Batteries International talks exclusively to Tim Vargo, Exide's new CEO.

Issue 110

Winter 2018/2019

Tim Vargo Meet Exide’s new CEO and his vision, plans for the future

Bringing the industry together

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COVER STORY: EXIDE TECHNOLOGIES

Technology to prove the driver for the next advances at Exide New Exide CEO Tim Vargo talks innovation, staff, customer care — all key to driving the firm forward once more. As Debbie Mason reports, these are exciting times as the battery giant takes its next steps.

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COVER STORY: EXIDE TECHNOLOGIES It has had to emerge twice from Chapter 11 bankruptcy, and has been fined millions of dollars for the Vernon recycling plant pollution — but Exide Technologies refuses to stay down, instead constantly coming back with new products, new acquisitions — and new CEOs. Latest in the top job, brought in this November, is Tim Vargo, a seasoned pro with more than 40 years’ leadership experience in the automotive supply chain and process improvement arena.

He’s got an impressive track record.

As president and COO of AutoZone, the largest aftermarket automotive parts and accessories company in

the US, Vargo increased the number of stores from 1,000 to 3,250 before he moved to Exide.

Sales quadrupled under his tenure, from $1.5 billion to more than $5 billion.

It wouldn’t be a ridiculous assumption to make that Vargo is looking to do something similar at Exide, where he replaces Vic Koelsch, who had been in place since May 2015 and who remains in an advisory role.

“I’ve been asked to accelerate the changes necessary to improve the key pieces of our business leveraging the three key things (customer focus, quality, environmental responsibility) that Vic helped put in place,” Vargo says.

“I’ve been asked to accelerate the changes necessary to improve the key pieces of our business leveraging the three key things (customer focus, quality, environmental responsibility) that Vic Koelsch helped put in place.”

THE INTERNET OF THINGS AND BEYOND

Perhaps one of the most fascinating aspects of talking with Vargo is that the idea of tailoring products is going to be a key part of the industrial side of Exide’s business — especially as the GNB Industrial Power arm joins the Internet of Things revolution in what he calls ‘a unique way’.

“We look at this technology as a means to better understanding our customers’ energy challenges for designing customized solutions from our wide bench of motive power technologies. Pre-sales this means monitoring vehicles to develop multivariate energy profiles and auditing facilities to ensure seamless integration of our technologies.

“Once we have this information, we can model our entire product line to understand which solutions are the most viable from an operational and financial perspective. This allows us

to give more informed answers to our clients, who are understandably confused about the plethora of new batteries hitting the motive power market.”

Perhaps what’s most exciting about this is that this is a launch of a battery manufacturing and technology firm into understanding the complete electronic lifecycle of its products — for the gain of both consumer and vendor.

“We’re committed to being the experts with the answers to design better systems for our customers — with their input and their data. And once deployed, we can monitor our systems to understand how we are doing. We look at system design as our promise to the customer, and the back-end monitoring as a way to better understanding how well we are living up to that promise.”

What’s most exciting about this is that this is a launch of a battery manufacturing and technology firm into understanding the complete electronic lifecycle of its products — for the gain of both consumer and vendor.

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COVER STORY: EXIDE TECHNOLOGIES NEW PRODUCTS, NEW APPROACHES

Vargo says the company is setting out a new approach to customers, with products tailored towards specific needs, for example whether a vehicle requires more starting power, or more power for its electrical systems.

“Modern vehicles demand more from their batteries than ever. In a race to provide more modern conveniences and safety features, car makers have dramatically increased the number of electrical components in their vehicles.

“While some of these features are easy to see, such as touchscreen infotainment systems and powered accessories like windows and locks, other items such as lane departure avoidance systems and emergency braking systems are out of sight.

“All of these systems create an additional burden for the car’s electrical system. To put this in perspective, a modern vehicle may contain more than 100 pounds (45kg) of wiring and as many as 90 small computers, whereas a base model vehicle from the 1970s contains less than 10 pounds (4.5kg) of wiring.

