March 20, 2023

Republicans Charge Delay in Disclosing a Chevy Volt Fire

At a hearing of a House Committee on Oversight and Government Reform subcommittee, members released a staff report that argued that the administration’s bailout of General Motors created business and political reasons for the government to sacrifice public safety.

The chairman of the regulatory affairs subcommittee, Jim Jordan of Ohio, also criticized Ray LaHood, the transportation secretary, for saying in December that the car was safe.

“You wait six months before you start an investigation, and two weeks after you start an investigation the secretary says it’s fine, and you think that’s normal?” he asked David L. Strickland, the administrator of the safety agency.

Mr. Strickland said it took time to determine that the Volt’s battery was responsible for the fire, which occurred three weeks after a side-impact crash test in May and happened when no one was around to see it. And it took weeks to reproduce the event, he said. If his agency had to disclose every allegation of safety problems, it would make 40,000 such disclosures a year, he said.

“It is irresponsible, and frankly illegal, for us to tell the public there is something wrong with the car if we don’t know what it is,” Mr. Strickland said. “I don’t disclose to the public anything we find that we don’t have proof is a risk to safety.”

The agency said last week that there was no discernible safety trend, and the inquiry was closed.

The chairman and chief executive of General Motors, Daniel F. Akerson, told the hearing that the Volt had not been designed “to be a political punching bag, and, sadly, that is what it has become.” G.M. has begun a print and television campaign to emphasize the vehicle’s safety.

Darrell Issa, Republican of California and chairman of the full committee, has been among the most aggressive critics of President Obama on questions of policy.

On Wednesday, Mr. Issa berated Mr. Strickland for saying his agency was still developing protocols for dealing with battery-powered vehicles. Mr. Issa showed a photo of President Obama smiling through the driver’s side window of a Volt parked at an event to introduce the car.

“How dare you tell us you’re still developing protocols while the president is sitting in an electric car?” he asked. “You’re behind the power curve.”

But Mr. Akerson, in his testimony, questioned whether the June fire represented a highway hazard. He said the fire could be reproduced only by impaling a battery with a steel rod, and even then the fire did not occur immediately; it took three weeks the first time and one week the second time.

The questioning showed a marked split, by party, over the wisdom of electric vehicles and government help in promoting them. Dennis J. Kucinich, the Ohio Democrat who is the ranking minority member of the subcommittee, accused Republicans of trying to sabotage the car.

A 16-page report by the Republican staff maintained that, “like the case of Solyndra, the president has closely tied his reputation to the success of the Volt.” Solyndra was a manufacturer of solar energy arrays that went bankrupt after receiving a federal loan guarantee of more than $500 million.

The report points out that the government has given Compact Power Inc., a manufacturer of lithium-ion batteries for the Volt, $151.4 million; it has also given General Motors $105.9 million to build factories to make electric drive systems; and it has given Delphi Automotive Systems, which used to be part of G.M., $89.3 million to expand factories for making components. The report also notes that Volt buyers can get up to $7,500 in tax credits for buying the car, which is a plug-in hybrid.

Mr. Akerson said many of the subsidies and tax credits were set up during the Bush administration. And the decision to make the Volt was announced in 2006, when the price of gasoline hit $4 after Hurricane Katrina and “was not based on any clairvoyant power to correctly predict the 2008 presidential election.”

Mr. Strickland of the highway traffic agency said most investigations were started after calls to the agency’s phone hot line, warranty claims or accidents, but there were none of those in the case of the Volt’s battery. And the fire burned three cars when no one was around to see; it took time to establish that the fire originated in the Volt and wasn’t arson, he said.

The agency closed its investigation with an announcement that said the car was no more dangerous than an ordinary car filled with gasoline.

The company has since reinforced the metal protecting the battery.

“The Volt is safe,” Mr. Akerson said. “It’s a marvelous machine.”

General Motors has sold more than 8,000 Volts, including 1,500 in December, its best month. The company had hoped to sell 10,000 last year.

This article has been revised to reflect the following correction:

Correction: January 25, 2012

An earlier version of this article incorrectly said that the hearing would be chaired by Darrell Issa, who heads the House Committee on Oversight and Government Reform. It is actually a hearing of the regulatory affairs subcommittee, chaired by Jim Jordan.

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Common Sense: U.S. Ownership and Regulation of G.M., Like Oil and Water

This, essentially, is what the United States has done to General Motors and its signature new vehicle, the Chevy Volt.

If it wasn’t already obvious, at least one reason the government shouldn’t own controlling stakes in major companies is that ownership and regulation are inherently incompatible. This week, the Republican presidential candidate Mitt Romney defended his tenure as head of the private equity firm Bain Capital by comparing Bain’s role in troubled companies to the government’s rescue of G.M.

Rest assured that if Bain Capital owned G.M., it would not be subjecting the Volt to severe safety tests and trumpeting the negative results.

More than a year after G.M.’s return to public ownership, the government still owns just less than 30 percent of the company, or about 500 million shares. Of course, the government must hold G.M. to the same strict safety standards it applies to all auto manufacturers. The National Highway Traffic Safety Administration, or N.H.T.S.A., said in late November that it would assess the risk of fire in Volts after two incidents of fires following crash tests.

But some Republican congressmen questioned whether the Obama administration had concealed the results. And conspiracy theorists and others have taken to the Internet to argue that the agency has been too soft on G.M. and has a motive to soft-pedal or even distort the results because of the government’s ownership stake.

Safety Research and Strategies, a Massachusetts consulting firm, claimed the government’s Volt crash report was little more than a “sales pitch” for the plug-in hybrid vehicle.

Others have suggested that the agency was too tough, even if subliminally, in an effort to forestall any perception of a conflict, and that the danger of a Volt catching fire was remote.

Car and Driver magazine noted that the Volt’s batteries caught fire three weeks and one week after the crash tests, and said that “if you ask us, even just one day is plenty of time to safely exit a vehicle that’s in peril of burning.” The magazine noted that no Volts had caught fire in the real world and that only three safety complaints showed up in the government’s database for all of 2010 and 2011, none involving fire hazards. “No vehicle is completely and infallibly safe,” the magazine said. The risk of fire following a crash in an electric car also appears to be vastly less than in a conventional gas-powered vehicle.

Tim Massad, assistant Treasury secretary for financial stability, told me this week that Treasury, which oversees the government’s investment, “is not G.M. or Chrysler’s regulator and has no involvement with N.H.T.S.A.” I haven’t seen any evidence that the agency acted in anything but a professional and independent manner with respect to the Volt, but the controversy illustrates why even appearances of a conflict need to be avoided.

How much has the Volt controversy cost G.M.? One measure of the new G.M. is its aggressive, albeit expensive, response. The old G.M. might have dug in and fought the government. It could have appealed and stalled for years while losing the public relations war. This time, G.M. immediately offered a loaner vehicle to any existing Volt owner concerned about the vehicle’s safety. Since then, G.M. has announced that it will make structural enhancements and install a sensor to warn of any battery fluid leak.

Of course, what choice did G.M. have, given that its regulator is also its biggest owner?

Consumers seem to be reacting positively. N.H.T.S.A. has now awarded the Volt five stars, the top ranking, in its crash test results (a ranking that is also suspect to conspiracy theorists). G.M. said December was the best sales month ever for the Volt, but it’s still selling in small numbers, and it’s impossible to know how many potential customers were discouraged by the bad publicity. And the damage to G.M.’s image is also hard to quantify, but surely considerable. The Volt was expected to deliver a halo effect to all of G.M.’s brands and bolster its overall reputation, much as the Prius did for Toyota until the company ran into its own safety and quality issues. That effort has suffered at least a temporary setback. (A G.M. spokeswoman declined to comment.)

And it’s not just safety issues where the government’s interests conflict. Along with other bailout recipients who remain under government oversight, G.M. is subject to executive pay restrictions. No private equity owner would agree to such limitations on its ability to attract and keep management talent. The pay constraints apply to the top five executive offices and extend deep into the ranks to include the 20 most highly compensated employees.

At this week’s North American International Auto Show in Detroit, Ford was showing off Lincoln’s new design director, Max Wolff, who took to the stage to unveil the boldly redesigned Lincoln MKZ. Ford poached Mr. Wolff from G.M.’s Cadillac division in 2010, and design directors are some of the most highly paid people in the industry. The G.M. spokeswoman wouldn’t comment on whether G.M. could match or top Ford’s offer, but said that the company continued to attract top talent because of its “iconic” status and because people wanted to be part of “an incredible comeback story.” Still, G.M.’s chief executive, Dan Akerson, has said he’d like to see pay restrictions eased.

(G.M. got approval to pay Mr. Akerson $9 million for 2011, which was in the lower quarter of chief executive pay at the nation’s largest companies, the automaker said.)

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Tsunami Reveals Durability of Nissan’s Leaf

None of the cars caught fire, and their batteries remained fully intact, shielded by an airtight steel exoskeleton and two other layers of protection that surround the 660-pound packs.

