General Motors is far from giving up on its American-made, innovative electric plug-in vehicle, the Chevy Volt, despite announcing a temporary suspension in production on Friday, much to the delight of some conservative lawmakers and commentators.
As GM explained to the Detroit Free Press on Friday, the five-week suspension in Volt production was necessary to re-align the automaker’s inventory with market demand.
After a weekend full of conservative, Volt-hater gloating, representatives from GM and sources close to the United Auto Workers Union (UAW) on Monday told TPM that not only is the production suspension a totally benign occurrence, but that both organizations fully believe in the Volt’s propensity for success.
“The goal of seeding this technology is not only to enhance GM’s reputation for leadership, but to sell as many vehicles as we possibly can,” said Jim Cain, GM’s financial communications manager, in a phone interview with TPM.
“We anticipate improvement in demand going forward,” said Chris Lee, a manufacturing spokesperson at GM, also by phone. “We absolutely believe in this car. No doubt.”
Sources close to the United Auto Workers Union (UAW) also told TPM that the temporary production halt was “totally normal,” as was the fact that GM would be temporarily laying off 1,300 workers during the shutdown, which will extend from March 19 to April 23.
“This happens all the time,” one source told TPM, noting that the 1,300 laid-off workers at GM’s Detroit-Hamtramck plant, where the Volt is made, will be eligible for supplemental unemployment benefits as well as receive SUB pay, up to 95 percent of regular earnings, during the temporary halt.
This is the third occasion that GM has halted production on the Volt, The New York Times reported, although the previous two times were due to mechanical upgrades done at the plant, including once in the summer 2011 and once in January.
“What was happening from a sales standpoint [over the summer] was we actually ran out of Volts due to high demand,” Cain told TPM. “So we started rebuilding our salable inventory and continued to add dealers.”
Cain said that Volts were still en route to dealerships around the country and that GM had shipped the vehicles to over 2,600 dealerships at the end of 2011.
The Volt is a 4-door, plug-in hybrid with an onboard gas generator that gets 61 miles-per gallon (25 to 50 miles per single charge) and costs $41,000 before tax credits (of which there are many, including a $7,500 federal tax rebate).
Indeed, not only has GM routinely temporarily halted production of other vehicles to adjust inventory to meet demand, but numerous other leading automakers have done so as well, including Toyota and Ford.
More to the point, GM pointed out that Volt sales were up almost double in February from the month before, to 1,023 units, more than both competitors the Nissan Leaf and the Mitsubishi ‘i’. That number rocketed the Volt to the 10th best selling “green” car out of 55 different models currently available on the U.S. market, according to the blog HybridCars.com.
The Volt also sold well in October and November of 2011. But January was a big miss for the company, with only 603 cars sold.
Cain attributed the sudden chill in Volt sales in January to the aftershocks of the negative press surrounding an engine fire that eruped on a Chevy Volt during a routine crash test in November. The UAW sources agreed. The National Highway Traffic Safety Administration (NHTSA) investigated the incident and concluded in January that: “Based on the available data, NHTSA does not believe that Chevy Volts or other electric vehicles pose a greater risk of fire than gasoline-powered vehicles.”
“We could see an impact in sales,” Cain said of that investigation.
However, both he, Lee and UAW sources thought that the future for the Volt looked quite bright.
“We hope we wont have to take any more actions like this in the future,” Lee told TPM.
Lee and Cain both said that the state of California’s recent decision to allow Volt’s to be drive in its “high occupancy vehicle,” carpool-only lanes beginning March 1, even by just one Volt driver, would help bolster interest in the car.
“People who have actually driven a Volt and purchased one actually like it,” Cain said, “They love talking about it. The more vehicles you get out there, the more the conversation is driven by real world experience. That’s the best possible thing for the Volt and for GM.”
As if to underline that point, on Tuesday, the Volt was named the European Car of the Year at the Geneva Auto Show (the honor was actually given to the Volt’s European brand name, the Opel Ampera). Though given the hostility with which the Volt has been greeted by some, this honor too could prove to be more of a curse than a blessing.
