GM’s Cruise robotaxi service targeted in Justice Department inquiry into San Francisco collision

SAN FRANCISCO — General Motors is facing a U.S. Justice Department investigation into a gruesome collision that critically injured a pedestrian and derailed its self-driving car ambitions.

The Justice Department inquiry disclosed in a report Thursday is the latest twist in a debacle that began in October after a robotaxi operated by GM’s Cruise subsidiary dragged a pedestrian about 20 feet (6 meters) after the person was struck in San Francisco by another vehicle driven by a human.

The incident resulted in Cruise’s license to operate its driverless fleet in California being suspended by regulators and triggered a purge of its leadership — in addition to layoffs that jettisoned about a quarter of its workforce — as GM curtailed its once-lofty ambitions in self-driving technology. Cruise’s omission of key details about what happened in the Oct. 2 incident also led to allegations of a coverup that could result in a fine of $1.5 million. Cruise has offered to pay $75,000 instead.

GM didn’t release any details about the nature of the Justice Department’s investigation, or of another one by the U.S. Securities and Exchange Commission. A company spokesman would only say GM is cooperating with authorities.

The revelations about the latest troubles facing Detroit-based GM and San Francisco-based Cruise came in a report reviewing how things were handled after the pedestrian was hurt.

The report prepared by the law firm of Quinn Emanuel Urquhart & Sullivan rebuked Cruise’s management that has since been dumped for “poor leadership, mistakes in judgment, lack of coordination, an ‘us versus them’ mentality with regulators.” But the report also asserted that Cruise initially thought it had shown California regulators a video that included segments showing a robotaxi named “Panini” dragging the pedestrian, only to discover later that scene hadn’t been seen because of internet streaming issues.

The report blamed Cruise for having a “myopic focus” on protecting its reputation instead of setting the record straight after management realized regulators hadn’t seen the video of the incident in its entirety.

“Cruise must take decisive steps to address these issues in order to restore trust and credibility,” according to the report’s summary findings.

GM has already installed a new management team at Cruise and walked back its goals for a driverless division that was supposed to transform the transportation industry by operating robotic ride-hailing services across the U.S. Even as skeptics raised doubts about whether autonomous driving technology had become reliable enough to realize that vision, GM was projecting Cruise would generate $1 billion in revenue by 2025 — 10 times the amount it had been bringing in during a ramp-up phase that resulted in billions of dollars in losses.

Cruise had cleared a significant hurdle last August when California regulators approved its request to begin operating its robotaxi service throughout San Francisco at all hours — over the strenuous objections of city officials — only to have it all unravel in early October.