General Motors is rising with dividends and share buybacks, while subsidiary Cruise is struggling with financial problems

General Motors is rising with dividends and share buybacks, while subsidiary Cruise is struggling with financial problems

According to a report by www.heise.de,
General Motors (GM) has announced that it will reduce investments in its subsidiary Cruise, which develops self-driving taxis. This move comes after Cruise lost its California registration due to incidents in which Cruise autonomous cars interfered with emergency vehicles and were involved in accidents. At the same time, GM is increasing its dividend for shareholders by a third and is planning to increase share buybacks.

The cessation of Cruise's operations has a positive impact on GM's finances. In the first nine months of the year, Cruise reported a loss of $1.9 billion, higher than the loss incurred by the strike at GM factories. The agreement on higher wages has also led to an increase in production costs for new GM vehicles.

GM plans to invest hundreds of millions of dollars in cost-cutting measures, with Cruise receiving less funding in 2024. These cuts will hurt Cruise's expansion plans, as the company will only be able to offer taxi rides in one US city for now, instead of four cities originally planned.

Despite the austerity program, GM announced that its auto business's operating cash flow will be higher than expected. The car company has also cut production of electric cars as demand is lower than expected. The planned cooperation with Honda in the electric car sector was canceled and the start of production of some electric vehicles was postponed.

These moves suggest that GM is rethinking its strategic direction and investment priorities to address challenges in the self-driving car and electric vehicle markets. GM's stock price has already risen as a result of these announcements, indicating that investors are supporting the company's actions.