Exclusive: GM’s Cruise CEO apologizes and allows stock sale

A self-driving Cruise car, owned by General Motors Corp, is seen outside the company's headquarters in San Francisco

A self-driving car from Cruise, owned by General Motors Corp, is seen outside the company’s San Francisco headquarters, where it conducts most of its testing, in California, U.S., September 26, 2018. Photo taken September 26, 2018. REUTERS/Heather Somerville/File Photo Obtain licensing rights

SAN FRANCISCO, Nov 18 (Reuters) – The CEO of Cruise, General Motors’ robo-taxi unit, apologized on Saturday for the company’s plight following an accident that led to the suspension of its self-driving vehicle operations while it conducted a safety investigation.

In an email to staff reviewed by Reuters, Cruise CEO Kyle Vogt also said the company would make a new offer to allow employees to sell shares, just two days after canceling an earlier offer.

“I am sorry that under my leadership we have deviated from our course and that this has affected many Cruisers in a very personal way,” Vogt wrote in the email to employees.

“As CEO, I take responsibility for the situation Cruise finds itself in today. There are no excuses and there is no sugar-coating what happened. We must double down on safety, transparency and community involvement.”

Vogt also noted that the company’s approach to working with regulators, the press and the public “needs to improve.”

Cruise had said on Thursday that employees would not be able to sell their shares in the buyback program in the current quarter as it undergoes a compensation review.

But Vogt said in his Saturday email that certain employees could sell a limited number of shares in a one-time opportunity, citing employee concerns about tax liabilities.

The privately held Cruise unit introduced the stock program – aimed at attracting and retaining talent – in 2022 to allow current and former employees to sell their acquired shares to GM and other investors on a quarterly basis.

The suspension of the program sparked backlash from some employees, who said they would face heavy tax burdens on the shares acquired on Oct. 15 at a much higher valuation.

Canceling the program helped reduce costs for GM after it had to pause Cruise operations.

“We have heard your concerns and are developing a plan to launch a new offering that would provide some RSU liquidity to mitigate potential tax liabilities,” Vogt said, referring to the restricted stock units, a type of stock compensation.

Vogt did not provide details about the new offering.

One frustrated employee told Reuters on Saturday: “I’m glad they realized they had to resolve the situation.”

A Cruise spokesperson had no immediate comment Saturday.

In November, the California Department of Motor Vehicles (DMV) ordered Cruise to remove its self-driving cars from state highways, calling the vehicles a risk to the public and saying the company had misrepresented the safety of its technology.

Cruise initially did not release all video footage of an Oct. 2 crash involving another vehicle and in which one of Cruise’s self-driving taxis dragged a pedestrian, the regulator said.

Cruise has said it showed California DMV officials the full video of the accident several times and provided a copy to officials.

Cruise has suspended all robo-taxi services in the United States, saying it must regain public trust with a full safety review of its vehicles and self-driving technology.

Reporting by Greg Bensinger and Hyunjoo Jin in San Francisco; Additional reporting by David Shepardson in Washington; Editing by Cynthia Osterman and Tom Hogue

Our Standards: Thomson Reuters Trust Principles.

Obtain licensing rightsopens a new tab

Greg Bensinger joined Reuters in 2022 as a technology correspondent, focusing on the world’s largest technology companies. He previously served on the editorial board of The New York Times and was a technology beat reporter for The Washington Post and The Wall Street Journal. He also worked for Bloomberg News and wrote about the automotive and telecommunications industries. He studied English literature at the University of Virginia and studied journalism at Columbia University. Greg lives in San Francisco with his wife and two children.

Leave a comment