Report details failings at GM's Cruise as 2 fed agencies probe pedestrian crash

General Motors Co.'s autonomous vehicle unit said Thursday it's being investigated by two federal agencies over a pedestrian accident with one of its driverless cars, the same day a third-party review of the October incident slammed Cruise LLC for "deficient leadership."

The company disclosed the probes by the U.S. Department of Justice and the Securities and Exchange Commission in a blog post that summarized the findings of Quinn Emanuel Urquhart & Sullivan LLP, a law firm hired to "examine and better understand Cruise's response" to the incident, in which a San Francisco pedestrian was dragged 20 feet.

Poor leadership, judgment errors and having an “us versus them” mentality with regulators are some of the failings the firm cited in its report.

The firm found "Cruise’s response to the October 2 Accident reflects deficient leadership at the highest levels of the Company — including among some members of the C-Suite, legal, governmental affairs, systems integrity, and communications teams — that led to a lack of coordination, mistakes of judgment, misapprehension of regulatory requirements and expectations, and inconsistent disclosures and discussions of material facts at critical meetings with regulators and other government officials. The end result has been a profound loss of public and governmental trust and a suspension of Cruise’s business in California."

GM has made several changes at the AV unit since the incident, in which a person crossing the street was hit by another car driven by a human and thrown into the pathway of the Cruise AV. The pedestrian was pinned under a tire on the Cruise vehicle and was pulled for about 20 feet as the car attempted to move off the road.

In the wake of the incident, the law firm found Cruise leaders were "fixated" on correcting media reports that the Cruise AV and not the human-driven Nissan had caused the accident.

"This myopic focus led Cruise to convey the information about the Nissan hit-and-run driver having caused the Accident to the media, regulators, and other government officials, but to omit other important information about the Accident," the firm says in its report.

And even after obtaining a full video of the incident "Cruise did not correct the public narrative but continued instead to share incomplete facts and video about the Accident with the media and the public. This conduct has caused both regulators and the media to accuse Cruise of misleading them."

The firm gave the Cruise and GM boards several recommendations. Among them: restoring its credibility and trust with regulators by ensuring it has senior leaders who embrace transparency, providing training to senior leaders on regulatory requirements, revamping leadership and management of crises, reviewing and revising its incident response protocol, reforming governmental affairs, legal and public communications functions within the company, and having a reporting approval process to file each incident report with regulators.

In a statement, Cruise said it accepts the conclusions of the report's authors and will act on "all of their recommendations."

"We acknowledge that we have failed to live up to the justifiable expectations of regulators and the communities we serve," the company said in a blog post. "In doing so, we also fell woefully short of our own expectations. We are profoundly remorseful both for the injuries to the pedestrian, as well as for breaching the trust of our regulators, the media, and the public."

The company added it's "fully cooperating with the state and federal regulatory and enforcement agencies which have opened investigations or inquiries in connection with the incident, including the California Department of Motor Vehicles, 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."

After the incident, Cruise voluntarily paused all of its nationwide driverless, supervised and manual AV driving operations. Nine employees, including key leaders in legal, government affairs, commercial operations and safety departed the company, in addition to former CEO and founder Kyle Vogt. Cruise also established a chief safety officer role and appointed an interim leader for it.

GM, in a statement Thursday, said the report "confirms Cruise’s actions following the incident on October 2 were not consistent with the company’s values and fell far short of the justifiable expectations of regulators and the public. We know that in order to successfully move forward, Cruise must do so in full partnership with regulators and the communities it serves. We remain committed to Cruise’s vision and know this transformative technology will ultimately save lives."

khall@detroitnews.com

@bykaleahall