These days, auto safety recalls don’t get much attention. So the news that General Motors was recalling 9,000 of its 2007 Saturn mild hybrids to replace the high-voltage battery pack in each one was no more than a blip in the press.

Behind the scenes, though, it’s an expensive and annoying distraction for General Motors, and a huge blow to Cobasys, makers of the nickel-metal-hydride batteries. For six months now, GM has been forced to divert batteries it should have fitted to this year’s mild hybrids toward its dealers’ repair bays instead.

The bulk of the cars recalled, about 8,000, were ’07 Saturn Vue Green Lines (the last of the old, squarer body); the remaining 1,000 were the brand-new ’07 Saturn Aura Hybrid sedan. For 2008, the company’s Belt-Alternator Starter system was also fitted to the restyled and very popular Chevrolet Malibu, its platform mate the Aura, and a totally redesigned version of the Vue Green Line.

GM discovered the problem last fall, said spokesman Tom Wilkinson, by analyzing warranty claims data on battery packs replaced by its dealers. These days, automakers pore over claims data closely, to identify abnormal levels of claims for any given part or system. “We saw the problem, and did a root-cause analysis” with the vendor—in this case, Cobasys.

The problem turned out to be an unspecified manufacturing defect—neither GM nor Cobasys will provide more detail than that—that created hairline cracks in the plastic modules containing groups of battery cells. While hardly visible to the naked eye, the electrolyte seeping through those cracks into the overall pack housing reduced the pack’s performance—meaning the hybrid system had less power to restart the engine after stops, so the engine remained on much more of the time, compromising mileage.

Wilkinson stresses that no electrolyte leaked out of the pack housing itself, nor were there any fires or other safety issues. But when GM projected the early failure rates out over the 10-year, 150,000-mile life required of the system, it was clear the number of failures would be large. So once the problem was identified and a fix instituted at Cobasys, prudence demanded that all potentially defective packs be replaced as soon as possible.

GM phased the recalls by region, replacing packs first in the hottest climates, since high temperatures increase the stress on a pack. Wilkinson said the last batch of recall notices has just gone out to hybrid owners in the northern U.S. and Canada.

The entire episode has put a cloud over Cobasys, jointly owned by Energy Conversion Devices and Chevron Corp. The company’s long-term future was already up in the air, since GM had announced in March that its second generation of the Belt-Alternator Starter mild-hybrid system will use a lithium-ion pack supplied by Japan’s Hitachi Ltd. Now industry rumors say GM is on the verge of buying Cobasys outright, to ensure greater control over the supply of this critical hybrid component—which it must stock as a replacement part for more than 10 years.

The recall couldn’t have come at a worse time. With gas prices over $4 a gallon, small and midsize car sales have soared as full-size trucks and SUVs clog dealer lots. At those prices, the payback period on a mild hybrid system is shorter than ever, but GM is forced to trim its planned production—earlier this month, the company told Automotive News the target was 27,000—to ensure that the BAS hybrids already on the road work properly.

How does GM feel about all this? “We’re not back to where we need to be,” says GM’s Brian Corbett in measured tones, “We’re selling a lot fewer hybrids than we’d like.”