Zero Factory Waste: Automakers Save Money, and Rake in Green PR

If it's going to hold on to its "greenest automaker" award from the Union of Concerned Scientists, as it has for five years, then Honda has to constantly up the environmental ante. Now the automaker is not only totally eliminating factory waste to landfills at 10 of 14 North American plants, but also encouraging its suppliers to do the same. And if you think it's all just good PR, think again.

Honda's "nil to landfill" work lines up with similar efforts at Subaru, General Motors and Volkswagen. It's not necessarily altruism -- automakers are finding that there are untapped revenue streams in what's called zero waste, some of which can be recycled internally for cost savings. Further, new recycling programs increase overall plant efficiency. Approximately 10 percent of a car's lifetime pollution is associated with building it, so there's a lot of progress that can be made on the factory floor.

According to Ron Lietzke, a spokesman for Honda's manufacturing operations in Ohio:

From a strict standpoint, sometimes its cheaper to bring our waste to landfills. But getting the operations focused on saving waste tends to make the whole process more efficient, which leads to major cost savings at our factories. And we're also trying to be good citizens of our host communities, and they're increasingly concerned about landfill waste.

Everyone quickly saw the green dividend of not wasting anything. You reduce packaging, negotiate a better deal from suppliers, and everyone then shares in the savings.

Getting suppliers in line
Honda's internal landfill goals will be easier to achieve than corralling a huge group of disparate suppliers to do the same, through a just-announced Supplier Sustainability program. But big companies are big accounts -- they have a lot of clout to get results from the many smaller companies that circle them like minnows.

The pioneer in this field is Walmart (WMT), which aims to eliminate 20 million metric tons of carbon dioxide from its supply chain by 2015. The company has 10,000 suppliers in China alone, and if it were a country instead of a company, Walmart would be the fifth or sixth largest market for Chinese exports. It can force compliance, in other words, and so can Honda.

The waste savings are lying around the factory floor. GM at last count had converted 69 plants to landfill-free operation. It is, for instance, using old cardboard boxes from a stamping plant to make acoustic headliner pads for quieter Buick Lacrosses. And it uses paint sludge as filler in the making of reusable shipping containers, too. Bumper parts become new air inlet panels, and carpet is made into mirror frames.

As GM searches for economies that will cut its production costs on cars like the subcompact Chevrolet Sonic, it's increasingly finding them in recycling what used to be waste.

Honda started early
Honda has actually been pursuing zero waste goals for quite a while. Its auto plant in Lincoln, Alabama was landfill-free when it opened in 2001, and the Greensburg, Indiana plant also at the start of production, in 2008. In 2001, Honda was generating 62.8 pounds of industrial waste for every car produced; today it is 1.8 pounds.

Honda engine plants recycled 9,400 tons of casting sand in 2010, and it got reused as mulch, landscaping material and as a base for concrete. A new process for stamping body parts dramatically reduced the volume of steel scrap at Honda plants. The East Liberty plant in Ohio now puts out bins for unused fasteners and bolts, recycling 22 tons of steel annually.

At Volkswagen's new $1 billion Passat plant in Chattanooga, some of the focus is on eliminating waste before it's created. VW paints cars there by dipping instead of spraying them, and it does without a primer coat and a bake oven, which saves 20 percent on water and chemicals. It developed a new process for switching colors that saves the use of 123,000 gallons of paint and solvent. Still, there's some paint waste, but it runs into a bed of dry limestone powder and is blended as raw material for a nearby cement kiln.

Once companies start thinking about ways to reduce waste, they find a lot of them -- and save a considerable amount of money, too.

Related:

• GM's Big Bet on the Made-in-the-USA Sonic Subcompact
• Zero Waste: What it Means