Tarnished Reputation

Expert suggests GM avoiding mentioning Volt to avoid memories of bailout

October 9, 2013

General Motors has shied away from promoting the Chevrolet Volt in 2013 as the federal government begins selling off its final shares of company stock, a move one expert said may have been made to avoid reminding the public of the federal bailout.

GM press releases have avoided discussing the plug-in hybrid that was once hailed as the "halo car" and a "moon shot" that could increase GM’s market share in green technology.

GM’s public press releases mentioned the Chevrolet Volt roughly 111 times per month when it launched in 2010 and 92 times the following year.

However, the company began drawing less attention to the vehicle in November 2011 when the National Highway Transportation Safety Administration launched an investigation into claims that the vehicle’s fire hazards.

From December 2011 to December 2012, the company mentioned the Volt just 31 times per month. The acceleration of the federal government’s withdrawal from the company has also coincided with decreasing attention drawn to the Volt. GM press releases have mentioned the vehicle just 11 times per month on average through September 2013.

Despite record-breaking sales in August, GM mentioned the Volt only once, as part of a press release focused on overall company performance.

"The Chevrolet Volt had its best month ever, as did the Chevrolet Spark, Chevrolet Sonic, Cadillac XTS and Buick Verano," the release said.

Auto analyst Ed Niedermeyer said that GM has every reason to distance itself from the car because it served as a reminder of the company’s ties to Washington and the $50 billion taxpayer bailout, which he says tarnished the brand.

"More than turning a profit, Volt was supposed to give GM a ‘green halo’ like the one the Prius bestows on the Toyota brand," he said. "Because the Volt is so closely associated with the bailout, it has turned out to be a net negative in terms of public relations."

The Treasury Department sold $3.4 billion worth of stock between January and August of 2013, before announcing in September that it would sell off the remaining 101.3 million shares in taxpayer holdings.

GM did not respond to request for comment.

Company executives have been doing their best to turn the page on the bailout in recent years, especially as it attempts to unveil a new line of pick-up trucks, SUVs, and a revamped Corvette. GM North America President Mark Reuss said in October that the company must overcome the "Government Motors" moniker it acquired during the bailout.

"We … know that the government ownership influence is highest among truck buyers," Reuss said. "Being owned by the government is problematic for now."

Dave Sullivan, a car expert with AutoPacific, said that the company’s lack of attention for the Volt reflects the "natural" market cycles for vehicles, rather than any relation to government ownership.

"The car came out three years ago now," he said. "They’re introducing their bread and butter pick-up trucks; they’re now turning to SUVs, so the Volt is going to get passed by right now."

The reason the Volt received so much attention when it was first introduced had more to do with GM’s "stale line-up—there wasn’t a whole lot to get excited about," according to Sullivan.

"Now they have very good product," he said. "They’re probably turning out the best vehicles they’ve ever engineered—they’ve come a long way in a very short time."

Niedermeyer agreed that the new car excitement "tapers off" the longer it is around, but said the Volt stands out as a special case of silence.

"GM doesn’t want the Volt out there reminding traditional truck buyers that it’s a bailed-out company, as that message clashes with the values of patriotism and self-reliance that truck marketing depends on," he said.

Taxpayers are expected to lose $10 billion on the GM bailout.