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GM maps out future for GM Cruise
Posted on Thursday, 07 February 2019 12:56
General Motors (GM) has pretty much confirmed future plans for its autonomous driving startup amid ongoing rumour and speculation regarding a potential sale of shares, a spin-off or an initial public offering (IPO).
In the 2018 annual report filed with the Securities and Exchange Commission late yesterday afternoon, the car manufacturer revealed a stock incentive plan for employees aimed at promoting the long-term success of GM Cruise.
The idea is to light a fire under current chief executive Dan Ammann to develop technology and commercial plans to meet targets that could pave the way for a “change in control transaction or the consummation” or an IPO.
Basically, restricted stock units for shares in GM Cruise awarded to former GM president Ammann are worth roughly USD 25.62 million, or USD 1,515 apiece.
However, his options could be worth more if he manages to take the subsidiary public successfully within the next ten years and the market value exceeds the current strike price.
GM Cruise is the global segment responsible for the development and sale of self-driving vehicle technology.
GM sees autonomous technology leading to zero crashes, emissions and congestion, since more than 90.0 per cent of accident are caused by driver error, according to the National Highway Traffic Safety Administration (NHTSA) cited in the report.
The group has designed “super cruise”, an assistance feature that enables hands-free driving on the motorway, which will be expanded to all Cadillac models, with roll-out beginning in 2020.
In January 2018 GM revealed the Cruise AV, a production-intent autonomous vehicle engineered from the start to operate safely on its own, with no person behind the steering wheel.
SoftBank Vision Fund came on board in May 2018 by agreeing to handing over an initial USD 900.00 million in GM Cruise, followed by a further USD 1.35 billion once its vehicles are up and ready for commercial sale.
Ultimately, it would own a 19.6 per cent stake but if the business does not hold an IPO, sale or a spin-off within seven years since the closing of the investment, it may convert the stake into GM stock.
Five months later, Honda Motor agreed to fund and develop a shared autonomous vehicle (SAV) for deployment onto GM Cruise’s network.
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