Sun. Dec 10th, 2023
    New Employee Share Buyback Program Reinstated by Cruise CEO

    In a recent turn of events, Cruise, the self-driving unit of General Motors (GM), has reinstated its employee share buyback program following a suspension that caused concern among workers. The program, which allows employees to sell back a limited number of shares to GM, was initially suspended due to tax obligation concerns and a comprehensive review of the company’s operations.

    CEO Kyle Vogt addressed the situation in an email to staff, expressing his apologies for the impact it had on employees. He took full responsibility for the company’s current state and emphasized the need to prioritize safety, transparency, and community engagement moving forward. Vogt acknowledged the importance of improving Cruise’s relationship with regulators, the press, and the public.

    The decision to reinstate the share buyback program comes after workers voiced their concerns about facing significant tax burdens on vested stocks. Vogt assured employees that a new plan was being developed to provide liquidity and mitigate potential tax obligations.

    The recent incident involving a driverless Cruise robotaxi hitting a pedestrian added to the company’s challenges. As a result, Cruise’s self-driving permit was revoked by the California Department of Motor Vehicles (DMV), and investigations by the National Highway Traffic Safety Administration (NHTSA) and the state were initiated.

    Amidst these setbacks, Cruise has also undergone layoffs of hundreds of contractors responsible for operating and maintaining the driverless fleets. The company faced criticism for “misrepresenting” and “omitting” details related to the pedestrian accident. Additionally, the production of GM’s Origin driverless van has been halted, and a recall of nearly 1,000 driverless vehicles on U.S. roads has been implemented.

    The reinstatement of the employee share buyback program represents a positive step for Cruise, as it aims to rebuild public trust and address the concerns of its workforce. By prioritizing safety, transparency, and engagement, the company aims to overcome the challenges it currently faces and regain its position in the self-driving industry.

    Frequently Asked Questions

    1. What is a share buyback program?

    A share buyback program allows a company to repurchase its own shares from existing shareholders, often as a way to return value to shareholders or manage its capital structure.

    2. Why was Cruise’s share buyback program suspended?

    The program was suspended due to concerns about tax obligations and the need for a comprehensive review of Cruise’s operations following an accident involving one of its driverless vehicles.

    3. How will the new share buyback program help employees?

    The new program will allow employees to sell a limited number of shares back to GM, providing liquidity and helping to mitigate potential tax obligations.

    4. What challenges is Cruise currently facing?

    Cruise is facing investigations from regulatory authorities, including the National Highway Traffic Safety Administration (NHTSA) and the California Department of Motor Vehicles (DMV), following an incident involving a pedestrian and the subsequent revocation of its self-driving permit. The company has also experienced layoffs of contractors and a halt in the production of the Origin driverless van.