General Motors Suspends Autonomous Vehicle Project Origin and Reports Impressive Quarterly Figures

General Motors (GM) has "indefinitely suspended" work on its autonomous vehicle project Origin. Mary Barra, GM's Chairwoman, explained in a letter to shareholders that this move would reduce the cost per unit and address "regulatory uncertainties" due to the vehicle's "unique design." The Origin, designed for ride-sharing, lacks pedals and a steering wheel. Instead, employees of GM's subsidiary Cruise will focus on the next generation of the battery-powered Chevrolet Bolt. According to CFO Paul Jacobson, the decision to "pause" Origin's production led to a $605 million charge in the second quarter. Cruise has been under intense scrutiny since an accident in October involving a pedestrian in San Francisco. A pedestrian was struck by another vehicle and thrown into the path of Cruise's autonomous robo-taxi, which then dragged the person an additional six meters. The California Department of Motor Vehicles subsequently revoked Cruise's permit to operate driverless vehicles on city streets, accusing the company of misrepresenting details of the accident. An external report commissioned by GM and Cruise concluded that Cruise had failed to fully explain the role of the driverless vehicle in the accident. The report noted "poor management behavior, misjudgments, lack of coordination, a 'us versus them' mentality toward regulatory authorities," along with a general lack of transparency and accountability. Ultimately, Cruise CEO Kevin Vogt resigned. Cruise suspended operations in Houston and Austin, Texas, as well as in Phoenix, Arizona. However, according to Barra, operations have resumed in Houston and Phoenix and have started in Dallas. Last month, Marc Whitten, a veteran of the video game industry, was hired to lead the unit. Jacobson hinted that the company might return to Origin in the future, but for now, the focus is on the Bolt. GM announced the suspension of the Origin project while surpassing Wall Street expectations for the second quarter. The automaker raised its forecast for the second time this year, citing strong sales and prices, particularly for trucks and sport utility vehicles. The company reported operating income of $4.4 billion in the second quarter, a 37 percent increase compared to the same period last year. GM earned an adjusted $3.06 per share, compared to the $2.71 expected by analysts. The company expects an adjusted operating income for this year between $13 billion and $15 billion, an increase from the January forecast of $12 billion to $14 billion. GM's stock, which closed at $49.56, rose nearly 5 percent in pre-market trading.