GM's Cruise Self-Driving Car Division Lost $728 Million In 2018
Although General Motors posted positive numbers overall, Cruise lost 19 percent more than in 2017.
General Motors recently reported an $8.1 billion net profit for 2018, marking a major turnaround from the year prior. But not all of the Detroit automaker's 2018 financial results were so positive. GM's Cruise autonomous-driving division lost $728 million, or 19 percent more than in 2017, according to the automaker.
GM purchased Cruise in 2016 with the aim of commercializing self-driving cars—but that hasn't happened yet. Aside from a deal with DoorDash to use prototype autonomous cars as delivery vehicles, Cruise is still firmly in research and development mode. That means GM will likely need to continue pumping money into Cruise, without the division having any real options to earn revenue.
Cruise has, however, attracted investments from major outside parties. In 2018, it secured deals with Honda and SoftBank, the Japanese conglomerate that is also a major investor in Uber.
GM also indicated that it would redirect more funds to autonomous-driving tech after making major cuts to staff, production facilities, and its existing vehicle lineup. In a major vote of confidence in Cruise, GM appointed Dan Ammann as the division's new CEO in November 2018. Ammann, who replaced Cruise co-founder Kyle Vogt as CEO, was previously president of GM and played a crucial role in helping the automaker recover from its bankruptcy.
The announcement of GM's 2018 financial results comes as the automaker lays off 4,250 workers, part of a larger restructuring effort that will include the elimination of 15 percent of the salaried workforce and 25 percent of executives. GM previously announced that it would shut down five North American factories, including four in the United States and one in Canada.