“Considering how they were tossed around and crushed, we think that is a very good indication of the safety performance of that vehicle,” said Bob Yakushi, the director of product safety for Nissan North America.

Nissan’s decision to encase the Leaf’s battery in steel may help explain why federal safety regulators investigating postcrash fire risks in the Chevrolet Volt do not have the same concerns about the Leaf. General Motors packages the Volt’s battery cells on a T-shaped steel tray with a plastic cover.

The durability and design of the Volt’s battery have come into question since two of them caught fire after being damaged in testing by the National Highway Traffic Safety Administration. The fires prompted the agency to open a formal defect investigation of the Volt, a low-volume but high-visibility model that G.M. has held up as proof it can lead the industry in advanced technology.

The N.H.T.S.A. examined the Leaf and other electric vehicles after the initial Volt fire but last month said its testing “has not raised safety concerns about vehicles other than the Chevy Volt.”

A General Motors spokesman, Robert D. Peterson, said the Volt’s battery was “fully encased by the steel floor pan or rails” and that the company chose to use material for the cover that did not conduct electricity. But the Ford Motor Company is following Nissan in putting a steel case around the pair of batteries that power an electric version of its Focus compact car, which it started building this month. The decision about the battery casing was made long before the Volt’s problems were known.

Although the N.H.T.S.A. has not yet crash-tested the electric Focus, Ford executives say internal testing has resulted in no damage to the actual battery cells. “Given that this is new technology, we chose to put that extra level of protection in,” said Derrick Kuzak, Ford’s group vice president for global product development.

Clarence Ditlow, executive director of the Center for Auto Safety, said he expected G.M. to recall the Volt to protect its battery more as Nissan and Ford do. Because G.M. has sold only about 6,000 Volts, doing so would cost a fraction of a typical recall, he said, but the bigger problem is repairing the damage to its image.

“Whenever you come out with an alternative vehicle, there will be problems with it,” Mr. Ditlow said. “But when you have a significant portion of the company’s success in the future based on a particular technology, you want to make sure you get it right, and they didn’t. Nissan clearly was ahead of G.M. in this.”

Mary Barra, G.M.’s senior vice president for global product development, said the company was studying whether it needed to make the Volt’s battery “more robust,” but she insisted that the car, which went on sale a year ago, was “fully developed” and not rushed into dealerships prematurely.

“If we have to do something, we will,” Ms. Barra said this month. “The one thing you don’t want to do is jump to conclusions.”

The Volt has been widely praised by reviewers and owners, but even a small flaw threatens to give the company a black eye. The Web site of the conservative radio talk radio host Rush Limbaugh depicts a crumpled Volt engulfed in flames, and a Republican congressman, Jim Jordan of Ohio, has called for a subcommittee hearing about the battery problems in January.

G.M. has defended the car, pointing out that no real accidents have resulted in a fire, but it has offered to lend a replacement vehicle to any Volt owners concerned about their safety. About 33 people have taken the company up on its offer, and G.M. has been working to satisfy a smaller number of owners who have asked to sell their Volt back.

In early June, a Volt caught fire three weeks after it was heavily damaged in a government crash test. The N.H.T.S.A. said the test, which simulates the car rolling over after striking a pole on one side, damaged the Volt’s battery and ruptured part of the liquid-cooling system that regulates the battery’s temperature.

The federal agency intentionally damaged three additional Volt batteries, one of which caught fire a week later. A second one emitted smoke and a brief spark.

G.M. officials have said they believe that the rotation allowed coolant to leak and later crystallize, possibly creating a short circuit. The N.H.T.S.A. did not disconnect the battery before storing the car, as G.M. has been training emergency personnel to do, because G.M. did not finish developing its postcrash protocol until July, after the fire occurred.

Any time a Volt is in a crash that deploys its air bags, G.M. learns of the incident through the car’s OnStar communication system. If the incident is deemed severe, G.M. sends engineers to examine the battery and drain it. Nissan says it does not need to respond to crashes in person but recommends that a damaged Leaf be taken to a Nissan dealership for repairs.

The Leaf also differs from the Volt in that its battery does not have a liquid-cooling system. Mr. Yakushi said laminated circuitry reduced the amount of heat produced.

The electric Focus and Tesla Roadster, a battery-powered car sold by California-based Tesla Motors since 2008, do have liquid-cooling systems. Tesla says it encloses each battery pack’s 6,831 cells in steel to protect them and dissipate heat.

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