March 2, 2012 at 4:15 PM ET
Facing a significant backlog of unsold inventory, General Motors will shut down production of the Chevrolet Volt for five weeks.
The maker has notified 1,300 workers at the GM plant in Detroit that they will be idled from March 19 through April 23while assembly operations are idled. But the maker insists the latest setback is not a sign of long-term problems for the plug-in hybrid, noting that Volt sales in February jumped 70 percent over the prior month.
“We’re going to do what we need to the keep production in line with what the market demands,” said GM spokesperson Michelle Malcho.
She noted that demand has been recovering in the wake of reports, late last year, that several Volt battery packs had caught fire following federal crash tests. After briefly opening an investigation into the problem, the National Highway Traffic Safety Administration gave the Chevy Volt a clean bill of health when GM announced it would take several steps to further reduce the risk of battery problems. The maker has stressed there have been no such incidents involving Volts in real-world use.
But the controversy escalated last month when California Republican Congressman Darrell Issa held a hearing on the Volt that critics said was primarily aimed at embarrassing the Obama Administration. Issa was a strong critic of the 2008-2009 federal bailout of GM and Chrysler.
In the wake of the original Volt fire news reports sales plunged, dipping to just 603 in January before rising to 1,023 last month. But while that was a significant upturn, it is still well short of where GM had hoped to be.
The maker originally planned to produce about 10,000 Volts in 2011. It made that production target but rang up sales of only 7,671 of the battery cars. By comparison, Nissan sold nearly 10,000 of its Leaf battery-electric vehicles.
GM has promised to ramp up production of both the Volt and the similar Opel Ampera this year, with an initial target of 60,000 units – 75 percent of those vehicles intended for the U.S. market. Spokesperson Malcho declined to say whether the maker now will miss the 2012 target.
If anything, she said GM is “pleased with the enthusiasm” shown by initial Volt buyers. Significantly, when the maker offered to buy back the plug-in from owners worried about the safety of the Volt battery pack, only about a dozen took GM up on that offer.
And, if anything, Malcho insisted there has been a surge in demand in the California market since the beginning of this month when GM made modifications to the car’s backup gasoline drivetrain to further reduce emissions and qualify as a so-called P-ZEV vehicle under California law. That qualifies a buyer for the Golden State’s coveted HOV lane sticker – enabling them to drive in the quicker freeway carpool lanes without having two or more passengers onboard.
Despite that reported surge, however, the production cuts suggest that, on the whole, demand is still not keeping up with the projections GM initially made for 2012. Whether the pace will pick up later in the year remains to be seen.