How the Chevy Volt Became a Political Punching Bag

Chevy VoltThere's one thing about General Motors (GM) CEO Dan Akerson: He doesn't shy away from a fight.

Called before a congressional committee on Wednesday to testify about a safety investigation into the Chevrolet Volt, Akerson was blunt.

The political hullaballoo around the car cast "an undeserving, damaging light on a promising new technology," said Akerson, who drove to the hearing in a Volt. "We did not engineer the car to become a political punching bag."

Tough words. But then, rescuing the high-tech Chevy's reputation is going to be a tough fight.

A Lot of Trouble for a Little Car

This all started back in June, when a wrecked Chevy Volt -- a car that had been totaled in a government crash test three weeks earlier and left to sit in a lot -- caught fire, all by itself.

The Volt, of course, is a hybrid, but an unusual one. Essentially, it's an electric-powered car with a gas-powered on-board generator. It uses a lithium-ion battery pack, a newer kind of battery than those used in most hybrid cars. The fire raised questions about the safety of the new battery technology.

After the fire, the National Highway Traffic Safety Administration -- the federal agency that conducts crash testing -- notified GM, which sent engineers to examine the car. Attempting to replicate the fire, GM and NHTSA engineers conducted a bunch of experiments, including one where they mounted a Volt battery pack in a wooden frame and smashed it in a particular way.

A few days later, it too caught fire. Clearly, GM needed to take action.

GM accelerated its efforts to educate first responders and body shops on ways to reduce post-accident fire risks. (The key is to drain the batteries, just as you'd drain the gas tank of a crashed car before working on it.) It put production of new Volts on hold and later offered to buy back cars from any customers who were concerned. And the company started designing a fix: extra protection for the battery pack that could be retrofitted into existing Volts.

But it wasn't until November, six months after the initial fire -- and only after Bloomberg got hold of the story -- that NHTSA opened a safety investigation and notified the public.

That time lag has turned out to be a problem.

From Shining Example of American Ingenuity to 'Political Punching Bag'

If the Volt were just another car and GM just another company, this whole thing would probably be no big deal.

NHTSA gets 40,000 reports of vehicle safety problems every year. Only a few of those turn out to be serious enough to lead to action by the agency, and most of the time, those actions are routine: The manufacturer comes up with a fix, issues a recall, and updates the affected cars.

All auto manufacturers, from Ford to Ferrari, have recalls every now and then. As long as nobody's injured, they're no big deal, and they get handled in the ordinary course of business.

But the Volt's no ordinary car. It really is a high-tech masterpiece, a great example of American ingenuity -- and a pretty nice car to boot. But it cost a fortune to develop, and some of that was funded by government loans and grants. GM has tried to make the Volt a symbol of its renaissance, but in some minds, it has become a symbol of the still-unpopular auto industry bailouts instead.

House Republicans and pundits have made a lot of hay out of the issues around the Volt, even going so far as to suggest that the Obama administration covered up a potential safety defect to protect its ownership stake in GM, a relic of those 2009 auto bailouts.

That's probably not true. And it's largely moot at this point. Last week, NHTSA gave the Volt (with GM's fixes incorporated) a clean bill of health, closing its investigation.

The Damage Has Been Done

GM will start installing those fixes in customers' cars in a few weeks and will resume production of the Volt next month. But the task of fixing its car's reputation will take a lot longer. Akerson's appearance before Congress coincided with the launch of a new GM marketing campaign that touts the Volt's efficiency and safety.

But given the concerns surrounding the Volt, and an election-fueled debate about whether government should help promote green-car development, the Volt's tenure as a political punching bag may not be ending any time soon.

At the time of publication, Motley Fool contributor John Rosevear owned shares of Ford and General Motors. The Motley Fool also owns shares of Ford, and Motley Fool newsletter services have recommended buying shares of General Motors and Ford. Motley Fool newsletter services have also recommended creating a synthetic long position in Ford.

