Chevrolet Cruise autonomous vehicles sit parked in a lot in San Francisco, June 8, 2023.
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Cultural issues, incompetence and poor leadership in General Motors’ The autonomous cruise vehicle unit has been at the center of regulatory oversights and cover-up concerns that have plagued the company since October, according to the findings of a third-party investigation.
The report addresses, in part, the controversy that swirled around Cruise after an Oct. 2 accident in which a pedestrian in San Francisco was dragged 20 feet by a Cruise robotaxi after being struck by a separate vehicle. The results of the investigation, which examined whether Cruise representatives misled investigators or members of the media in discussing the incident, were released Thursday in a 105-page report.
Despite the findings, which point to widespread issues with corporate culture, the third-party investigation found that the evidence to date “does not establish that Cruise leadership or personnel intended to deceive or mislead regulators” during briefings a day after the accident, according to one summary of the report published by Cruise.
Cruise remains under investigation by various entities, including the US Department of Justice and the US Securities and Exchange Commission.
Several Cruise leaders and employees — most of whom no longer work for the company — tried to show regulators a video of the incident, according to the findings, but were only able to do so in one of several initial meetings because of a connection or ” video streaming problems.” Although the intent to share the information was there, according to the report, Cruise representatives then failed to properly inform certain regulators or officials of everything that happened.
“The problem is that when the video froze, literally and figuratively, the Cruise employees froze in the moment and no one thought to speak up and fill in the details,” a person close to the investigation told CNBC.
Some officials also failed to update or correct company statements that omitted such information and attempted to shift blame to the hit-and-run driver who struck the pedestrian in the first place.
The report details several instances in which then-CEO and co-founder Kyle Vogt, who stepped down in late November, made last-ditch calls to withhold information, especially about the media.
Cruise co-founder Kyle Vogt demonstrates opening the side-opening doors on the new Cruise Origin, a fully autonomous passenger vehicle, in San Francisco, Jan. 21, 2020.
Carlos Avila Gonzalez | Hearst Newspapers | Getty Images
“This behavior has caused both regulators and the media to accuse Cruise of misleading them,” the report said. “The reasons for Cruise’s failures in this case are many: poor leadership, errors in judgment, a lack of coordination, an ‘us vs. them’ mentality with regulators, and a fundamental misunderstanding of Cruise’s obligations of accountability and transparency to the government and the public. .”
Quinn Emanuel Urquhart & Sullivan, the business law firm retained by GM and Cruise to conduct the three-month investigation, interviewed 88 Cruise employees and reviewed more than 200,000 documents, including emails, text messages, Slack messages and more.
The investigation was led by former federal prosecutor John Potter, a San Francisco-based partner and co-head of Quinn Emanuel’s corporate investigations team. The firm is known for representing high profile celebrities and business owners including Tesla CEO Elon Musk.
The cruise “accepts” an exhibition
Since the incident, Cruise’s fleet of robot taxis has been grounded. Local and federal governments have launched their own investigations. Cruise leadership destroyed: Its co-founders, incl Vogt resigned and nine other leaders were expelled. And the venture laid off 24% of its workforce, as well as a round of contractors.
Cruise said she “accepts” the conclusions found in the report. The San Francisco-based company, which GM owns about 80 percent of, said it will “act on all” recommendations and is “fully cooperating” with investigations by state and federal agencies following the Oct. 2 crash.
The company said Thursday that inquiries or investigations into the incident include those of the California DMV, the California Public Utilities Commission, the National Highway Traffic Safety Administration, the U.S. Department of Justice and the U.S. Securities and Exchange Commission.
“It was a fundamentally flawed approach for Cruise or any other company to take the position that a video of a serious injury accident provides all the necessary information to regulators and otherwise relieves them of the need to positively and fully inform those regulators of all relevant facts,” Queen Emanuel’s findings said.
A separate survey by engineering consulting firm Exponent Inc. found that Cruise’s autonomous vehicle involved in the Oct. 2 incident “misclassified the collision with the pedestrian as a side collision, which led the AV to perform a subsequent pullover maneuver (in the outermost lane) instead of an emergency stop,” according to with the report.
Exponent’s results, which also detected a semantic mapping error, were consistent with Cruise’s analysis of the event, according to the company.
Cruise said it updated the software to address the underlying issues and filed a voluntary recall with NHTSA in November.
The future of cruising?
Cruise vehicles remain grounded in the U.S. A source familiar with the operations told CNBC that the company is “committed” to restarting operations, but is currently focused on restoring trust with regulators and addressing other issues outlined in the report.
Before the accident, Cruise was planning aggressive robotaxis expansion outside its home market, where the majority of its vehicles operated.
Cruise, which GM acquired in 2016, was considered among the leaders in autonomous vehicles alongside Alphabet-backed Waymo, beating out many other companies that have left the industry.
After buying Cruise, GM attracted investors such as Honda Motor, the SoftBank Vision Fund and, more recently, Walmart and Microsoft. However, in 2022, GM acquired SoftBank’s equity stake for $2.1 billion.
GM CEO and President Mary Barra, who heads Cruise’s board, said in December that the Detroit automaker is “very focused on righting the ship” on Cruise. The Quinn Emanuel report does not mention Barra directly. GM is mentioned several times.
GM said in a statement that the Quinn Emanuel report “confirms that Cruise’s actions following the Oct. 2 incident were inconsistent with the company’s values and fell far short of the reasonable expectations of regulators and the public.”
“We know that to move forward successfully, Cruise must do so in full cooperation with regulators and the communities it serves. We remain committed to Cruise’s vision and know that this transformative technology will ultimately save lives,” the company said on Thursday.