Inside Subaru's Zero-Waste Factory

Can a maker of SUVs without a hybrid or EV to its brand really be green?

The Subaru plant in Lafayette, Indiana. (Photos by Michael Hickey/Getty Images)

Dec 30, 2013· 10 MIN READ
Steve Friess has written for Politico and The New York Times. He teaches journalism at Michigan State University.

They probably weigh 10 pounds each. Multiply that by the 60 used every production day, and that’s about 70 tons of thick black plastic a year that, until today, went to a recycler. That was better than ending up in a landfill for the rest of human history as they might have a decade ago. But not good enough for Jeff Garrity, so a few months back he called up the supplier. Could these things be reused? Nobody had tried before, he learned. Here’s the number of a guy in Michigan who might be able to do it.

And so, on this snowy December morning in an otherwise inconspicuous corner of the American heartland, metal stands made of rusted old railings are set up around the area of the factory where mighty forklifts gingerly lower mammoth coils of steel to the ground. That steel is destined to become parts of somebody’s car, but right now it’s the black circle of plastic that keep the coils from unraveling that are of most interest. For the first time, those pieces—known in the trade as “inner diameter protectors”—would be removed, tossed like rings at a carnival game onto those stands and carted off later in the day for refurbishing.

“They’ll go through quality control to make sure the rings are OK to use, and if they are, we’ll ship and sell them to a steel vendor,” Garrity says. “So instead of grinding them up and making them into something else, which takes a lot of energy, we get to use as much as we can. I’m not sure what the life span is, but they tell me they could have an 85 percent reuse rating. That’s not bad.”

If it’s surprising that a middle manager at a car plant—a prototypical balding 48-year-old Midwesterner who “liked” Mitt Romney on Facebook and volunteers at his local fire department—is this excited about protecting the environment, consider that he gets no bonus for the idea. Like his 3,700 coworkers, from the cafeteria staff to the lawyers, he is expected to come up with ideas for ways to reduce the use of resources. Not all of them work out quite this well, but the 24-year factory veteran insists the effort is its own reward. “Indiana is not known for being a very environmental area, being part of the rust belt. I think SIA is trying to change that. I think emissions and environmental stewardship is very important to SIA and the state of the country.”

Yes, he said Indiana. Lafayette, to be exact, the home of Purdue University, an endless plain of corn and soy fields, and Subaru of Indiana Automotive Inc., probably the most eco-friendly car assembly plant in America. This coming May, the maker of Outback and Legacy sedans and Tribeca SUVs celebrates 10 years at “zero-landfill,” meaning that nothing used in the process of building nearly 1.7 million vehicles since 2004 has gone to the dump. There hasn’t been a single layoff at the plant over that period, during which the U.S. auto industry as a whole lost around 415,000 jobs, and its U.S. sales have exploded. By 2016, the parent company, Fuji Heavy Industries, expects to plunge another $400 million into SIA to create 900 additional jobs.

The ethos makes the plant a model not only for other carmakers—GM, Honda, and Volkswagen have all made strides towards or achieved some level of “nil to landfill” since Subaru did so—but for other industries. Anheuser-Busch and Xerox have zero-landfill factories now, and reps from Smuckers and Colgate-Palmolive have toured and consulted with SIA.

“Subaru was the first auto plant in North America to get there,” says Dean Schroeder, associate dean of the business school at Valparaiso University and an expert in eco-friendly manufacturing. “And they didn’t stop. They just keep getting greener.”


The thing about Subaru is, as a company it is not just some liberal fantasy utopia, even as its broader image is that of the vehicle of choice for lesbians and granola eaters. It is, after all, a maker of millions of carbon-spewing machines so durable they encourage people to use them as much and as long as possible. It got a mound of shit from environmentalists a decade ago for raising the Outback’s ground clearance, qualifying it as an SUV, with that class of vehicle’s less stringent fuel economy standards. Not one of the company’s vehicles in any class tops the list of fuel-efficient cars. While next year marks the release of the company’s first hybrid, the 2014 XV Crosstrek, plans for an electric car are unclear. SIA is also stridently antiunion.

Zero-waste makes the plant a model not only for other carmakers—GM, Honda, and Volkswagen have all made strides—but for other industries as well.

It’s difficult, then, to independently tease out the precise impetus for the zero-landfill effort—a desire to do good, or to do well? It would be easy to conclude that the $10 million savings realized since 2004—via lower supply costs, rebates from reusable or recyclable items, and sale of some excess materials—and good publicity have always been part of the plan. Clearly a business instinct was at work—as acknowledged in Subaru’s application in 2013 for the Campbell Institute–Stewardship Action Council’s Innovation Challenge, which SIA won—and Subaru’s five plants in Japan have long been zero-waste, but that’s standard there because the space-crunched Asian archipelago doesn’t have much room for landfills. The cheapest means of disposal in Japan is, in fact, to incinerate waste and recoup some expelled energy for the power grids.