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I don't understand this animosity against companies that actually MAKE stuff. That GM has had problems to compete is not so strange given that various states subsidized foreign competitors to come and set up shop here. so, instead of having decent paying jobs in the auto industry, and tax revenues, we instead have lower paying, non union jobs, less tax income and slightly cheaper cars. It has been part of the enviceration of the US, but then Wall Street, and other non productive parasites are happy.

January 31 2012 at 9:09 AM Report abuse rate up rate down Reply

Apparently only the gals are smart enough to pay the SALE price, not the full price. Did Waldo forget that there is a $7500 tax credit for cars like the Volt? Did Waldo also know that states like Colorado throw in another $6000 tax credit? That brings a fully loaded Volt in at $26k.

But not for Waldo. When there is a sale HE pays full price instead! What in the world is Waldo thinking?

January 30 2012 at 9:09 PM Report abuse rate up rate down Reply

You Lie Bad Tina Pinnochio Akerson

January 30 2012 at 8:07 PM Report abuse rate up rate down Reply

I paid $32k for my fully loaded Volt. It's my first American car, and also the best car I have owned in 30 years. My electric bill increased $330/year, my gasoline bill decreased by $2000/year ($1700/year savings). With over 12,000 city/highway miles (including some cross country trips), I have not had a single problem. I love the sporty acceleration and handling, the library quiet cabin, the gorgeous twin LCD instrument panels, the comfy leather seats. It takes me 6 seconds to plugin. No standing in the rain, cold, snow. By the time dinner is done and I catch a TV show, the car is fully charged. Easy. In the morning, I remote heat the car from my iPhone.

January 30 2012 at 7:56 PM Report abuse -1 rate up rate down Reply
5 replies to Tina's comment

I'd love to have a Volt but it doesn't have a track record yet. It will be interesting to see how many get traded in on other cars. This is a good concept but it's a long ways from being a replacement for what we have already. After all you still have to buy gas for it. I want to see maintenance records for a couple of years before I drop that kind of cash on a vehicle. By the way you can't put that much in the trunk, so I guess the groceries have to go in the back seat.

January 30 2012 at 4:54 PM Report abuse rate up rate down Reply
1 reply to waldoknowswhere's comment

I can fit 10 bags of groceries in two rows of 5 inthe cargo area of my Volt. And there is room left over.

January 30 2012 at 7:58 PM Report abuse -1 rate up rate down Reply
1 reply to Tina's comment

stop lying Tina Akerson

January 30 2012 at 8:04 PM Report abuse +1 rate up rate down

Consumers don't want little matchbox cars like the Volt. I have to drive 30 miles each leg to work. Is this vehicle going to get me there int he snow and cold without issues every day ? No. I have to plug it in everynight. How am I going to save money on energy this way ? I will need a 220 Volt drop in my garage and it will need to recharge in 12 hours or so ? Then it will demand so much energy I will have trouble running my appliances and other things tha need power. $35-50,000 for a car and then the battery is good for a couple years then I will need to plunck down another $2400-7000 ? I don't think so ! This is what we get with alternative energy. A lot of marketing but in reality expensive and not very powerful nor efficient. Why do you think all these taxpayer subsidies are going to companies that don't last and end up in bankruptcy court on our dime.

All this for what ? There is no global warming. CO2 is not a pollutant and plants NEED it to survive. CO2 constitutes less than 1 % of our atmosphere. It is currently on 385 ppm in the be even close to be considered dangerous you need to be closer to 10,000-20,000 ppm. Look back at the last 3000 years and there is a temperature range that planet earth has stayed within. The 1600's were very warm....much more so than now. The science is simply not there and many "scientists" got caught lying to us again (Climategate 2.0). There are many more scientists against "global warming" than for it....Al Gore is right....this is an inconvenient truth and he is laughing all the way to the bank......

January 30 2012 at 1:02 PM Report abuse rate up rate down Reply
2 replies to Frankie's comment

The Volt has a 500 mile range on a 10 gallon tank of gas (yes, it has a gas engine).
On the other hand, all your ranting shows that you are an ignoramus.

