GM's Road Well-traveled

GM's Road Well-traveled

Zero emission vehicles. Ten years ago, GM's vice chairman Harry Pearce admits he didn't think such a thing was possible. Today, however, he holds out the promise that before the first quarter of this new century is over, commercially viable ZEVs may not be an uncommon sight on the nation's highways.

It will happen, says Pearce and Dennis Minano, vice president of environment and energy and GM's chief environmental officer, not because of who, but rather what, drives environmental innovation at the company. There isn't one single person leading the charge, they say, but rather thousands of GM employees worldwide who have integrated environmental action into their modus operandi.

"The great strength of any company is people," notes Pearce. "There isn't a more important resource. If you have ethical standards or environmental principles or social standards by which you hold yourself accountable, you energize and motivate your people. They're turned on about being an employee and nothing produces greater productivity, more creativity, more innovation than that."

And innovation, the pair agree, is what General Motors is all about in the environmental arena. During a recent interview with editors of [email protected], Pearce and Minano proudly described dozens of GM's environmental achievements -- from improved fuel efficiencies to the use of methane gas occurring in a landfill to power plant boilers to the economic revival of Detroit's Clark Street area and, finally, to Pearce's personal favorite, what he describes as the "extraordinary engineering" of the Precept.

Their message, as featured in the interview on the following pages, was clear: actions speak louder than words. It is why, Pearce and Minano say, they eagerly encourage comparison of GM's environmental programs with those of its competitors. And why GM was the first in the industry to hold itself publicly accountable by third-party standards.

"This is the way to communicate with corporate America," notes Minano, "not on some esoteric basis, but on a substantive basis because this is what will work in the new way of doing business."




Q: GM's environmental principles focus on products, plants and partnerships. What do these elements entail? Is one more important than another?

PEARCE:
They're all important, but I'll start with products. We obviously manufacture products that have a direct impact on the environment. The vehicle itself -- the final end product -- produces emissions. Some toxic emissions, some non-toxic, but nevertheless important emissions like greenhouses gases. The manufacturing process produces its own set of emissions. Our view is that, as a developer and manufacturer of motor vehicles that have a direct impact on the environment, we have a special responsibility to find a way to continue to reduce those emissions. We understand that emissions have health impacts. There are some things we don't know with a high degree of certainty yet, for example, the impact of man-made greenhouses gases in terms of global warming. We certainly understand that it can have an impact, whether or not it has any significant impact vis-à-vis the normal changes in our environment that we have nothing to do with.

Our view at GM is that even though there is a degree of uncertainty, the risk is potentially very high that man-made greenhouse gases do have a significant impact on our environment. So we need to step up now and do what we can to reduce those gases. So with respect to the product itself, we have spent literally billions of dollars over the years reducing emissions and we continue to look for more innovative technology solutions, hybrid technology being one good example.

By way of example, consider our hybrid propulsion system that's been developed at Allison Transmission, a division of GM. If we could replace all of the current diesel conventional power trains in the transit buses in cities with a population of one million or more -- that's about nine cities in the U.S. -- we could save 30 million gallons of diesel fuel every year. It would be the equivalent of putting about 470,000 to 500,000 Precepts on the roads throughout the U.S. So we have focused first on what we call the heavy end of the product line because you get a bigger bang for your buck. That's why we're working down from commercial buses to medium-duty trucks to full-size pickups and then automobiles. The real end is to achieve zero emissions and no greenhouse gases. Ten years ago I would have told you that was unlikely. We now have done sufficient work in the development of fuel cells that we are convinced they will eventually become commercially viable for automotive applications.

Q: In what kind of a time frame?

PEARCE:
It's difficult to put it in a specific time frame, but I would say 10 years from now we will clearly have commercially viable fuel cell powered vehicles on the highways in this country. I drove a fuel cell powered vehicle a couple of weeks ago and was extremely impressed with the progress made in terms of integrating the propulsion system and power plant into the vehicle. And the controls technology is very sophisticated, just like a normal vehicle. We're storing hydrogen on board in a liquid form, but the ultimate solution is to store hydrogen in a solid state. We have committed a lot of resources in R&D efforts to understand how to achieve that storage technology. Once we have that, then we will have a true ZEV vehicle. Not only is it a ZEV vehicle, but it is the most efficient power plant known to man today, more efficient than a gasoline fueled engine. It's more efficient than a diesel engine. If you put those three power plants up against one another, you'd jump about 20 percent in efficiency in each step. So you gain enormous efficiencies in moving toward the fuel cell. Now the benefit of that is obvious. You use less fuel, whatever it is. And obviously that has a solemn and positive environmental impact.

Q: Where do partnerships come in?

PEARCE:
Partnerships are absolutely critical in a variety of ways -- first of all with respect to what I just discussed -- hybrids and fuel cell powered vehicles. We need special fuels. That requires partnerships with all major energy companies. We've got to build the infrastructure through the BP Amocos and the Exxon Mobils and Shells of the world in parallel with what we're doing so that when we're ready to produce that commercially viable vehicle, we have the fuel infrastructure in place to deliver the total system. We have had lengthy discussions with all of those companies and we're doing joint research. They seemingly are committed to the same vision that we are. Quite frankly, whoever gets there first is going to have a significant market advantage.

MINANO: And we're buying some of their products. We are purchasing lower sulfur fuel that we're putting in our vehicles as they're leaving the assembly plant. So it's not just a long-term vision, but also an actual, measurable working relationship. We think that's an important way that partnerships work.

