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White Lies at Live Earth: DaimlerChrysler Kisses Green Goodbye

By Sebastian Knauer

Carmaker DaimlerChrysler may appear as a green world savior at Live Earth on Saturday, but the PR push comes as the company scraps a number of its much-lauded programs to create eco-friendly cars and biofuel products. Daimler customers, unfortunately, would prefer a fat car than an environmentally friendly one.

On Saturday, DaimlerChrysler will sponsor Al Gore's Live Earth series of concerts, where it will promote its Smart "fortwo" line of fuel-efficient automobiles. Daimler's presence at the event has drawn heavy criticism from some environmental groups, including Greenpeace which has refused to affiliate itself with the global event.

"It's problematic that a firm like Daimler, which just several weeks ago was doing battle with the European Commission plans for mandatory emissions limits, can now present itself as a protector of the climate," Jürgen Maier of the Berlin-based Climate Alliance wrote in the July issue of Greenpeace Magazine.

And while Daimler may be packaging itself at Live Earth as an environmentally friendly firm, its recent track record of abandoning support for sustainability projects suggests the company isn't putting its money where its mouth is.

The following article first appeared on our German sister site in May.


DaimlerChrysler's top environmental man Herbert Kohler always had a double role. As a DaimlerChrysler executive, he is both the official vice president of the Group Research and Advanced Engineering Vehicle and Powertrain division and the multinational company's chief environmental officer. That makes for a certain degree of tension when it comes to reconciling environmental and economic considerations. Right now, Kohler the car engineer is in the fast lane, as the conservationist gets left behind in the slow lane.

DaimlerChrysler -- which will soon be divided into Daimler AG and Chrysler as a result of the sale of the company's American division in May -- is shedding itself of once highly praised environmentally friendly projects around the world.

The company's support for the natural fiber factory Poematec in Belém, Brazil, for example is to be fully abandoned. The production of car seats, head rests and natural fiber carriage components, made from coco fibers and latex, was pursued as an especially sustainable DaimlerChrysler environmental project after the 1992 Earth Summit in Rio de Janeiro. The project was partly financed by public funds from the German government's development bank, KfW Entwicklungsbank.

About 500 families currently make a living by cultivating fiber plants in the region around the mouth of the Amazon River. Now the debts incurred by the factory -- about $1 million -- are to be shouldered by Poematec employees who had previously been promised a good return. In the future DaimlerChrysler will only continue to purchase about "80,000 to 90,000 components" produced by Poematec every year and the factory will remain one of DaimlerChrysler's regular suppliers.

It was an abrupt turnaround for a company where, just last year, managers like political director Michael Inaker were still rhapsodizing about a "global sustainability alliance" in South America, South Africa and Asia that would equip millions of automobiles according to the Brazilian model. In the end, the company went back to cheaper plastic alternatives. And now Daimler is considering selling the factory to a Dutch construction firm that specializes in coco mat insulation for homes.

Plastic Displaces Natural Fibers

Brazil, where Daimler has experienced disappointing sales of its Mercedes "A" series of cars, isn't the only place where plastic has once more won out over more environmentally friendly materials for fitting a car's interior. Similar projects involving sisal fibers in South Africa or banana fibers in the Philippines have also seen the multinational company terminating agreements or deciding to "further adjust the logistics," as one Daimler spokesperson puts it in the company's jargon.

As for the production of modern biofuels from jatropha plants in India, Daimler is also opting out and negotiating the possible divestiture of the facility to German chemical company BASF and American biofuel company ADM. That project received German development funds as well. Interest in jatropha developed vigorously the world over thanks to DaimlerChrysler's temporary interest in the plant, which involved the company sending two test cars across the Indian subcontinent.

In the future, though, DaimlerChrysler will not be a party to this growing interest. True, executive Thomas Weber, who heads Daimler's research and technology department, emphasizes the importance of biofuels. But the company's involvement, along with Volkswagen, in a production plant in the eastern German state of Saxony is also being minimized. And Daimler's Ulm research center for car components in southern Germany made from sustainable materials has also been scaled back.

In executive Herbert Kohler's opinion, these developments are "no pullout" from environmental protection. In fact the US-German company's "research and environment budget" for the further development of more fuel-efficient engines, fuel cells or resource-sparing production processes amounts to about €1.5 billion ($2 billion) a year. The eco-projects involving tropical fibers or biofuels were "successfully initiated" and have to now "prove their worth on the market," he says. "Such things need to make economic sense in the long term too," says Kohler, who continues to see "great potential" in the development of fuel cells and biofuels. Kohler said the company also plans to continue reporting on its environmental efforts in an annual "sustainability report" and in the context of the Global Reporting Initiative (GRI), which is recognized as the international standard for corporate sustainability reporting.

Mercedes Customers Want Fat Cars, not Eco-Friendly Ones

But the reporting system has its critics, including Andreas Troge, president of the Dessau-based German Federal Environmental Agency, who says they are "only credible if they are complete." In the past, he says, members of the GRI initiative have come under fire for their lack of full disclosure in reports. General Electric, for example, failed to report on a major public controversy that broke out over one of its chemicals. "The biggest bandits always write the prettiest reports," he told attendees of a conference in Stuttgart earlier this year where GRI was promoted. More than 20,000 companies worldwide have agreed to use Amsterdam-based GRI's standardized sustainability reporting instruments, including 200 in Germany.

In defending their retreat from environmentally friendly products, Daimler managers also have some convenient statistics they can fall back on. According to a recent internal study, the company's customers care more about a car's technical performance and the extras it comes kitted out with than the vehicle's sustainability. That also makes it easier for the company to resist outside calls for it to produce more responsible cars. As a member of the Federation of German Industry, Daimler fought hard and successfully this spring against a European Commission proposal to establish mandatory emissions limits on new models.

That, however, doesn't keep DaimlerChrysler from attempting to cultivate an environmentally friendly image for itself. Not long ago, CEO Dieter Zetsche said: "Sustainability is not an abstract concept in the company, it's a part of everyday life."

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