“In addition to these electrical demands, features such as stop-start functionality place additional strain on the batteries.”

Improving batteries to meet these demands is what Exide calls ‘reinventing batteries from the inside out’, says Vargo, and the new EFB Marathon and Marathon Max products released by the company were specifically designed for the North American market: Marathon uses enhanced flooded battery

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technology, which was introduced to North America for the first time in November, when the Nautilus marine battery was launched on the continent to meet growing energy need in modern boats.

“Marathon EFB is for the automotive market and provides added heat protection and delivers two times the cycle life of a standard flooded product with a higher charge acceptance over the life of the battery,” says Vargo. “We will also have an EFB offering for heavy-duty applications as well.

“Certain customers are going to take advantage of our ability to build EFBs in a good quantity and provide them with an option to take market share from their competitors that only have an AGM offering.

“With EFB, our customers can provide an option to their customers that falls between the entry-level standard flooded batteries available and the premium AG batteries.

Our customers are excited to have another option to sell.”

Vargo says all EFBs include the company’s new punched plate LifeGrid technology, improving performance and enhancing durability.

New products for vehicles that only need greater starting power are the Sprinter and Sprinter Max lines, and will be available in North America next year.

“Overall, our new products and new path-to-purchase strategy will reduce customer confusion, increase customer satisfaction, and strengthen profits in the battery category,” he says.

But although Vargo says major investments made globally have and will continue to increase production capacity, more important at the moment is customer delivery.

“The goal of our company is not to achieve world leadership position in terms of volume in the battery business,” he says. “We want to be the best battery supplier for our customers and make sure we are providing them with what they need. We want to make sure we are their preferred supplier in whatever segment we serve.”

And with this premium customer service must go innovation.

“Exide truly excels in innovation,” he says. “We have a 130-year history, which was built by the merging of many battery companies, each with their own rich history of innovation.

“Innovation is critical in our industry to ensure that batteries continually become ‘smarter’ to meet new demands from customers and environmental regulations.

“We are not operating in a ‘one size fits all’ industry, meaning that we have to develop the best battery for each market we serve, taking into account numerous industry trends and factors that impact battery operation.

“I believe the innovations we are bringing to our customers will really set Exide apart from our competition. There is a renewed vision for Exide to be the quality provider in the industry, something we have worked hard to earn back over the past few years.

“Now we are ready to take advantage of the opportunity we see for us to earn a larger piece of our customers’ battery businesses. We will do this with innovative, high-quality and energy efficient products delivered on time.”

But the approach will differ from region to region.

“In Europe, even as we see some hybrid and electric vehicles emerging from OEMs, the aftermarket’s main focus will continue to be on lead batteries for many years,” he says.

“European Union environmental regulations on limiting carbon emissions and increasing fuel economy standards have encouraged the rapid adoption of start-stop AGM and EFB batteries as well as lithium-based energy solutions in automotive, industrial motive and stationary energy storage applications. These environmental trends and the market demand for those types of batteries have developed later in the US.”

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COVER STORY: EXIDE TECHNOLOGIES

When it comes to the different sectors in which Exide operates, the company is keen to expand its capabilities. This June, the company bought Aker Wade — a charging, software and telemetry firm — whose purchase was made with the intention of growing Exide’s motive power business worldwide, Vargo says.

“Exide offers a battery portfolio with a solution for every application using a variety of technologies including flat plate, tubular and lithium. Adding the Aker Wade capabilities to this portfolio will allow us to be more competitive in applications that require advanced lead and lithium ion batteries,” he says.

Continued product launches

New batteries have been launched across the marine and leisure, material handling and heavy-duty truck applications, with AGM, Gel and VRLA ranges across the board.

But automotive is where Exide began and where it’s going to stay tuned, Vargo says.

“Exide’s 130-year history is in the transportation battery business and that is our clear focus on both enhancing the technology to starting and charging wherever that may go.

Yes, we’re in other segments, but we are primarily a transportation battery manufacturer. Motive and network

power are good, solid businesses for Exide, but the bulk of our business is in transportation and we see that as a great growth opportunity for our business.”

