Cruise Self-Driving Car Unit Under Investigation by Lawyers

News Summary

The self-driving car unit of General Motors, Cruise, faces investigations by the U.S. Justice Department and SEC after a robotaxi struck a pedestrian in October 2023. This incident has raised serious legal and operational concerns, leading to leadership accountability issues and regulatory scrutiny. As Cruise grapples with calls for cultural reform and transparency, it has suspended operations, potentially facing millions in penalties while undergoing significant internal changes to ensure compliance and safety.

Cruise Self-Driving Car Unit Faces Probes After Mishap Involving Pedestrian

The self-driving car unit of General Motors (GM), known as Cruise, is currently under investigation by the U.S. Justice Department and the Securities and Exchange Commission (SEC) following a severe incident that occurred in October 2023. This unfortunate event involved a Cruise robotaxi striking a pedestrian and dragging her for approximately 20 feet. The seriousness of the situation has led to a significant fallout, raising various legal and operational concerns.

Leadership Accountability and Company Culture Reform

In the wake of this incident, Cruise has recognized a “failure of leadership” within its ranks. The company is vowing to undertake a serious reform of its internal culture after being criticized for inadequate responsiveness. A legal expert has described Cruise’s actions following the accident as “egregious,” emphasizing that the measures taken fell dramatically short of the expectations placed upon automotive innovators.

With pressures mounting from various stakeholders, GM’s CEO, Mary Barra, has vigorously defended the company’s substantial $8 billion investment in its robotaxi operations, notwithstanding the evident financial losses which continue to rise.

Regulatory Pressure and Suspension of Operations

The accident has shifted scrutiny not just onto Cruise but also onto other companies in the autonomous driving sector, including competitors like Amazon’s Zoox and Alphabet’s Waymo. Calls are growing for a careful reconsideration regarding the rollout of robotaxis in light of the turmoil surrounding Cruise’s operations. The California Department of Motor Vehicles has subsequently suspended Cruise’s permission to operate autonomous vehicles in the state, a decision which could have long-lasting implications.

Non-Disclosure and Irregularities in Reporting

Significant issues arise around Cruise’s lack of transparency. Cruise failed to disclose the identity of the accident victim and omitted crucial details of the incident from regulatory filings. A report from a leading law firm expressed concern that Cruise’s executives made it intentionally difficult for authorities to grasp the incident’s severity in a timely manner. Critically, these actions led to accusations of insincerity from experts who allege the company misled the public concerning the accident details.

Initial Response and Investigation Challenges

After the mishap, Cruise’s former CEO Kyle Vogt and COO Gil West disbanded the incident response team alarmingly quickly, within 24 hours post-accident. Adding further complications, Cruise neglected to gather vital eyewitness testimonies, leaving gaps in the investigation. Reports by the engineering firm Exponent revealed that mapping errors in the vehicle misidentified the incident as a side-impact collision, raising further questions about the reliability and safety of autonomous driving technology.

Ongoing Reviews and Internal Shakeup

The National Highway Traffic Safety Administration (NHTSA) is currently reviewing GM’s report regarding the incident, focusing on issues related to judgment errors and misunderstandings of regulatory requirements. Several individuals within Cruise appeared to have had a clearer insight into the specifics of the case before the formal meeting with regulators, yet the leadership seemed more focused on combating negative media narratives rather than addressing the factual concerns.

As part of the fallout from the incident, Cruise has terminated nine executives, including top leaders Vogt and co-founder Dan Kan, and cut its workforce by a quarter. The company has acknowledged the need for accountability and submitted a false report to NHTSA related to the pedestrian accident, resulting in a $500,000 penalty.

Future Operations and Compliance Commitments

State regulators hinted at potential penalties nearing $2 million for Cruise due to the withholding of crucial accident details. Responding to the scrutiny, Cruise leadership has undergone a transformation, with the introduction of new personnel dedicated to safety compliance. The company aims to resume testing on public roads in the future, although it has not disclosed specific timelines or locations. Moreover, Cruise is increasingly pivoting towards integrating its robotaxis into existing platforms, notably through a partnership with Uber set to launch in 2025.

The future of Cruise continues to look uncertain with challenges including the company’s shift from the original Cruise Origin robotaxi model to using all-electric Chevrolet Bolts as a response to operational difficulties. The terms of a recent consent order require Cruise to submit a corrective action plan and meet quarterly with NHTSA to discuss compliance and operational status, with emphasis on the critical need for transparency and accountability within autonomous driving development.