GKN Driveline

Environmental Stewardship Initiative

The GKN Way

GKN Driveline

GKN Driveline Sanford Precision Forming Facility

Plant construction 1983

First production October 1984

Inital capacity of plant 4 million forgings / year

2005 output more than 12.2 million forgings

GKN Driveline

Our Product

Steel is the starting material

Forgings are made at PF

From forgings, CV joints are made at other GKN plants

GKN has more than 40% of the global market for CV joints

GKN Driveline

HR-EHS-014 / January 2, 2001 / Rev. Date: 5/5/04

EHS PolicyAt GKN Driveline, we are committed to maintaining a high standard of environmental,

health, and safety (EHS) performance by the establishment and review of objectives and targets by corporate management. We also are committed to creating and promoting a safe and healthy working environment by implementing accident

prevention programs, encouraging safe work practices, and by systematic and active management of risk in all areas of our business.

We strive to comply with all applicable EHS regulations, GKN policies, and other requirements to which we subscribe. We will ensure prompt correction of non-

compliant issues.

We are dedicated to the prevention of pollution, reduced emissions to air, land, water, and to the conservation of natural resources. We encourage the development of waste reduction partnerships with employees, suppliers, and customers. We will

continually improve actions that reduce risks, accidents, and minimize negative EHS impact.

GKN Driveline

ENERGY CONSUMPTION

OUR SIGNIFICANT ENVIRONMENTALASPECTS & IMPACTS

WATER CONSUMPTION

ISO14000 ENVIRONMENTAL MANAGEMENT SYSTEM

WASTE GENERATION

GKN Driveline

Corporate Target

Site Target

Corporate target: 10% reduction from 1999 baseline

Site target: 18.65% reduction from 1999 baseline

Energy ConsumptionKWh per 100,000 Pieces Produced

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Jan

Feb Mar Apr MayJu

ne July

Aug Sept

OctNov Dec YTD19

9920

04

Energy Usage (KWh) Energy Target (KWh)

Corporate Target

Site Target

GKN Driveline

Corporate target: 10% reduction from 1999 baseline

Site target: 17.75% reduction from 1999 baseline

Water ConsumptionCubic Meters per 100,000 Pieces Produced

0.0050.00

100.00150.00

200.00250.00

300.00350.00

400.00450.00

Jan

Feb Mar Apr MayJu

ne July

Aug Sept

OctNov Dec YTD19

9920

04

Water Usage (Cubic Meters) Water Target (Cubic Meters)

Site TargetCorporate Target

GKN Driveline

Corporate target: 5% reduction from 1999 baseline

Site target: 48.14% reduction from 1999 baseline

Waste GenerationMetric Tonnes per 100,000 Pieces Produced

0.000.501.001.502.002.503.003.504.004.505.00

Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec YTD 1999 2004

Solid Waste (Metric Tonnes) Solid Waste Target (Metric Tonnes)

Site Target

Corporate Target

GKN Driveline

Our Commitment beyond Compliance

GKN Driveline

Earth Day Celebration

An opportunity to renew our pledge to minimize the impacts of our significant aspects—energy, water, and waste

Employees reviewing Earth Day displays

GKN Driveline

State-of-the-Art Emissions Control System

The Rotoclonescrubber combines centrifugal force and mixing of water and dust-laden air

Only forging plant in the world that has applied this technology to control warm form press emissions

Rotoclone scrubber replaced the wet scrubber system although compliance was fully achieved with the wet scrubber system

GKN Driveline

Debottlenecked Waste Water Treatment Plant

The Waste Water Treatment plant project was debottlenecked to ensure zero non-compliance at all times

The limitations of the previous plant were flow and zinc content. But the new plant was over-designed on purpose to accommodate stewardship features, e.g., drier filter cake, lower toxic levels, and equalized flow.

GKN Driveline

Value Stream Management (VSM) CellThe VSM cell reduced material movement by streamlining the cold forming operation

Phosphate treatment is one of the main contributors of environmental pollution. The VSM cell eliminates phosphate treatment.

