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General Motors And Its Impact On The Environment Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 3279 words Published: 1st Jan 2015

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Industrialization and technological advancement have resulted in humans having had to bear an opportunity cost in the form of environmental damage for increased production and the firms then face this opportunity cost in the form of reduced profits. Owing to the enforcement of such policies many companies have been made to re-evaluate their production strategies and have thus been negatively affected. In the United States, as is the case in most industrialized nations, the leading cause of pollution is the industrial community. Therefore, because of this, most of the industrial sector is under heavy surveillance by the American government so as to prevent any violators of environmental policies or acts and thus reduce the effects of environmental damage. 

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Pollutants that emanate from automobile operation have begun to create environmental problems of a considerable extent. According to a report around seventy percent of the carbon monoxide, forty-five percent of the nitrogen oxides, and thirty-four percent of the hydrocarbon pollution come from automobile exhausts in America (Columbia Encyclopedia, 2007). Moreover with regards to this fact both the authors, Breno Nunes and David Bennet (2010) stated in their article that “the main environmental impact from car production is down to solid waste generation, emission of volatile organic compounds (VOCs) and high energy and water consumption. Inadequate or irresponsible management of landfill sites and wrecker’s yards may also contaminate the soil and aquifers as end-of-life cars are dumped or scrapped. Add in the environmental impact of day-to-day car usage and a dark, sooty, gloomy environmental picture looms through the murk.”

These procedures when left unchecked led to severe environmental damages which can be reflected in the fact when according to Martin V. Melossi (n.d) who stated that these damages were confirmed once again by the “killer smog which plagued London and New York, causing over four thousand and two hundred deaths in those cities, respectively. This led Congress to legislate the National Air Pollution Control Act in 1955 so that more theories could be tested on the pollution of the atmosphere.

Furthermore, according to the Toxics Release Inventory (TRI) of the U.S. Environmental Protection Agency (EPA) (2000), “approximately 2.95 million metric tons (6.5 billion pounds) of toxic chemicals from 2,000 industrial facilities have been annually released into the environment, which includes almost 45,360 metric tons (100 million pounds) of chemicals and agents that have been recognized to have been causing cancer. Such is also the case for General Motors, part of the leading automobile industry, where the business corporation has been throughout the years accused and penalized for damaging the environment through activities that directly affect the ecosystem.”

General Motors and its impact on the Environment

Martin V. Velossi (n.d) in view of the damages caused by the automobile industry to the environment stated as to the purpose of the automobile industry pursuing such a damaging path that affected the environment that General Motors, Ford, and Chrysler did not think that they could sell small cars. They believed that there wasn’t enough demand for them. So far as they had less expensive fuel for their cars, bigger and stronger automobiles would be manufactured. These bigger cars had a lot more horse-power in them, which facilitated faster travel. Cars with a built-in automatic transmission, which were being offered alongside 91 percent of the cars, resulted in a better and more comfortable ride. What the companies didn’t realize was that there would be a few negative externalities that they would have to deal with, in pursuit of their goals. Gasoline shortages and air pollution were the direct result of such actions. This clearly reflects the purpose of the automobile industry in flaunting environmental acts and legislatures.

According to Mike Westfall (2009), General Motors were accustomed to having been in trouble for their nefarious toxic waste disposal methods. An example is stated where the EPA complained about one of the New York General Motors plant which was deemed to pose a major hazard to human health. It was said that the General Motors’ plant released enormous amounts of PCB which are cancer-causing in nature. The plant was deemed very hazardous. What this shows is the extent of the damaging inflicted by the company since the 19th century when it began its foundry related operations. 

Mike Westfall further demonstrates and supports his facts by interviewing Mike Bennett (2009), who represented General Motors workers, who stated that the General Motors Flint Ternstedt factory had numerous chemical ponds where lethal and poisonous elements were disposed of. A lot of the dwellers of that area were highly affected because they had wells which were polluted, thus their drinking water supply was no longer clean. The people who worked in that factory had become exposed to the deadly toxins, too, and they were infected by cancerous cells that speeded up their deaths by around three times the national average.

Furthermore, in the recent case of California v. General Motors Corp. (2007), California filed a suit against six of the world’s leading automakers namely GM, Toyota, Ford, Honda, DaimlerChrysler, and Nissan because of the fact that their vehicles contributed the most to global warming and heavily effected California. The complaint declared that all the aforementioned companies were involved in a national crisis because they discharged more than 289 million metric tons of emissions, which ranked them highly worldwide. The lawsuit sought for monetary damages for the environmental degradation that occurred in California.

According to the Public information office whereby the United States announced $773 million settlement with General Motors to resolve environmental liabilities and according to the information released by Ellen Davis, Edeli Rivera and Jessie Erwin (2010), the old General Motors would have to give more than $641.4 million. Other stipulations included giving more bursaries in the form of non-cash assets. These were to be given so that the old plant sites which have been polluted could be properly sanitized against toxicity. Moreover, the old General Motors has already spent nearly $11.5 million in order to tidy up their plants which have been contaminated.

