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General Motors Stock Slides After Sudden Exit Of Cruise CEO Dan Ammann

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Dec 17, 2021 9:50 AM EST


Dec 17, 2021

Dan Ammann, who has led GM’s self-driving car subsidiary Cruise since 2019, abruptly stepped down last night, the carmaker said.

General Motors  (GM) – Get General Motors Company Report shares slumped lower Friday after the carmaker lost a key executive in its self-driving car subsidiary.

GM said late Thursday that Cruise CEO Dan Ammann would be stepping down from its majority-owned division immediately, with CTO Kyle Vogt tabbed as his interim replacement. 

Cruise, which is close to receiving permits to operate its self-driving taxis in San Francisco, was recently touted by GM CEO Mary Barra as having the potential to generate $50 billion in revenues over the next six years.

“Alongside this leadership change … GM (will) aggressively pursues addressable AV markets beyond rideshare and delivery,” the carmaker said in a statement. “GM is deeply committed to its vision of zero crashes, zero emissions, zero congestion, and AV technology will play a critical role in realizing it.”

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General Motors shares were marked 6% lower in early trading Friday to change hands at $54.90 each, a move that would tip the stock into negative territory in terms of its six-month performance.

GM’s EV ambitions were laid out in detail earlier this fall, with the carmaker vowing to double it annual revenue by the end of the decade.

Cruise, in fact, was a central plank in that forecast, which included EV and traditional combustion-engine cars that could collectively lift annual revenues to around $280 billion by 2030.

GM CFO Paul Jacobson noted that the carmaker could commit as much as $10 billion in annual capital spending while still having enough to return cash to shareholders.

The carmaker posted stronger-than-expected third quarter earnings of $1.52 per share in October, on revenues of $26.8 billion, adding that full-year profits will likely hit the high end of its prior forecast, as the carmaker navigates a global semiconductor shortage amid its ongoing shift towards electrified vehicles.

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