GM Cruise faces DOJ, SEC probes over dragging pedestrian, vows reforms

Cruise vehicles that have been taken off the road in Austin, Texas. (Getty)

SAN FRANCISCO/WASHINGTON — GM's Cruise self-driving car unit on Thursday revealed probes by the U.S. Justice Department and Securities and Exchange Commission stemming from an October accident in which one of its robotaxis dragged a pedestrian who had been struck by another car.

Cruise reported the government investigations in a blog post in which the company also vowed to reform its culture stemming from a «failure of leadership» around the incident. One expert said the actions that Cruise took immediately after the accident were «egregious.»

The new probes and disclosures about Cruise's mishandling of the accident intensify pressure on General Motors and its CEO Mary Barra, who has defended her investment in the robotaxi operation despite more than $8 billion in losses. GM reports fourth-quarter results on Jan.30,and Barra could face more questions about the future of Cruise from analysts.

The incident also creates problems for other robotaxi companies, including Alphabet's Waymo and Zoox, a unit of Amazon. Critics of robotaxis, including the Teamsters union, are calling for slowing the rollout of autonomous vehicles. California has already suspended the company's permission to operate autonomous vehicles in the state.

Cruise did not disclose the status of the victim who was dragged 20 feet by its vehicle, nor the scope of the Justice Department and SEC probes.

The company commissioned a 195-page report from law firm Quinn Emanuel. The report said the company did not intend to mislead regulators. Still, it detailed steps taken by Cruise executives that made it more difficult for officials to quickly understand or evaluate the severity of the accident.

Bryant Walker Smith, a law professor at the University of South Carolina, said «it was and is obvious that Cruise did not tell the truth, the whole truth, and nothing but the truth after the crash.»

He added: «At some point, they became aware that they had misled the public, and yet they did not correct this until they were caught. This is egregious.»

Among the findings were that Cruise's then CEO Kyle Vogt and Chief Operating Officer Gil West