Jan. 25 (Bloomberg) -- The “unnatural relationship” between President Barack Obama’s administration and automakers that received U.S. bailouts may explain the delay in disclosing a potential safety defect in General Motors Co. Chevrolet Volts, Republican lawmakers said in a report.
The House Oversight and Government Reform Committee report, released before a hearing today at which GM Chief Executive Officer Dan Akerson will testify, questions whether the government’s 32 percent ownership of the automaker led it to delay publicizing a June 6 fire in a Volt lithium-ion battery that happened three weeks after a crash test.
“This unnatural relationship has blurred the lines between the public and private sector as President Obama touts the survival of General Motors as one of the top accomplishments of his administration,” according to the report by Issa’s committee. “On a policy level, this relationship raises serious questions about whether or not the administration is too heavily invested in the success of GM to be an effective regulator.”
Today’s hearing stems from the Volt fire and followup testing by GM, based in Detroit, and the U.S. National Highway Traffic Safety Administration that found battery coolant can leak and catch fire in a simulated rollover crash that punctures the battery compartment.
GM and NHTSA didn’t disclose the fire until Bloomberg News reported it in November. The agency opened a formal investigation later that month and closed it last week, saying electric cars posed no more of a fire risk than gasoline-powered models, after GM announced a fix for current and future Volts, avoiding a formal recall.
Akerson and David Strickland, head of the auto-safety regulator, will take questions from a congressional panel overseen by Representative Darrell Issa, a California Republican who has criticized the Obama administration’s electric-vehicle goals and the U.S. bailouts of GM and Chrysler Group LLC.
GM denied that the administration is involved in its business.
“The administration’s been true to their word from the start and has not interfered in our business,” Greg Martin, a GM spokesman, said by telephone. “As our actions with the Volt have demonstrated, we’ve always put our customers’ safety and peace of mind first, above all else.”
Akerson, in testimony prepared for today’s hearing, said politics are behind the “disproportionate level of scrutiny” of the Volt.
‘Surrogate’ for Critics
The Volt has become “a surrogate for some to offer broader commentary” on GM and on Obama’s administration, Akerson said.
The hearing follows Obama’s annual State of the Union speech last night, which comes as candidates prepare for the U.S. presidential election in November.
“The Volt’s entry into the market came soon after GM’s emergence from its government rescue and restructuring -- and during this political season,” Akerson said in prepared testimony. “As such, the Volt seems, perhaps unfairly, to have become a surrogate for some to offer broader commentary on General Motors’ business prospects and Administration policy.”
Issa has questioned the delays by GM and the regulator in notifying the public about a safety defect. He asked NHTSA’s Strickland in December whether his agency “deliberately suppressed” disclosure.
Strickland, in testimony prepared for the hearing, said his agency took the “uncommon step” of opening the Volt investigation without any fires reported outside crash tests to “ensure the safety of the driving public with the emerging electric vehicle technology.”
GM began selling the Volt, which Akerson called “a technical showcase for GM,” after a 2009 U.S. government bailout. It was introduced as a concept car at the 2007 North American International Auto Show in Detroit.
Obama has set a goal of having 1 million electric vehicles on U.S. roads by 2015. The Volt, a plug-in hybrid, and the Nissan Leaf, a fully electric model, were the only two mass- produced electric vehicles in the U.S. market last year.
--Editors: Bernard Kohn, Andrea Snyder
To contact the reporter on this story: Angela Greiling Keane in Washington at email@example.com
To contact the editor responsible for this story: Bernard Kohn at firstname.lastname@example.org
© Copyright 2013 Bloomberg News. All rights reserved.