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General Motors to Pay $1.5M Penalty for Failing a Crash Disclosure
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General Motors’ (GM - Free Report) autonomous vehicle division, Cruise, is set to pay a $1.5 million fine after failing to fully report a crash involving a pedestrian, per the National Highway Traffic Safety Administration (NHTSA). The incident, which occurred in October 2023 in San Francisco, involved a robotaxi that dragged a pedestrian for 20 feet after she got hit by another vehicle. It led Cruise to halt its driverless operations nationwide after California regulators deemed its vehicles a public safety risk. As a result, the California Department of Motor Vehicles revoked Cruise's license to operate without human drivers in San Francisco.
The U.S. Department of Justice and the Securities and Exchange Commission are still investigating the incident. A GM-commissioned report revealed that Cruise employees attempted to dissuade the NHTSA from launching an investigation into the pedestrian’s injuries and failed to disclose that the pedestrian had been dragged.
Per Reuters, the NHTSA pointed out that Cruise filed incomplete reports for multiple crashes involving its automated driving systems, which includes two reports related to the October 2023 accident. The California Public Utilities Commission also fined GM $112,500 for not providing full details about the crash.
One month after the incident, Cruise recalled all 950 of its vehicles to update software. Under a consent order with NHTSA, Cruise is required to submit a corrective action plan outlining how it will improve compliance with regulations for crashes involving automated driving systems. The consent order lasts two years and the NHTSA holds the option to extend it for a third year.
Per Steve Kenner, Cruise’s chief safety officer, the agreement with NHTSA marks a positive step in a new phase for Cruise, reflecting the company's advancements under new leadership, enhanced processes and culture and a strong commitment to increased transparency with regulators. The company is committed to working closely with the NHTSA to enhance road safety. Cruise will meet quarterly with the NHTSA to review the periodic reporting and development toward the requirements of the consent order. Cruise will submit a final report summarizing its compliance and operations 90 days before the consent order's term ends.
The consensus estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.71% and 35.46%, respectively. EPS estimates for 2024 and 2025 have improved 51 cents and 37 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for BLBD’s 2024 sales and earnings suggests year-over-year growth of 17.58% and 215.89%, respectively. EPS estimates for 2024 and 2025 have improved 65 cents and 80 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for BYDDY’s 2024 sales and earnings suggests year-over-year growth of 21.88% and 17.12%. EPS estimates for 2024 and 2025 have each improved by a penny in the past 60 days.
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General Motors to Pay $1.5M Penalty for Failing a Crash Disclosure
General Motors’ (GM - Free Report) autonomous vehicle division, Cruise, is set to pay a $1.5 million fine after failing to fully report a crash involving a pedestrian, per the National Highway Traffic Safety Administration (NHTSA). The incident, which occurred in October 2023 in San Francisco, involved a robotaxi that dragged a pedestrian for 20 feet after she got hit by another vehicle. It led Cruise to halt its driverless operations nationwide after California regulators deemed its vehicles a public safety risk. As a result, the California Department of Motor Vehicles revoked Cruise's license to operate without human drivers in San Francisco.
The U.S. Department of Justice and the Securities and Exchange Commission are still investigating the incident. A GM-commissioned report revealed that Cruise employees attempted to dissuade the NHTSA from launching an investigation into the pedestrian’s injuries and failed to disclose that the pedestrian had been dragged.
Per Reuters, the NHTSA pointed out that Cruise filed incomplete reports for multiple crashes involving its automated driving systems, which includes two reports related to the October 2023 accident. The California Public Utilities Commission also fined GM $112,500 for not providing full details about the crash.
One month after the incident, Cruise recalled all 950 of its vehicles to update software. Under a consent order with NHTSA, Cruise is required to submit a corrective action plan outlining how it will improve compliance with regulations for crashes involving automated driving systems. The consent order lasts two years and the NHTSA holds the option to extend it for a third year.
Per Steve Kenner, Cruise’s chief safety officer, the agreement with NHTSA marks a positive step in a new phase for Cruise, reflecting the company's advancements under new leadership, enhanced processes and culture and a strong commitment to increased transparency with regulators. The company is committed to working closely with the NHTSA to enhance road safety. Cruise will meet quarterly with the NHTSA to review the periodic reporting and development toward the requirements of the consent order. Cruise will submit a final report summarizing its compliance and operations 90 days before the consent order's term ends.
General Motors’ Zacks Rank & Key Picks
GM currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space are Dorman Products, Inc. (DORM - Free Report) , Blue Bird Corporation (BLBD - Free Report) and BYD Company Limited (BYDDY - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.71% and 35.46%, respectively. EPS estimates for 2024 and 2025 have improved 51 cents and 37 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for BLBD’s 2024 sales and earnings suggests year-over-year growth of 17.58% and 215.89%, respectively. EPS estimates for 2024 and 2025 have improved 65 cents and 80 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for BYDDY’s 2024 sales and earnings suggests year-over-year growth of 21.88% and 17.12%. EPS estimates for 2024 and 2025 have each improved by a penny in the past 60 days.