HAMILTON, Ontario - Automakers must view environmental issues as opportunities to cut costs, not as legislative burdens, said General Motors of Canada's environmental monitor.
Bruce Reid, director of GM Canada's Office of the Environment, said the environment must become an integral part of automakers' day-to-day operations. He was part of a three-member panel addressing cost-cutting through pollution prevention at the Automotive Parts Manufacturers' Association of Canada's annual conference here this month.
If companies are to operate efficiently, Reid said, they must become leaders in environmental issues rather than wait for new legislative requirements to drive their decisions.
'Our customers and society as a whole expect each of us to improve our environmental performance,' he said.
By adopting pollution-prevention techniques, Reid said, the industry can reduce waste and cut costs.
'Everything that we emit, discharge or send to landfill carries with it a cost, including the original purchase of the material, transportation costs, handling, storage, monitoring and control, and of course, treatment and disposal,' he said.
Such costs often are hidden by routine financial analysis, but taking the time to address them can result in significant benefits.
Reid noted that the benefits of a proactive approach are not always immediately apparent, and a real effort is needed to identify cost-cutting opportunities. 'The more data we have, the more readily we are able to sell a particular idea for a process change,' he said. GM Canada uses a combination hands-on and high-tech approach to identify cost-cutting opportunities and involves its people through a 'we care' program.
One result of this approach is that GM Canada has moved to a single Tier 1 supplier that acts as its chemical manager and provider, with fees based on a fixed amount per vehicle. Reid said experience with the program has shown the variety of chemicals required has been reduced, as have on-site inventory and thus environmental risk.
The closer links between company and supplier also have resulted in new and more efficient ways of doing things. This has resulted in lower costs, lower inventory and a reduction of the need for on-site chemical expertise.
Preventing pollution (and improving the cost structure) also has become an industry initiative in Canada, where GM, Chrysler and Ford joined forces with Ontario and federal agencies in 1992 to create the Canadian Automobile Manufacturing Pollution Prevention Project, which now also includes other companies. Reid said the project has shown that a voluntary program to augment the traditional legislative approach provides significant environmental benefits.
LET'S WORK TOGETHER
Panelist Don MacKay, senior vice president of Dana Canada Inc., said that although being a leader in environmental issues could be seen as worth protecting as a competitive advantage, Dana believes it makes more sense to share information. 'Yes it could be (an advantage), but it's the environment ... that's more important,' MacKay said. 'I don't think it's an area where there should be competition.'
MacKay explained how an environmental management system and the ISO 14001 standard have helped Dana Canada and the environment. He said, however, that when Dana began looking into an environmental management system in the early 1990s, he was not convinced.
'But after comparing examples of reacting to problems rather than practically preventing them, the need for change became obvious,' McKay said.
Results of a pilot project for the ISO 14001 standard later convinced the company it could be more competitive under the new standard. MacKay said losses declined, stakeholders' interests improved, and work force morale rose.
Blake Smith, director for environment, energy and vehicle safety with Ford of Canada, paraphrased his boss, William Clay Ford Jr., in saying the industry needs to make it easier for people to say, 'I'm an environmentalist and a car enthusiast.'
Part of accomplishing this, Smith said, is the industry's effort to produce safer, cleaner, more efficient vehicles by bringing new technologies to market and by ensuring that factories meet the highest environmental standards.
But, he warned, the impact of technology will not be a quick fix. He said it will take up to 36 years to replace the worldwide vehicle fleet. And that assumes there are not glitches and that an infrastructure can be implemented.
Smith concluded: 'It's up to you as suppliers to look into your crystal balls to see what technology will succeed and when.'