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Jonathan Gardner
February 21, 1994
WASHINGTON The American Plastics Council soon may leave the Society of the Plastics Industry Inc. and link more closely with the Chemical Manufacturers Association.

The possible split suggests a power struggle among top group officials, as SPI's staff, in an unusual turn, urged some processor members to lobby against the proposal.

After Plastics News learned of the plan, however, officials from both organizations played down any changes that might result.

``We're trying to look at how we can make this initiative more effective and efficient,'' said Watts Humphrey, the SPI board vice chairman who also sits on APC's board. ``We're trying to look at a way to build relationships across the entire industry.''

``In fact, we want [the SPI-APC] relationship to be much closer,'' said Earnest Deavenport, the Eastman Chemical Co. chairman and chief executive officer who also chairs the APC board. ``APC will always continue to be an ongoing joint initiative with SPI.''

The proposal is part of a review of APC's efficiency and effectiveness requested by its board of directors, which comprises the top executives of 25 chemical companies who are also CMA members.

Robert Roland, the retired CMA president who APC retained to review its programs, delivered an interim report to APC board members at a Jan. 11 meeting.

In reviewing the programs, Roland said he interviewed more than 30 people involved with APC and SPI, including board members, high-ranking executives of member companies, and staff members of both groups.

From that report, APC directors formed a task force to develop some final recommendations to be released at the board's April 20 meeting.

Although Roland said he was surprised that an SPI official was describing the plan as a loss to that organization, he declined to describe the contents of his report, citing the confidentiality of his relationship with APC.

Deavenport and Humphrey said Roland and the task force are looking at how to improve APC decision-making and communications and eliminate possible redundancies in CMA, APC and SPI functions.

Deavenport said they are reviewing how to tap each organization's resources to benefit the plastics industry.

The possible realignment was disclosed in a Feb. 4 letter SPI staff members sent to some member companies. Plastics News obtained a copy of that letter, in which SPI officials describe the possible changes and, in urgent terms, ask members to campaign against them.

The 12-page letter includes material that it says ``strongly suggests that processor members of SPI may lose a substantial benefit if the APC were to separate from SPI,'' such as questions about APC's future, possible consequences if APC pulls out, and reasons why APC should be a unit of SPI.

It also includes the names, addresses and phone numbers of members of APC's board and coordinating group.

``Because the loss of the APC activity as part of SPI would have a particularly significant impact on the interests of packaging producers, and because packaging producers are highly regarded as energetic, thoughtful contributors to many of our past policy debates, we believe you have the incentive and the ability

to make a difference in the outcome of these deliberations,'' read the letter.

That message is unusual because it indicates some resistance even within SPI's staff against a proposal floated by some of SPI's most powerful members, the resin companies. Both APC and SPI tend to downplay internal discord on important decisions.

John Malloy, SPI's director of packaging services, signed the letter. The letter named SPI Chairman Rip Gage of Gage Industries Inc., past Chairman Bill Joyce of Union Carbide Corp. and SPI President Larry Thomas as approving of the letter's message.

None of the principals of the letter would comment on it or the APC board's review.

The study of the APC structure comes as the group, now a partnership of SPI and CMA, is funding a campaign to enlist processors in an effort to improve the image of plastics and defeat legislation banning or restricting plastics.

Some processor members active in that campaign had sharp criticism for the proposed APC/CMA shift.

``Based on everything I've heard so far about it on both sides of the issue, I am opposed to it,'' said Harry Ussery, president of Beacon Plastics Inc. of Greenville, S.C., and a member of SPI's board of directors.

``I think it would have a negative effect on the ongoing mobilization efforts and a negative effect on the cohesiveness of the plastics industry,'' said Ussery, also vice chairman of APC's mobilization committee.

George Makrauer, president of bag manufacturer Amko Plastics Inc. in Cincinnati who advanced the concept of APC to the group's first board chairman, warned that processors will not view any separation kindly.