Employees — a key resource

One of the key messages that comes up time after time talking with Vargo is his belief in the importance of Exide’s employees. It’s a sentiment that echoes the mindset of the late CEO Gordon Ulsh, the man who was responsible for successfully restructuring Exide a year after it came out of Chapter 11 in 2004.

When he took charge in 2005, Ulsh identified one key problem at Exide was its low morale, and that this was taking hits from the outside as well as within.

“You really have to thank people and praise them, and after just a little bit of celebration, you raise the bar so that we keep trying to get better the next time,” he said in an interview with Batteries International in 2008.

“The only thing that erases selfdoubt is success. Turning around morale is the constant reinforcement of successes, be they small or large.”

The issue is intrinsic in every area discussed with Vargo: when he stresses the importance of continuous improvement he says it benefits employees as well as customers;

“We have improved our team in the past three years and have hired great people from this industry and others to up our game so that we can improve all facets of our business. We’ve done it and now we’re going for it.” www.batteriesinternational.com

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COVER STORY: EXIDE TECHNOLOGIES when we talk about investments in manufacturing facilities, he says a big focus has been ‘to improve ergonomics and to provide an even safer work environment’; and when it comes to customer service, he says ‘how we do that starts with our employees’.

“I see our responsibility as being first to our employees and to continue in investing in and nurturing a culture based on integrity, accountability, quality, customer success, courage and safety,” he says.

“Our employees embrace the ‘Powered by You!’ rallying cry, which means each of us knows what we have to do each day to help drive the

EXIDE’S LITHIUM PATHWAY

In 2013, while the company was filing for Chapter 11 bankruptcy in the US, in Europe it was turning its sights to lithium. The GNB Industrial Power team put itself at the forefront of this burgeoning industry by launching its first lithium battery for material handling systems, the GNB Sonnenschein lithium battery, to be used in large distribution centres, AGVs, hybrid cruise ships and other demanding applications.

“Following the success of these batteries in Europe, Exide launched its GNB LiFTFORCE LPX lithium battery in the US in April 2018,” says Vargo.

“Its benefits are streamlined operations, reduced downtime and lower total cost of ownership than traditional lead batteries.”

It can charge in just 15 minutes, up to eight times faster, and provides increased cycle life and lower maintenance requirements in forklifts and AGVs. It is suitable for large distribution centres and companies that run heavy-duty or multiple shifts looking to lower their operational costs.

“In terms of the future, we clearly see a role for lithium-ion because of all the advantages these batteries offer,” says Vargo. “But lithium is just part of our portfolio.

Our battery portfolio will continue to include both lead acid and lithium ion options. The focus is always on the customer and the economics driving the decision.”

As its lithium battery business grows, Exide is going to have to consider the recycling implications, especially since

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environmental concerns are one of its three key focuses.

“For our lithium products, we are exclusively working with external business partners,” says Vargo. “From the beginning of Exide’s entry to the market for lithium-based batteries, we have had end-of-life management integrated into the development of our product line.

“We have a clear understanding of the end-of-life transport requirements and have selected our business partners in light of these requirements.

“Also, we have designed products in a way that facilitates dismantling them to achieve the best recycling efficiency.

“The remaining challenge in lithium collection and recycling is recycling efficiency. While reclaiming the content of metals such as copper, aluminium, steel and cobalt is well established, the recovery of the lithium content (about 1%-2% w/w) is still a technological and economical challenge.

“This is addressed in multiple ways. On one hand our business partners in the recycling industries are addressing this, and on the other we see public-funded programmes (eg the Strategic Action Plan for Batteries of the European Commission) that can improve the sustainability of battery systems.

“It makes no difference whether we talk about lithium or leadbased batteries, At the end of the useful life, all batteries are collected and processed for the recovery of the materials used.”

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COVER STORY: EXIDE TECHNOLOGIES success of Exide Technologies.

