The cruise control in the GM vehicles I currently have and have had recently are all the same, awful. It's really not the fact that it downshifts too often, it's the fact that it does not sense the need for higher rpms soon enough to apply the accelerator properly and then has to make a 1 or 2 gear downshift to maintain speed.
I currently have a 2001 Yukon XL Denali (6.0L), a 2003 GMC 2500 (Duramax Diesel) and a partner with a 2003 GMC 2500 (6.0L). All of them, even the Duramax, have the same annoyance with the cruise control as my H2 except it is not as noticeable with the Denali or the Duramax until you drag just a little weight behind it.
The Denali cruises fine on flat ground unless you try to drag more than 2000#. Then it can't maintain speed without downshifting about every 3/4 mile, even in Tow/Haul mode. You simply have to keep it out of overdrive. I had attributed this to the fact that the Denali has 3.73 gears but noticed the same type of annoyance even though the others have 4.10 gears. By the way, this is on highways in the flat delta land and by "flat" I mean surveyor's flat.
The cc is controlled electronically and I personally think it needs to be re-programmed. I have written this in each survey that GM has sent after buying a vehicle.
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