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GM president hints at strategy disagreement with departed Cruise CEO

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Cruise Automation CEO Dan Kan (l-to-r), Cruise Automation CEO Kyle Vogt, and General Motors President Dan Ammann, Tuesday November 20, 2018, at the Cruise Automation offices located in San Francisco. 

Source: Noah Berger | General Motors

DETROIT – General MotorsThe abrupt resignation of Cruise’s CEO Dan Ammann on Thursday has not been reported by the company.

However, GM President Mark Reuss hinted at a potential disagreement over strategy Friday, telling reporters that the subsidiary and company are now “totally aligned” under Cruise’s interim leadership, which includes founder Kyle Vogt.

Reuss refused to speak outside the company statement released ThursdayAmmann left Cruise on Friday afternoon, however his comments Friday hinted at a possible conflict in strategy with GM executives.

Cruise, Cruise’s founder, president and CEO, is “in great hands” with Kyle Vogt. He will assume the title of interim CEO,” Reuss stated to Phil LeBeau on CNBC during an interview on “Squawk on the Street”..”“Cruise & GM are really aligned now to accelerate the joint autonomous vehicle strategic plan that we outlined during our recent investor meeting.”

Ammann detailed these growth plans early in October. These included commercializing the robotaxi next year in San Francisco and ramping up operations. 1 million such vehicles by 2030.

Ammann’s sudden departure is still unknown at the moment. There is renewed speculation among Wall Street analysts about Cruise’s sudden departure. could be more valuableAutomaker spin-off.

Itay Michi from Citi told investors that he thinks Ammann’s resignation was related to strategic decisions about Cruise. IPO timing) as GM has “increasingly viewed Cruise as integral to its Consumer AV Strategy.”

Shares of GM fell as high as 7% Friday morning to $54.51 a piece. Stock closed Friday morning at $55.16 per share. This is 5.5% less than the previous close.

Wall Street analysts were well-respected Ammann as an ex-investment banker. After serving as GM’s president and CFO, he began his role as Cruise’s leader in 2019. Cruise was acquired by him in 2016.

Cruise has fallen short of key milestones under Ammann. This includes plans to launch an Uber-like ride-hailing service in San Francisco for the general public in 2019 Company delayed those plans that year to conduct further testing and obtain the needed regulatory approvals.

A GM spokesperson declined to comment on Reuss’ comments beyond the previously published statement by Cruise that stated: “By continuing our work together, GM/Cruise bring huge manufacturing and technological scale that autonomy that will quickly drive down costs. By leveraging synergies and increasing GM and Cruise’s total market address, the integrated strategy will maximize GM and Cruise’s combined value, resulting in greater and more sustainable returns for both GM and Cruise shareholders.

GM bought Cruise and has since invested millions in operations. GM also brought on other investors like Honda MotorSoftbank Vision Fund, and more recently, Walmart and Microsoft.

— CNBC’s Michael Bloom contributed to this report.

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