GM self-driving unit Cruise admits to submitting false report, will pay $500,000 fine

By David Shepardson

(Reuters) -General Motors' self-driving car unit, Cruise, admitted on Thursday to submitting a false report to influence a federal investigation and will pay a $500,000 criminal fine as part of a deferred prosecution agreement, the Justice Department said.

The department said Cruise failed to disclose key details of an October 2023 crash to the National Highway Traffic Safety Administration (NHTSA) in which one of its robotaxis in San Francisco struck a pedestrian after she was hit by another vehicle and dragged her 20 feet (6.1 meters).

“Companies with self-driving cars that seek to share our roads and crosswalks must be fully truthful in their reports to their regulators,” said Martha Boersch, who heads the criminal division for the U.S. Attorney's Office in San Francisco.

Under the three-year agreement, Cruise must cooperate with government investigations, implement a safety compliance program, and provide annual reports to the U.S. Attorney's Office, which can proceed with prosecution of the charged offense if Cruise fails to comply over the next three years.

"Cruise will comply with the requirements set forth in the agreement, as we continue to move forward under new leadership and with a firm commitment to transparency with our regulators," said Cruise President Craig Glidden in a statement.

In response to the accident and subsequent investigations, Cruise's CEO and co-founder both resigned, the company cut a quarter of its workforce and fired nine executives, including its chief operating officer and chief legal and policy officer.

The Cruise robotaxi stopped after running over the pedestrian but then attempted to pull over to the side of the road with the woman underneath it, dragging the woman who was seriously injured. Cruise's report to NHTSA omitted reference to the dragging. GM subsequently reached a settlement with the woman worth at least $8 million, a person confirmed to Reuters.

In September, Cruise agreed to pay a $1.5 million fine to resolve a NHTSA investigation. Cruise must submit to NHTSA a corrective action plan on how it will improve its compliance with reporting of serious incidents and face enhanced reporting requirements for at least two years.

NHTSA's investigation into whether Cruise is taking sufficient precautions with its autonomous robotaxis to safeguard pedestrians remains open. In August, Cruise recalled 1,200 robotaxis over hard braking issues.

The company also faces a Securities and Exchange Commission investigation.

Cruise has relaunched supervised autonomous driving testing in three U.S. cities but abandoned its Origin vehicle that does not have human controls. The company said in August it will offer its autonomous vehicles on ride-hailing platform Uber starting next year.

(Reporting by David Shepardson; Editing by Sandra Maler and Christian Schmollinger)