The company’s motivation for going zero-waste at SIA, according to company literature, “was twofold: first it was the right thing to do from an environmental perspective; second, it gave FHI better leverage in Japanese financial markets due to the Nikkei Index environmental rankings.”

Local leaders at the SIA plant say they didn’t question the company’s motives when the president of Fuji Heavy Industries issued the edict at a 2002 meeting in Indiana. By then, the Indiana site, set on 832 acres along the Wabash River an hour east of Indianapolis, was a year away from earning its status as a Backyard Wildlife Habitat from the National Wildlife Federation for decades-long efforts to exile exotic plants and restore native prairie grasses. The lake at the center of SIA’s test track, for example, is a sanctuary for blue herons and a popular visiting spot for bald eagles. The culture at the facility, it seems, has long bent toward responsible stewardship.

Denise Coogan, SIA’s safety and environmental compliance manager, who is tasked with overseeing the transition as well as ongoing efforts, prefers to dwell on the purer objective. “We couldn’t bring a hybrid car to market, we couldn’t bring an electric car to market—we were too small.” She means that, given the company’s small market share and the limited demand for battery-powered vehicles, it couldn’t achieve the economies of scale necessary to make production profitable. “So we asked, ‘How can we help the environment right now?’” She’s shouting over factory noise in a classic Chicago drawl, her blond bob crushed under a hard hat. Bright eyes and a perpetually broad smile pulsing her earnestness, she answers herself: “We said, ‘We can make the car in an environmentally friendly way and help the environment that way.’ So that was really why we started that.”

Even if that’s just for show, and even if the “it was the right thing to do” explanation is a load of hooey—what’s wrong with that, exactly? Is the point to help the environment, or to act all superior about it when we do? If a company can demonstrate that going green is good business—that, contrary to what a thousand sputtering commentators on Fox News will tell you, environmental measures save money, and are therefore fundamental to conservatism—then wouldn’t that be an idea worth spreading beyond the few places where it now resides?

Whatever the reason for the goal, Coogan and her Indiana colleagues achieved it in year two of the five-year timeline provided by the parent company. It started with employees recycling the obvious stuff—pop cans and bottles, newspapers and glass containers. Then the staff went Dumpster diving, flipping over containers and making an inventory of what was being hauled away. Steel, the largest source of excess materials in a car factory, was already being recycled here as at virtually every assembly plant. “Then it was cardboard; then it was pallets; then it was plastics; then it was Styrofoam,” Coogan says. With each material, SIA would try to find a recycler or a reuse for it. “Then we would check it off our list and go to the next one.”

The trick, she says, was not to rely on the fallback of incineration—as many plants in Japan had. Burning eliminates landfill bulk and creates some energy, but it also requires quite a bit of energy to operate an incinerator, and the process usually results in significant air pollution. It might have been the cheapest approach, too, but SIA has managed to recycle or reuse 99.97 percent of its waste—including, the company says, a small, undisclosed portion incinerated for energy—with the remainder being hazardous waste that is incinerated separately per federal guidelines. “In the first two years, we didn’t make any money at all; it cost us money,” Coogan says. “But now it’s a business strategy. Our quality improved, our waste costs went down.”

Intriguingly, for all the effort on the factory side, Subaru engineers are not expected to create more eco-friendly designs for the vehicles themselves. “The quality of the car and what customers want is always first,” Coogan says. Then they figure out a way to meet environmental objectives through production.

That is how the plant handled a new design a few years ago. It called for a metal lining around car windows, and required cutting window-shaped perimeters out of flat sheets of steel. At another car factory, the leftover steel would have been waste, at least at the start. But the manager of the department, accountable for keeping his waste numbers at a certain low level regardless of what demands were made of him, had to devise a plan. His solution: Run a conveyor below to carry off the excess, and then have it stacked onto a pallet. A supplier hauls this away, and re-forms it into gas cap covers and other parts. The savings comes to about 15 pounds of waste per car.

SIA can drown skeptics in data. In 2012, it recycled 30,116 tons of scrap metal, 1,632 tons of cardboard and paper, and 83 tons of wood, according to SIA executive vice president Tom Easterday. More than 670 tons of Styrofoam was sent back to Japan for reuse in 2012, for a savings of $1.3 million.

