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Friday, January 27, 2012

GM'S AKERSON DEFENDS VOLT BEFORE HOUSE COMMITTEE

Akerson told a House committee: "We did not
engineer the Volt to be a political punching bag."
By Christina Rogers, Automotive News - General Motors CEO Dan Akerson said the company is now going about "reconstructing" the Chevrolet Volt's image, after a recently closed federal probe called into question the safety of the plug-in car.

"As you see, there is certain political air around this discussion about a car that is safe," Akerson said, after testifying before House Oversight subcommittee on the handling of an investigation into the Volt's safety.

To have GM's product mentioned in the same phrase as fire, he added, "causes collateral damage because it makes the market pause, so we're going to go about reconstructing that image."

In his testimony before the House panel, Akerson said GM and U.S. regulators tried several times to replicate the initial fire and only once, under conditions unlikely to occur in real-world driving, did the test produce a second blaze.

He added that the battery fire in November only occurred in simulated, laboratory environment where the battery was pierced with a rod, rotated and then "drenched" in coolant fluid.

"For all the loose talk about fires, we are here today because the test by regulators resulted in a fire under lab conditions that no driver would experience," Akerson said.

Reputation hurt

Even so, the car's reputation has taken a hit, and GM has already responded by tapering back its production plans for the $39,145 US vehicle. GM had originally planned to build 45,000 Volts this year for the U.S. market. Now, it's going to match production with demand. GM also took the extra step of offering to buy back Volts from owners concerned about the safety probe. Akerson said he'd recently purchased one of the returned Volts.

"So what we saw last year before this investigation was started might have been one perspective," he added. "We're going to have to see what plays out in the coming months."

When asked if GM had any communication with the White House about the Volt fire, Akerson said "absolutely not". Akerson, who drove a Volt to the hearing, reiterated that the government has no presence in GM's boardroom or input in the company's business.

He rejected suggestions that politics influenced GM's handling of the Volt investigation and stressed that the Volt's development was well underway before the government saved GM with a $49.5 billion bailout in 2009.

Written testimony changed

In an advance copy of his testimony, he said the company's halo car has become a political lightening rod for critics of the Obama Administration. Those remarks weren't included in his spoken testimony.

"The Volt seems, perhaps unfairly, to have become a surrogate for some to offer broader commentary on General Motors' business prospects and administration policy," Akerson stated in his original written testimony.

"These factors should not be discounted as to why federal regulators opened an investigation into the Volt's battery safety."

But in his actual testimony today, Akerson said: "Unfortunately, there is one thing we did not engineer. Although we loaded the Volt with state-of-the-art safety features -- we did not engineer the Volt to be a political punching bag."

Investigation timeline

In November, the National Highway Traffic Safety Administration opened an investigation after two incidents in which the Volt's battery pack either caught fire or emitted sparks in the days or weeks after crash tests. An earlier battery fire occured in June, three weeks after the agency completed side-impact testing on the Volt.

Last week, NHTSA closed the investigation, saying it does not believe that the Volt or other electric vehicles pose a greater risk of fire than gasoline-powered ones. The agency also said that a modification that GM has proposed to reinforce the Volt's vattery pack should make the car safer.

In two hearings, House subcommittee members pressed Akerson and NHTSA administrator David Strickland about the timing of the fire's disclosure, at times accusing regulators of "pulling punches" because of the government's 32-percent ownership stake in GM.

The House panel, in a report released this morning, raised concerns about an "unnatural relationship" between GM and the Obama Administration. It also questions why NHTSA, which learned about the fire June 6, didn't bring it up when it was negotiating new fuel economy standards for the auto industry. The proposed standards offer a slew of new incentives for electric vehicles.

NHTSA first acknowledged the June fire in a Bloomberg News report on Nov. 11, five months after it learned of the initial fire on June 6. NHTSA opened a safety investigation on the Chevrolet Volt on Nov. 25.

Strickland also rejected suggestions that if it weren't for the report, NHTSA wouldn't have told the public about the fire or investigation.

Irresponsible idea

Rather, he said it would have been irresponsible, even illegal, to deem the Volt a safety risk without evidence to back up that claim. The agency had planned to inform the public about the probe "fairly soon" and worked with a Bloomberg reporter to ensure the Nov. 11 story was correct.

Moreover, Strickland said replicating the initial fire was "difficult" and took a "tremendous amount of engineering" to produce a second fire under laboratory conditions.

Still, because of the sensitive surround this new technology, NHTSA took the unusual step of continuing its investigation, even though there'd been no reports of real-world fires involving the Volt.

Asked by subcommittee members whether GM or the Obama administration requested NHTSA to keep the investigation quiet, Strickland replied: "Absolutely not."

House Oversight Chairman, Rep. Darrel Issa, R-Calif., said he's satisfied with GM's response but now plans to focus his panel's inquiry on NHTSA.

"We are disappointed," Issa said. "NHTSA could have done a much better job both in transparency and speed. When you have a new vehicle, it's better to take a pause."

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