Company Incentives for Going Green?

Greenie asks: "With fuel costs reaching record highs and more eco-friendly vehicles on the market than ever before, one has to ask, is it making a difference (yet)? NewEnough.com is an online retailer of new and surplus/wholesale motorcycle apparel based in West Texas. Recently, they posted a letter to the public on their website about how they've 'gone green,' and are offering incentives to their employees for switching to modern, fuel efficient vehicles (hybrid electric, diesel, bio-diesel...). While the specifics of their incentive program were not discussed, has anyone ever heard of larger companies offering a similar incentive program? According to Fortune.com, Wal-Mart is the largest employer in America. If Wal-Mart, McDonalds, UPS, GM, and Ford, the five companies that Fortune lists as having the most employees, all offered a similar incentive, more than 2,865,700 people would be eligible for incentive to go green. That could really start to make a difference for the environment. Now imagine the environmental benefit of every company in America making this same incentive offer..."

Comments

Going green

[BWJones]

If they really want to push more efficient automobiles, perhaps we could wean the American preference for the large SUV? I wrote about this some time ago here, talking about small car companies like Smart who really should be looking harder at the American market and employing creative marketing approaches to specific markets that would be most receptive to the small car.

Of course a real way of going "green" would be to simply make it easier for people to telecommute. We saw a huge interest in telecommuting a couple of years ago, but since then, many corporations have cut back on telecommuting or reversed earlier policies.

Programs to make broadband more ubiquitous and accessible would enable inexpensive video conferencing technologies (like iChat with an iSight), audio conferencing and the ability to be persistently available, which could be a bad thing for salaried employees though :-)

Re:Going green

[Arandir]

Of course a real way of going "green" would be to simply make it easier for people to telecommute. We saw a huge interest in telecommuting a couple of years ago, but since then, many corporations have cut back on telecommuting or reversed earlier policies.

Bingo. The idea that companies should offer incentives for "green" cars is bizarre, because there is no benefit to the company for employees having "green" cars. Companies are not in the business of pure philanthropy, neither are they social experiments. For a small company it might be possible if enough of the shareholders lean one way or another politically, but it's not viable for larger companies.

It's one thing for a company to organize a weekend charity drive, but to actually redirect revenues towards political posturing is nuts. If the cost savings for fuel efficient cars isn't enough incentive for employees, then maybe they're not the global panacea everyone says they are.

But telecommuting *benefits* the company, so it makes sense to encourage it for those jobs where its practical.

Re:Going green

[philipgar]

The auto companies have no incentive to make their SUVs more fuel efficient? Are you retarded? With gas between $2.50 and $3 a gallon the auto manufacturers are starting to see the incentive. SUV's have sold poorly since gas rose in price. The reason is obvious, consumers don't like paying so much in fuel costs, and when gas is $2.50 a gallon they start to think more about getting something that is more fuel efficient.

If you want the majority of cars sold to be extremely fuel efficient the easiest way would be to artificially increase the costs of gas through taxation. If gas were $10/gallon with no chance of lowering people would A: Drive a lot less, and B: when they purchase a new car the fuel economy would be much more important to them.

The thing is the cost of ownership of a new car is kind of hard to judge, and depends how long people will be driving it. Assuming a 7 year ownership (beyond that it gets much more complex due to the car breaking down etc) we get a yearly cost of about (Purchase cost)/7 + yearly insurance cost + (Miles Driven/year)*(Cost of a gallon of gas)/(MPG). For many people if they actually did the math it works out that even with gas being $2.50/gallon it's cheaper not to buy a hybrid car! Wasn't there a study not too long ago showing that?

Of course people don't really use these equations when buying a car, but many rough estimates are considered, and it's probably remarkably accurate. Of course than the category of car (how fancy, status symbol, etc) come into play as well. But even than gas prices will likely factor into the purchase (unless the person is wealthy enough that they wouldn't bat an eyelash at paying $20/gallon).

That being said I'm completely against the whole idea of the government getting that involved with the affair. As far as companies giving incentives to employees. . . WHY the hell would they? If Walmart gave employees credits for buying hybrids they'd either have to pay their employees less, or raise prices or profits. Does that make any sense to them? I don't know what world /. thinks we're living on, but without an incentive to do this there's no reason a company would. Maybe some small operation who's owners are willing to lose profit (or their employees are willing to lose some pay) will follow this, but I can't forsee the major company's doing this. Of course the government could do this, but this essentially works into pay cuts for everybody and a benefit to those who buy the hybrids. Of course who gets helped the most by the deal .. . those who drive THE MOST!!! Those are the ones with the most incentive to get a more fuel efficient car.

Phil

WalMart?! Bahahaha...

[FatSean]

They don't care, the factories in China that produce the majority of WalMart's goods spew pollution wholesale.

The incentives...

[drmike0099]

Wal-mart: Buy a smaller car, cuz next week we're going to start paying you less.
McDonald's: Buy our salads and lose weight; it will cut your fuel costs by not dragging your fat butt (which you must have got at Burger King and not here) around.
UPS: Don't take it there and waste gas yourself, pay us to.
GM and Ford: Trade in that old, fuel-inefficient sedan for a new, advanced-fuel-utilization sport-utility vehicle. You know you want to!

Not just to mock this, but what incentives do these companies really have for their bottom line that would inspire them to make this an issue? As a rule, top companies stay out of potentially politically-charged issues, and this is, unfortunately, one of those.

Ford and GM: not likely

[rgoldste]

"If Wal-Mart, McDonalds, UPS, GM, and Ford, the five companies that Fortune lists as having the most employees, all offered a similar incentive..."

Recall that Ford and GM missed the hybrid boat big time, and are now struggling to catch up with Honda and Toyota (who are developing prototype hydrogen cars already). Further, the Ford Escape hybrid (Ford's first hybrid), while technically a hybrid, has roughly the same fuel efficiency as the standard model; the electric engine is used to better performance, not efficiency. Thus, it's not clear how much green benefit society would get from Ford employees buying Ford hybrids.

Something tells me that Ford and GM wouldn't subsidize purchasing their competitors' cars, especially given their dire financial situation. Don't expect Ford and GM to jump on this bandwagon.

Paternalism

[Brian Stretch]

Is anyone else bothered by all these paternalistic, lead-the-unwashed-masses-by-the-hand approaches? Just give me my salary and I'll decide how I want to spend it. I'll make an exception for little things done in the name of tax efficiency though (buying bus passes for employees because it's a business tax deduction, etc), and even then only until the Flat Tax can be passed (alas, it won't be by President Bush).

the SmartCar

[Tumbleweed]

Look, as much as I love the idea of the SmartCar, no way in hell am I going to be driving one on the roads around here, with all the monster SUVs on the road. I'm green, but I'm not suicidal!

Some better ideas are coming along shortly, though. VW is coming out with their "twin-charger" engine cars (Polo & Golf, and in 2008, a Scirocco successor, possibly named the Rivo). A twin-charter Polo may get up to 69mpg - on gasoline.

Another idea is to use an efficient diesel auto - like the TDI Volkswagens currently available in most U.S. states. The TDI Jetta & Golf can get over 45mpg (some get slightly over 50; depends on how you drive, I imagine). Since these are diesels, you can run them on biodiesel and not only get great gas mileage, but also have much-improved emissions at the same time.

VW recently announced they're switching to common-rail diesels, so as to improve emissions.

And all this without resorting to an overly-expensive (not that VW is cheap, mind), overly-complex, not-so-safe-for-emergency-workers hybrid.

I'm really hoping that hydrogen injection system, H2N-Gen, actually comes to market and works as advertised. This is a device that injects hydrogen into the cylinders during combustion to enable around 97% of the fuel to be burned, thus almost eliminating emissions; should work on any internal combustion engine (gas, diesel, or natural gas). Let's hope it's also relatively affordable. "Another fine Canadian product (based on an American invention)"

I now return you to your regularly-scheduled Slashwhining, already in progress...

Support the gasoline tax!

[Chalex]

A number of economists agree that the simple tactic (from your intro microeconomics class) of imposing a tax on the consumption of gasoline will do a lot more social good than harm. You can read more about it at the excellent blog http://www.env-econ.net/

Of course, no one wants to pay even more for gasoline! Many Americans don't realize that they already pay much less than people in other parts of the world.

Keep dreaming

[supabeast!]

"...if Wal-Mart, McDonalds, UPS, GM, and Ford, the five companies that Fortune lists as having the most employees, all offered a similar incentive"

Most Wal-Mart employees are limited to fewer than 32 hours of work per week simply to avoid giving them any benefits, so I doubt they'll offer up any enviromentally friendly car benefits soon, not that most Wal-Mart employees could afford a new car on their salaries in the first place. McDonald's is even less likely to hand out benefits - especially since a large number of McDonald's employees work at franchises, and doesn't pay well enough for most of it's employees to afford a car at all. GM is on the verge of bankruptcy and slashing benefits, while Ford isn't too far behind, as they're about to announce plant closings and thousands of job cuts. UPS pays pretty well and has great benefits, but their employees generally work long hours as drivers, so UPS would do better by just using greener delivery trucks.

This one isn't going to happen any time in the near future, and between rising health care costs and the continuing demise of American manufacturing, corporate America isn't too likely to jump on this one in the near future. What's really going to drive adoption of green products is Chinese production of them for use in China as they start dealing with the environmental impact of their population. Once China starts pumping out mass quantities of hybrid car batteries, solar cells, and fuel cells, all at dirt cheap prices, humans can enter a new age of green living.