Padding the bottom line

compiled by Linda Platts

Hardly a company in America is not boasting about its “green” practices and commitment to the environment. To believe all these claims is probably naive, but General Motors has supplied some substantive data that show the benefits of its “green” practices to both the environment and to the company. Not only did GM want to be a better corporate citizen, it saw an opportunity to boost its bottom line and become more competitive, according to an interview on GreenBiz Radio. Ray Tessier, GM’s global director of environmental services, recently announced the automaker has eight manufacturing plants that use no landfill space. While landfill space remains relatively cheap, GM examined all of its waste streams and determined that money could be saved through reuse of some waste materials, and money could be made by selling others. The mantra seems to be waste not want not.

At its Baltimore manufacturing plant, GM found 600 tons of steel were designated as waste each year. By recycling the steel to its own foundries, GM is using the former waste for engine blocks, transmission casings, and other vehicle parts. Additional revenue was generated by selling 520 tons of aluminum and alloy metals to other manufacturers and cleaning dirty oil for reuse on site. More than 360 tons of wood pallets were given to people who reuse the wood, and materials that were combustible were sent to a waste-to-energy facility. While keeping some waste products out of the landfill costs GM money, these costs were offset by new revenues.

In the United States, GM has reduced its waste management costs from $32 million a year in 2000 to just $8 million in 2006. Half of GM plants around the world are on track to eliminate landfill waste by 2010, says Tessier. To achieve these results, GM needed to adopt a new mindset. From top management to workers on the factory floor, everyone was encouraged to view waste as wasted resources. By shifting paradigms and changing business practices accordingly, the company is in a more competitive position in the global marketplace.

GM has continued to innovate by partnering with its suppliers to share the lessons it has learned about reducing waste. Tessier is pleased with the results: “Basically it helps our business because it makes our suppliers more cost competitive, which helps our bottom line as well.”