Manufacturers See “Green” Benefits, American Consumers See “Idol”

(Editor’s Note: Rotor Clip blog contributors, Don Thoms-Cappello and John Hardee, have very different views of the environmental agenda as it applies to business.

Don TC thinks consumers should be urging companies to do more to push the “green” agenda.

John Hardee thinks the movement is nothing more than a misguided series of government mandates.

Read the next two blog entries as our verbal pundits square off on the subject. Be sure to weigh in with your comments as well.)

A recent study by IFS North America polled manufacturing professionals about what specifically is driving their companies to explore options in the green industry, the majority of them listed “management directive” first and foremost.  After that, “social responsibility”.  Third on the list?  “Customer demand”, with 50% saying customers were generating interest and advocacy.

At the same time, Fox’s American Idol finale generated a 6.2 on the Nielsen Rating scale, which means that 95% of its 18-48 adult viewers have continued to faithfully stay tuned to the show. 

So despite all the hubbub and hoopla about the green movement being grassroots, the majority of management, at least in this study, believe interest for green initiatives is primarily generated in-house…. and more Americans are consistent in their television watching than they are in advocating the green movement.

Now why is this bugging me?  Half of manufacturing officials in this kind of poll saying they feel outside pressure from their customer base is nothing to sneeze at.  Half is solid.

Half, however, is not a mandate.  Half will not move the business world into action right now.  Half won’t win you a music contract off a reality show, either.

With a stumbling recovery, a bloated unemployment rate and a US government hampered by tough decisions like “how to break the 14^th amendment in a way that scores political points”, the last interest group left that has any hope of changing the American manufacturing landscape quickly in an environmentally conscious way is the consumer base.

And to be honest, they’re (we’re) missing a golden opportunity right now.  Studies like this prove there is a business community out there that is truly open to exploring the clean tech landscape.  Most execs look at the numbers and know green conversion in their products, services and operations are going to save money in the long run.  The problem, as always, is that when every dollar is so directly tied to a business’s actions, the safer choice is always to lean towards status quo.  Not to mention, the bigger the company, the harder it is to change at all.  Consequently, big innovations need to be prodded and pushed by the outside world more than anything.  Business needs to see bags of letters dropped on the boardroom table, a la Mister Smith Goes to Washington, in order to rally every department (and scare shareholders into going along with the inevitable price fluctuations when a company changes course.)

Hell, with the “innernet” you don’t even have to write a letter anymore (although I’m of the conviction it makes more of an impression than ever these days.)  All I’m saying, Consumer Joe Shmoe (and I mean “shmoe” with the utmost respect) is that you literally have the keys to a prosperous future for our country at your fingertips.  Instead of using them to vote for that kid on the TV with the golden pipes, how about using them to push for the future to get here faster?  Call your favorite auto company and ask how they’re currently planning to top the Prius or the Volt.  Go to your local business center and ask the guys in the big building what they’re doing to convert to a carbon-neutral operation, and if they’re using other local companies to do so.  If you want to play hardball, call your local congressman (or the intern who will most likely answer) and let them know your vote is heavily influenced by tax incentives to local manufacturing companies who adopt and incorporate energy alternatives. 

An active customer breeds a smarter business.  Trust me, Simon Caldwell would agree.

(And yes, I’m aware he’s not on the show anymore.)

 (….And no, I will not watch Glee with you afterwards.  If I want to relive high school, I’ll dust off my copy of Beastie Boys’ Ill Communications and hit up the fro-yo stand at the mall, thank you very much…) 

Donal Thoms-Cappello is a freelance writer for Rotor Clip Company, Inc.

A Toast: To CFCs, SUVs, DDT, GHGs, and Everything Else the EPA Wants DOA, ASAP. OK?

I feel it necessary to begin by stating that I share my colleague's opinion on two points: It is the individual's responsibility to make their wants known and to be more proactive with whatever entity--be it business or government--able to effect those desired changes; and American's are not very interested in pushing the green movement forward. Although, regarding this last point, only statistics can prove if it's because they're sedated by trite entertainments or because they haven't fallen for the green lobby's promises of unicorn-infested utopia.

