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Will GM Declare “Environmental Bankruptcy”?

| Friday November 13th, 2009 | 0 Comments

gm-logoOne of the nice things about bankruptcy is that certain debts are forgiven and you get something of a clean slate. That may be fine in a strictly financial sense but when environmental externalities are concerned it may be playing fast and loose. General Motors, long criticized for being a laggard on many fronts, agreed some time ago to be a primary participant in a voluntary resource recovery program known as End-of-Life Vehicle Solutions (ELVS). One of the primary purposes of ELVS is to recover Mercury from automotive switches when vehicles are scrapped. A massive 39,000 pounds of the substance remains to be collected according to activist group Mercury Policy Project.

ELVS Has Not Left the Building, But He’s at the Door…

The good news, according to MPP, is that, under pressure, the restructured GM has reaffirmed its commitment to ELVS. The bad news is that it’s a temporary participation with no obvious long term commitment. It also suggests that GM may try to dodge the bullet on other environmental responsibilities under the excuse that the “old GM” no longer exists. GM is such a cornerstone of ELVS that if they drop their involvement, the entire program will likely unravel.

Given that GM is now a partly publicly owned company, I’d argue that they’re subject to a particularly high standard of doing the right thing for their owners – both financially and environmentally – and dropping participation in programs like ELVS should be out of the question.

Hunter Lovins, of Natural Capital Solutions says:

As a taxpayer, I’m outraged to have paid to bail this company out, only to have to pay again as it now declares environmental bankruptcy. To allow “Brand GM” to shunt its liability for all of its past environmental pollution to old GM, which will soon liquidate itself, is irresponsible and unfair. Chrysler went bankrupt but is living up to its obligations. Any future GM profits (assuming there ever are any) should go first to pay to clean up all of GM’s environmental liabilities, which now far exceed the money left in the fund for all purposes. Or else you and I and all American taxpayers will get to pay again to clean up polluted vehicle production sites, retrieve mercury switches from GM’s old cars lest they get vaporized and wind up in people’s lungs, and otherwise support irresponsible corporate practices, which were all part of what drove the company into bankruptcy in the first place. If we, the new shareholders of new GM, allow the company to remain irresponsible, what hope have we of avoiding its future financial ruin?

What are your thoughts on the matter? Is GM playing dirty with their responsibility or will they come clean?


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