GM’s “Progress” Under Akerson Questioned as Chevy Volt Faces Another Production Halt
Chevrolet Volt production has been suspended for a second time since launch, raising doubts about CEO Dan Akerson’s claims of progress at General Motors.
General Motors has halted production of the Chevrolet Volt for a second time since the car’s launch in December 2010, as weak sales continue to undermine CEO Dan Akerson’s claims that the company is making progress. The latest shutdown, scheduled to last a month, follows disappointing demand for the extended-range electric vehicle despite heavy investment in advertising and incentives.
The Volt’s troubles have become symbolic of GM’s wider challenges. Since its introduction, the car has struggled to attract mainstream buyers. Despite a $41,000 price tag and a federal tax credit of $7,500 per vehicle, the Volt’s sales have lagged far behind expectations. Critics point to its limited electric range, around 35 miles on a full charge that can take up to 12 hours, and the fact that it costs roughly twice as much as a comparable petrol-powered car. Automotive News first reported the latest production halt, which follows a previous stoppage earlier in the Volt’s life.
GM has spent millions on advertising the Volt and even invested $10.4 million in a promotional “Volt-ville” project, but these efforts have failed to generate sustained interest. The company has also faced criticism over misleading advertising in Europe and scrutiny from watchdog groups in the US. As of late 2011, estimates suggested that total government support for the Volt, including subsidies and incentives, reached $250,000 per vehicle sold. Even with this backing, the car has failed to achieve commercial success.
Financial pressures and bailout legacy
The Volt’s production pause comes as GM continues to grapple with the legacy of its 2009 government bailout. Although the Obama administration claimed taxpayers would profit from the $82 billion rescue, projections in 2012 indicated a likely loss of over $42 billion. The US government remained a major shareholder, holding more than 500 million shares that would need to reach $54 each for taxpayers to break even. At the time, GM stock was trading around $20, suggesting a substantial loss on the investment.
Despite these challenges, Akerson has continued to defend the company’s strategy, pointing to investments in green technology and a growing portfolio of hybrid and electric models. GM claimed to have registered more green energy patents in 2010 than any other company. The manufacturer pressed ahead with new hybrid Buicks, SUVs and pickups, and set up a $100 million venture capital arm to invest in clean energy and technology firms. Yet, the ongoing struggles of the Volt and the scale of government support have led critics to question whether these efforts represent genuine progress or simply mask deeper operational and financial issues.
Ongoing management scrutiny
Uncertainty over GM’s direction has fuelled speculation about further management changes. Reports in 2012 suggested a major shake-up was likely, with critics arguing that the company’s leadership had failed to deliver on promises of a turnaround. The Volt’s continued underperformance, combined with persistent financial pressures and unresolved questions about the effectiveness of government intervention, have left Akerson and his team facing mounting scrutiny.
For more on GM’s recent corporate moves, seeGM and Opel Executives to Meet Merkel Amid Bochum Plant Uncertainty.