The problem with the green movement is that it isn't an individualistic grass-roots movement; it's legislated mandates fraught with burdensome restrictions and financial punishments designed to either bankrupt the worst offenders or force them into Cap-and-Trade schemes, whereby they may continue to be naughty but must pay for the privilege. It's an economy based on Chicken-Little-hysterics, radical ideology, and government subsidies, rather than one driven by the free-market. 

It is understandable that "management directive" tops the list as the greater motivator of green conversion amongst the companies responding to the survey.  They would be the ones receiving all of the notices from Washington that they had better make the switch before stricter and stricter regulations force their companies to face financial consequences.  However, what sorts of things should the Greens be asking them to do? 

Switch to those energy-efficient CFL bulbs? 

• Aside from containing enough mercury to pollute 528 gallons of water, they are so potentially dangerous that they require an eleven-step process to clean safely if broken; among which is a recommended "airing-out" of one's home to remove any airborne toxins.  A broken incandescent bulb requires just three steps: Tell the kids to stand back; sweep it up; and throw it out
  
  

Plugging into a wind farm grid? 

• Windmills are only as reliable as the weather: which is to say, "Not very."  When factoring in the noise pollution and dead birds, even environmentalists have a love-hate relationship with the unsightly fans. 
• The government subsidies [$23 per MWh for wind versus $0.50 for coal] needed to create and sustain this unproved industry have resulted in higher utility bills in states where renewable-energy mandates exist.  

                              "The Institute for Energy Research has found electricity prices are almost 40 percent higher in states with mandates (in New York they are double) and although mandates may not be the only reason, they clearly contribute. In New Mexico in 2010 consumers were fighting a 21.2 percent increase in electric rates as a result of a 2009 law that set renewable mandates at 10 percent for 2011 (and 15 percent by 2015). In Montana the legislature is already considering repealing its mandate after a study by the American Tradition Institute and the Montana Policy Institute found Montana’s mandate would cause the loss of 1,874 jobs by 2015 and cost an additional $225 million in electricity bills for consumers." (Link)

And, as for asking automotive companies how they plan to top the Prius or Volt? 

• Shouldn't be hard, with Prius topping the 2011 Car Complaint Index and a little issue with Volts only reaching the promised 40 miles per charge under ideal circumstances--ideal circumstances being that it is neither too hot nor too cold.  Who knew batteries could be so fickle? 

So, as we look to the various green options offered Joe Shmoe, we find that he is not wasting an opportunity to make his wishes known.  He is making his wishes known; it's just that the green lobby is too blinded by smug to see them.  

John Hardee is a Marketing Commuincations Specialist for Rotor Clip Company, Inc.

PROPOSED GAS MILEAGE STANDARDS ACHIEVABLE

New fuel standards currently under discussion will bring

challenges to our automotive industry that we can meet.

The Obama administration has been pushing a rather ambitious gas mileage standard on the automotive industry of roughly 56 miles per gallon by 2025.(NYT July 3, 2011).  This has far reaching implications on the way automobile components and assemblies will be manufactured to meet any new mileage requirements.

For example, Rotor Clip has long contended that our line of retaining rings is an ideal way to reduce fastener costs by eliminating multiple fastening systems and costly shaft/housing preparation. In fact, auto makers are generally in agreement that they and their suppliers could similarly do the things necessary to meet a reasonable mileage standard.

The more pressing question is what effect will the new requirements have on the overall cost of the vehicle? The consensus among industry observers is that the resulting vehicle will be smaller and come with a much higher price tag, two factors that may turn off consumers.

Still, let’s not second guess American manufacturing's ingenuity to make components that will ultimately reduce the weight of vehicles along with our dependence on foreign sources of energy.  Here are four good examples of manufacturing breakthroughs right here in America:

1. Steel—Inventor Gary Cola recently devised a process of heat treating steel that makes it 7 % stronger than martensitic high-strength steels. Once perfected, Cola believes this steel would enable automotive companies to build frames 30% thinner and lighter than conventional ones (Design Daily, Friday, June 10, 2011).
   
2. Batteries—MIT researchers are in the middle of a 3 year program launched in 2010 to develop a lightweight battery for hybrid vehicles. They have come up with a unique prototype battery  that they believe already meets these requirements. The scientists are also looking to develop the battery so that it could be “refueled,” like changing a car’s oil thus enabling it to function like a brand new one.
   
