Cruise CEO Kyle Vogt resigns after robotaxi safety concerns

Cruise CEO Kyle Vogt resigned this past weekend after the General Motors (GM) subsidiary halted its autonomous vehicle operations. The shutdown came after several incidents and accidents involving pedestrians. Vogt publicly admitted Cruise had "veered off-course" under his leadership.

Yahoo Finance Autos Reporter Pras Subramanian breaks down the details of Vogt's resignation, providing insights into what this would mean for General Motors moving forward amid recent events, including union votes on the automaker's labor contract with United Auto Workers (UAW) membership.

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Video Transcript

Kyle Vogt resigning from his role over the weekend. Now, this comes weeks after the company, a subsidiary of GM, suspended its autonomous operations after several traffic incidents, including an accident where its vehicle dragged a woman more than 20 feet. For more on this, Yahoo Finance reporter Pras Subramanian is here to break all of this down. Hey, Pras.

PRAS SUBRAMANIAN: Hey, Rachelle. Yeah. So Kyle Vogt, he tweeted out last night that he was leaving the company. This follows Cruise halting its operations, its autonomous operations across the country and recalling its vehicles for a safety issue and had its permit revoked in California all based on that one major accident there in San Francisco where a woman was hit by a hit-and-run driver, launched into the intersection.

And then a Cruise robotaxi hit her, ran over her, and dragged her. So not very good there. So in an internal email, Kyle Vogt said to employees-- this is secured by Reuters that he said the company veered off course during his leadership and there was no sugarcoating what happened. So pretty sad there for what's going on with Not sure what's left for the company going forward. Probably a pause there, and then we'll see if they can reform it.

But bottom line, this is another black eye for the self-driving tech, autonomous tech industry. You had Argo AI backed by Ford and VW getting shut down. And then of course Tesla's FSD, various investigations there with NHTSA and also the DOJ as well.

RACHELLE AKUFFO: There's certainly some of those enthusiastic timelines we heard from the likes of Elon Musk about when we'd be getting fully autonomous driving widespread out here not living up to it. But in terms of what this means for GM, when you add this to what's already been happening for the company, where do things stand?

PRAS SUBRAMANIAN: GM this year had started off on a right step. It had really good earnings first and second quarter. They boosted their profit guidance forecast both times. But then in the back half of the year, some issues, right? First off, you had the UAW strike. That shutting down production for more than six weeks.

And then GM having problems there getting their deal ratified. A lot of workers, older workers not happy with the deal. Eventually, they got that squeak through the members there, approved it. So that's past them. But they took a big hit from Q3 earnings about-- CFO Paul Jacobson said that earnings were hit by 800 million bucks in Q3. That was as of the end of October, so presumably more of an effect there.

And then we also saw them push back their EV plans. They delayed a factory conversion in Michigan that was going to build some EV pickups. They delayed that till 2025. They've cut their targets for what they see in terms of EV production. They then reduce what they see as how much they're going to build by 2025.

And then combine with what happened with Cruise today or over the weekend, you see three big headaches this year. And for the stock, it's down a lot this year compared to the market. The question is, can CEO Mary Barra get things right get going in 2024, 2025, get the stock where it needs to be compared to its competitors.