Nobody who consumes any mass media could miss GE’s ecomagination advertisements. From sexy (supermodels in coal mines pushing clean coal) to downright clever (fisherman “catching” desalinated water in bottles), these ads have been everywhere for nearly 2 years. In Green to Gold, ecomagination is used as a key example of driving intangible value with a green pitch. GE has spent many millions positioning itself as an environmental leader in no uncertain terms: An ad for GE’s wind business in the Journal today says that the turbines are “yet another example of our blueprint for a better world.”
So it’s surprising to hear that GE’s transportation business has, according to the Journal, “pushed to weaken smog controls for locomotives in rules about to be proposed by the EPA.” The EPA says new regs (following similar rules for diesel trucks) will cost the train and ship industries $2-4 billion over 23 years, but would save the country $70B in health and environmental benefits, including reduced cancer rates. Sounds like a no-brainer.
But the execs from GE’s transportation division are saying the technology that trucks use is not ready for primetime for trains. Now I’m not an engineer (in either sense of the word), so I can’t judge that claim. But it’s not great for GE that both a competitor and the president of the Engine Manufacturers Association — representing 10 companies in this space — told the Journal that the industry could in fact meet the new standard. In quite a dig, the director of engine design for competitor Electro-Motive Diesel said, “We’re not making a big thing out of being green, but we’re definitely intending to meet all of the EPA rules and requirements.” Ouch.
This kind of story makes me ask: Does GE’s transportation business know how its battle with the EPA undermines the company’s marketing efforts to position GE as an environmental leader (including, as the Journal points out, ecomagination ads about locomotive engines)? It’s the same question we ask in Green to Gold about why Toyota supports industry groups that lobby against higher fuel standards on the one hand while its other hand is promoting its fuel efficiency and hybrid technologies.
I’m more than willing to say that GE and Toyota are environmental leaders in many ways (and I have said it often), but this kind of disconnect between a business unit or government affairs and the positioning of the entire company on green bona fides is value-sucking at best. At worst, it draws even the Wall Street Journal into effectively crying “greenwashing.” (The title of the article was “As It Polishes Green Image, GE Fights EPA”, which sort of tarnishes the image, no?)
It’s hard to measure brand and intangible value, but I’m guessing that the value of ecomagination is far higher than the cost to the transportation business of retooling or innovating. These tradeoffs are not easy, but having different “hands” of the business at odds is probably not part of any company’s “blueprint.”
Andrew
UPDATE: GE has responded to the WSJ article I reference above. Here it is in its entirety.
We are having routine technical discussions with the EPA on how to achieve significant and sustainable emissions reductions as part of an upcoming notice of proposed rule making (NPRM). The rule will require reductions in both particulate matter and nitrogen oxides (NOx) from new locomotives as well as requiring retrofits of some older locomotives. GE strongly supports this effort and agrees with the technical feasibility of nearly all of the points that will make up the NPRM.
We are continuing to discuss the appropriate new locomotive emission level for nitrogen oxides (NOx) in 2017. GE shares the EPA’s goals for aggressively reducing NOx emissions. GE’s discussion with EPA concerns the level that is technologically achievable and sustainable for the useful life of the locomotive. EPA has stated a 75% reduction in NOx is achievable and sustainable. GE has expressed the view that a 65% reduction is more technologically sustainable over the life of the locomotive.
We spend millions of dollars every year to explore all the technical options and have a long-standing cooperative relationship with EPA regarding locomotive technology issues. This is a good faith discussion about what the available technology can achieve and the best way to successfully reduce these emissions balanced with efficiency and carbon (CO2) emissions.
GE was the first to bring to market locomotives that met the EPA’s January 2005 Tier II emissions standard. The Evolution Series locomotive platform disproved the belief that increased environmental controls could not be imposed without increasing fuel consumption. This technology resulted in the fastest adoption of reliable and environmentally sound locomotive technology. More than 1,500 Evolution units are in service today. The company also has a hybrid freight locomotive in development, with a prototype due later this year.
One Response
Great site and I hope to check out your book soon. I too was surprised when I heard GE was fighting the EPA ruling, seems like something I would expect out of a big pharma company. Anyways, I posted on this news a few weeks back at my blog, Green is Good