“When employees are aligned with our company strategy and believe in the future success of our company they will naturally be more engaged with customers, provide excellent service levels and partner them to help them more profitably grow.”

This is new, he says. “Who we are today is different from who we were in the past. We have improved our team in the past three years and have hired great people from this industry and others to up our game so that we can improve all facets of our business. We’ve done it and now we’re going for it.”

TECHNOLOGY AND THE APPS

Exide equips users such as garage workshops or high-end users with tools to identify and analyze aftermarket battery reference.

This includes a Wi-Fi enabled, future proof battery tester suitable for use with EFB, AGM, Gel and standard flooded batteries for light, commercial, marine and leisure vehicles.

There is a companion mobile tester app which evaluates driving patterns and vehicle criteria to give installers tailor-made direction on whether a battery is at risk, or when it should be retested.

“Exide also launched a major update to its online battery finder, which features a modern interface and all-new user experience and supports battery selection and fitting for the most comprehensive range of vehicle types

such as cars, buses, trucks and motorcycles — plus, for the first time, construction and agricultural vehicles, snow mobiles and jet skis,” says Vargo.

“The tool’s new calculator function for motorhome and boat batteries is also the first of its kind from any battery manufacturer.

This trio of new Exide tools can help installers optimize the rising battery servicing demand created by the higher power requirements of today’s vehicles, and the global trend towards fuel and energy efficiency.

“Being able to offer a faster, expert service while also accessing vital data for service recall can also help garages improve customer satisfaction, enabling them to stand out from the competition.”

“We are not operating in a ‘one size fits all’ industry, meaning that we have to develop the best battery for each market we serve, taking into account numerous industry trends and factors that impact battery operation.”

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COVER STORY: EXIDE TECHNOLOGIES

Exide: The first 130 years were the hardest The creation of Exide as a global giant has had its ups and downs over the years — the last 20 of which the firm is ready to acknowledge as having been difficult — but this year the firm has every reason to celebrate its strength and continuity.

1888 was a year of invention in the US. That year George Eastman patented his Kodak camera, Edison filed a patent for the optical phonograph — now better known as the movies — and the US War Department installed its first rudimentary (and distinctly not electronic) computer.

But that spring, while the eastern seaboard of the country was ravaged by one of the worst blizzards in the country’s history, William Gibbs had other things on his mind.

As vice president of the United Gas Improvement Company, a Philadelphia gas lighting firm, Gibbs saw that electricity would eventually wipe out the business.

His answer was diversification. That year he set up his own firm — The Electric Storage Battery Company.

Armed with the ideas and patents of French inventor Clément Payen, Gibbs immediately realized that lighting and batteries would inevitably go hand in hand.

The result was the “Chloride Accumulator” — a name that still resonates throughout the lengthy history of the battery industry.

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Within two years the firm had won its first major contracts in Philadelphia. Initially it was to power electric streetcars, and Exide must be given credit for having been the first battery firm in at the start of the hybrid.

By 1895 the Electric Storage Battery Company — under the extraordinary business genius of Isaac Leopold Rice — annually grossed $1 million from batteries designed to fit lathes, drill presses, sewing machines, telephone and telegraph stations, switchboards, fans, fire alarms, phonographs, hospital tools and automated pianos.

In 1898 Exide provided the first batteries to the US Navy’s first modern commissioned submarine the USS Holland.

By the turn of the century, Electric Storage Battery Company batteries were used as power sources in electric locomotives, streetcars, passenger cars, surface boats and telephone exchanges and signalling systems for railroads. In 1898 they were even used to power the US Navy’s first submarine.

The first recognized instance of the name ‘Exide’ occurred in 1900, when

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COVER STORY: EXIDE TECHNOLOGIES

that is what it labelled its star battery — in full, ‘Excellent Oxide’.

Exide batteries powered some of the first electric cars but they also solved a common health problem for drivers at the time: motorists’ broken arms.

As a driver’s hand cranked the engine, the crank often swung back violently, injuring the driver’s arm. It was efforts to eliminate dangerous engine cranking that led to the development of battery-started vehicles.