``I think that would be looked at as an abandonment of processors,'' Makrauer said. ``I think most processors, whether they are able to quantify it or not, have seen a tangible benefit from the programs of the APC and its relationship with the SPI.''

One processor said a better idea would be to retain APC's relationship with SPI, but to involve the CMA more.

``It doesn't seem to me to hurt in any way to have both the SPI and CMA involved,'' said P. Marshall Henderson, president of Amex Packaging Ltd., a Mooresville, N.C., blow molder.

``I like the fact that the SPI is involved with the APC. I think the APC has a very effective program. You have to rationalize paying your dues to any organization, and to me I think the APC is one of the best things the SPI is doing,'' he said.

Henderson added that he would be more likely to respond to APC calls for grass-roots lobbying if they came through familiar SPI channels, likening it to his dealings with his resin supplier, Occidental Chemical Corp.

``If the OxyChem chemicals guy asks the plastics guy to get me involved, I don't see any difference. But if I get a letter from the CMA, a group that I've had little or no contact with, I don't know what I'd do with it,'' he said.

The SPI letter, which apparently was sent to a small number of processors, anticipates that they may be reluctant to participate with a CMA-directed APC.

``Will SPI's processor members the largest organized block of processor companies continue to line up behind a mobilization effort under a chemical industry banner?'' it asked.

``Is it preferable to have the plastics resource management issue remain a plastics issue rather than forcefully and facially establishing the connection to chemicals, at a time when some say chemicals have a worse public image problem than plastics?''

Meanwhile, opposition may be coming even from the heads of the resin businesses of some APC member companies.

Indeed, many of the resin business executives also sit on the APC coordinating council, which is one area in which both Deavenport and Humphrey said APC decision-making and communications could be streamlined.

Some processors familiar with the discussions said the pressure to bring APC under CMA's umbrella came from CEOs on the board of directors because they are more comfortable with CMA.

The plastics business managers in the coordinating group typically wanted APC to retain its ties with SPI because of SPI's links with processors, according to the sources.

In addition, some people familiar with the discussions also contend that CMA, in taking more direct control of APC, would be trying to insulate itself from the environmental pressures applied by such grocery manufacturers as Procter & Gamble Co.

Those package fillers frequently have pressured their package suppliers to improve recyclability or use recycled content in their containers. That pressure has caused the container suppliers, in turn, to pressure resin companies to beef up the plastics recycling infrastructure.

APC now appears to have closer ties with SPI than CMA. APC and SPI staffs work in adjoining offices in a downtown Washington building more than a mile from CMA's offices, and SPI claims APC staff members on its payrolls.

APC and SPI share phone systems and resources, and APC's stationery describes itself as ``a joint initiative with the Society of the Plastics Industry Inc.,'' without mentioning its CMA ties.

APC staff members are almost all former staffers of the Council for Solid Waste Solutions, an SPI project that was dissolved when APC was formed. APC took over the staff and programs of CSWS.

SPI's letter to processors adds: ``SPI has been providing the administration for the APC and its predecessor organization for six years. A change now would be costly and disruptive.''

Officials declined to say how a shift to the CMA would affect APC's employees or programs.

One APC director portrayed the discussions differently than the SPI letter, however.

Michael Grasley, president of Shell Chemical Co., said the discussions were about whether ``to leave [APC] inside CMA where it began and seems to be doing OK, or put it entirely over into SPI.''

He said that since the APC board is one of a number of CMA's panels that are called Chemstar units, APC always has been more under CMA's umbrella. Grasley said, however, he was ``not deeply involved'' in the debate.

The spokesman for another APC board member, President John Peppercorn of Chevron Chemical Co., said, ``Any efficiencies that would result would not in any way affect the working relationship between the SPI and APC.''

After SPI officials said Thomas would answer questions on Feb. 16 about the proposed realignment, Thomas declined to do so. He instead arranged for Deavenport and Humphrey to speak with Plastics News.

When asked about the letter and further details on the possible changes at APC, Thomas said, ``I really can't get into it.''

News Editor Don Loepp also contributed to this report.

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