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General Motors Challenges San Francisco Over Hefty Taxes
December 28, 2023
In the latest twist of corporate-city relations, American vehicle manufacturing behemoth General Motors (GM) is battling the City of San Francisco with a lawsuit. The Detroit-based powerhouse seeks to retrieve a whopping $108 million in taxes, alongside an additional $13 million in interest, which, according to GM, had been unjustly levied from 2016 onwards.
The filing, lodged on Friday in both the California Superior Court and the County of San Francisco, argues that the city demanded GM pay more taxes than necessary. The contention revolves around the inclusion of GM’s Cruise self-driving car unit as part of its overall revenue generation. Despite the city associating Cruise’s operations with a $3 billion worldwide revenue stream, GM maintains that this autonomous vehicle division operates independently.
While Cruise is indeed based in San Francisco and was bought by GM in 2016, GM emphasizes that the two businesses have distinctly different operations and revenue architectures. They have established agreements that ensure both entities function “at arm’s length.”
GM’s legal document states that the automaker’s sales in San Francisco were relatively marginal in 2022, roughly amounting to $677,000 in goods. Furthermore, GM insists that its footprint in the city is quite limited, with no employees, manufacturing units, physical locations, or dealerships present.
The City Attorney’s Office, when contacted, revealed that they are currently examining the lawsuit, promising to retaliate in court. The deputy press secretary, Alex Shorter-Barrett, represented the office during this exchange.
In related news, Cruise has recently faced its share of turbulence. The CEO stepped down in November after the autonomous fleet was recalled for software updates following a series of accidents. This decision was particularly triggered by an incident on Oct. 2, where a Cruise vehicle ended up dragging a pedestrian to the side of the road after being hit by another car. This unfortunate event raised questions about the safety of the autonomous vehicles, leading California to revoke Cruise’s driverless permits, labeling them as unfit for public operation.
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