By Joseph White
DETROIT (Reuters) - General Motors said on Thursday it was reorganizing its BrightDrop electric commercial vehicle unit to make it less independent and reduce costs, and that the unit's head, Travis Katz, would be leaving.
GM said CEO Katz was leaving at an unspecified date, but did not elaborate on the reason for his departure.
GM said BrightDrop, the unit it launched in early 2021, will no longer operate separately from the parent company. When it was first launched, officials talked about BrightDrop as a startup within GM that had operational freedom.
Now, its teams will be fully integrated into GM, "so our work is more efficient," it said.
"Bringing BrightDrop fully into GM means the beginning of a new chapter," GM said in a blog.
San Francisco-based Trucks Venture Capital managing partner Reilly Brennan was not surprised by the move.
"Brightdrop was created at a time when the public markets had a voracious appetite for new EV manufacturers," he said. "Now that the market no longer has such demand, it makes sense that Brightdrop would be folded into the core of GM."
In October 2021, GM said it expected BrightDrop's revenue to top $10 billion by 2030 with low-20% profit margins.
GM said it still intends to build up production of the BrightDrop Zevo vans, which is expected to resume next year and will be supported by the launch of the Ingersoll plant's new battery-module operations.
BrightDrop idled the Ingersoll plant in October due to delays in the delivery of battery modules that power the vans.
Katz, a longtime tech entrepreneur who joined GM in 2020 from venture capital firm Redpoint Ventures, did not immediately respond to a request for comment.
In March 2021, he described himself as a "nontraditional person to find in the automotive world" and said GM had given him "a lot of leeway" to set pricing and business strategy.
(Reporting by Joe White, Ben Klayman, David Shepardson and Hyunjoo Jin; Editing by Jonathan Oatis, Cynthia Osterman, Tom Hogue and Daniel Wallis)