Is GE Mightier Than the Hudson?
Jack Welch is the darling of American capitalism, an Irish kid up from Salem, Massachusetts, who with salty tongue and a take-no-prisoners ferocity toppled the staid bureaucracy of the General Electric Co. As its CEO since 1981, he has engineered more than 600 acquisitions and increased GE's market value from some $13 billion to more than $550 billion. The Financial Times has decreed GE the world's most respected company; Fortune anointed Welch the greatest manager of the twentieth century; to Talk magazine he is simply "a legend." As this 65-year-old miracle worker heads toward retirement at year's end, he is writing a book that eager executives hope will divulge the secrets of his mythic administrative wizardry. Time Warner Books has paid him $7.1 million for this instruction; Colin Powell and the Pope settled for smaller advances.
All this confetti tends to obscure the fact that for twenty-five years Welch has worked overtime to dodge GE's responsibility for cleaning up the upper Hudson River, the biggest toxic site on the Superfund list of the Environmental Protection Agency. The company's latest strategy has been to bombard residents of the region with television and radio commercials, full-page newspaper ads and billboards demonizing the EPA for its position, announced formally on December 6, that dredging is the best way to rid the river of the PCBs that GE heedlessly dumped into it over a thirty-year period. This slick PR blitz does not dwell overlong on the fact that Superfund law puts the company on the hook for the cleanup tab, which the EPA estimates at some half a billion dollars, a figure that could well balloon by several billion.
GE began using PCBs in the late 1940s as a dielectric fluid in the housings of the transformers and capacitors it manufactured in plants at Hudson Falls and Fort Edward, on the east bank of the river north of Albany. By the mid-1970s the company had dumped some 1 million pounds of the toxic, man-made chemicals into the river. A growing number of studies by then had demonstrated that these polychlorinated biphenyls caused cancer in laboratory animals and probably humans, and that they were also linked to premature births and developmental disorders. When PCBs are consumed, directly or through eating fish, they are not excreted but bioaccumulate in fatty tissue; the EPA continues to rank them among the chemicals most toxic to human health. Despite strong opposition from GE, the federal government banned PCB use in 1977. New York State had demanded a cleanup even before the ban, and in 1976 GE dispatched its rising star to reach a settlement. With the same kind of hard-nosed tactics that would win him the nickname "Neutron Jack" after he laid off 100,000 employees in the early 1980s, he bulled through a deal that stated that GE had done nothing illegal and that limited the company's liability to $3 million--0.6 percent of what the EPA now says it will cost to dredge the river. This history is spelled out in some detail in At Any Cost: Jack Welch, General Electric, and the Pursuit of Profit (1998), whose author, Thomas O'Boyle, and publisher, Alfred A. Knopf, received several threatening letters from GE after Welch managed to obtain O'Boyle's book proposal, which made plain that the work would not be the kind of valentine the CEO had come to regard as his due.
Welch's triumph in the 1976 negotiations played no small role in his elevation to GE's executive summit, and once on that peak he may well have assumed that he had buried the issue, as GE scientists insisted--and continue to insist--that the PCBs are buried in the river's sediment and are thus now harmless. But the science only grew more damning, and in 1983 the EPA declared 200 miles of the majestic river--from the two plants south to New York Harbor--a Superfund site. After almost two decades, the New York State Health Department still advises women of childbearing age and children under the age of 15 not to eat any fish from this entire stretch and urges that no one eat any fish from the upper Hudson, where the cancer risk from such consumption is 700 times the EPA protection level. The river's once-thriving commercial fishing industry has been moribund since the mid-1980s, and sports fishing is on a catch-and-release basis for the indefinite future.
Once GE stopped dumping, its scientists began arguing that natural biological mechanisms were eliminating the PCBs from the river or reducing them to nontoxic form. When the company's own research demonstrated that this wasn't true, its new battle cry became: "Don't worry, the PCBs have been buried in the sediment." Then, in 1991, GE discovered that PCBs were still seeping into the river from a long-abandoned mill just below the plant at Hudson Falls. Under a consent decree with New York State, GE agreed to clean up the site and to date has spent some $200 million on the project, which the company claims has reduced seepage from five pounds to three ounces a day. The mill finding was a setback for GE, but the company soon scrambled to turn this debit into an asset: by maintaining that the seepage is responsible for the continued presence of PCBs in the river, that stanching it will solve the problem and that dredging the river is unnecessary and courts ecological disaster. "Let Nature Clean Up the Hudson, Not the EPA," announce signs on Albany bus shelters and big, blue highway billboards throughout the upper Hudson River region. "EPA can dredge literally until doomsday, and it won't make the fish any better than natural recovery," insists Stephen Ramsey, GE's vice president for corporate environmental programs, in a half-hour infomercial that has aired on several network outlets in the area. Ramsey may be a company suit, but with his open collar, salt-and-pepper beard and earnest promise to "spend whatever it takes" to save the Hudson, he comes across as someone who might jump out of the frame at any moment to hug a tree. This is the least of the campaign's deceptions: