GM's Cruise Gears Up For Comeback After Brief Pause, One City At A Time

General Motors Co‘s (NYSE:GM) autonomous vehicle subsidiary Cruise is eyeing re-launching in a city weeks after the company paused its operations across the U.S.

What Happened: "Once we have taken steps to improve our safety culture and rebuild trust, our strategy is to re-launch in one city and prove our performance there, before expanding," a Cruise spokesperson told Benzinga in an email statement, but did not elaborate on the timeline or the name of the city.

Cruise has been embroiled in safety concerns after one of its AVs got involved in an accident in early October. It has presently paused both autonomous and manual AV operations in the United States.

Initially, Cruise paused its autonomous vehicle operations in San Francisco in October following a directive from the California Department of Motor Vehicles (DMV). California DMV suspended Cruise's autonomous vehicle deployment and driverless testing permits citing "unreasonable risk" to public safety.

The authority further alleged that the company misrepresented information on the safety of its autonomous technology.

The suspension of Cruise’s operations in Austin, Phoenix, and Houston followed a few days later. Early in November, the company announced that it is also pausing supervised and manual AV operations in the U.S., in a bid to rebuild public trust and undergo a full safety review.

Why It Matters: Earlier this week, Cruise’s co-founders Kyle Vogt and Dan Kan resigned from the company without offering reasons. Vogt was also the CEO of the unit.

However, despite all hurdles, Cruise seems determined to resume operations.

GM CEO Mary Barra had said during the company’s third-quarter earnings call in October that it has big hopes for Cruise.

"We do believe that Cruise has a tremendous opportunity to grow and expand," Barra said while agreeing that the company's share price does not get any credit for its Cruise business. But that was prior to a complete halt in operations.

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