In late 2011, when routine back-to-school testing found high lead levels in the blood of about 50 Shanghai schoolchildren, Chinese officials blamed one of Milwaukee’s largest corporate citizens: Johnson Controls, the maker of lead-based car batteries.
For some, exposure was so high, they required hospitalization, and an indignant Shanghai Environmental Protection Bureau ordered Johnson Controls to shut down its battery plant in the area, a facility the Fortune 100 company has owned since 2005.
Johnson Controls, which has an international headquarters in Glendale and more offices Downtown, blamed a waste recycling facility for poisoning the children, insisting that emissions from its lead-processing operations were far below national standards for China. The company added that its plant employees were regularly tested for poisoning and showed no signs of contamination.
To further bolster its case, the battery maker commissioned an “independent study” from a trade group, the China Electric Equipment Industry Association, which confirmed high concentrations of lead at the accused recycling plant. Like the Johnson Controls facility, it’s located near the Kanghua New Village, the housing development where most of the children lived in apartment buildings.
A yearlong battle ensued between Johnson Controls management and Shanghai officials, but the plant never resumed lead processing operations. Instead, they met a definitive end late last year, imposing a setback on the company’s expanding Chinese operations.
The stoppage is perhaps the greatest loss suffered by a Milwaukee company at the hands of Chinese officials in recent years, whether or not Johnson Controls was responsible for releasing lead into the environment. Other well-known local companies, including Briggs and Stratton, Brady Corp. and Rockwell Automation, have found China to be a fertile market despite allegations from U.S. companies that government regulation there is often capricious or wrongheaded.
Shanghai officials say their actions are tied to efforts at improving dire environmental conditions in many parts of China, where some local governments are determined to curb industrial pollution.
“There’s an official recognition that the current situation isn’t sustainable,” says Barrett McCormick, a political science professor at Marquette University. “It’s impossible to know if the local government is going after Johnson Controls because it is probably easier to pick on the foreigner, or if Johnson Controls isn’t respecting the environment.”
The company continues to profess its innocence, even after agreeing to Shanghai’s demands.
“We stand by our environmental performance,” Alex Molinaroli, president of Johnson Controls’ Power Solutions division, said in September. “While we are disappointed with the local government’s position … we will continue to transparently work with governments and the industry to address environmental requirements.”
Work reduced at the Shanghai facility was shifted to other plants around the country. With fears of lead pollution wracking China, could Shanghai’s enforcement actions be repeated elsewhere? Yes, says McCormick. “There’s pressure to do something.”