General Motors is working hard to establish itself as a leader in the market for high-tech eco-friendly vehicles, but its actions since coming out of bankruptcy raise doubts about the depth of the company’s environment commitment.
When GM emerged from bankruptcy, it was freed of responsibility for rehabilitating dozens of toxic waste sites in 13 states where it had manufacturing plants. In a ruling that is expected to apply to all communities with former GM sites, Judge Robert E. Gerber sided with GM in a lawsuit filed by New York’s Mohawk Nation of Akwesasne seeking $225 million in cleanup funds.
The Detroit Free Press reported that GM’s 270-acre Massena powertrain plant in New York, near the Canadian border, is probably the worst polluted site among the more than 100 properties shed by the automaker in bankruptcy. The site contains several areas that “received thousands of tons of PCB-contaminated sludge from the dumping of hydraulic oil” and includes an open dump “as well as millions of gallons of open waste lagoons,” according to paperwork filed in GM’s bankruptcy case.
The PCBs and other toxins close to the tribe’s reservations near the St. Lawrence and Grasse rivers are linked to the killing of wildlife, harm to plant species, and multiple threats to public health.
Judge Gerber’s ruling stated that “any Old GM properties to be transferred will be transferred free and clear of successor liability.” Since the “New GM” is technically a new company simply purchasing the assets from the old GM—renamed “Motors Liquidation Company”— it is cleared of legal environmental responsibilities associated with its former incarnation.
But in the court of public perception—where a green image can mean more sales of fuel-efficient cars like the upcoming Chevy Volt plug-in hybrid—GM could face greater scrutiny. Yet, the story in the Detroit Free Press in early August failed to reach the national stage, and was drowned out by front-page stories a few days later about the potential for the Chevy Volt, due out in late 2010, to get 230 miles to the gallon.
Public Money But Not the Public Good
Last December, former General Motors CEO Rick Wagoner pledged to Congress to become a leaner and greener company—if the federal government rescued the company from financial ruin. Thanks to taxpayer money—the total tab is estimated at nearly $50 billion—GM was able to cast off a mountain of debt and its reputation for making gas-guzzling vehicles. But the company is expressing no interest in using any portion of those funds for cleaning up toxic sites. These costs are estimated at $500 million, or about 1 percent of bailout dollars. The Obama Administration and its Auto Task Force failed to ensure that GM’s toxic legacy was addressed as part of the company’s restructuring.
Given the shift of debt to Motors Liquidation Company, which has a little more than $1 billion to wind down its operations, it’s unlikely that “Old GM” will be able to meet its environmental commitments. Without the cleanup money, states and municipalities have little hope of opening large disused sites—such as Buick City in Flint, Mich.— to new development and new jobs, and the health risks and environmental damage to surrounding communities will indefinitely remain.
The New GM has also decided not to join a program that safely disposes of mercury from recycled automobiles, according to a recent report by Associated Press. Without GM’s participation, that program, called the End of Life Solutions Corporation, will have a difficult time safely disposing of GM vehicles under Cash for Clunkers—another taxpayer-supported effort that has benefited GM’s business. According to Department of Transportation figures, nearly 18 percent of new vehicles purchased under the $3 billion dollar Cash for Clunkers program were General Motors products. Exposure to mercury through contaminated air, water, and food can cause birth defects and nervous system damage in adults and children.
GM declined to support the program, claiming that the new company has not built vehicles with mercury switches and has no plans to do so in the future. But many of GM’s older vehicles that contain the switches have been sent to an early grave under the Cash for Clunkers program—and those vehicles will continue to get recycled for years to come. Approximately 750,000 vehicles will be recycled through Cash for Clunkers. The old GM manufactured more than half the cars on the road containing mercury switches.
The End of Life Vehicle Solutions Corporation is a partnership of automakers created in 2005 to prevent contamination from the disposal of mercury switches, which were used in cars until a few years ago. The program was designed to last until 2017, when it is estimated that most all of the cars containing the switches will be off the road.
GM’s contributions to the End of Life Vehicle Solutions Corporation contributions were less than $1 million a year—a relatively modest fee for a company that measures even short-term success in terms of billions rather than millions. But the new GM is holding firm to separating itself from legacy expenses of the old GM—even when the environmental stakes are high and the costs are low.
Our attempts to contact GM for a response have been unsuccessful so far.