric car, for its first step before scaling up. The layoffs reflect Cruise's more deliberate path forward with safety as a priority [c7de628d].

These challenges collectively highlight the need for GM to navigate through difficult times and make strategic decisions to ensure the company's future success. The strikes, CEO resignation, potential fines, and layoffs have significant implications for GM's financial performance and its position in the automotive industry. It is crucial for GM to address these challenges effectively and maintain its commitment to achieving its long-term goals [20101401] [8982c696] [ec613b3d] [c7de628d]. Mary Barra's 10th year as CEO of General Motors is being evaluated, with discussions about her tenure, performance, and possible succession plan [001a6903].