Still, the zero-landfill policy was merely a starting point for the plant. After achieving that goal, the pressure remained to find other ways to improve the use and reuse of its materials and diminish its effect on the environment. The most toxic place in the factory for the air, for instance, is the paint shop, where a decade ago SIA was emitting more than 15 pounds of volatile organic compounds, or VOCs, per vehicle. In 2007, the factory began switching to waterborne paint, which contains significantly less solvent, and replaced old spray guns with more precise applicators to reduce paint waste. A downdraft pushes excess paint into a water bath, which is chemically treated to bring the “live paint” to the top to skim off. The plant now uses 5 pounds of VOCs per vehicle. The leftover sludge is sent off-site for recycling.

The process is another win-win for Subaru. “We get a much better quality finish,” Coogan says. Meanwhile, “it also helps the transfer efficiency, so we get more of that paint on the car and less of it going down into the waste stream.”

These excess sheets of steel are re-formed into gas caps, saving 15 pounds of waste per vehicle.

“You know about the three Rs, right?” Schroeder asks. “Recycle, reuse, reduce. Recycling is good, getting usable product out of something. Reuse is better, because less of it has to be made. Reduce it, though, and you use less from the start. That’s the ideal.”

The professor’s lecture comes to life in places like SIA. The Styrofoam effort ranks as his favorite example. “They’re looking at the packaging for all these parts coming over from Japan and someone notices that the boxes go back empty. He says, ‘Why can’t we send this packaging back for them to reuse?’” They looked into it and discovered that the engine assembly department alone could send packaging for 80 different parts back for reuse.

Such ideas abound under kaizen, the collaborative Japanese management style in which low-level employees are encouraged to offer improvement suggestions at roundtable meetings with executives, even if their own supervisors are uninterested. This may help explain Subaru’s extraordinarily loyal workforce, one that embraces the zero-landfill process with gusto because it trusts bosses who have never, in the plant’s 24 years, resorted to cost-cutting layoffs. Subaru has forcefully and successfully resisted unionizing in part because it offers an exceptionally generous benefits package that includes premium-free health care, paid time for volunteering in the community, and an on-site doctor and pharmacy.

Ideas rarely stay within a particular department at SIA, Coogan says, but rather go on a public log on the factory floor. The logs list the dates of suggestions, the names of the employees who offered them (and their supervisors), the name of whomever has been tasked with considering them, and their status.

A decade in, much of these are small-ball stuff, but the effort shows the sincerity with which the company regards all voices, Coogan says, which makes it significant in its own right. So, for example, associate Shane Devon wanted the cafeteria vendor to offer a reusable coffee mug, and three employees have submitted similar queries about why restroom lights aren’t put on motion detectors so they’ll go off when nobody’s inside. (The food service mugs sold out, and the verdict from the oversight committee is that the motion sensor lighting wouldn’t be worth it.)

For all the victories, indeed, there are ideas that never get off the ground and others that prove to have potentially disastrous consequences. To reduce the fuel emissions required in hauling the paint-tainted water, for instance, SIA tried running it through a sludge dryer that boiled the water off and deposited it in a condenser for reuse. That reduced the amount of sludge sent off—until one day a couple years later when residual solvent caught fire. The practice was immediately halted.

Another challenge has been composting. Two 90-gallon steel bins stand behind the plant loaded with food waste and shredded biodegradable containers that, over time, become soil for employees to take home for their gardens. Employees have become so waste-conscious that the amount of food discarded has diminished to the point that the compost process doesn’t occur that well.

After a stocker suggested redesigning the tops of shipping boxes several years ago, the company reduced both its use of cardboard and incidents of workers cutting themselves slicing open the old boxes.

The idea that an army of auto-factory employees could almost be recycling and reducing too much may have seemed unlikely in 2002 when the company demanded the changes. But, Coogan says, “there was never a doubt that we weren’t going to do it. It was fun, and the people are so good. Really, there was no grumbling, or ‘Why are we doing that?’ There was none of that. People were really interested in getting it done, so it challenged them.”

It also changed them. The ethos has trickled down to personal habits, too. Garrity, the supply group leader, says he’s become painstaking at home about recycling even though he lives in a rural area where there’s no pickup. “What I have, I have to take somewhere after I accumulate it,” he says. “And, actually, I bring it here.” So many of his coworkers do the same that the plant provides a 20-yard-long recycling container that is hauled away at least twice a month heaping with cast-off materials from employee homes.

Garrity’s triumph in reusing the plastic inner diameter protectors is among the bigger new ideas to come along at a time when, as Coogan says, most of the “low-hanging fruit has been picked.” But Garrity isn’t quite happy yet. Those steel coils also have outer diameter protectors, made of the same thick plastic, that aren’t being reused. He continues to brainstorm with suppliers, though, on how to fix that. “It’s just like several other goals that we have around here,” he says. “If I have a goal, I’m sure we’re going to meet it one way or another.”