The Volt, running on empty

A circular firing squad seems to be forming around the Chevrolet Volt, Chevy’s mostly coal-powered car, according to Bloomberg through Autoweek:

Ever since it became known that the plug-in hybrid car’s batteries had burst into flames after government crash tests, the Volt has become the whipping boy of Republican politicians. Conservatives have equated General Motors Co.‘s Volt with everything from government bailouts to radical left-wing environmentalism.

“Although we loaded the Volt with state-of-the-art safety features, we did not engineer the Volt to be a political punching bag,” GM CEO Dan Akerson said during a Congressional hearing on the Volt in January. “And that, sadly, is what the Volt has become.”

Republican presidential hopeful Newt Gingrich faulted the Volt for its lack of space for a gun rack. Front-runner Mitt Romney called it “an idea whose time has not come.” American Tradition Partnership Inc., a conservative group, referred to Volts as “exploding Obamamobiles.”

Not surprisingly in today’s superheated political environment, some exaggeration and misinformation is taking place. (But: Coal produces electricity, which recharges the Volt batteries.) What is not an exaggeration is the bottom line of the Volt:

Politics aside, Volt sales have been a source of disappointment for GM. The Environmental Protection Agency gave it a 95 mpg rating for city driving, less than half the 230 mpg rating GM had anticipated in 2009.

After the battery fires became public in November, 2011 sales fell short of Akerson’s goal and following slow sales in January and February, GM decided to stop making the cars for five weeks. While the government’s investigation found the Volt to be as safe as other vehicles, they are complicated and expensive for a small car at nearly $40,000 before a federal tax credit.

The “exploding Obamamobile” argument, while amusing to read, is really the least compelling reason to oppose the Volt. The battery-pack fire theme seems only slightly more compelling than the cases of sudden acceleration supposedly discovered in the Audi 100, which turned out to be the driver’s stomping on the wrong pedal. (Remember, I come from the generation of people who survived riding in the back seat of Ford Pintos,  which exploded when rear-ended.)

To call the Volt the “Obamamobile” is not entirely accurate either. The Volt was developed during the George W.  Bush administration, and the GM bailout was proposed and enacted during the Bush administration, though it was administered by the Obama administration. So instead of developing a minivan that could compete against the Honda Odyssey or the Chrysler and Dodge minivans, or a rear-drive sedan that would sell with consumers and police departments (two markets GM abandoned in 1996), or a diesel engine for its truck-based SUVs (the Duramax diesel is not sold on the Chevy Tahoe or Suburban, GMC Yukon or Cadillac Escalade), or unique cars that Pontiac could successfully sell — or, for that matter, cars good enough for consumers to buy them without several thousand dollars of discounts — GM was developing the low-wattage Volt.

The Obamamobile tag makes one of my favorite people in the car industry a bit ticked:

Bob Lutz, the former vice chairman at General Motors who helped develop the Volt, said he’s angered that the car has become politicized.

“I don’t mind criticizing Obama, I don’t mind criticizing the Democrats and, you know me, I think global warming is a huge hoax perpetrated by the global political left,” Lutz said. “But when it comes to starting to tell outright lies to advance your political purposes and damage an American company that is greatly on its way back, hurt American employment in Hamtramck, Michigan, I just think it’s totally outrageous.”

Lutz, a Republican, said he voted for former U.S. Sen. Rick Santorum in the Michigan Republican primary in part because former Massachusetts Gov. Romney wrote an opinion piece in The New York Times in 2008 headlined “Let Detroit Go Bankrupt” about his opposition to a GM bailout.

Now that we have the inaccuracies out of the way, what does the unpopularity of the Volt (a car I don’t believe I’ve ever seen in person; if I have, I didn’t recognize it, which is another GM problem) say about GM?

First, it says that the GM bailout, regardless of who approved it, remains immensely unpopular with voters, and rightly so. Lutz appears to have not actually read what Romney wrote, which Romney reiterated in the Detroit News before the Michigan presidential primary:

My view at the time — and I set it out plainly in an op-ed in the New York Times — was that “the American auto industry is vital to our national interest as an employer and as a hub for manufacturing.” Instead of a bailout, I favored “managed bankruptcy” as the way forward.

Managed bankruptcy may sound like a death knell. But in fact, it is a way for a troubled company to restructure itself rapidly, entering and leaving the courtroom sometimes in weeks or months instead of years, and then returning to profitable operation.

