Something’s Rotten in Hondo

Topic: Environment

Characters: George, Plant manager Bill, George’s boss


George Mackee thought of himself as bright, energetic, and [having] lots of potential. So why was this happening to me, he thought. George, married, two children, with his wife, Mary, had moved to Hondo, Texas, from El Paso four years ago and was now the manager of Ardnak Plastic Inc., a small plant that manufactured plastic parts for small equipment. The plant employed several hundred workers, which was a substantial portion of the population of Hondo. Ardnak Plastics Inc. had several small plants the size of Hondo’s, and George had a good relationship with Bill, his boss, in Austin, Texas.

One of the problems George’s plant had was that the smokestack emissions were consistently above EPA guidelines. Several months ago George got a call from Bill, stating that the EPA had contacted him about the problem and fines would be levied. George admitted the situation was a continual problem, but because headquarters would not invest in new smokestack scrubbers, he didn’t know what to do. Bill replied by saying that margins were at their limits and there was no money for new scrubbers. Besides, Bill commented, other plants were in worse shape than his and they were passing EPA standards. George ended the conversation by assuring Bill that he would look into the matter. He immediately started calling his contemporaries at other Ardnak plants. He found they were scheduling their heavy emissions work at night so that during the day when the EPA took their sporadic readings they were within standards. George contemplated this option even though it would result in increasing air contamination levels.

A month went by, and George still had not found a solution. The phone rang; it was Bill. Bill expressed his displeasure with the new fines for the month and reminded George that there were very few jobs out in the industry. That’s when Bill dropped the whole thing into George’s lap. Bill had been speaking to the Mexican government and had received assurances that no such clean air restrictions would be imposed on Ardnak if they relocated 15 miles south of Hondo in Mexico. However, Ardnak must hire Mexican workers. Bill explained that the reason for relocating would be to eliminate the EPA problems. Bill told George he had one week to decide whether to eliminate the fines by correcting the current problems or by relocating.

George knew that relocating the plant on the Mexican side would devastate the infrastructure of the city of Hondo and would continue to put contaminants into the air on the U.S. side. After mentioning the possibility to Mary, other concerns were reinforced. She did not want him to be responsible for the loss of jobs for their friends and extended families. What should George do?

Author: Dr. John Fraedrich, Assistant Professor of Marketing, Southern Illinois University

What Are the Relevant Facts?

  1. George has a family.
  2. George is a manager of a small plant.
  3. George’s plant smokestack emissions were consistently above EPA guidelines.
  4. George was informed by his boss that the EPA would levy fines pertaining to the emissions problem.
  5. George’s boss stated that no money was available and that other plants in worse condition were able to pass the emissions standards.
  6. George found out that the other plants were scheduling their heavy emissions work at night when the EPA officials were not around.
  7. George’s boss provided two options: eliminate the fines by correcting the problem with no additional money or relocate the plant in Mexico.
  8. The relocation of the plant would devastate the town of Hondo and would continue to contaminate the air on the U.S. side.
  9. Mary, George’s wife, stated that she did not want George to be responsible for the loss of jobs in their town

What Are the Ethical Issues?

  1. Whether or not to mislead the EPA as to the true level of emissions from the plant
  2. Whether or not to capitalize on a neighboring country’s less stringent laws
  3. Whether or not to destroy an entire community’s infrastructure

Who Are the Primary Stakeholders?

  • George
  • George’s family
  • Townspeople of Hondo
  • EPA
  • People affected by the pollution of the plant
  • The Mexican town

What Are the Possible Alternatives?

  1. George could follow the same approach as do the other plants in his company.
  2. George could relocate to Mexico.
  3. George could look for another job.
  4. George could discuss this problem with someone in upper management.

What Are the Ethics of the Alternatives?

  • Ask questions based on a “utilitarian” perspective (costs and benefits). For example:
  1. Which possible alternative provides the greatest net benefit to the greatest number?
  2. How would costs be measured in this situation (employment levels in Hondo, emissions levels, plant profits, etc.)?
  3. Do the benefits of moving the plant to Mexico outweigh the costs of loss of jobs or continued high emissions?
  • Ask questions based on a “rights” perspective. For example:
  1. What rights does each stakeholder have in this situation?
  2. Which alternative(s) would not respect your rights if you were a plant worker? A citizen of Hondo? A stockholder in Ardnak Plastics Inc.? George?
  • Ask questions based on a “justice” perspective (benefits and burdens). For example:
  1. Which alternative distributes the benefits and burdens most fairly among the stakeholders?
  2. Which stakeholders carry the greatest burden if the plant moves to Mexico? If heavy emissions occur at night?
  3. Is it fair for manufacturing plants to find expedient ways to avoid reducing levels of pollution? Why or why not?

What Are the Practical Constraints?

  1. It is unlikely that George has discretion to seek a costly solution.

What Actions Should Be Taken?

  1. What action steps should George take?
  2. What alternative would you choose if you were George? Why?