Ford Exec Calls Greenleaf a “Failure”

Sustainability is a key corporate goal for Ford Motor Co., Dearborn, Mich., but an initial attempt to enter the recycling industry has not gone well for the automaker, according to one company executive.

Speaking to attendees of the International Symposium on Electronics and the Environment in San Francisco on Tuesday, Heritage 2000 Manager James L. Richardson described the “recycling” of the Ford River Rouge complex in Dearborn and the company’s commitment to revitalizing the sprawling industrial complex.

In its renovation of the massive 85-year-old industrial site, the company has incorporated elements of sustainability, says Richardson, which he defined as “meeting the needs of the present without compromising the needs of the future.”

Considerable construction and demolition materials recycling has taken place during the renovation project, he remarked. In addition to scrap metals harvested from demolition jobs, Richardson noted that 110,000 tons of concrete and asphalt have been recycled in place during the River Rouge revitalization project.

As plant space has been reconfigured, Richardson noted that space has been set aside for future vehicle disassembly operations. Even though no such tasks are taking place there now, “Bill Ford insisted on it,” said Richardson, referring to current Ford CEO William Clay Ford Jr.

But Richardson also acknowledged that Ford Motor Co.’s initial attempt to enter the auto recycling industry has not gone as smoothly as planned.

In the late 1990s and into 2000, the company purchased several existing automotive salvage and parts recycling companies and unified them under the name Greenleaf.

Richardson, who referred to the Greenleaf subsidiary as the acquisition of “several junk yards,” said of the purchases, “They’ve been abysmal failures up to this point.” Reports circulated last year that Ford Motor Co. was looking to sell off its Greenleaf assets.

“It was primarily a poor business decision,” said Richardson of Ford Motor’s foray into auto recycling. The Greenleaf initiative occurred during the tenure of former CEO Jacques Nasser, and not that of current CEO William Clay Ford Jr.

“The way we went into it—to buy [the salvage companies] first and then make a business out of it—doesn’t usually work,” said Richardson of the Greenleaf strategy.

During Ford Motor’s acquisition spree, many observers from within the automotive recycling industry predicted that the company’s inexperience in the specialized world of automotive salvage would be a hindrance.

Experienced salvage and dismantling facility operators are careful not to overpay for end-of-life vehicles purchased at auctions and from insurance companies. This may have been a problem for Greenleaf. “The value of materials we were buying just wasn’t there,” said Richardson.