Battery Fires Prompt GM to Alter Volt

For the few people who had more money than brains and bought one of the Chevrolet Volts littering U.S. roads, General Motors (NYSE: GM) is advising them to bring their cars in for a service to install steel plates underneath the batteries to help protect them in the event of a collision.

Three Volts caught fire during government crash tests last year which has had GM’s engineers working on a fix.  They announced the repair program on Thursday under the rubric of a ‘customer service campaign’ which is a euphemism for  recall.

The Volt is an important piece of the puzzle for re-establishing GM’s reputation in the marketplace after 2009′s takeover by the U.S. government and re-organized under a new corporate structure.  In my eyes it is just another metaphor for government ineptitude.  This is a project that has cost far more than it will ever return in value or research.

The Volt is uncompetitive versus its rival electric car the Nissan Leaf which is beating it in sales.  The safety issues overhanging the car along with the current NHTSA investigation, which began in November will make the Volt a tough sell.  With a struggling economy and more economic uncertainty on the horizon a $40,000 Volt is a luxury item, not a value proposition.

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Tom Luongo

About Tom Luongo

Tom Luongo is a professional chemist and self-taught economist who has been following and trading stocks for nearly 12 years. He has no formal ties to the financial industry and considers that an asset in his analysis of the interplay between monetary policy and capital markets.

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