This showed that the past activities of General Motors had been damaging to the environment proving to have been detrimental for the company itself as well as the environment. After these lawsuits had been filed against General Motors and bankruptcy had been declared, a new corporation, the new GM, was formed which aimed at being environment friendly. 

Strategies Implemented

General Motors had to with respect to their past proceedings, adapt to the changing environment and client base so as to earn sufficient profits with regards to having an environment friendly image. This was an essential point to consider as was elaborated by Breno Nunes and David Bennet (2010) stated that “defining strategic operations objectives is strongly connected to environmental issues. The operations function of a company encounters environmental protection issues directly because it’s the main source of harmful emissions, so environmental management programs and policies should be carefully developed to strengthen operations strategy.”

Moreover with regards to the three leading companies, Toyota, GM and Volkswagen, the authors stated that these companies “have addressed the main environmental impact of manufacturing through technology-based solutions. Paint shops were converted to use waterborne paint sprayers, and water-based solvents were also introduced into processes. Energy and water conservation, reduction of greenhouse gas emissions, waste management (including recyclable and non-recyclable waste) and recycling are the main initiatives to achieve greener production.”

On this matter the company itself, General Motors, (General motors, 2002) stated that it had contributed to the clean-up and drop in the amount of emissions. They have also saved up natural resources and got rid of the majority of the effluents. The company has also released seven annual reports which give further details on the matter at hand. This in fact shows the efforts involved on behalf of the corporation to improve the environmental conditions and to make significant reductions in the damages inflicted by the corporation. 

According to a newspaper article (Mich Warren, 2008) it was asserted that Gary Cowger, the vice president of General Motors global manufacturing and labor, ascertained that GM could find the right solutions to the problems it faced which limited their production capabilities due to the environmental laws imposed on the automobile industry. He, Gary Cowger (2008) further stated that as novel ideas in the propulsion of automobiles are proposed, General Motors is making enormous strides to diminish the negative impact on worldwide ecosystems.

The newspaper further established the fact that more than 96 percent of the leftover discharge is recycled or salvaged at General Motors’ plants and 3 percent is transformed into energy. This is what General Motors is striving for and it will help sustain the environment. General Motors are receiving almost $1 billion, annually, from their salvaged material sales. $16 million is further received from its sale of recycled materials (Mich Warren, 2008). 

Government and Environmental Group Relations

For a company like General Motors to maintain its market share and customers it was necessary and imperative that the relations and ties be strengthened with the government and environmental groups and agencies so as to promote an image where they reflected the fact that the company was not only about earning profits but cared for the people that it directly and indirectly targeted. 

In an article Larry Cotrell (2001), GMs environmental engineer commented on the importance of establishing ties with the government and stated that the regulations imposed by the state were far more rigorous and inflexible as compared to the regulations imposed by the federal government. He stated that “State governments know better what concerns and benefits its citizens in each municipality. Also the federal government doesn’t have to cope with the various industrial/environmental complexities and differences of each of the 50 states.” 

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Dennis A. Rondinelli and Michael A. Berry (2000) with regards to this fact stated that more customer loyalty can be sought by being environmentally friendly. This can also result in an increase in the overall efficiency. Workers would also be willing to stay for longer periods of time. Proactive environmental management allows companies to maintain control over their own environmental activities, provide evidence of planning and interaction to address environmental issues, and influence future regulatory and competitive requirements.” 

Furthermore the authors in their journal affirmed that General Motors was indeed a company that maintained an association with such environmental agencies. They stated that “General Motors entered a partnership with the Nature Conservancy to provide $5 million over five years to help the environmental group preserve land and water ecosystems in North America, Latin America, the Caribbean, and the Asia-Pacific Region.”

In addition to this fact, the authors pointed out the fact that “General Motors (1998) created a ‘GM Suppliers Environmental Advisory Team’ in 1997 to improve mutual understanding of environmental programs and efficiency and evaluate new ideas to promote eco-efficiency throughout its supply chain.” which goes to reveal the extent to which environmental friendly initiatives were taken by the company. 

The New General Motors: Environment friendly vehicles

According to Chris Foster and Ken Green (200), “The rest: in these cases, green issues receive only limited attention, most commonly in the form of a ‘compliance check’. Little innovative effort will be directed specifically to improving green performance in these cases. However, if the environmental impact of the product or service is linked to its effectiveness in providing its main function, green performance may be improved indirectly: such achievements may or may not be promoted as part of the product-marketing effort. If they are, green issues may receive additional attention, as in situation.”

