GM’s Cruise Faces DOJ and SEC Probes Over Autonomous Vehicle Collision
GM’s self-driving car unit, Cruise, is currently under investigation by the US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) following a collision involving one of its autonomous vehicles. The incident, which occurred in October, resulted in a pedestrian being dragged by the vehicle after being struck by another car. In a blog post, Cruise acknowledged the government investigations and pledged to reform its culture, citing a “failure of leadership” surrounding the incident.
The blog post did not disclose the condition of the victim or provide details about the scope of the DOJ and SEC probes. However, Cruise did admit to inadequate internal processes, mistakes in judgment, an adversarial relationship with government officials, and a lack of understanding of regulatory requirements. The company commissioned a report from law firm Quinn Emanuel, which concluded that there was no intentional effort to mislead regulators about the incident.
Furthermore, an engineering firm called Exponent conducted a technical review and found that the Cruise vehicle experienced mapping errors and incorrectly identified the collision as a side-impact accident. Cruise has since updated its software. The National Highway Traffic Safety Administration is also conducting its own investigation into the crash.
Since the incident, Cruise has taken significant action, including firing nine executives, accepting the resignation of its CEO and co-founder, and reducing its workforce by 25%. In addition, California suspended the company’s permission to operate autonomous vehicles in the state, and Cruise initiated a recall of all its cars.
In December, California regulators stated that Cruise could face fines of up to $1.5 million and additional sanctions for not fully disclosing details of the incident. The company’s permit to operate was suspended after it failed to promptly inform the California Department of Motor Vehicles about the collision. The DMV expressed concerns about Cruise’s ability to respond appropriately during incidents involving pedestrians.
Cruise admitted that it made mistakes in its response to the incident, attributing them to the company’s relative inexperience in dealing with regulators, the media, and the public. The company initially provided regulators with video footage of the incident but failed to provide verbal context, such as mentioning the distance the pedestrian was dragged. Cruise claimed that it let the video “speak for itself” and did not take steps to address technical issues that prevented regulators from fully viewing the footage.
To address what it perceives as inaccurate media portrayals of the incident, Cruise admitted to omitting information and providing incomplete facts and video to the press and public. However, it did not clarify how these actions align with its assertion that there was no intent to mislead.
Despite these challenges, GM remains committed to Cruise and views it as a significant growth opportunity. The company is investing nearly $2 billion annually in the autonomous driving unit and predicts that Cruise could generate $50 billion in annual revenue by 2030. GM CEO Mary Barra has emphasized the potential of Cruise and its role in the company’s future.
Executives from Cruise will appear before the California public utilities commission on February 6th to address questions about the incident and assist in determining an appropriate fine. While Cruise’s operations are currently suspended, competitor Waymo, a subsidiary of Alphabet, continues to operate self-driving vehicles on San Francisco streets and has plans for expansion.
In conclusion, GM’s Cruise is facing investigations by the DOJ and SEC following an autonomous vehicle collision. The company has acknowledged its shortcomings and pledged to reform its culture. Despite the challenges, GM remains committed to Cruise and sees it as a significant growth opportunity in the autonomous driving industry.