January 30 2012 at 1:45 PM Report abuse -1 rate up rate down Reply

Frankie, where do you get your misinformation? I drive 65 miles round trip in my Volt and live in the snow belt. The Volt is heavy and plows through the snow. I am getting 120 MPG. It takes me 6 seconds to plugin. The car is recharged in the time it takes to have dinner and watch a TV show (4 hours @ 220v). My electric is up by $330/yr, my gas is down by $2000/yr. I paid $32k fully loaded. The battery is warranted for 100,000 miles. A replacement if needed is $3k. Not powerful? The Volt has 273 lb-ft of torque at 0 RPM. It will leave must cars in the dust!

January 30 2012 at 8:05 PM Report abuse -1 rate up rate down Reply
4 replies to Tina's comment

Coal is our best short term solution. Its super cheap and the US is the world's largest exporter, has been for decades. EPA obstruction based on false science and political libtardism must stop! Colorado University study reports total Emissions from coal fired plants are less than natural gas PER UNIT OF ELECTRICITY PRODUCED. Decreasing demand on natural gas makes ng a viable cheap transportation energy alternative. See what BIG LIBEREAL FEDERALISM GETS YOU? SHEAR STUPIDITY AT THE EXPENSE OF YOUR PROSPERETY!

January 30 2012 at 10:38 AM Report abuse +1 rate up rate down Reply

If you think they are that great, go buy one. I can almost gaurantee that after 5 years of misery you will not get anything more than scrap money less the hazardous waste costs. Doesn't anyone understand, We have not developed the proper battery for an automobile yet! If we had went the route of the CNG engine we would have cheap fuel, cheap autos, and a cleaner atmosphere. These clunkers will leave us with more hazardous waste Than was ever dreamed of in nuclear power.

January 30 2012 at 10:01 AM Report abuse +1 rate up rate down Reply
1 reply to donny3666's comment

So far, I have one year of pure joy under my belt Donny. I have had zero problems with the Volt.

January 30 2012 at 8:07 PM Report abuse -1 rate up rate down Reply
2 replies to Tina's comment

You Lie Tina Akerson.

January 30 2012 at 8:10 PM Report abuse rate up rate down

Donny the only thing under her belt is the vibrator charged off her Chevy Volt that frequents her Vagina for 12000 miles a week .......................lmao

January 30 2012 at 8:21 PM Report abuse rate up rate down

If any dealer or person wants to junk their Volts because of the battery issue I will take it off their hands for free.......

January 30 2012 at 9:43 AM Report abuse rate up rate down Reply

Tehran Pushes to Ditch the US Dollar

India and Iran are negotiating deal to trade oil for gold. Does this matter, you ask? It strikes at both the value of the US dollar and today's high-tension standoff with Iran.

Officially the US & EU is Tehran must be punished for efforts to develop a nuclear weapon. Sanctions on Iran's oil exports meant to isolate Iran and depress the value of its currency to a point that the country crumbles.

Sanctions will not achieve their goals. Iran is far from isolated and its friends - like India - will stand by the oil-producing nation until the US backs down or acknowledges the real matter the American dollar as the global reserve currency.

In the 1970s a deal cemented the US dollar as the only currency to buy and sell crude oil, and from that monopoly on oil trade with the US dollar as the reserve currency for global trades in most commodities and goods. Massive demand for US dollars ensued, pushing the dollar's value up. Countries stored their excess US dollars savings in US Treasuries, giving the US government a vast pool of credit.

If the US dollar loses its position as the global reserve currency, the consequences for America are dire. The dollar's valuation stems from its lock on the oil industry - if that monopoly fades, so too will the value of the dollar. Global fiat currency relationships will change. Gold will rise. Uncertainty around paper money always bodes well for gold, and these are uncertain days indeed.


January 29 2012 at 5:39 PM Report abuse rate up rate down Reply