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Sounds like your resistor pack for the climate control blower is going bad. No, it shouldn't be glowing and yes, given the right circumstance (leaves touching it) it could start a fire. Turn the blower off and see if it stops glowing. If it does select one blower speed at a time and see which setting starts to make it glow red. I recommend repairing ASAP.
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Scott Diener
89 300E
93 300E
92 Volvo 740 Wagon aka "Mutt mover"
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