Though Ford Motor Company (F -1.35%) and General Motors (GM -0.99%) are bitter rivals, especially in their bread-and-butter full-size truck segment, the truth is they have much more in common than not. In fact, it's a rare divergence when the two don't have a similar strategy when it comes to the automotive industry.

But that rare divergence happened when Ford severely scaled back its homegrown driverless vehicle ambitions (and took a big $2.7 billion charge on Argo AI) while General Motors appeared to double down on its Cruise driverless vehicle.

Given the recent Cruise headaches, was Ford right all along? And more importantly, what does it mean for Ford's investors?

GM's Cruise takes a hit

Cruise was the first company to start commercial driverless rides in San Francisco in the summer of 2022, and problems surfaced almost immediately. The National Highway Traffic Safety Administration initiated a probe on two incidents when Cruise vehicles hit pedestrians and other incidents when Cruise vehicles interfered with emergency responders. Then the California Department of Motor Vehicles suspended Cruise's permits for driverless testing and deployment, calling them "unsafe." Amid the onslaught of negative publicity, Kyle Vogt, who co-founded Cruise in 2013, resigned as CEO in November 2023.

Let's not forget that right as California suspended Cruise's permits, the company was planning an ambitious expansion. It had launched smaller-scale operations in Phoenix, Arizona, and Austin, Texas, with preparations for a dozen more locations and even rumors of entering Tokyo.

Cruise slashed almost 25% of its full-time workforce and fired nine executives in the middle of December. After a complete leadership overhaul, it was fair for investors to question not only the future of Cruise but whether or not rival Ford had been right all along.

Was Ford giving up or being smart?

Let's rewind to the end of 2022, when Ford bucked the unmistakable buzz surrounding General Motors' Cruise ambitions, and gave up on developing its own fully autonomous driving technology with Argo AI -- a move that cost the company $2.7 billion in impairment charges.

At the time, Ford simply admitted to investors that bringing level 4 advanced driver assistance systems (ADAS) to the market profitably wasn't feasible anytime soon. Management remained confident there was indeed a future for the technology, just that Ford didn't need to spend significant resources to create that technology.

Ford decided to refocus its efforts on level 2 and level 3 systems, which don't completely cut out the human driver, to better provide customers with premium services and offer investors better profitability.

What did investors learn?

In fairness, General Motors has been doing a lot of things right over the past 15 years, since the 2008-09 Great Recession and financial crisis brought the company to its knees. But when bitter rivals that generally focus on similar strategies choose opposite paths on such a big development, investors should be asking a lot more questions. As I noted back in 2022, Ford's move to scale back its driverless car efforts should be a warning sign for General Motors.

So far, General Motors is saying the right things for long-term investors. The company is refocusing Cruise on safety, and it reassured investors it has the capital to continue funding Cruise, which has lost more than $8 billion since 2016. GM even boasted a bit, claiming not only to back Cruise's turnaround efforts but also to increase its dividend by 33%. It also announced a $10 billion share buyback program.

For investors, keeping an eye on Cruise will be an important component of any investing thesis. It could be one reason GM makes investors rich over the next two decades, or it could be a profitable black hole for a decade, leaving investors wondering why GM didn't follow Ford's lead here.

Stay tuned. It's sure to be an interesting ride.