The quality and safety concerns continue to surface at General Motors as officials investigate the likelihood that a Chevy Volt started a fire in a Connecticut home that devastated the garage where the vehicle was being charged. This story was reported by a local Eyewitness News team on Thursday and has not received widespread media coverage. This follows a GM recall of the Chevy Cruze that was necessitated after a steering wheel broke off of one of the vehicles traveling at highway speeds and endangered the family traveling in the car.
Regarding the Chevy Volt incident, I have yet to hear that GM or the Department of Transportation is starting their own investigation. One has to wonder how much attention these latest stories would get if we were talking about Toyota, which had previously been lambasted regarding perceived safety issues, instead of Government Motors.
Quality issues at GM have plagued the brand for decades. As recently as this year, Consumer Reports ranked GM quality 12th out of 13 automakers reviewed with only Chrysler receiving a lower grade. It is not a coincidence that the automakers receiving a government bail out rank lowest in quality. This is indicative of two things, first and foremost that quality is the most important factor for an automaker’s success or failure. The second fact is that the Obama Administration couldn’t understand this simple concept as it blamed GM’s problems on balance sheet issues when it orchestrated a taxpayer funded bankruptcy process that favored UAW claims over bondholder claims. GM’s lack of competitive product is the reason that Ford outsold GM in March for only the second time in years. In months that GM spent significantly more money in incentives than the competition, sales held up well, but when they reduced incentives closer to the industry average consumers chose vehicles that offered better value.
The Chevy Volt is a prime example of the main underlying problem at GM, which is that this company spends more effort on marketing and public opinion than it does on focusing on developing mainstream quality vehicles. Much hype has surrounded the Volt, yet sales of the vehicle remain dismal. Worse yet, the Obama Administration and GM are misleading the American people when they make claims that the Volt has such high demand that supply can not keep up with demand. Stories are circulated that consumers are willing to pay thousands of dollars more than MSRP for the hard to find vehicles. If this were the case, why is the Obama Administration and Michigan Democratic Senator, Debbie Stabenow, pushing for legislation that would give purchasers of the Volt a $7500 taxpayer funded rebate at the time of purchase, as reported by the Washington Times?
Supposedly, consumers are already willing to pay a premium for the Volt, why waste even more taxpayer money subsidizing a vehicle that travels about 30 miles on an electric charge and then gets only about 30 MPG running on premium fuel? More suspicious activity surrounding the Volt surfaces if you do a cars.com search for used vehicles. It seems that non-GM dealerships have been purchasing Volts and reselling them as used vehicles. Now why in the world is GM selling Volts to non-GM dealerships when there are claims that there are not enough of the cars available to meet retail demand?
It remains to be seen if GM can restructure for success over the long haul. The $50 billion taxpayer bailout it received less than two years ago will not carry GM far into the future, particularly if GM continues to rely on smoke and mirrors rather than focusing on developing quality vehicles.