The 1912 Cadillac became the first battery-started car with an internal combustion engine, courtesy of the Electric Storage Battery Company.

Over the years, Exide has been a part of many major developments in exploration, communications and warfare.

In 1934, an Exide deep-cycle battery was the sole source of electrical power when Commander Byrd established a military base on Antarctica. Exide batteries provided power for Piccard’s balloon flight and diesel locomotives that same year.

New frontiers

In 1969, NASA’s first lunar landing module used the stored energy of Exide’s solar-recharged batteries. NASA took silver-zinc Exide batteries to the moon on all of the Apollo space missions.

By 1987, with Exide’s acquisition of General Battery Corporation, the company’s product line had become broad enough to be fitted in nearly every vehicle on US roads.

In 1992 Exide introduced free electrolyte and gel batteries, climate tailored batteries and maintenance free technology for various marine applications.

Its technology continued to push out the bounds of battery power and in 1999 it introduced the cylindrically wound Exide Orbital technology into the automotive and speciality battery markets.

Exide bought GNB Technologies in 2000, expanding its presence in North

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America for automotive and industrial batteries. It also bought Gould National Battery, the owner of the Vernon recycling plant, which was to be a source of trouble for many years ahead.

In 2001, Exide announced batteries would be in the X-38, the prototype for the emergency Crew Return Vehicle for the International Space Station. The vehicle and its batteries had to stand at the ready for as long as three years and be able to evacuate a crew of seven from the Space Station within three minutes.

But it was at the turn of the century that some of its troubles began. In 2002, it filed for Chapter 11 bankruptcy. (Under US law Chapter 11 allows a firm to trade while being technically insolvent. During this period it is allowed time to reorganize itself so that it can trade profitably afterwards.)

The reasons for the collapse predate the move into Chapter 11 by almost a decade. The expanding battery manufacturing firm was growing rapidly with acquisitions across Europe. Notable take-overs included BIG batteries and Gemala in the UK, CEAC in France and Tudor in Spain.

As corporate financiers are keen to point out (and usually do so at length), the hardest part of a merger is not necessarily the acquisition of the firm but more often its assimilation.

So, although Exide had achieved global status it was gradually accumulating fat across its operations with inefficient practices going unchecked, excess staff accumulating and a coherent, cohesive organization was starting to fall into disarray.

In a sense the problems came to a head in October 1998, when chair-

man, president and CEO Arthur Hawkins and executives Alan Gauthier and Douglas Pearson were forced to resign from Exide.

Charges against the former executives included conspiracy to defraud the US and defraud by wire. The charges stemmed from allegations that Exide executives had lied to secure a large contract with Sears, Roebuck & Co in 1994, which also involved more than $100,000 in alleged bribes paid to a Sears battery buyer.

Indictments

It wasn’t until July 2001 that the culmination of legal proceedings brought about an indictment of Hawkins, Pearson and Gauthier. As part of this, Exide was fined $27.5 million.

Alan Johnson headed the firm for eight months before Bob Lutz — who described himself as the interim president and CEO — took over. Lutz pulled some bold initiatives. He sought to pull the disparate parts of Exide’s global operations into functional business units by geographical region and pushed to ensure that Exide would continue to focus on its core business (by selling off non-battery units).

Lutz saw the future of the firm lying in one further acquisition, which would transform Exide into a global giant. And, since financial analysts at the end of 2000 were already speculating that Exide might be technically insolvent, the new company’s cashflows would be immensely useful in propping up Exide’s troubled bottom line.

So in May 2001 Exide bought GNB Technologies for $368 million from Pacific Dunlop. Strategically, GNB Industrial Technologies, renamed GNB

This May — on the 130th anniversary of the firm — Exide bought Aker Wade Power Technologies, signalling yet again that Exide was as much a technology firm as a battery manufacturer.