3. Ceramics—Manufacturers are even testing lightweight engines made from ceramics. Engine blocks made of these materials have been produced but costs so far have been high and unlikely to be easily mass produced for today’s modern automobile. There’s much work to be done, but it’s a sure bet that research will continue in this critical area.
   
4. At Rotor Clip we are always expanding our R&D efforts to experiment with new, exotic materials that deliver the required performance at lower weights and overall costs.

Regardless of where one stands politically on the issue, I’m certain of one thing: US manufacturing will step up to the challenge for the benefit of our economy and our environment.

Craig Slass is Co-President/Owner of Rotor Clip Company, Inc. 

CEO BOOK OFFERS DIFFERENT PERSPECTIVE ON GOVERNMENT/BUSINESS RELATIONSHIP

Author and CEO Andrew Liveris stresses the need for our

government to come to the aid of US manufacturing.

“If you picked (this book) up thinking this was another long complaint by another CEO who wants nothing more than for government to back off... then I’m afraid you’ll be disappointed.” So begins  Andrew Liveris, CEO of Dow Chemical Corporation,  in his treatise on the importance of US manufacturing and the role government should play in its revival, entitled, “ Make It In America: The Case for Re-Inventing the Economy.”

As CEO of one of the largest corporations in the world, Liveris uses his book as a platform for re-defining the roles of government and business in addressing the needs of the US economy. He believes that in certain key areas, “…we actually need more government, not less,” striking  a chord for government to become more involved as a mutual partner in the effort to strengthen our economy in the wake of a rising global competitiveness.

He does bring the usual complaints against government: too much regulation, a burdensome and a costly corporate tax rate that encourages companies to locate off shore. But he rejects the idea that governments should butt out and let markets alone set the course for our economy. By their very nature, markets aren’t always wise in building solid economic foundations. According to Liveris, “…thorough, long-range, strategic thinking…is the responsibility of government. Only governments can create the kind of framework that will move markets to respond.”

He makes a strong case for the importance of manufacturing to our society and why there needs to be a healthy presence of manufacturing in our country. Service jobs alone can’t deliver the volume of jobs necessary to keep Americans employed. Liveris notes that in the 1950’s manufacturing made up 28% of GDP; today that number is just 11.5%, with over 42,000 factories having closed their doors in the last 10 years.

The toll on employment doesn’t stop with the loss of manufacturing jobs only. Rather, Liveris reports to a ripple effect, quoting an analysis from the Manufacturing Institute: “…every dollar in final sales of manufactured products supports $1.40 in output from other sectors of the economy.” These are reportedly high paying jobs that we lose every time we move a plant offshore.

Liveris presents convincing examples of how governments in other countries are supporting their industries in ways that are anathema to American capitalist sensibilities. The German government vigorously pursued a private sector initiative in renewable energy, passing the Renewable Energies Act in 2000. According to Liveris this created a “feed-in tariff,” which paid individuals and corporations four times the market rate for selling renewable energy back into the grid. The results created an entire industry with over one million jobs and an export business in renewables that accounts for more than half of the installed solar panels in the world.

China also entered the renewable energy race by mandating that 70 percent of all the equipment used in Chinese wind energy projects come from domestic manufacturing. That government sponsorship was eventually lifted as foreign countries cried foul accusing the Chinese of over protecting their market. But by the then their domestic industry was firmly established and it was Chinese manufacturing companies who reaped the benefits of their governments’ actions. The Chinese government also provided an upfront subsidy of $3 per watt for solar projects.

Amazon’s extremely successful Kindle was a product of research and development conducted by the company and its partners in Silicon Valley. According to Liveris, the key to the products feasibility was the special ink process made by only one company, E Ink, in Massachusetts. Yet, when it came to producing the unit, there was no viable place to do so in America. Taiwan got the call and Prime View was selected as the manufacturer. The company decided it could shorten the time to produce the Kindle if it had the special ink process at its facility. So it purchased E Ink virtually taking over all production of a product that could have (and should have) been made in America.

The choice for Liveris is simple: we either choose to get into the game and counter foreign government intervention in their respective markets or be sentenced to following our own rules, “no matter how outmoded and outmatched those rules may be.”

