Board of GM’s Cruise reviewing regulatory response, technology

By Joseph White

DETROIT (Reuters) -The board of Cruise, the robo-taxi company controlled by General Motors (NYSE:), has hired an outside law firm and technology consultants in the aftermath of an accident that led it to suspend all driverless vehicle operations, Cruise said Friday.

Cruise’s board has hired law firm Quinn Emanuel to review Cruise management’s responses to regulators investigating the Oct. 2 accident, and technology consultancy Exponent (NASDAQ:) to review Cruise’s technology. The Cruise board’s actions were first reported Friday by the New York Times.

GM, in a statement Friday, said “we fully support the actions that Cruise leadership is taking to ensure that it is putting safety first and building trust and credibility with government partners, regulators, and the broader community. Our commitment to Cruise with the goal of commercialization remains steadfast.”

Federal and state safety regulators are investigating a series of accidents involving driverless Cruise vehicles. California regulators suspended the company’s license to operate driverless vehicles last month, saying the self-driving vehicles were a risk to the public.

California regulators said Cruise officials had misrepresented information about an accident in which a Cruise car struck a pedestrian after she had been hit by a vehicle operated by a human driver.  

Federal regulators last month told Cruise they are investigating incidents in which Cruise driverless cars appeared to fail to yield to pedestrians in crosswalks. The National Highway Traffic Safety Administration had previously opened an investigation into incidents in which Cruise cars were struck from behind.

Cruise said last week it would pause all driverless operations “while we take time to examine our processes, systems, and tools.”

GM Chief Executive Mary Barra, who also sits on Cruise’s board, has told investors Cruise could generate $50 billion in revenue by 2030. The operation lost more than $700 million in the third quarter of this year as it has increased spending to expand operations to 15 U.S. cities.

Cruise last month announced plans to begin operations in Japan in partnership with Honda (NYSE:).

Barra said last week GM would disclose more about its plans for Cruise later this year, and told analysts “rest assured, we do have funding plans that will support Cruise’s expansion.”