GM CEO’s Cruise investment became a liability
Good morning, Broadsheet readers! Reese’s Book Club dominates the literary landscape, five states will have abortion rights on their November ballots, and GM tries to salvage its $10 billion investment in self-driving business Cruise after a scary safety incident. Have a productive Monday!
– Safety first. As General Motors poured $10 billion into autonomous driving startup Cruise, GM CEO Mary Barra hoped that the investment would help the automaker pull ahead in the EV race. GM has manufactured electric vehicles since the 1990s, but has been outshone by Tesla—and GM’s strategy is still go to 100% electric by 2035. Barra believed in the technology so much she posted a video on her LinkedIn two years ago in which she was thrilled by her first ride in a Cruise car. “I can’t stop smiling,” she said at the time.
But a serious safety incident last year has put that all in jeopardy. In October 2023, a self-driving robotaxi in San Francisco hit a woman, ran over her, and dragged her for 20 feet. The car incorrectly labeled the incident a “side collision” and tried to pull over, not registering it was dragging a person along with it.
The non-fatal incident set off a wave of re-evaluation and restructuring at GM and Cruise, my colleague Jessica Mathews reports in a new Fortune investigation. For GM, the incident has taken one of Barra’s most promising investments (GM owns 80% of Cruise) from a “crown jewel” to a “liability,” Jessica writes.
The upheaval arrived as Barra was simultaneously managing last year’s UAW strike against the Big Three automakers. GM replaced most of Cruise’s management team and eventually settled with the woman who was hit for somewhere between $8 million and $12 million. And as Jessica writes, the incident showed the power of a Fortune 500 giant like GM to salvage an upstart self-driving business, compared to a typical startup trying to save itself after a disaster. When an analyst said that the incident was “un-GM-like,” Barra told him, “I agree with you.”
Read Jessica’s full investigation here.
Emma Hinchliffe
emma.hinchliffe@fortune.com
The Broadsheet is Fortune’s newsletter for and about the world’s most powerful women. Today’s edition was curated by Joseph Abrams. Subscribe here.
ALSO IN THE HEADLINES
– Five and counting. Five states will now put abortion rights on their November ballots. South Dakota and Colorado are the latest to approve ballot measures that will ask voters whether to enshrine abortion rights in their state constitutions. NBC News
– Read with Reese. How did Reese Witherspoon’s book club take over the literary world? Print sales of Reese’s Book Club picks totaled 2.3 million in 2023 and outsold those of both Oprah’s Book Club and Jenna Bush Hager’s Read With Jenna. New York Times
– Chair in the hot seat. Tesla chair Robyn Denholm says her job does not include babysitting CEO Elon Musk and fought back against accusations that the exorbitant wealth she’s amassed via Tesla obstructs her oversight of the company. She’s working to garner shareholder support for CEO Elon Musk’s $56 billion pay package and reincorporate Tesla in Texas ahead of an annual company meeting next month. Financial Times
– Blame the wife. Supreme Court Justice Samuel Alito and Sen. Bob Menendez (D–N.J.) have both blamed their wives after being caught in hot water; Alito for a “Stop the Steal” symbol at his house, and Menendez for bribery allegations. It’s an age-old political strategy that raises questions of sexism and stereotypes. New York Times
– Custody battle. Japan’s parliament passed an amendment permitting joint custody, rather than sole custody, of children after divorce. However, the change has drawn criticism from women’s rights activists who say it can put victims of domestic abuse in harm’s way. Nikkei Asia
– #MeToo boom. A French short film spotlighting the testimony of thousands of sexual assault victims is reinvigorating the country’s MeToo movement after its debut at the Cannes Film Festival. Moi Aussi, or Me Too, was produced by French actress Judith Godrèche, one of the first women to make accusations against disgraced Hollywood producer Harvey Weinstein. Bloomberg
MOVERS AND SHAKERS: Dior CEO Delphine Arnault, a favorite candidate to succeed her father Bernard Arnault at LVMH, is taking a broader role across LVMH’s fashion portfolio after the abrupt departure of executive Michael Burke.
ON MY RADAR
Cardi B TikTok helps stock in South Korean maker of spicy instant noodles jump by 30% Fortune
Why no women are among the world’s 50 highest-paid athletes Forbes
From denial to admission: How a surveillance tape held Sean ‘Diddy’ Combs accountable CNN
PARTING WORDS
“I’ve had 35 really great self-centered years and, to be honest, I could use a break.”
—Cookbook author Molly Baz on embracing parenthood
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