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COVER STORY: EXIDE TECHNOLOGIES EXIDE’S GLOBAL SIZE AND REACH

GLOBAL CORPORATE HEADQUARTERS • Milton, Georgia EUROPEAN HEADQUARTERS • Gennevilliers, France TRANSPORTATION, MANUFACTURING FACILITIES USA/North America • Florence, Mississippi • Manchester, Iowa • Salina, Kansas Europe • Azuqueca, Spain • Büdingen, Germany • Manzanares, Spain • Pinsk, Belarus • Poznan, Poland • Romano, Italy South Asia • Prantij, India TRANSPORTATION DISTRIBUTION CENTRES USA/North America • Manchester, Iowa • Mississauga, Ontario • Salina, Kansas Europe • Albairate, Italy • Azuqueca, Spain • Brunn, Austria • Castanheira do Ribatejo, Portugal • Ciempozuelos, Spain • Florival, Belgium • Helsinki, Finland • Herblay, France • Nimes, France • Moscow, Russia • Nol, Sweden • Oslo, Norway • Poznan, Poland • Romano, Italy • Rotterdam, The Netherlands • Swarzedz, Poland • Trafford Park, England • Vejle, Denmark

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Tactically the acquisition made a lot of sense. To this day GNB is the crown jewel in Exide’s operations. But hopes that it would solve Exide’s cashflow problems were unfounded.

Industrial Power, was to give Exide strength in the network power and motive power businesses (the industrial battery market).

Tactically the acquisition made a lot of sense. To this day GNB is the crown jewel in Exide’s operations. But hopes that it would solve Exide’s cashflow problems were unfounded.

However, the core problem of bloatedness was intact. It was now much more than a potentially flawed M&A strategy. The very size of Exide had created its own set of problems — most particularly in that the economies of scale had been lost in scale itself.

A year later, the DTSC began a yearslong investigation into the Vernon recycling plant — which came with the GNB acquisition — and fine after fine was levied upon Exide, which was ordered to clean up the residential areas around the plant.

The Vernon issue continued in the background for years, and the clean-up is still continuing (see separate piece).

In 2004 the firm emerged from Chapter 11. And that same year Exide Europe released the first start-stop AGM battery for a French car manufacturer.

Under the charismatic leadership of CEO Gordon Ulsh, the firm regained lost ground quickly.

Four years later, Exide Europe developed its first EFB battery for start-stop systems, as well as its first generation of high-vibration resistance truck battery technology in 2008. In terms of technology the firm was on a roll.

And business still advanced. In 2010, Exide opened a $4 million Global Technology Centre in Georgia, aiming to develop new materials, products and processes along with its existing facilities in Spain and Germany. Two years later, the Edge AGM product line was launched in the Americas as the first AGM stored energy product.

But dark clouds over its finances had already started to form as early as 2008. The worldwide economic crisis hit Exide’s European business — which generated just over half of its revenues — hard and continued to do so for years to come.

A further blow happened in 2010.

Wal-Mart, one of Exide’s then major customers, chose Exide’s principal rival

Johnson Controls as its sole supplier of transportation batteries and stopped carrying Exide’s rival products.

Exide said Wal-Mart’s switch resulted in a loss of about $160 million in annual revenue.

“More significantly, in addition to the revenue lost from Wal-Mart sales, Exide also lost an important and reliable source of battery cores under a captive-core arrangement with WalMart,” Exide later said.

The situation wasn’t helped by increased production costs that couldn’t be passed on to the consumer, and the long-standing problems with the battery recycling plant in Vernon, near Los Angeles, which had come under increasing scrutiny and fines by California’s Department of Toxic Control Substances.

Ironically the acquisition of what became GNB Industrial Power — the basis for Exide’s present success story — came with the related acquisition of its battery recycling plant.

Chapter 11 became inevitable. In June 2013, Exide again filed for Chapter 11 bankruptcy, claiming $1.9 billion in assets and $1.1 billion in liabilities.

It emerged two years later as a privately held company, substantially in its current form — operating across all industrial energy and transportation business segments globally.

In August 2015, it opened a new motive power R&D testing facility in Michigan to develop advanced materials, products and processes.

