GM Looking at Ways of Squeezing Cash Out of Cruise: Report

Steph Willems
by Steph Willems

The small San Francisco startup bought by General Motors in 2016 could generate a lot of money for the automaker in the near future.

According to sources who spoke to Bloomberg, GM wants to unlock the value of its self-driving Cruise Automation division (officially GM Cruise LLC) — a 50-person company valued at $600 million at the time of purchase. Japan’s SoftBank, which recently pledged a $2.25 billion investment in the division, now values Cruise at $11.5 billion.

To put that figure into context, GM’s market capitalization hovers around $50 billion. The word “Cruise” should be accompanied by an old-timey cash register sound.

According to Bloomberg‘s sources, there’s a number of options on the table for Cruise: a initial public offering of shares, the listing of a tracking stock to reflect the division’s value, or a spin-off (a la Ferrari’s departure from Fiat Chrysler Automobiles).

After SoftBank’s vote of confidence, GM pledged another billion of its own dollars towards the division, which aims to offer an autonomous ride-hailing service next year. The Japanese bank’s investment hinges on meeting this timeline. Self-driving cars based on the Chevrolet Bolt (the “Cruise AV”) will utilize technology developed by the automaker’s self-driving arm to carry paying passengers, providing another revenue stream for GM.

Still, the massive growth in Cruise’s workforce and valuation means there’s money to be had in the division itself, should GM decide to allow the public a chance to grab a piece. This isn’t a plan that’s set in stone, however. Bloomberg reports that the automaker won’t make a decision until Cruise fleshes itself out a little, meaning a potential wait of two years or more.

[Image: General Motors]

Steph Willems
Steph Willems

More by Steph Willems

Comments
Join the conversation
2 of 14 comments
  • Dantes_inferno Dantes_inferno on Jun 18, 2018

    >GM Looking at Ways of Squeezing Cash Out of Cruise Lease as a crash test vehicle?

  • Erikstrawn Erikstrawn on Jun 18, 2018

    "GM wants to unlock the value of its self-driving Cruise Automation division (officially GM Cruise LLC) — a 50-person company valued at $600 million at the time of purchase. Japan’s SoftBank, which recently pledged a $2.25 billion investment in the division, now values Cruise at $11.5 billion." When GM went bankrupt, didn't they "value" Hummer's branding at a half a billion dollar or so? And if I remember right, they couldn't sell it for a tenth of that. Just something to keep in mind.

  • 1995 SC How bout those steel tariffs. Wonder if everyone falls into the same camp with respect to supporting/opposing them as they did on the auto tariffs a few weeks ago. Doubt it. Wonder Why that would be?
  • Lorenzo Nice going! They eliminated the "5" numbers on the speedometer so they could get it to read up to 180 mph. The speed limit is 65? You have to guess one quarter of the needle distance between 60 and 80. Virtually every state has 55, 65, and 75 mph speed limits, not to mention urban areas where 25, 35, and 45 mph limits are common. All that guesswork to display a maximum speed the driver will never reach.
  • Norman Stansfield Automation will make this irrelevant.
  • Lorenzo Motor sports is dead. It was killed by greed.
  • Ravenuer Sorry, I just don't like the new Corvettes. But then I'm an old guy, so get off my lawn!😆
Next