PEARCE: Other partnerships are equally important. For example, we typically need to partner with a municipality or a county or a state when we do super fund clean-ups, as well as partnering with other corporate entities. We partner with regulatory agencies on R&D efforts with respect to environmental advances. There has to be a varied, well integrated set of partnerships among business, government, NGOs and government agencies all working with a single objective of providing cleaner air, cleaner water, cleaner soil. I think one point that tends to get missed is that we're all inhabitants of the same planet. This biosphere that we live in is life sustaining. Without it, we wouldn't be here. So we all have the very same interest in ensuring the integrity of the environment; certainly for our children and grandchildren, to provide them a life-sustaining environment.

MINANO: Another example of partnerships is what we've done at Clark Street. The Clark Street plant at one time was a very large facility with numerous buildings. Working in partnership with the state and the city, the site was leveled, environmental mediation was done and there now are business on the site -- a new economic base for the city. This is an important societal issue -- you don't want to have [abandoned] buildings in your main core city. Because economic growth is there, you're really achieving the triple bottom line. This area of sustainability, we think, is going to be defined by the type of projects and the type of partnerships you have. It's another component of sustainability; partnerships have to make progress.

Q: What or who drives environmental policies at GM?

PEARCE:
The men and women of General Motors do. It's often thought that one person drives the policy, but it's simply not the case and the reason is obvious. It's because of what I eluded to previously: we're all inhabitants of this planet. You have the same concerns about the environment for your family, your children, your friends, your colleagues that I do. And, consequently, all of the men and women of this company are very committed to these environmental objectives. They feel good about the company because the company is reflecting environmental, social and economic values in a balanced way. It's very motivating to know that you're doing something that's fundamentally good. It's a morale issue, but it's also a business issue and they are inextricably intertwined.

MINANO: And there has been terrific support by senior management in this area. It's real, it's consistent and it goes up through the board. Our environmental principles have been supported by the board of directors since the early part of this last decade. I think our environmental principles hold up so well because they reflect the values of our people.

PEARCE: We didn't sit around the office and dream them up. We asked people, "What do you think the values ought to be?" A lot of what goes on isn't glitzy, like thinking about waste in a plant or using less water or less electrical energy to produce a vehicle. We focus on all of those kinds of savings and/or reductions. It's hard work. Plant by plant, facility by facility, we've made enormous progress. But we're never satisfied with the progress that we've made. We publicly report our results and have for some time. Quite frankly, if we were to compare ourselves to some of our competitors, we think what's important is the actual substance of our environmental programs, which speak for themselves. We want to be held publicly accountable. So we have been one of the first, if not the first, in our industry to hold ourselves accountable by third-party objective standards.

Q: You have said, Harry, that corporate ethics and sustainable development are critical enablers of successful business performance. Can you explain what you mean?

PEARCE:
Well, the great strength of any company is people. There isn't a more important resource. In my judgment, the way you truly turn people on is to do the right thing whether it's legally, ethically, socially or environmentally. If you have ethical standards or environmental principles or social standards by which you hold yourself accountable, you energize and motivate your people. They're turned on about being an employee and nothing produces greater productivity, more creativity, more innovation than that.

MINANO: We were very fortunate a few weeks ago to receive a very prestigious award for our recycling efforts. Frankly, it's not just what one plant did, it's our whole resource management program. The team found a way to use methane gas from the landfill adjacent to the plant to power their boilers. What does that mean? We didn't have to use coal. We didn't have to use oil. We used methane gas that accumulated in a natural disposal site. As a result, they began to look at their corporate programs at every facility, began to look at how they were using resources, what they could recycle. They ended up taking some of the fly ash and sending it to Scotts for potting soil. And it saved $50 million a year. That's a real win. These are the financial returns we're starting to see. I think that's what's going to eventually define if you're making sustainable success.

Q: How can General Motors help other companies move the needle?

PEARCE:
We've pretty much started with our supplier community because we have a huge number of companies that provide materials of one kind or another for our final end product, and we have imposed certain standards with respect to our suppliers. If they choose to live by them, they can be our suppliers. If they don't, they won't be our suppliers. We want to send a very strong message that we expect good environmental performance from our suppliers. That permeates down through the tiers of suppliers so that it pretty much encompasses a large part of manufacturing America. I think this can be a very powerful stimulator.

MINANO: I think we're the only auto company that's had a supplier environmental advisory council for a number of years. This is the group that reviewed our decision to ask our suppliers to go to ISO 14001. It's all about partnerships -- participating in CERES, taking a leadership role on Global Reporting Initiative's open reporting initiative, moving forward on the global Sullivan principles -- this is the way to communicate with corporate America, not on some esoteric basis, but on a substantive basis because this is what will work in the new way of doing business. I think we're moving on those fronts and getting a good response from the leading companies of the world.

Q: What's next?

PEARCE:
We've formed a three-way partnership, if you will, with Toyota and Shell to study the future of ground transportation and figure out how to make it sustainable around the world. That may mean different things depending on where you are. A lot of work has been done, but this is a project that's going to take years and the solutions aren't easy. But it's a wonderful example, I think, of the kind of collaboration that's required and certainly a good example of the kinds of partnerships that are required. We now have companies flocking to join this effort.

MINANO: The project is part of the World Business Council for Sustainable Development and is called "Sustainable Mobility." We're happy to see so many people interested in it and that governmental organizations, such as the Department of Energy, will be participating at different levels. They also see the possibilities in acting globally in this area, which is a very unique opportunity.

PEARCE: If some of these technologies are as successful as we believe they eventually will be, we need the infrastructure and that requires everyone cooperating in a singular way.

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Katie Sosnowchik is editorial director of [email protected] magazine, a GreenBiz News Affiliate. This feature is copyright 2001 [email protected] magazine, all rights reserved, and was adapted from the magazine's January/February 2001 cover story.