In May this year — on the 130th anniversary of the firm — the company bought Aker Wade Power Technologies, the advanced charging system designer and manufacturer for the motive power industry. The move signalled yet again that Exide was as much a technology firm as a battery manufacturer.

Aker Wade’s existing research development and light manufacturing facility remain in Charlottesville, Virginia while Exide remains based in Milton, Georgia.

New CEO Tim Vargo was appointed in November. He takes charge of a company with a 130-year history of technological advancement, a firm with 10,000 employees and a presence in more than 80 countries.

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COVER STORY: EXIDE TECHNOLOGIES

Vernon: fixing the sad saga of a lead recycling plant gone wrong Exide has a plastic recycling plant and two battery recycling plants in the US, and three battery recycling plants in Europe.

Its former plant at Vernon, California, is still undergoing clean-up operations after years of investigations, public outcry, soil testing and millions of US dollars in fines.

The history of Exide and the recycling plant goes back to 2000, when the company bought Gould National Battery and its assets, which included the Vernon plant.

But the history of the plant goes back to 1981, when GNB was issued with an ‘interim status document’ by the California Department of Health Services and the recycling plant was opened.

It has never actually operated with a full permit, although in 2006 the Department of Toxic Substances Control did invite public comments on a draft permit issued in response to an application by Exide in 2006 for a full permit.

The first fine was levied on Exide in 2003, when $40,000 was demanded by the DTSC for improper storage of lead batteries. The payment was delayed because at the time the company was in the throes of a Chapter 11 bankruptcy filing.

Since then, fines and orders to clean up have been issued on a regular basis, and investigations by the DTSC have tested the soil in and around hundreds of homes in the area.

In 2009, the first six-figure fine was levied on Exide, this time by the Air Quality Management District, which agreed a settlement of $400,000 for air quality violations and enforcement costs.

Just a year later, in 2010, the DTSC fined Exide $100,000 for illegally storing hazardous waste lead and failing to remove contaminated sludge from a storm water retention pond.

In the same year, the AQMD set more stringent monitoring and reporting requirements on the facility, as well as requiring additional testing and housekeeping measures.

Another hefty fine was imposed in 2012, when Exide had to find $119,000 for seven air quality violations — and a year later, the site was briefly closed for the first time by the DTSC, which found there was ‘an imminent and substantial

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CEO Tim Vargo: “In Vernon we are meeting our obligations to the State of California and the DTSC. Exide will continue to be a constructive participant in evaluating and addressing the need for clean-up of industrial and residential properties to the extent they were impacted by the facility’s former operations.” danger to the public health, safety and the environment’. Exide contested the shutdown and there followed years of public meetings, soil tests and removal, resident blood testing and other health assessments before a final, permanent Closure Plan was agreed in 2015.

The clean up begins

Under the plan, 2,500 properties within a 1.7-mile radius would be cleaned up over a two-year period, the largest clean-up of its kind in California, according to DTSC director Barbara Lee. Homes with soil concentrations of 400 parts per million or higher would be prioritized, along with any which had individual samples of more than 1,000 parts per million, even if the overall concentration was less than 400.

But the situation isn’t as bleak as this history of fines and penalties would suggest.

Incoming CEO Tim Vargo is insistent that the firm is doing its best.

“In Vernon we are meeting our obli-

gations to the State of California and the DTSC and Exide will continue to be a constructive participant in evaluating and addressing the need for clean-up of industrial and residential properties to the extent they were impacted by the facility’s former operations,” he says.

“Clearly the industry had to change its practices a number of years ago and Exide has worked hard to make sure we have fulfilled our obligations to change our processes to meet current standards,” he says.

“We are committed to providing clean air for our employees and we embrace the current standards for air quality, water quality and soil quality.

We work hard to make sure we are good stewards of the environment.

“Exide is committed to operating in a manner that protects the health, safety and well-being of our employees, contractors, visitors and those in the communities where we live and operate. In all facilities, we meet or exceed the requirements of national, provincial, state or local EHS laws and regulations.”

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