Green Dealers Improve Bottom LineWritten By Joanne Costin
Article Date: 12-03-2007
Copyright(C) 2007 Associated Equipment Distributors. All Rights Reserved.
Equipment companies also enjoy a cleaner public image as a fringe benefit of their environment-responsible practices.
There are plenty of reasons for going green and none more important than doing the right thing for the environment. But is there something in the green movement for bottom-line focused dealers to love? Can going green be profitable?
In fact, it appears that going green doesn't have to break the bank and might even save a few bucks. Construction equipment dealers, as well as those in the trucking and automobile industries, are making it happen.
California Energy Miser
San Diego-based Hawthorne Machinery began its quest to save energy 18 years ago. Clyde Marion, corporate purchasing director for the Caterpillar dealership, began with lighting changes. According to the Environmental Protection Agency, lighting accounts for 30 to 40 percent of electricity used in commercial buildings.
Taking advantage of incentives from local utility companies, Hawthorne's lighting plan called for energy-saving fixtures and lamps. All interior office lighting was replaced with T8 lamps with electronic ballasts. According to A Dealer Guide to Energy Star: Putting Energy into Profits, published by the National Automobile Dealers Association (NADA), changing from 150 fixtures utilizing T12 lamps with magnetic ballast to 100 fixtures utilizing T8 lamps and electronic ballast would save 47,000 kWh, or approximately $3,700 annually.
On Hawthorne's outdoor signage, Par38 incandescent lighting was converted to Light Emitting Diode (LED) lighting. Throughout the property, 225-watt outside illumination was converted to compact fluorescent 13-watt fixtures. Exit lighting was converted first from incandescent to fluorescent lighting and then later to LED lighting. According to the NADA guide, the approximate savings from replacing 20 exit signs with LED lighting would be $420 annually.
"Anytime you address energy you are talking big time savings," said Marion. "In the shop we converted all the 400-watt metal halide fixtures to fixtures with T5 fluorescent systems with electronic ballast, and that was a substantial reduction in electricity."
Equipment is another huge drain on power and Hawthorne has taken several steps to reduce its power needs. In the shop, they converted two high-energy, 45-hp air compressors to one 65-hp energy-efficient model. In another area they took out a 75-hp high-energy use compressor and downsized to a 45-hp compressor.
To reduce consumption further, Hawthorne's computers are now equipped with flat screen monitors. Energy Star-qualified monitors use up to 60 percent less electricity. Multiple servers were replaced with a virtual server, further reducing energy costs. Even Hawthorne's vending machines are equipped with a low-power mode feature that reduces energy consumption when a building is at low occupancy.
Solar energy has also been a solution for Hawthorne. A photovoltaic generator on its roof produces 200 kilowatts of power, thus lowering the company's demand charge from the utility. With the rising cost of energy, solar power is under consideration at other Hawthorne locations, as well.
Hawthorne is currently undergoing evaluations to receive its Energy Star certification rating from the EPA. According to the company's calculations, which are pending EPA validation, its rating is 98 out of a best possible rating of 100.
Marion looks for a payback period of under three years for his investments and advises dealers to seek out outside resources to help cover the cost of energy-saving initiatives. However, he also says that payback isn't always the driving factor in decisions.
"One is need. I needed a new roof, so when we decided to reroof the headquarters, we said, ‘Why don't we throw a photovoltaic generator up there.' "
The other is just the desire to do the right thing for the environment, something that Hawthorne's top management has fully supported.
"Fuel is a huge cost for many dealers", said Mike Quirk, vice president of earthmoving for Wagner Equipment, the Caterpillar dealer for Colorado, New Mexico and far west Texas. "And generally, they are not making money driving."
To combat rising fuel costs, Wagner has invested in software and GPS systems to plan routes and keep trucks full. "Now we will dispatch trucks to pick something up," said Quirk, "whereas before we would send a truck out and they would come back [empty]." The company is also testing hybrid SUVs and flex fuel trucks that burn environmentally friendly ethanol.
Recycling Waste Water & More
When it comes to wash facilities and recycling water, you probably won't find a bigger advocate than Wagner Equipment. The company received an Environmental Achievement Award from the Colorado Department of Public Health and Environment for its state-of-the-art heavy construction equipment wash facility.
"We recycle 90 percent of the waste water," said Quirk. "It might cost us money, but it has paid back in the way our company has been perceived in the community."
Water conservation is a huge issue in the Southwest, and Wagner's facility saves thousands of gallons of water a day.
"Being green also pays dividends with employees," said Quirk. "We have grown from 340 to 1,676 people, so we are always recruiting. It helps you recruit the right type of people as well - those who share similar values."
At Hawthorne Machinery, more than water is recycled - in fact, virtually everything is recycled.
"All of our waste streams are diverted with the exception of wet garbage," said Marion.
Everything is recycled in one form or another: Used engine oil, used antifreeze, batteries, wash water, cell phones, wood packing and crating, cardboard, light bulbs and shredded documents.
"It actually costs us more to recycle," said Marion, "but we feel obligated to do that."
In Nappanee, Ind., headquarters for McCormick Motors, a medium-duty Chevy truck dealership, waste-oil furnaces with supply transfer systems reduced the company's annual liquid waste from some 9,000 gallons to 100. The dealership was recently a finalist in the Innovations Awards program sponsored by USA Today and NADA. Similarly, Sendell Motors in Greensburg, Pa., utilizes a waste oil boiler to provide in-floor radiant heat. While this isn't an option in all states, for some construction equipment dealers it could be a cost-saving option. Case studies like these can be found on www.energystar.gov.
"If you are looking to improve your company's performance and stand out as an environmental leader, you might consider adopting an environmental management system (EMS)," said Melinda Tomaino, associate director of environmental services at the Associated General Contractors of America. "A company could use an EMS to set, achieve and maintain its environmental goals."
A tool to set performance goals for environmental initiatives, an EMS helps move companies beyond compliance to realize additional environmental and financial benefits. The first step involves examining processes to determine those that impact the environment. The company then sets priorities and goals and develops a plan. A business case for EMS is available on the AGC Web site at www.agc.org/ems. Tomaino advises businesses to start small and avoid being bogged down with details. Starting small will help a company reach some of the quicker and easier-to-achieve goals. These early successes will boost morale and support for the EMS as well as bring about environmental benefits.
Another good starting point is A Dealer Guide to Energy Star: Putting Energy into Profits published by NADA and available on their Web site. The guide identifies opportunities for savings in buildings, body shops, washing facilities and service areas. In addition, it lists many sources for grants, rebates, loans and tax incentives.
Indeed, there's a lot to love about energy-saving initiatives that can boost the bottom line or make it possible to take on other green initiatives. And when you consider the marketing value to dealers, even break-even initiatives make good business sense. However, dealers able to take a long-term view stand to benefit the most.
"You pay a premium to build things" said Quirk, "but the payback is there. We are in it for the long run. We know we will get the payback. We are recognized in the community and that is important."
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