American Automobile Fuel Consumption Debate


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Wow. Thats pretty crazy.

Too bad the journalist felt the need to be so artsy, its a great story that doesnt need all those stupid references to early 20th century literature.

In response to Mike's point

what would you do if you were on the board of AEP?

I agree with them based on what we know from this article. They have a fidicuary responsibility to shareholders, and they don't seem to have broken any laws.

But we'd have to know more to make a fair assessment. Was there real informed consent in this process? Did the town's people have have a competent lawyer? Was AEP negligent in there past operation of the plant, which would certainly disqualify this settlement.

A little better journalism and this would be a juicy one.


Let's pretend for a second that we believe the best way to serve shareholder interest is to be a good corporate citizen. That in the long term, the returns will be better if you are, as a business, aware of the social responsibilities that come with being an employer and a member of a community. (...really just pretend it's that way for a second.)

With that frame of mind, let's say you're a consultant hired by AEP to solve this problem. The problem is that AEP has broken all sorts of environmental laws and can't hide the truth. They've injured people, caused both short term and long term environmental damage, and isolated an entire community. But they've seen the errors of their ways. They want to fix the problem and become that good corporate citizen, which they now believe will always yield better long term profits.

So now the question... what do you do?

Buying the town sounds so terse. So heartless. A big, bad corporation buying silence and a solution. But what are the alternatives? How do you put a moral fix on such a problem?

Now begins my humble opinion...

The payment ($20 million) was incredibly low, without a doubt, and the clause that prevented the residents from taking any further legal action was sleazy. But let's say you increase the payout 10 times. Is that better? Is that enough? I'm not so sure. Buying out the town sounds sleazy regardless of the price paid.

In a conversation around dinner, a few of us discussed taking responsibility for the future health of all of the residents. Seems logical. I'm willing to bet that regardless of how sick those people get, the insurance costs (and probably the actual medical bills) would not reach $20 million over their lifetimes. But how do you prevent abuse by patrons (i.e. running to the settlement clause every time you have a toothache)? Or do you even care about abuse? They've been so wronged, perhaps giving them some perk is not a bad idea. Does this set a precedent that AEP would be hestitant to follow through on in a different situation (like some kid playing under a power line)?

I put forth during the conversation that on top of whatever reparations are made to the residents of Chesire, AEP needs to make some guarantee that this will not happen again. I think if they took on some campaign to make sure every plant was safe for local residents, maybe the impact of the negative publicity wouldn't be as bad. But wouldn't this be an admittance of non-compliance at every plant that was made safe and clean?

So I'm still bugged by the question. How do you balance the cost of any solution (monetary or otherwise) with an effort to do what is right?

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