- Thomson Reuters
- General Motors President Dan Ammann will take over as CEO of Cruise, the carmaker’s self-driving division that’s now valued at $14.6 billion.
- Current CEO Kyle Vogt will become president and CTO, concentrating on leading “technology development” as the division pushes toward a commercial rollout in 2019.
- Ammann’s role at GM had previously been adjusted so that he could spend more time on Cruise.
General Motors announced on Thursday that President Dan Ammann would assume the role of CEO at the company’s Cruise self-driving vehicle division.
Cruise’s current CEO, Kyle Vogt, will become president and CTO. The changes will be official on January 1, 2019, and Ammann will relocate from Detroit to San Francisco, where Cruise is based. He’ll continue to serve as a member of GM CEO Mary Barra’s leadership team.
Ammann’s involvement with Cruise had been expanded earlier this year as GM shuffled responsibilities, shaking up the leadership of its Cadillac brand and putting executive vice president Mark Reuss in charge of the luxury division as well as product planning and development for the largest US automaker.
“I’ve been spending 80% of my time on GM and 80% of my time on Cruise, so now I can spend 160% of my time on Cruise,” Ammann told Business Insider on Thursday. “It’s the right time to apply all my energy.”
Vogt told Business Insider that he and Cruise co-founder Dan Kan had been exploring a management expansion for some time, but decided that Ammann’s partnership with the startup since the acquisition made him the best choice.
“We realized that the most qualified and most capable person on the planet was sitting in our backyard at GM,” Vogt said, adding that making Ammann CEO was an “opportunistic move.”
Cruise is now worth $14.6 billion
- GM Cruise
GM bought Cruise in 2016, for an all-in price of around $1 billion, accounting for future hiring and expansion costs (the initial price was $581 million). Subsequent investments from the SoftBank Vision Fund and Honda have increased Cruise’s valuation to $14.6 billion.
Cruise’s focus since 2016 has been to develop a fully autonomous technology that can be deployed as a ride-sharing platform in a geographically defined urban context. Beyond testing in the Bay Area, Cruise has also been prototyping its systems in Arizona and Michigan.
Cruise’s tech relies on laser-radar units and integrated software and computer processing power, currently being installed in all-electric Chevy Bolt vehicles at the assembly stage. GM and Cruise believe this will provide the division with the reliable scale needed to put on the road thousands of self-driving vehicles that could be hailed using a smartphone app.
In 2017, Cruise acquired Pasadena-based Strobe, Inc., which manufactures smaller, lower-cost lidar units.
Pushing toward commercialization in 2019
Commercialization is now Cruise’s top priority. Media reports have suggested that Cruise could be lagging on GM’s 2019 launch timetable, but the carmaker maintains that the schedule hasn’t changed.
“From my perspective, Cruise is doing well,” Vogt said.
Ammann noted that the technology only matters if it can be successfully brought to market. “The timing makes sense,” he said of his new job as CEO.
That was echoed by GM’s top leader. “As we move toward commercial deployment, adding Dan to the strong team led by Kyle is the next step,” Barra said in a statement.
Ammann, a former investment banker who previously served as GM’s CFO, has led the automaker’s efforts to create new businesses that could ensure its prosperity in a world of rapidly changing mobility choices. He has also assisted Barra in streamlining the global giant’s operations, including the sale of the perennially underperforming Opel/Vauxhall division in Europe to Peugeot.
Growth to come
Under Vogt, Cruise has grown from a 40-person startup to employing 1,000 people in San Francisco, with as many as 300 new hires planned for a satellite office in Seattle.
“We’ve got another huge leg of growth to go,” Ammann told Business Insider in July.
On Thursday, he pointed out that Cruise has already attracted significant investment, but that it wouldn’t back away from future opportunities.
“The business is extremely well-resourced,” he said.
“It feels really good to have those folks on the team, and we’re in really strong shape,” he said of SoftBank and Honda.
Vogt said that he and Kan have had a unique opportunity to see how Ammann thinks and have been impressed by his ability to absorb complex processes in what Ammann himself has called the biggest engineering challenge in a generation.
“He plays four-dimensional chess,” Vogt said.
The competitive landscape for self-driving vehicles and services is set to become significantly more competitive in 2019, as Cruise and Alphabet’s Waymo both bring their businesses to consumers. Argo AI, supported by a $1 billion investment from Ford, is also in the race, as Tesla has promised to provide higher levels of autonomy in the coming years to its customers.
Vogt said that Cruise was too busy to pay much attention to what potential competitors are up to.
“We’re entirely focused on what we’re doing, building technology in accordance with our plans.” he said. “It’s hard to know what others are doing.”
Big decisions for the new GM
Ammann’s role as president of GM won’t be filled. Instead, several of his prior areas, including GM Financial, will now report directly to Barra.
GM has been making a lot of news as 2018 comes to a close. Earlier this week, it announced that it would be idling a total of five factories in the US and Canada, drawing the ire of President Donald Trump but operating in a manner that’s consistent with Barra’s relentless drive to maximize the company’s return on investment and profitability.
Ammann didn’t indicate that GM was getting all of it major decisions out of the way before the year is in the history books, but he did agree that the carmaker isn’t backing off from the urgency that it’s shown since its bankruptcy in 2010.
“At a high level, it’s part of the overall transformation of the company,” he said. “It’s all consistent with that.”