Self-driving car business Cruise has a new leader: Dan Ammann, the General Motors president who led the company’s acquisition of Cruise in 2016, is now being named CEO of the autonomous vehicle subsidiary.
Cruise co-founder Kyle Vogt is relinquishing the top role to remain with the company as its president and chief technology officer. Vogt will work directly with Ammann to lead the strategic direction of the company, GM (NYSE: [[ticker:GM]]) said in a news release. GM paid $291 million in cash and $290 million in new stock to buy the startup, which was founded in 2013.
Ammann’s leadership takeover comes as GM continues to eye commercial deployment of autonomous vehicles in 2019, in particular targeting a ride-hailing service. Earlier this month GM CEO Mary Barra confirmed Cruise’s plans to unveil a ridesharing business in 2019, with autonomous vehicles manned by “safety attendants.” And this week GM announced it was closing four North American plants and cutting more than 14,000 jobs related to the manufacturing of some of its brands’ sedans, part of an effort to focus more on trucks and SUVs, as well as autonomous and electric vehicles.
GM and others have been pouring billions into the once-small startup. SoftBank Vision Fund said in May it would invest $900 million in Cruise, and planned to eventually add another $1.35 billion (for a total of $2.25 billion). GM said it would simultaneously pump another $1.1 billion into the division. Then, in October, Honda announced it will pay $2.75 billion to take a 5.7 percent stake in the business—$750 million upfront and the rest over the next 12 years.
“We’re moving as quickly as we can to get to the point where we can initially deploy the technology and then scale it,” Ammann reportedly said during a conference call with news media.
Cruise now has more than 1,000 employees and recently opened an office in Seattle, where it is adding between 100 and 200 new people, according to GM.
While the hype is strong with autonomous vehicles, the risk is too. A fatality and concerns about other potentially dangerous scenarios have made the bevy of companies testing self-driving cars proceed more cautiously. In March, a self-driving Uber with a safety driver in Tempe, AZ, hit a pedestrian, who died. Uber decided to suspend its self-driving testing program in May. In the meantime, insurers are investing in and learning about the industry to prepare for a future with driverless vehicles.
GM has also invested in autonomous vehicles elsewhere: In 2016, it purchased a 9 percent equity ownership stake in Lyft for $500 million to develop on-demand autonomous vehicles.
