DETROIT -- Cruise LLC CEO Dan Ammann had a slate of meetings on Dec. 16 when he got an early afternoon call from General Motors CEO Mary Barra. She told Ammann he was being dismissed from the robotaxi startup that GM controls through a majority stake, people familiar with the events told Bloomberg.
What seemed abrupt to outsiders and people working at Cruise had been building for months. The two executives didn’t agree on how to focus the breakthrough self-driving technology that the Silicon Valley unit is preparing to launch with a taxi service.
Barra and GM’s board were pushing a grand vision that included transferring that knowledge to create luxury Cadillacs, self-driving cars sold at retail or delivery vehicles for GM’s new electric-van business. The opportunities, and their potential value, were immense.
Ammann -- a star in his own right who once competed with Barra to run GM -- was open to all of those things eventually, but he disagreed on some key points. First, he thought Cruise needed to focus on starting its taxi business before spreading its resources. Second, he wanted Barra and GM’s board to take Cruise public sooner rather than later, giving it stock to lure the rare talent that can program cars to drive themselves, said two people familiar with his thinking.
Ultimately, the dispute was about control: In the vision shared by Barra and the board, keeping Cruise in-house gave GM both a high-margin robotaxi business and more direct access to the company’s resources to make other autonomous vehicles and services. Cruise could also enhance GM’s own assisted-driving features. People didn’t think the collaboration was smooth enough. If Ammann prevailed, there would be the further complication of public stakeholders in a new company to consider, not just the strategic interest and shareholder value of GM.
Ammann, 49, discovered the hard way that Barra and her board call the shots, even though Cruise is legally a separate entity with other private shareholders besides GM. When he didn’t fall in line with that vision, it was over. How it all went down is instructive to how Cruise will be an integral part of GM and how it will probably be managed when Barra finds a new CEO.