Liveris’ book is intriguing and daring in that it doesn’t fall back on the same worn out arguments about big bad government and an accepted view of the demise of American Manufacturing. He speaks as a businessman in favor of entrepreneurship and in the power of capitalism to foster our way of life.

“But I do not agree with those in the business community,” he concludes, “who think that our future success depends on government shriveling up and dying on the vine.”

Check out Andrew Liveris' book

Joe Cappello is Director of Global Marketing for Rotor Clip Company, Inc.

New GE Power Plant Combines Utility and Renewables

Future power plants may well feature wind and solar power

additions.

I give a lot of grief to my friend Andy for sinking all the money he’s saved these past few years into buying a Prius.  Yes, I’m one of those who likes to characterize consumers like Andy who invest in hybrid technology as, for wont of a more graceful label, “suckers”.  As in “You’re a sucker for buying that thing because something more energy-efficient that doesn’t rely on gas nearly as much is only a few years away.”   Of course, the thought only occurs to me while I’m riding with Andy in said Prius, and so his usual response to my rant is to come to a screeching halt, and suggest I ride the bus.

The truth is we can look down on bridge technology as temporary, trendy or ripe for monetary manipulation all we want, but it is absolutely necessary if we have any hope of keeping energy production on pace with American population growth (which, by the way, is accelerating faster than any other first-world country’s.)  This not only means merging clean technology with our everyday surroundings like cars and roofs.  No, we need to think deeper, closer to resources; more at the heart of the matter.

Oh snap, someone already has:

“Utilities are eyeing adding solar as a power source for conventional plants. Augmenting natural-gas-fired power plants with cells that capture the sun’s heat can boost a generating station’s total efficiency and increase its peak capacity.By using the plant’s existing infrastructure…steam turbines, transmission lines…they can produce renewable energy 30% cheaper than stand-alone solar installations.” 

Kiplinger Letter, June 24, 2011

Of course, utility companies make a lot of hubbub these days over integrating clean tech but not exactly stepping up to the plate in any real scenario, right?  Eyeing potential hybrid power sources is not exactly shelling out the investment to manufacture one, and we don’t see anyone doing that anytime soon, right?

Oh, double-snap, someone already did:

“General Electric Co. (GE) said its new turbine designed to pair gas and renewable-power generation was chosen by Turkey’s MetCap Energy Investments

for the first combination solar-natural gas plant.

The site will use technology from closely held eSolar Inc., wind and the “FlexEfficiency” gas turbine GE announced last week. The combination will be able to operate at a fuel- efficiency rate of more than 70 percent, greater than the rate of 61 percent for the combined-cycle turbine alone, GE said. It also makes solar more cost-efficient.”

                        Bloomburg.com, June 7, 2011

That’s the Gee-to-the-E putting its money where the collective advocacy’s mouth is and adding solar AND wind technology to a 530 Mw power plant in Karaman, Turkey. 

Now, this move has “publicity” written all over it, and the folks at depletedcranium.com take a well-deserved gut-punch at how this project is being advertised to the general public here.  But even though I do agree with them that the solar-wind augmentations are “window dressing” at best, I have to take issue with their assertion that “A bridge to renewable energy is a bridge to nowhere.”  Sure, there are hurdles in attaining profit in alternative energy.  And sure, if there’s no dependability on that alternative energy, GE is basically dipping half of a pinkie toe in the water.  But the fact that wind turbines and a solar tower are anywhere near a natural gas plant shows a willingness to create a template for different energy sources being constructed simultaneously.  That alone is huge.  Solar and wind may not be profitable now; but as more and more companies drive the costs of manufacturing down with each investment, they will be.  Having technology embedded in the construction process instead of added later makes it easier to augment when (not if) these sources become profitable.  It’s also important not to underestimate the value of a company like GE holding a vested interest in multiple energy resources.  It means less of a possibility that company will choose one over the other sooner rather than later.

Bridge technology is messy and its temporary status is frustrating, but a company like GE putting capital into it can never be overlooked.  They’re taking the first steps to something bigger.  Let’s hope others follow suit instead of standing still.

Like I am….waiting for the downtown line….sorry Andy.

Donal Thoms-Cappello is a freelance writer for Rotor Clip Company, Inc.