DOJ, SEC, Among Agencies Probing GM Cruise After October Pedestrian Collision

It appears it isn’t just Tesla’s full self driving that has come under scrutiny of regulators: General Motors’ driverless car business, Cruise, is also reportedly being probed by Federal prosecutors, according to the Wall Street Journal this week. 

On Thursday the division said it was cooperating with the Department of Justice and SEC, among other agencies, who were reviewing the company’s handling of a case where a vehicle hit and dragged a pedestrian. 

Following the incident, California revoked Cruise’s permits, citing the company’s lack of transparency. A review by law firm Quinn Emanuel cleared Cruise executives of intentional deception but criticized their leadership and confrontational attitude towards regulators, the report says. The victim survived the accident.

As we have noted over the last several months, the incident (combined with frothy demands from the UAW) significantly impacted GM’s expansion plans for Cruise, led by CEO Mary Barra. Post-incident, Cruise withdrew its vehicles from several cities and later saw the departure of nine executives and a 25% workforce reduction. It now plans to relaunch operations in a single U.S. city.

The Journal notes that Cruise faced criticism for failing to fully disclose the accident’s details, including the dragging, and for continuing to share incomplete information even after obtaining the full video of the incident. A separate technical review revealed that the vehicle did not immediately stop due to a misinterpretation of the collision’s nature, prompting a software update recall.

Recall back in December we noted that Cruise was slashing 24% of its workforce as part of a restructuring. The autonomous driving said it would lay off 900 of its 3,800 employees, most of whom are in the commercial operations and related corporate functions.

“This reflects our new future and a more deliberate go-to-market path, meaning less immediate need for field, commercial operations and corporate staffing,” Cruise said in a statement this week. 

“GM supports the difficult employment decisions made by Cruise as it reflects their more deliberate path forward, with safety as the north star,” GM said of the division during an earnings call late last year.

We wrote in early November that about 11 days after Cruise halted all autonomous vehicle deployment across the US following several collisions and a suspension of its permit to operate robot taxis in California, Forbes revealed that Cruise CEO Kyle Vogt held an all-hands meeting to halt production of its fully autonomous vans temporarily. 

The fallout continued as Vogt, according to audio obtained by Forbes, told employees that suspending driverless operations nationwide was the primary reason why it must pause “production of the Origin” van.