Inspired to Do Better Every day

Mohawk Chairman and Chief Executive Officer Jeff Lorberbaum and Mohawk Chief Sustainability Officer Bill Kilbride discuss Mohawk's approach to sustainability issues.

Mohawk has been operating through a severe industry downturn in recent years. What effect has this environment had on sustainability initiatives?read more

Lorberbaum: We were very effective at utilizing this period of weak demand to analyze and execute long-needed process improvements throughout our operations. While we have always been mindful of resource conservation, a declining market forced us to re-examine every part of our cost structure. As a result, dozens of initiatives emerged that not only reduced costs, but also reduced our consumption of energy, water and raw material inputs. We weathered the recession, and we are coming out of the downturn as a stronger, more competitive and more sustainable company both economically and environmentally. And I believe that everyone at Mohawk has a renewed appreciation for the saying, "If it's good for the environment, it's good for business."

It's been two years since Mohawk established a formal corporate sustainability function. How is management's approach to sustainability evolving?read more

Kilbride: "Continuous improvement" has been, and will continue to be, the operative phrase for years to come. Our first priority was to set baseline environmental metrics and goals. Since then, we've continued to get a better picture of our footprint, which in turn helps us to identify new best practices for our manufacturing facilities and in our administrative areas. We have also increased our focus on the social or workforce-related indicators in this year's report as intended. Our third-party assuror, FIRA, has been tremendously valuable in pointing out areas where we can do a better job, and we've concentrated on their findings during the past year to improve our data integrity. Going forward, our intent is to keep raising the performance bar.

What are some of the challenges you face with regard to realizing operational progress?read more

Kilbride: The majority of our growth going forward is likely to come from international market expansion and new product innovation. This presents a lot of unknowns with respect to manufacturing and distribution practices. It also adds more complexity to our decision-making process about business investments. We will have to take a more holistic view and consider the economic return, as well as the potential impact on our environmental footprint. Technology also could prove to be another challenge. At some point, we will exhaust readily available initiatives for significant resource conservation. At that time, the next level of significant progress may depend upon the development of new technologies, which adds another unknown to the long-term equation.

Looking beyond operational improvements, how are you integrating sustainability into your product portfolio?read more

Lorberbaum: We have a strong sustainability story in this area that goes back more than a decade to when we purchased our PET bottle recycling plant. Today, virtually all of our R&D investment is focused on products that have sustainable attributes – from recycled content to renewable inputs. Our motivation is two-fold. First, we want to meet the growing demand for these products among both residential and commercial customers. Second, innovations such as SmartStrand^® that use an agricultural input reduce our dependence on the volatile and inevitable rising cost of petroleum. Again, this makes business and environmental sense.

Kilbride: Our investments also extend beyond product development to product responsibility and management. We have just acquired, for example, a new lifecycle system, that helps us analyze the complete impact of any change that we make to our manufacturing processes. Finally, it is important to underscore that when Mohawk talks about sustainable products, we speak carefully to ensure that any environmental claims about our products are supported and verifiable.

Turning to social responsibility issues, Mohawk is expanding globally. How do you ensure that your international businesses are conducted at an appropriately high standard?read more

Lorberbaum: Though it is certainly harder to keep watch on a business on the other side of the world than on the other side of town, our level of responsibility is the same. We are committed to doing the right thing, regardless of the geographical location. As Mohawk enters new international markets, our due diligence goes beyond marketplace dynamics to include areas such as local labor practices, human rights and legal compliance as well. We also audit overseas suppliers before signing any contractual agreements.

How does Mohawk approach employee relations, especially given your expanding presence into different regions of the world where employment practices often differ?read more

Kilbride: Our success – no matter where we operate – reflects our ability to relate with our employees on a one-on-one basis. And we strive to have the same respect for employees in all areas of the world. Labor practices vary tremendously from market to market, and our intent is always to follow and uphold customary practices and local market regulations as they relate to the rights of workers to decide whether to enter into collective bargaining representation. Having said that, we also believe that open, direct and constructive dialogue between workers and management is the most effective way to reach mutually agreeable solutions to workplace issues.

Returning to where we started this discussion, the flooring industry has been through its worst downturn in history. How has this affected your employees?read more

Kilbride: Very few people in this country have been fortunate enough to get through the past years without making sacrifices, and that certainly extends to everyone at Mohawk. Many of our carpet operations, in particular, are in the unique position of being a major, if not the largest, employer in a relatively small town. This is a responsibility that we take very seriously, and we are mindful of the impact our business can have on the welfare of the community. We work hard to minimize the effects of painful decisions such as plant closures. We make every effort to re-employ our people at another location and to work with local governments to attract new employers.

Lorberbaum: On a positive note, I mentioned earlier that Mohawk is a stronger and smarter organization today for having managed through the economic challenges. We are very proud of our Healthy Mohawk program, which has been developed to help both our Company and our employees to manage rising healthcare costs and to improve their individual health. The program has some innovative features such as on-site health clinics that facilitate a more proactive approach to preventive care for our employees and others in the community. It's a great example of finding a solution to a long-term problem that potentially will benefit our employees for the rest of their lives.