The VSM cell results in significant reduction of energy, water, and waste—our significant ISO 14000 aspects and impacts.

GKN Driveline

Recycling Projects

• Computer and photocopier paper

• Plastic bottles

• Aluminum cans

• Chemical drums

• Aerosol cans

• Used oil

• Wood pallets

• Fluorescent lamps

• Steel scrap

COMPLETED

GKN Driveline

Other Stewardship InitiativesGKN is one of the few companies that tracks CO2 emissions from transportation of raw materials and products (Global Warming/Kyoto Protocol)

We meet with the City of Sanford to pro-actively address compliance issues

Various parameters of our storm water are monitored on a daily to weekly schedule (our permit requires semi-annual monitoring only)

We are actively pursuing a project for incorporating waste watertreatment sludge into building materials (instead of landfilling)

GKN Driveline

Our Partnership with Local Community

GKN Driveline

Sustainable DevelopmentENVIRONMENT ECONOMY

COMMUNITY

GKN’S CORPORATE POLICY EMBRACES HARMONY BETWEEN THE ENVIRONMENT, THE ECONOMY, AND THE COMMUNITY

GKN Driveline

Greening Sanford

GKN Driveline employees planted trees at Depot Park, Sanford (Sanford Herald,

April 17, 2005)

GKN Driveline

Benchmarking for Environmental Stewardship

The GKN PF plant is routinely benchmarked by forging operations all over the world

We have benchmarked environmental management systems of Toyota, Moen, and others

In return our environmental management system was benchmarked by NACHI, Lee Iron and Brick, Caterpillar, and others

Our corporate website provides internal benchmarking opportunities on our best management practices for environmental systems

GKN Driveline

Other Community Initiatives

Presentation of our environmental policy and environmental management system to the Mayor and his City Council members

Partnership with NC State University on energy audit

Partnership with NC Solar Center, State Energy Office, and San Diego Power for energy reduction measures

Partnership with supplier IMDS program for greening the supply chain

GKN Driveline

Integration of our EMS into Core Business Functions

GKN Driveline

Integration EffortsEnergy, water, and waste evaluations in our capital investment decisions (e-works software for CAPEX decisions)

Kaizen (continuous improvement) initiatives that won top award for EHS innovation in 2002, and local management award in 2003 and 2004

Communication of ISO 14000 objectives and targets:Monthly meeting with local management

•Monthly meeting with top management

•Quarterly environmental report to corporate

•Annual environmental report to corporate

GKN Driveline

Integration EffortsSite environmental goals and objectives are integrated with corporate loss prevention and risk assessment approach (through use of corporate-sponsored ENGAGE software)

Corporate “Green Scheme” program fosters innovation in environmental management systems, and provides a significant opportunity for benchmarking best management practices

Quarterly and annual environmental reports are submitted to corporate addressing environmental management system conformance with ISO 14000 standards

GKN Driveline

Integration Efforts•ISO 14000 steering committee, non-conformance forms, behavioral surveys

•ISO 14000 training and awareness campaigns

•ESCARs (corrective and preventative actions program)

•Rewards and recognition program

•Partnership with suppliers and contractors—review of EMS information at the security gate, contractor video

GKN Driveline

Incentives for Meeting Objectives and Targets

•Bonus package for management is linked to meeting ISO 14000 objectives and targets

•Incentives package for employees is linked to overall achievement of EHS metrics (including ISO 14000 objectives and targets)

•Spot awards for submitting exceptional environmental recommendations for meeting ISO 14000 objectives and targets

GKN Driveline

Going into the Future…..

•More recycling projects: Toner cartridges, Batteries, Oil absorbents, Gloves, Aprons

•Carpooling

•Further awareness through ISO 14000 puzzles and behavioral surveys

•Water-based parts cleaners (instead of solvent-based)

•Kamishibai audits for our environmental system

•Green supply chain

GKN Driveline

The GKN Driveline facility is poised to be the environmental benchmark for other GKN facilities, and

for forging operations around the world