GM Cruise may face fines for misleading the regulator about an accident

GM Cruise may face fines for misleading the regulator about an accident

The San Francisco skyline is seen behind the self-driving GM Bolt EV during a media event where Cruise, General Motors’ self-driving car unit, demonstrated its self-driving cars in San Francisco, California, US on November 28, 2017. REUTERS/Elijah Novelage/Photo The file gets license rights

Dec 4 (Reuters) – General Motors Co’s robo-taxi unit could face fines and penalties for failing to disclose details of an Oct. 2 incident in which a robo-taxi pulled a pedestrian 20 feet (6.1 meters) afterward. A California agency said he was hit by another car.

Increased regulatory pressure could hamper efforts by GM and Cruise to rebuild trust and restart operations in California after they were criticized for withholding information about the accident in San Francisco.

Last month, Cruise temporarily halted all driverless and supervised car rides in the US and expanded a safety review of its robotaxis, with CEO Kyle Vogt and chief product officer Daniel Kahn both resigning.

The California Public Utilities Commission (CPUC) on Friday ordered Cruz to appear at a February 6 hearing on charges of “misleading the commission by omission regarding the extent and severity of the incident” and “making misleading public comments regarding her interactions with the commission.” The ruling was made by a CPUC administrative law judge and the commissioner.

On Oct. 3, Jose Alvarado, one of Cruz’s senior government affairs managers, telephoned commission analyst Ashlyn Kong and informed her of the collision, according to the ruling. The description “omitted that the Cruise AV engaged in a vest maneuver that resulted in the pedestrian being pulled an additional 20 feet at a speed of 7 mph (11.27 kph),” the documents said, using the abbreviation AV for autonomous vehicle.

Kong said in a statement that GM’s blog post that it “proactively” shared information with the committee “including the full video” is “inaccurate.”

“The full video was only shared in response to a data request more than two weeks after the incident,” she added.

“Cruise is committed to rebuilding trust with our regulators and will respond in a timely manner to the CPUC,” the company said in a statement.

But GM investors said it will take time for Cruze to turn around.

“I don’t think there’s any expectation from our perspective that this issue is going to take a month, two months, three months or even six months. It’s going to be a longer time item to fix,” portfolio manager Tim Piechowski said. ACR Alpine Capital Research, which is investing $290 million in GM.

The committee did not suggest a specific penalty. The commission has the authority to fine public facilities up to $100,000 per day in the event of a violation in addition to other penalties, according to the judge’s order. It has the power to impose regulatory sanctions including suspension or cancellation of any operating permit.

CPUC commissioners in August voted in favor of Cruise and Alphabet Inc’s (GOOGL.O) Waymo plan to carry passengers day or night around San Francisco, despite strong opposition from some residents and city agencies. One of the CPUC commissioners is John Reynolds, a former cruise management consultant who was appointed by Gov. Gavin Newsom in 2021.

In October, the California Department of Motor Vehicles banned autonomous Cruise vehicles from public roads following the accident.

Cruz’s problems are also a setback for an industry that relies on public trust and regulatory cooperation. In recent months, the company has announced ambitious plans to expand into more cities and offer fully self-driving taxi trips. GM had told investors that Cruze and its technologies could generate revenues of $50 billion annually by 2030.

GM CEO Mary Barra said last week that the automaker would sharply cut spending on the unit next year. Cruise has lost more than $8 billion since 2017, including $728 million in the third quarter of this year.

GM has hired an outside law firm to conduct a review of the cruise department’s handling of the Oct. 2 incident and respond to regulators. Cruise also said it plans to relaunch in an unspecified city before expanding to other cities.

By December 18, GM is supposed to hand-deliver a “verified statement” that includes facts and arguments regarding the CPUC’s charges, all attachments, as well as a three-ring binder containing a copy of all authorities, to the administrative law judge.

Additional reporting by Hyunjoo Jin in San Francisco and David Shepardson in Washington. Additional reporting by Abhirup Roy in San Francisco.

Our Standards: The Thomson Reuters Trust Principles.

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