As mentioned upthread & here, yes, the early Fieros did have a habit of catching fire. There were primarily two reasons for this:
GM refused to budget for a new engine for the car-it never really wanted to have a two-seater outside the Corvette, but after the second gas crisis, the turkish engineer who'd been agitating for what would become the Fiero sold it to management as an economic commuter car.
The idea was to save money by using components (including the existing engine) from GM's A-body front-wheel-drive sedans, amongst others. The Pontiac 2.5L engine was too tall to fit properly in the mid-engined Fiero, and with no money for a complete redesign, the solution was to install a shallower oil pan, making the whole engine run a quart low (at least) at all times. That four was also not especially resistant to burning/leaking oil; so it was always a risk that the engine would be starved of lubricant, overheat, seize and catch fire.
I also understand that there were problems with the factory wiring on the electric radiator fans, such that airflow was never properly managed in the engine compartment, leading to... overheating and fire.
These problems were eventually fixed, but a reputation for burning up at stoplights is a hard one to overcome with normal consumers.
(I say 'normal consumers' here. Lamborghini has made many fire-prone models, but Lamborghini buyers are Not Normal.)
Radiator is at the front of the car, not in the engine compartment. If you bottomed out, you could break your coolant lines, as I had done with mine 20 years ago.
GM refused to budget for a new engine for the car-it never really wanted to have a two-seater outside the Corvette, but after the second gas crisis, the turkish engineer who'd been agitating for what would become the Fiero sold it to management as an economic commuter car.
The idea was to save money by using components (including the existing engine) from GM's A-body front-wheel-drive sedans, amongst others. The Pontiac 2.5L engine was too tall to fit properly in the mid-engined Fiero, and with no money for a complete redesign, the solution was to install a shallower oil pan, making the whole engine run a quart low (at least) at all times. That four was also not especially resistant to burning/leaking oil; so it was always a risk that the engine would be starved of lubricant, overheat, seize and catch fire.
I also understand that there were problems with the factory wiring on the electric radiator fans, such that airflow was never properly managed in the engine compartment, leading to... overheating and fire.
These problems were eventually fixed, but a reputation for burning up at stoplights is a hard one to overcome with normal consumers.
(I say 'normal consumers' here. Lamborghini has made many fire-prone models, but Lamborghini buyers are Not Normal.)