GM's Cruise CTO Is Leery of Spinning Off From Car-Making Parent
(Bloomberg) -- A top executive at General Motors Co.’s Cruise is cautious about an idea Wall Street keeps raising: The automaker’s self-driving unit ought to spin off from the core car business and cash in on its potential.
This isn’t a focus, at least for now, according to Kyle Vogt, Cruise’s president and chief technology officer. GM and Cruise’s engineers are better off working together on self-driving software and integrating it into the car, he said Monday at CES in Las Vegas. Plus, GM has already started upping Cruise’s value by attracting investments from Honda Motor Co. and SoftBank Vision Fund.
“It’s a lot easier to develop a vehicle working side by side with the engineers who are in the plant and developing the vehicle design itself along with the people writing the software,” Vogt said. “That’s going to continue to be the case for quite some time.”
GM spoke with advisers last year about spinning off the company, people familiar with the matter said in June. But GM won’t make a decision until Cruise is further along in development and may not take any action for a couple of years, if at all, the people said at the time.
Some GM watchers have said a spinoff should happen. In September, Morgan Stanley analyst Adam Jonas said a split would enable GM to focus on its car business, and it could still retain an equity stake in Cruise, which would be better able to attract talent as a standalone tech company. RBC Capital Markets analyst Joseph Spak estimated in a July report that Cruise could be worth $43 billion by 2025.
Vogt became CTO on Jan. 1 when Dan Ammann, who used to be GM’s president, became Cruise’s CEO.
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