Chevy Volt Production To Halt For 5 Weeks Due To Oversupply

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Late Friday afternoon, Chevrolet announced it would idle production of its Volt range-extended electric car for five weeks, from March 19 to April 23.

The story was first reported by the Detroit Free Press; GM informed the 1,300 assembly-line workers at the Detroit-Hamtramck plant of the shutdown on Thursday.

Because the Volt is the only car now built at the plant, the lines will be idled for those weeks. Later this year, production of the 2013 Chevrolet Malibu will be added at Hamtramck, which will likely more than double its output.

The spring shutdown follows a multi-week hiatus last summer for retooling (along with removal of dies and tooling for the discontinued Cadillac DTS and Buick Lucerne), and an extended pause over the end-of-year holidays that lasted until February 6.

Sub-par sales

GM spokesman Chris Lee told several media outlets that the latest decision was made to "maintain the right inventory levels" and "meet demand."

Volt sales have not reached the levels GM predicted before the car went on sale in December 2010. The company expected to sell 10,000 Volts in 2011, but sold a total of 7,671.

More recently, Chevrolet stepped away from its prediction of 45,000 U.S. Volt sales during calendar 2012, saying it would build Volts to meet demand.

Volt sales in February were 1,023, a 70-percent rise over January's 603, but at the end of February, the company had roughly 3,600 Volts in dealer stock. That figure--which differs from totals reported elsewhere--comes from Alan Batey, vice president of Chevrolet sales and service, as quoted in the Detroit News.

Target: 60 days of sales

The ideal supply is 60 days' worth of any model, and 3,600 Volts represents more than twice the desired number at the car's current average sales rate.

Following its bankruptcy and restructuring, General Motors has been relatively careful to keep its inventories in line, building only those vehicles it can quickly sell.

Overproduction was one of the (many) things that got Detroit automakers in trouble before the market collapsed. They kept too many factories rolling, rammed cars down dealers' throats, and resorted to huge discounts to "move the metal" that had been parked in stadium lots all over Michigan.

Cadillac coupe coming

So despite the Volt's status as GM's slightly tarnished halo car, the company wants to keep the supply of Volts at 60 days, not more. Sales being what they are, it would be folly to build more Volts than what's needed to keep that 60 days in inventory.

Cadillac ELR

Cadillac ELR

Enlarge Photo

Until assembly of the 2014 Cadillac ELR range-extended luxury coupe is added to Hamtramck next year, the plant's plug-in production will vary with Volt sales (and those of its lower-volume European sibling, the Opel/Vauxhall Ampera).

And hard as it is for Volt fans to hear, GM is making the right decision by maintaining production discipline.

It's been a tough year for the car, with garage fires, a Congressional hearing into a battery-pack fire three weeks after a NHTSA crash test, and a relentless drumbeat of often uninformed criticism of the Volt for partisan political purposes.

'Political punching bag'

“We did not design the Volt to become a political punching bag," GM CEO Dan Akerson told the Congressional panel in January, but "that’s what it’s become."

Volt advocates, meanwhile, may want to brace themselves for more questions from an ill-informed public.

The not-very-Volt-friendly Drudge Report had no fewer than three Volt headlines trumpeting the production halt by "Gov't Motors" and highlighting the "layoffs" of 1,300 GM employees. (They haven't been fired or let go; they'll all go back to work after the hiatus.)

Or as Volt owner Andrew Byrne wrote late Friday, "Well that sure didn't take long. A friend just called to tell me he heard on the news that 'GM cancelled the Volt and laid everyone off at the factory.' He concluded the message with '...guess you ended up with a modern Edsel.' Awesome."

It may prove to be a long five weeks.

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