In the case of Chrysler and GM, that was precisely what the companies needed. Both were saddled with an accumulation of labor, pension, and real estate costs that made them unsustainable. Health and retirement benefits alone amounted to an extra $2,000 baked into the price of every car they produced.

Shorn of those excess costs, and shorn of the bungling management that had driven them into a deep rut, they could re-emerge as vibrant and competitive companies. Ultimately, that is what happened. The course I recommended was eventually followed. GM entered managed bankruptcy in June 2009 and exited it a month later in July.

The Chrysler timeline was similarly swift. But something else happened along the way that was truly egregious. Before the companies were allowed to enter and exit bankruptcy, the U.S. government swept in with an $85 billion sweetheart deal disguised as a rescue plan.

By the spring of 2009, instead of the free market doing what it does best, we got a major taste of crony capitalism, Obama-style. …

The pensions of union workers and retirees at Delphi, GM’s parts supplier, were left untouched, while some 21,000 non-union salaried employees saw their pensions slashed and lost their life and health insurance. And so on and so forth across the industry.

While a lot of workers and investors got the short end of the stick, Obama’s union allies — and his major campaign contributors — reaped reward upon reward, all on the taxpayer’s dime.

I’ve been told, and read more than once, that GM has become a provider of employee benefits that happens to make cars. It’s unclear to me why I should buy a GM car when $2,000 of the price goes to employee benefits that were wrongly given to United Auto Workers members. But you  and I are GM owners after all, until the feds get rid of their GM stock at a loss of tens of billions of dollars.

The Volt has indeed become a political punching bag, and not just with Romney:

U.S. Rep. Mike Kelly, R-Pa., who owns a Chevrolet dealership in Butler, said he doesn’t sell the Volt at his store because it’s too expensive for his customers, who would be better served with a cheaper Cruze. While it may be an engineering marvel, it’s too far out for his customers, he said.

“It’s still just not a viable alternative to the market that I serve in western Pennsylvania,” he said. “I just don’t have people coming in to buy that car.”

The Volt not only personifies the bailout for Republican candidates, it also plays to other controversial issues such as class and environment. On the campaign trail, for example, [Newt] Gingrich, the former U.S. House speaker, has peppered his stump speech with comments about the Volt, including during a stop Feb. 17 caught by C-Span.

“The average family that buys it earns $170,000 a year and this is Obama’s idea of populism and in his new budget he wants to increase the amount given to every Volt buyer to $10,000, which is an amount which would allow a lot of people to buy a decent secondhand car but it wouldn’t be an Obama car,” Gingrich said to cheers in Peachtree City, Ga.

“But here’s my point to folks: You can’t put a gun rack in a Volt. So let’s be clear what this election is all about,” Gingrich continued. “We believe in the right to bear arms and we like to bear the arms in our trucks.”

It’s not that Republicans are opposed to the Chevrolet brand, but they appear uninterested in the Volt:

Republicans buy Silverado pickups and other Chevrolets in greater numbers than Democrats do, said Art Spinella, who studies new-vehicle buyers as president of CNW Marketing Research in Bandon, Ore.

While Chevy customers tend to lean conservative, less than 14 percent of Volt buyers so far this year identify themselves as Republicans while about 53 percent call themselves Democrats, according to CNW survey of 1,416 people. Buyers of the Chevrolet brand as a whole were 37 percent Republican, 22 percent Democrat and 41 percent independent.

Lutz may assert that he has no problem criticizing Obama, but that does not appear to be the case with Lutz’s former bosses. GM offered no resistance to the Obama administration’s wrongheaded proposal to jump the fleet-average fuel economy standard to a ridiculous 54.5 mpg, which will create cars that do not serve their owners’ needs but will be too expensive to buy anyway. I’m sure that when the Obama administration gets to banning cellphone use in cars, Government Motors will install some kind of jamming device in its new cars to meekly submit to that diktat too.

If that 54.5-mpg standard isn’t stopped, no Republican will be buying Silverados, because GM won’t be able to sell any. (GM makes nice profits selling trucks.) And to paraphrase what I’ve written here before, neither GM nor anyone else will sell hybrids (including the Volt,  the Toyota Prius and the Nissan Leaf) until families can buy hybrid minivans, SUVs or other family-movers. The Volt is not a family-mover, but it is an overpriced underperformer that based on its sales was built for a market that doesn’t exist yet.

GM would answer that technology improves. And it does. GM should not expect me or anyone else to serve as its technology guinea pig.

4 thoughts on “The Volt, running on empty

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