Cruise, which is the self-driving arm of General Motors, has announced that it is currently the subject of investigations by the U.S. Department of Justice and the Securities and Exchange Commission.
The news of the investigation was initially reported by TechCrunch, and it was disclosed by Cruise itself as part of a detailed 200-page report from Quinn Emanuel, a law firm hired by Cruise to assess its response to an accident that occurred on October 2nd, 2023 involving a Cruise-branded Chevy Bolt and a jaywalking pedestrian. While Cruise has acknowledged separate investigations by both federal agencies, it has not provided further details or the scope of the investigations.
These investigations represent the latest potential consequences for Cruise following the October crash. After the accident, the company lost its permit to conduct driverless operations in California and faced significant backlash from national media for its handling of the incident.
The report from Quinn Emanuel solidifies the poor response by Cruise, attributing it to poor leadership and a lack of transparency. The report suggests that the company may have intentionally misled the media and regulatory bodies by withholding crucial details and video footage of the accident.
Furthermore, the report reveals that Cruise attempted to downplay the severity of the incident when discussing it with government officials. Meetings with regulatory bodies were reportedly marred by technical issues that hindered the ability to fully examine the accident.
The California Public Utilities Commission issued an “Order to Show Cause” to Cruise, demanding an explanation for the omitted information in the original accident report. This has led to further scrutiny of Cruise’s actions.
In response, Cruise has acknowledged its failure to meet regulatory expectations and has committed to implementing all of the recommendations provided in the report from Quinn Emanuel. This includes leadership changes, improved transparency, and revised incident response protocols.
There are also concerns about the future of Cruise, as it has become a significant financial burden for General Motors, and the company’s justification for continuing to invest significant resources into Cruise is being called into question. All eyes are on GM’s upcoming year-end earnings report on January 30th.