Cruise, the self-driving subsidiary of GM, has disclosed that it is under investigation by the Department of Justice and the Securities and Exchange Commission following an incident on October 2. The company released an internal report that sheds light on the events surrounding the pedestrian crash involving one of its robotaxis.
Key Takeaway
Cruise, the GM self-driving subsidiary, is facing investigations by the Department of Justice and the Securities and Exchange Commission following a pedestrian crash involving one of its robotaxis. The company’s future has been jeopardized, leading to significant repercussions, including the resignation of its CEO and layoffs.
Multiple Investigations Unfold
The probes by federal prosecutors and securities regulators add to the list of ongoing investigations at various government levels, including the California Department of Motor Vehicles, the California Public Utilities Commission, and the National Highway Traffic Safety Administration.
Impact on Cruise’s Future
The October 2 incident and subsequent decisions made by Cruise’s leadership have placed the company’s future in jeopardy. As a result, GM has implemented cost-cutting measures and assumed greater control over the troubled subsidiary. Cruise has lost the necessary permits to operate commercially in California and has grounded its fleet in other locations. Additionally, CEO Kyle Vogt has resigned, and nearly a quarter of the workforce has been laid off.
Challenges Faced by Cruise
Cruise encountered difficulties shortly after obtaining the final permit required to operate its robotaxi service in San Francisco. However, the October 2 incident exacerbated the company’s troubles. The incident involved a pedestrian who was initially hit by a human-driven car and subsequently struck and dragged by a Cruise robotaxi. The lack of disclosure and the robotaxi’s risky maneuver further strained Cruise’s relationship with regulators.
Internal Report Findings
An internal report conducted by law firm Quinn Emanuel Urquhart & Sullivan identified several contributing factors to Cruise’s problems. These included a lack of judgment, leadership missteps, a strained relationship with regulators, and a focus on correcting the media narrative surrounding the accident. The report highlighted Cruise’s failure to provide complete information about the incident, leading to accusations of misleading regulators and the media.
