Chevrolet Cruise's autonomous vehicles are widely parked in San Francisco, California on June 8, 2023.
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Cultural issues, incompetence and poor leadership among General engines' The autonomous cruise unit has been at the center of regulatory scrutiny and concerns over cover-ups that have plagued the company since October, according to the findings of a third-party investigation.
The report partly addresses the controversy surrounding Cruise since an Oct. 2 accident in which a San Francisco pedestrian 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 published Thursday in a 105-page report.
Despite the findings, which pointed to widespread problems with corporate culture, the third-party investigation found that the evidence so far “does not demonstrate that Cruise management or staff intended to mislead regulators” during briefings a day after the accident , according to a summary of the report released by Cruise.
Several Cruise leaders and employees — most of whom are no longer employed by the company — attempted to show regulators a video of the incident, according to the findings, but were only able to do so during one of the initial meetings due to a connection or “video transmission problems.” Although there was an intention to share the information, the report found, Cruise's representatives subsequently failed to properly inform some regulators or officials about everything that was happening.
“The problem is that when the video literally and figuratively froze, Cruise's employees were frozen in the moment, and no one remembered to say anything and fill in the details,” a person close to the investigation told CNBC.
Some employees also failed to update or correct company statements that omitted such information and attempted to deflect blame to the human hit-and-run driver who initially struck the pedestrian.
“This behavior has led both regulators and the media to accuse Cruise of misleading them,” the report said. “The reasons for Cruise's failures in this case are numerous: poor leadership, errors in judgment, lack of coordination, an 'us versus them' mentality among regulators, and a fundamental misunderstanding of Cruise's accountability and transparency obligations to government and the public. .”
Quinn Emanuel, the business litigation firm that Cruise retained to conduct the three-month investigation, interviewed 88 of Cruise's 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-leader of the corporate investigations group at law firm Quinn Emanuel Urquhart & Sullivan. The firm is known for representing high-profile celebrities and business owners, including Tesla CEO Elon Musk.
Cruise 'accepts' report
Since the incident, Cruise's robotaxi fleet has been grounded. Local and federal governments have launched their own investigations. Cruise's leadership has been gutted: its co-founders, including former CEO Kyle Vogt, resigned and nine other leaders were ousted. And the company laid off 24% of its workforce, as well as a series of contractors.
Kyle Vogt shows off the push-button opening of the new Cruise Origin's side-opening doors with all driver machinery removed at the unveiling of the Cruise Origin, a fully autonomous passenger vehicle in San Francisco, California, on Tuesday, January 21, 2020. (Photo by Carlos Avila Gonzalez/The San Francisco Chronicle via Getty Images)
Carlos Avila González | Hearst Newspapers | Getty Images
Cruise said it “accepts” the report's conclusions. The San Francisco-based company, of which GM owns more than 80%, said it will “follow all recommendations” and “fully cooperate” with investigations by state and federal agencies following the Oct. 2 accident.
The company said Thursday that investigations or investigations into the incident include 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 by Cruise or any other company to take the position that a video of an accident causing serious injury provides all necessary information to regulators and otherwise relieves them of the need to affirmatively and fully to inform you about all relevant facts. ” according to Quinn Emanuel's findings.
A separate study by engineering consulting firm Exponent Inc. found that the Cruise autonomous vehicle involved in the October 2 incident “misclassified the collision with the pedestrian as a side impact, causing the AV to perform a subsequent braking maneuver (to the outer lane) instead of an emergency stop” , the report said.
Exponent's results, which also revealed a semantic map error, were consistent with Cruise's analysis of the incident, according to the company.
Cruise said it has updated its software to address the underlying problems and filed a voluntary recall with the NHTSA in November.
Cruise vehicles remain grounded in the US. A source familiar with the operations told CNBC that the company is “committed” to relaunching operations, but that the company is currently focused on rebuilding trust with regulators and addressing other issues identified in the report are described.
Prior to the accident, Cruise was planning an aggressive expansion of its robotaxis beyond its home market, where the majority of its vehicles operated.
Cruise, which GM acquired in 2016, was considered one of the leaders in autonomous vehicles Alphabet-backed Waymo and outlasted many other companies that left the segment.
After purchasing Cruise, GM attracted investors such as Honda Motor, 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 Chairman Mary Barra, who leads Cruise's board, said last month that the Detroit automaker is “very focused on righting the ship” at Cruise.
GM said in a statement that Quinn Emanuel's report “confirms that Cruise's actions following the October 2 incident were inconsistent with the company's values and fell far short of the legitimate 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 this transformative technology will ultimately save lives,” the company said Thursday.