GM's Cruise Unit Skids Off Course --- CEO quits as self-driving car division struggles; employees flagged problems.

"Shortly after midnight on Aug. 24, a driverless shuttle operated by General Motors' Cruise stopped in the middle of a street in downtown Austin, Texas. Then it veered off the road, jumped the curb and hit the side of a building, according to video footage and police reports.

By the time officers showed up, Cruise employees had covered the vehicle with a tarp and were trying to dislodge it -- a task complicated by the lack of driver's seat or steering wheel.

The crash was one of several alarming mishaps involving GM's ballyhooed self-driving car division that have raised questions about whether the vehicles are safe enough to carry passengers or be near human drivers and pedestrians. On Sunday night, following a turbulent month in which the company lost permits in California and paused operations, Cruise co-founder Kyle Vogt resigned as chief executive. On Monday, Dan Kan, his Cruise co-founder, also quit.

The late-night shake-up compounds uncertainty about a venture that not long ago was seen as one of the bright spots in the tenure of GM Chief Executive Mary Barra, a champion of the technology. News reports about misbehaving driverless vehicles belonging to Cruise and other companies, however, have tempered expectations that the movement was on the cusp of transforming human transportation. GM is on pace to lose more than $2 billion on Cruise this year, equal to 16% of its expected full-year operating profit.

Vogt, a 38-year-old engineering whiz and vegan who has run marathons on each of the globe's seven continents, is the second chief executive to depart Cruise in as many years. He had bristled at the backlash triggered by the mishaps, emphasizing that the company was trying to reduce car crashes and deaths from human drivers. "We as a society seem to be more focused on the anecdotes and headlines than on the real problem," he said in July.

Even before the June 2022 launch of Cruise's paid driverless taxi service in San Francisco, red flags were popping up inside the company, including flaws flagged by employees and later cited as factors in crashes. In a span of 15 months, Cruise recalled software on its vehicles three times after receiving reports of collisions, and federal regulators have launched two safety-defect investigations, which are continuing.

On Oct. 2, a hit-and-run driver in San Francisco threw a female pedestrian into the path of a driverless Cruise car, which pinned her underneath and dragged her for about 20 feet. The driverless vehicle was trying to pull over, a maneuver it was programmed to do if it detects a crash, Cruise said.

About three weeks later, California regulators pulled Cruise's permit to operate autonomous vehicles, and the company days later suspended its 400-car fleet across San Francisco and other cities. Cruise's board hired a law firm to investigate the company's response to the incident.

On Sunday, Cruise appointed two presidents to run things: Mo Elshenawy, the head of engineering, and Craig Glidden, GM's general counsel, who also is a Cruise board member.

Cruise has defended its decision to roll out service last year, first in San Francisco, then in Austin, Phoenix and Houston. It said it suspended operations to conduct a safety review and regain public trust.

A Cruise spokesman said the company puts cars on the road only after its internal metrics determine that their on-road performance would be superior to human drivers. The company has said that in San Francisco, its driverless cars in their first million miles of operation were involved in 65% fewer collisions, on average, than ride-hail vehicles.

GM, which owns about 80% of Cruise, wants to turn Cruise into an Uber-like, ride-hailing service. Executives have said the business could generate as much as $50 billion in annual revenue by 2030, at higher profit margins than GM's traditional car-making business.

Cruise executives have been adamant that its autonomous vehicles are safe and even superior to those with drivers. In July, the company ran full-page ads in several newspapers stating: "Humans are terrible drivers."

"Cruise is no longer a science project," said Vogt that same month. "There was once significant risk and reasons to doubt. But it's now a rapidly growing business."

For years, Cruise has been a core part of GM's story as it tries to refashion itself as a technology company and fend off newcomers to the car business, such as Apple and Alphabet's Waymo. In a written statement Thursday, GM said its commitment to Cruise and commercializing its technology is steadfast.

GM spent about $1 billion in early 2016 to buy Cruise, then a 40-employee San Francisco-based startup that had developed a system of radars and sensors to control some vehicle functions in highway driving, including steering and braking.

Vogt, its co-founder, had studied computer science and electrical engineering at the Massachusetts Institute of Technology from 2004 to 2008. Around that time, he participated in a federally sponsored autonomous-driving competition.

By the time GM acquired Cruise, industry executives were viewing ride-hailing companies and other tech innovations as threats to the car business. Many wanted in on the driverless-car movement.

Adding Cruise helped sparked a rally in GM's stock price, and investors cheered several big outside investments into Cruise in 2018 and 2019. In early 2019, Barra dispatched then-GM President Dan Ammann from Detroit to San Francisco to serve as Cruise's CEO, and Vogt became chief technology officer. Under him, Cruise grew rapidly, to more than 2,000 employees.

After years of testing, GM executives in 2017 said they aimed to deploy a driverless ride-hailing service "in large scale" in two years. By July of 2019, though, Ammann walked back the goal, saying Cruise needed to log more test miles.

After three years leading Cruise, Ammann was pushed out in late 2021 because of a disagreement with Barra over Cruise's direction.