Therefore when considering the case of General Motors, such innovative efforts as the introduction of EV1 as well as the research in hybrid and fuel cell vehicles (HVs and FCVs) will help in improving the automobile industry by reducing the environmental damages. Concerning the development of HVs and FCVs, Vanessa Oltra (2007) stated that “As a consequence since 2000, there is a significant increase in research and development activities of car manufacturers in the field of fuel cells. Even if a majority of stakeholders present FCVs as the future new technological paradigm for transportation, there remain a lot of uncertainties concerning the production and the storage of hydrogen, the indirect emissions and the costs of the necessary infrastructures. That is the reason why more recently, HVs have progressively developed and plays now a dominant role in the innovative strategy of car manufacturers.” Moreover, concerning this issue, Robert F. Service stated that it would be far from reasoning to give up on the technology available at hand. There are just two types of vehicles which can get the job done, only one of which are available for sale in the markets in the near future.

As of recent date General Motors (General Motors, 2010) was bestowed the honorary Energy and Environmental Excellence award in view of the efforts that it contributed towards sustaining the environmental conditions of the ecosystems. This award helped reduce the effects of the past stigmas associated with the dealings of GM whereby they had been on several occasions been accused and heavily penalized for the number of damages they had inadvertently caused to the environment from the introduction of such vehicles and automobiles that led to such adverse acts. 

The company recently introduced a vehicle known as the EV1 which was an electric vehicle, so as to combat the limitations that environmental laws imposed by the government on the automobile industry. This form of a vehicle was powered only by using batteries. This change was not only an initiative to introduce this vehicle but a radical significant change was also brought about in the workings of the company.

Brian C. Johnson (1999) stated with respect to the introduction of this vehicle that “In the case of General Motors, a change in environmental mindset helped lead to the development of a revolutionary new vehicle, the EVl, while the same vehicle also continues to be the force behind further change at the company, and even in the industry as a whole.” He further evaluated the benfits of this type of a change whereby he stated that “Clearly, the EVl has environmental benefits, both in terms of improved air quality in the long term and environmental compatibility. Since the EVl does not rely on petroleum for its propulsion, the power train is significantly more environmentally friendly than internal combustion vehicles.”

Moreover the author suggested that this initiative was in no regards a product that was launched keeping in mind the environmental benefits it could reap. He stated that “in the early stages of developing the EVl/Impact, very little thought was given to using the EVl as a tool to improve GM’s environmental image. It was only later that executives realized that the EVl could have the double benefit of simultaneously improving the company’s technological and environmental images, both of which were in dire need of attention.”

In addition to this fact the author goes on to imply that “The only way that GM was going to improve its environmental image was to do something tangible. The EVl is about as tangible as one can get. If GM is able to use the EVl to make its first leap toward the environmental compatibility of its products, it could find itself in a better position than any domestic automaker-to be seen as the environmental car company.”

Furthermore, Dr. Thomas Turrentine, et al. (2006) found that the advantages pertaining to hybrid cars were numerous and not only because they were environment friendly. They have the potential to outperform other currently existing vehicles in the matters of fuel efficiency. They stated that “Oil is a finite resource, and many have predicted that we are reaching what is called peak oil, the point at which the rate of extraction of oil from all developable oil resources and reserves begins to slow.” This reflects the fact that due to greater dependency on oil, the reserves will quickly diminish, hence establishing the need for such hybrid vehicles.

With regards to the company the authors stated that “General Motors’ Silverado truck is a “light” hybrid. It replaces the normal flywheel of a gasoline engine with an “integrated starter generator” that shuts the engine off whenever the vehicle is not moving, improving fuel economy by a few percent.” This depicts the sustainable methods being adopted by the company. Moreover they also stated that “In theory, HEV technologies can make all vehicles use less fuel than a normal combustion design, whether they burn gasoline, diesel, bio-fuels, natural gas, or hydrogen. Hybrid vehicle designs improve the environmental performance of all of these vehicles and stretch their potential to meet demand in the future. However, no HEVs are sold yet using one of these other fuels.” In addition to this the author also stated that, “HEVs provide a broad set of benefits to consumers including better fuel economy, quiet operation, low to zero emissions in sensitive locations such as schools and enclosed parking areas, better fuel economy instrumentation, longer lasting and better braking designs.”

Therefore when considering the case of General Motors it can be recommended that the company in tis proactive environment friendly research should research upon innovative methods and employ them in order to effectively improve its image as well its sales of greener products such EV1 and hybrid cars. As Chris Foster and Ken Green (2000) effectively stated that, “Involving sales and marketing, two functions crucial to communication between a business and its environment, would seem to be essential to success in this process. In addition, if exchange of information about green issues between the different actors that make up the green innovation framework could be established as the ‘norm’, it would be easier to balance changes that bring ‘greener performance’ with the other factors that must influence the direction and outcomes of R&D projects.”


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