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Less Water Means More Money

By saving water, Michigan companies discover new profits

August 10, 2005 | By Andy Guy
Great Lakes Bulletin News Service


Ford Motor Company is transforming its Rouge Center complex into the world’s largest sustainable manufacturing facility.

When an engineering intern from Western Michigan University figured out a way to save E/M Coating Services thousands of dollars each year simply by recycling the company’s wastewater, Environmental, Health, and Safety Coordinator Joy Neumann said the proposed modification “was pretty much a no-brainer.”

For the strikingly low cost of $85 in pipe and a few hours of labor, the Shelby Township-based auto parts supplier could significantly reduce its water consumption, decrease the amount of wastewater it discharges to the Detroit municipal system, and save $6,200 annually. The minor change, which involved rerouting the company’s plumbing to reuse treated wastewater, also would enable E/M to cut chemical use by more than 20 percent, saving an additional $5,300 per year on compounds like caustic soda and calcium chloride.    

“They had maintenance doing it the next day,” Ms. Neumann recalled.

The intern, who now works for a private consulting firm in Kalamazoo, Mich., also uncovered in 2003 another strategy to use wastewater more effectively that would allow the company to slash its water needs by more than 60 percent and achieve an additional $7,600 in annual savings.

E/M has yet to act on the recommendation. But the case demonstrates that, even in Michigan, a state surrounded by the largest freshwater system on the planet, private investments in more proficient water use can make fiscal sense. In fact, across the Great Lakes State, a growing number of companies large and small are discovering that aggressive action to conserve water quality and quantity has the real potential to reduce their cost of doing business, enhance their corporate image, and add value to their financial bottom line.

Linking Wealth and Water
Ironically, the movement is beginning to show measurable results just as the state’s top business organizations circle the wagons against more modern principles for water use in Michigan. They portray new state water standards to ensure quality and quantity as an expensive intrusion in the private sector that will saddle business with rising costs and sap the region’s economic competitiveness in the global marketplace.

Responsible regulations to protect public health and the environment can come at added short-term expense. But mounting evidence from the factory floor also suggests that an effective water policy pays off in the long run for both the economy and the environment. What is increasingly clear is that thoughtful investments in water stewardship today not only sustain the resource in a healthy condition for future business. They also can make industry more efficient and help reduce costs, protect jobs, and actually enhance economic competitiveness. Now even the intern knows it.

“We’re in the middle of the land of plenty, so water, as crucial as it is, just is not always on the radar screen,” said Bill Stough, CEO of Sustainable Research Group, an independent consulting firm based in Grand Rapids. “It is not typically viewed as a big expense. And it’s rare to find a company that tracks water use, or that has any sort of metrics to measure use or conservation. Consequently, they don’t know how much they are using or what’s it costing them. Even though they get charged twice for every gallon — once on the way in and once on the way out.”

Success Stories
But a handful of visionary leaders from the corporate sector are bucking that trend. Executives and employees at major companies like Ford Motor Company, Steelcase Inc., Herman Miller Inc., and General Motors Corporation have voluntarily begun to account more carefully for water as it passes through their operation. What they are discovering is that more sustainable environmental practices are compatible with bottom line business goals. Consider the following:

  • In 2003, Dow Chemical Company’s resource conservation plan reduced water needs across its global operation by more than 5 billion gallons — including a two billion gallon reduction in annual use at the Midland, Mich., site — and delivered approximately $15 million in value back to the company. 
  • An audit of water use at one Michigan light manufacturing plant revealed the potential to reduce cooling water consumption from 19 gallons per minute to one gallon per minute and save the company $6,500 a year.
  • One Michigan packaging company slashed water use by more than 1.2 million gallons a year and earned $5,300 annually. 
  • March Coatings Inc. invested in modern spray guns that allowed the company to reduce hazardous wastes by 7 percent, electrical use by 25 percent, and water and gas consumption by 15 percent.
  • General Motor’s Warren Transmission plant recently installed a new water treatment system that enabled the facility to triple the efficiency of water use and reduce annual water need by some 1.2 million gallons. The company also cut costs by $2,200 a year.

From 2000 to 2003, General Motors cut overall water use at its Michigan facilities by more than 15 percent. The Pontiac Assembly Plant, for example, slashed the amount of water purchased and sent back to the wastewater treatment plant by 52,000 gallons per year. The Orion Assembly plant dialed its water need back 12 percent. And the Saginaw Metal Casting Operation began reusing more than 20 million gallons of treated waster water every day, a change that also limited discharges to the Saginaw River.

“If you’re producing waste,” said Susan Kelsey, GM’s manager of environmental services in Southeast Michigan, “You’re losing money.”

No More Magic Fairy Dust
The drive to eliminate wasteful resource use and inefficient practices — and, by extension, cut costs — is leading a growing number of companies to more closely scrutinize their traditional water use practices. Michigan companies typically pay little attention to how water flows through their operation. But closer inspection is revealing some remarkably simple ways to simultaneously implement more responsible water use and save money.

General Motors, for instance, conserved more than nine million gallons of water at the Romulus Engine plant, in part, by flicking the switch from manual to automatic on a critical cooling process. The company also built the waste pipes at the Lansing Grand River plant above ground to ensure leaks are repaired immediately. E/M Coating spent $85 on new plumbing and saw a return on investment in less than five days.

“We just addressed a bunch of mundane kind of things,” said Carl Ozar, an environmental engineer at Ford Motor Company, about how his company cut water use at its Livonia transmission plant by 27 percent from 2002 to 2003.

“There was no magic fairy dust,” Mr. Ozar said. “We did some leak detection, made some repairs, and began tracking the system on an ongoing basis. But we’ve discovered significant [financial] savings. What we’re finding is that the initial purchase cost of water is not much. But the discharge fees can be substantial.”

Since 2000, Ford lowered its global water consumption by 17 percent — more than 4.3 billion gallons — due to an aggressive conservation plan. The company claims the program saved $14.2 million during that time.

Mr. Ozar said that costs associated with industrial water use include the energy to pump the resource, the various chemical packages to treat it, and the need to dispose of wastewater. All of which are tied directly to the amount of water used.

Changing Times
Historically, heavy water use is not an issue in Michigan, which is flush with groundwater and surrounded by four of the five Great Lakes. Ready access to a world-class water supply — matched with the innovative spirit of America’s hardworking heartland — provided the one-two punch that gave Great Lakes states a competitive edge through the 19th and 20th centuries over the rest of the industrializing world.

To this day the regional economy relies heavily on extracting vast amounts of water to generate electricity, refine petroleum, and manufacture chemicals, steel, paper, cars, and other goods. But today industry’s ability to compete and succeed is measured not necessarily by how much water a company can pump, but rather how smartly they employ the resource.

“These [water stewardship efforts] have significant implications for our ability to compete,” said Ray Tessier, director of the worldwide facilities group at General Motors. “Competition in the global economy is intensifying. And we have to become more efficient and effective in how we use resources across the company. Innovation. That’s the name of the game.”

Andy Guy directs the Michigan Land Use Institute’s Great Lakes Program. Reach him at aguy@mlui.org. This article is part of the Institute’s special report, Water Works: Growing Michigan’s Great Lakes Opportunities, which is available online or by mail order at www.mlui.org.

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