Chevrolet Volt crisis gives General Motors’ recovery plan a nasty electric shock

November 29, 2011

Effervescent General Motors marketing supremo Joel Ewanick now has a lot more on his bulging agenda than reviewing global ad agencies. GM is facing a full-blown image crisis, thanks to its flagship vehicle – the hybrid Chevrolet Volt – having an unfortunate tendency to burst into flames.

I should say it’s not the car itself which is a fault, but the lithium-ion batteries critical to powering it. And “smouldering” rather than “spontaneous combustion” is nearer the mark. Plus, there aren’t, as yet, many recorded cases. Never mind, all the ingredients are there for an outbreak of public hysteria, ventilated by the media.

As with most of these PR crises, the actual threat to human welfare is difficult to assess. Much more certain is the disproportionate negative impact on the manufacturing company’s reputation once the matter has entered the public domain. Especially if the beleaguered company fails the test of  immediate and effective remedial action. A few years ago the self-same problem of lithium-ion batteries catching fire (in this case in laptop computers) caused Dell to instigate the biggest computer product recall in history.

For GM, the Volt crisis could not be more serious. Last Friday, the federal authorities, in the guise of the National Highway Traffic Safety Administration (NHTSA), decided to launch an official investigation. A successful Volt – which is the halo product of GM’s biggest car marque, Chevrolet – is integral to GM’s hopes of recovery, not in numbers sold (heaven forbid, about 6,000 so far!), but in terms of perception as a leading-edge automobile maker.

You may smile at that, but GM’s senior management is deadly serious. Not long ago, Ewanick suggested that Apple, rather than other car-makers, was the benchmark by which his company’s future performance should be judged. The hybrid range has been used to curry public favour and convince the world that GM no longer equals “gas-guzzler.”

And it gets worse. President Obama has made it clear that the e-car is critical to lessening America’s dependency on oil. He wants one million electric vehicles on the road by 2015. What’s good for America is clearly good for GM. But not if the public is put off hybrid technology (of which it is, in any case, sceptical) by the suspicion that batteries may catch fire.

Predictably for a company under siege, GM’s immediate response to  the federal safety investigation was to issue a bland statement stressing the car’s safety – classic procrastination. Its crisis management team has now moved up a gear with the announcement yesterday that GM will provide free loan cars for any owner inconvenienced by a Volt “incident”. I wonder what other measures are on the way.

In the meantime, GM’s flagship remains firmly anchored in port. The Volt global export-drive has been beached.

Volkswagen – which has hugely benefited from its rival Toyota’s set of reputational issues – will be watching GM’s discomfort with interest. Toyota and GM are its principal competition. VW has come from behind and is now comfortably cruising towards being the world’s largest car-maker.


Regulator cracks down on car makers living in Cloud Cuckoo land

June 11, 2011

The time when the car was simply an internal combustion engine on four rubber tyres that got you from A to B has long since passed. Now it’s a mobile computer, equipped with cloud technology that maps your route automatically, gives you business listings, traffic information, sports news, stock market prices, local petrol station locations, cinema listings, reads out your email and text messages, and much more besides.

No self-respecting car marque is without its patent system. Ford has Sync, General Motors has OnStar. And even Hyundai is about to bring out its own market-challenging product, Blue Link – whose maker ATX also supplies BMW and Toyota.

Hyundai Velostar: One of the first models to get the Blue Link cloud technology launched next year

It’s easy to see why they are so popular. Customers love the gadgets, the systems give the car brand an extra cutting edge, and there’s a tasty aftermarket as well. Some car-makers charge a hefty annual rental for the services. OnStar, for example, costs up to $300. And, while we’re there, let’s not forget the commercial value of local search and location-finding services. Groupons at your local service station anyone?

Unfortunately, automobile telematics – as they are known in the business – are also killers. The top US safety regulator, the National Highway Traffic Safety Administration, reckons that every year thousands of motorists and their passengers end up in the morgue because of needless driver distraction. And what’s more it intends to douse the white heat of technological advancement with some very cold water.

Like Daniel striding among the lions, the NHTSA’s top man David Strickland chose the Telematics Detroit 2011 conference to put this unholy alliance of car and software manufacturers on notice:

“A car is not a mobile device… I’m not in the business of helping people Tweet better… We will not take a backseat while new telematics and infotainment systems are introduced. There is too much distraction of drivers,” he told a dismayed audience.

Wherever the regulator in the top automotive market goes, you can be sure the rest of the world will soon follow.


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