Vogt was named CEO in February 2022. More than a decade earlier, he had co-founded Twitch, an online video channel for watching and broadcasting people playing videogames that was acquired by Amazon.com in 2014 for nearly $1 billion. His Twitch co-founder, Emmett Shear, was named CEO of OpenAI on Sunday.

Within months, Vogt began planning expansions in late 2022 into Austin and Phoenix, with additional cities to follow. He had a close working relationship with Barra, who mentored him on strategy but also gave him independence to develop technology and business plans.

Behind the scenes, though, some employees were noticing worrisome behavior with the technology. For years, Cruise's collision-detection system had trouble identifying what it had hit when it got into a crash or incident, and the cars also couldn't see objects low to the ground, two former employees said. In testing in spring 2021, just months before Cruise launched its first driverless taxi, the car drove right over cardboard boxes without stopping.

One employee described relaying concerns to a manager and others at Cruise that the cars weren't ready to be rolled out, but was told there was pressure to launch an unpaid robotaxi service by the end of 2021, which the company did for select members of the public at first.

Since at least 2017, the cars also had difficulties making left-hand turns through an intersection when the light was green, according to four former employees. To make the turns, the cars had to detect cars coming from the other direction, determine how fast they were going and decide whether it was safe to turn. They struggled to make the calculations quickly and correctly, given their nature to yield to other vehicles.

In May 2022, a month before Cruise was to start offering paid rides in San Francisco, an anonymous letter was sent to a California regulator from a person who said he had been working at the company for a number of years. The letter, which was viewed by The Wall Street Journal, warned that Cruise was moving too quickly and its vehicles were still regularly stopping unexpectedly at intersections and blocking lanes of traffic.

The employee claimed that a risk assessment of a safety concern he had submitted through an internal reporting system hadn't been completed after six months.

"My subjective opinion from experiencing this and speaking with others at the company is that employees generally do not believe we are ready to launch to the public, but there is fear of admitting this because of expectations from leadership and investors," the letter said.

A spokeswoman for the regulator said it wasn't able to reach the letter writer.

A Cruise spokesman declined to comment on the letter or specific employee communications. He pointed to the company's 2022 safety report, which said "every Cruise employee is empowered to provide insight and visibility into any potential safety concerns." Employees have many ways to raise concerns, including anonymously, the report said.

In June 2022, a day after Cruise got its permit to start charging fares in California, one of its vehicles collided with another car while making a left turn through an intersection. The vehicle's software failed to correctly assess approaching traffic and slammed on the brakes, the company later said. An oncoming Toyota Prius that the Cruise vehicle assumed was turning right continued straight and slammed into it.

Less than three months later, Cruise recalled the software in 80 vehicles to fix the left-hand turn problem.

Regulators also received reports of its vehicles clustering at intersections and sometimes unexpectedly braking hard, leading to collisions.

Photos posted to social media in late June captured a collection of unmanned Cruise vehicles stopped in the middle of the road. Employees had to manually retrieve some of them, a company spokesman said.

Cruise's vehicles are programmed to stop or pull over when they encounter situations they can't safely navigate, which sometimes has caused them to obstruct roads and be hit by other cars. San Francisco residents and officials were growing frustrated by stranded Cruise cars on the city's already congested streets.

In mid-August, a driverless Cruise vehicle collided with an emergency vehicle responding to a call, injuring a passenger. Shortly after, Cruise agreed to a California motor-vehicle department request to cut its active autonomous-car fleet in half while the agency conducted an investigation.

Several days later, its autonomous shuttle -- a toaster-shaped vehicle called the Origin developed for use as a robotaxi -- hit the building in Austin.

The test vehicle had been traveling down the road when it experienced a software malfunction and stopped for several minutes, according to local police and fire department reports.

A Cruise employee assumed control remotely and shifted it out of park, which is when the vehicle veered off the road and hit the building with enough force to knock an 8-inch hole into the brick wall.

Cruise said the vehicle was being used in testing, and that the remote-assistance operator erred in taking the shuttle out of park. The company later changed its process for those situations, it said.

GM, which builds the Origin for Cruise, said recently it was pausing production after making a small number of pre-commercial vehicles, but it believes the shuttle is the first scalable vehicle ever designed specifically for autonomous rides.

In the October pedestrian incident in California, Cruise said, its driverless car had detected a collision and attempted to brake aggressively, when a woman struck by another car landed in its path. The Cruise vehicle came to a stop on top of the pedestrian and tried to pull aside with her underneath, leaving her with traumatic injuries.

Within weeks, Cruise recalled the software on 950 vehicles to fix the collision-detection system so that it would remain stationary in such situations, not pull over." [1]

1.  GM's Cruise Unit Skids Off Course --- CEO quits as self-driving car division struggles; employees flagged problems. Felton, Ryan; Bobrowsky, Meghan; Colias, Mike.  Wall Street Journal, Eastern edition; New York, N.Y.. 21 Nov 2023: A.1.