Denso's Green Ways Pay Off

In 1999, Denso International America Inc.'s auto-parts plant in Maryville, TN near Knoxville sent 2,812 tons (2,550 t) of trash to the local Blount County landfill.

In 2007, the facility delivered a mere 136 tons (123 t) of solid waste to the dump — a staggering 95% improvement, thanks to a corporate philosophy to rachet up environmentally friendly manufacturing methods throughout North America and the world over the course of several years.

Even more remarkable, the drastic reduction in solid waste came after eight years of steady prodution of starters, alternators, instrument clusters, airbag sensors and electronic controllers for a growing pool of OEM customers that include Toyota Motor Corp., Ford Motor Co., Honda Motor Co. Ltd. and General Motors Corp.

The Denso plant managed to stem the flow of trash by recycling plastics, soaps and vast amounts of cardboard that used to end up in the landfill.

The plant's environmental efforts snowballed to target water consumption (down 67%) and volatile organic compounds used in paints, coatings and cleaning solvents (down 36%).

Today, it seems every employee at the plant has jumped on Denso's “Green Ways” bandwagon, suggesting ideas to save electricity, reclaim scrap parts, better dispose of hazardous waste, reduce carbon-dioxide emissions and conserve water — a particularly sensitive topic in a region that has suffered from severe drought for two years.

Along the way, employees figured out there's good money to be made in Earth-friendly plant management — a crucial new revenue stream in recent months as vehicle-production volumes plummet due to the U.S. economic meltdown.

The plant has gotten a lot better at separating its scrap steel, aluminum, copper and cardboard, which all gets shipped out and processed for recycling. With raw-material prices skyrocketing, the market for this scrap is up dramatically, as well.

In 2003, plant officials say each ton of scrap generated $218 for the company. Today, the same scrap has nearly tripled in value, to $596 per ton. “In 2008, we anticipate it will be $648 for every ton we recycle,” a plant insider says.

The plant's reclamation efforts in 2007 sent $4.7 million to Denso's North American headquarters in Southfield, MI. From there, the money is plowed back into the divisional facilities, such as Maryville, in the form of new investments.

Denso employees in Tennessee — and elsewhere — are discovering that “reduce, reuse and recycle” is not only a responsible mantra for sustainability but a great way to recover value and replenish corporate coffers.

Proof that saving the Earth can be profitable — well beyond monetary implications — is easy to find.

As recently as last year, the Maryville plant received $39 per ton for scrap cardboard. But with new equipment to improve sorting, bailing and overall efficiency, a ton of scrap boxes now is worth $110.

In 2003, the plant paid $0.04 per lb. to send router trim from circuit-board production to Knoxville for recycling. But Denso discovered a Toronto company, Xstrata Canada Corp., with an innovative process that could recycle the trim, while extracting the valuable copper.

By 2007, the initiative had paid off handsomely. Instead of the trim costing money, it was generating a profit of $0.50 per pound.

Here's the kicker: That profit factors in the logistics costs of shipping the scrap by truck from Tennessee all the way to Canada. Router trim from two other Denso North American plants is processed the same way, for maximum return.

It gets better. The plant produces 3 million alternators annually, so the occasional defective part is inevitable. In the past, a rejected part was disassembled into components, then separated further into steel and mixed aluminum.

The copper coil in the alternator was more difficult to separate because it generally was contaminated with plastic. Most of that work was done by an independent recycler, and Denso barely received anything in return.

But as plant employees embraced the internal recycling initiative — and recognized the potential yield as raw-material prices climbed — they devised a way to do all the separation onsite.

Bottom line: The plant used to get only $0.06 per pound for scrap copper years ago, and in 2006 it made $1.20. Today, that copper is worth more than $3.00 per pound, depending on the market.

And the steel from a scrapped alternator now is worth more than $0.60 per pound.

If the price of copper should fall dramatically, Denso management insists the plant's recycling efforts will remain just as important as they are today, regardless of the contribution to the company's bottom line.

“With any recycling strategy, our top priority is to reduce, reuse and recycle,” says Robert Townsend, Denso International America's director-environmental, health & safety.

“With volumes being down, we've got some manpower to shift around. We've made some improvement teams, and we've put some leaders over these teams,” he says. “They've been going out, looking at how to better get some value out of the daily scrap. They came up with a lot of these ideas.”

A significant amount of work is being done on the front end, in the design studios, to prevent scrap from being created in the first place.

In Maryville, Denso is leading the community toward environmental sustainability. Although the city does not offer curbside recycling yet, there is movement in that direction, bolstered by many of the 2,580 employees who have adopted conservation as a way of life.

With this year's volatile fuel prices, motorcycles have become commonplace in the plant parking lot, and a bike rack recently was installed for the first time.

Denso management claims the “Green Ways” program has been good for everyone in the community of Maryville, although volumes are down at the landfill.

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