EX-SPI CHIEFS URGE CAUTION IN APC MERGER

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WASHINGTON — In moves that highlight processor skittishness about merging the Society of the Plastics Industry Inc. with the American Plastics Council, nine former SPI officers are urging SPI to reject any deal unless APC decides to ``take a proper place under the SPI banner.''

Seven past chairmen and two treasurers of SPI sent a letter March 11 to current Chairman Patrick Jack, senior vice president of chemicals at Fina Oil and Chemical Co., that said ``to do otherwise runs the risk of a perceived `takeover' of SPI by APC, which we are fearful will divide the membership and the unity we have all strived to maintain.''

Those who signed the letter include former chairmen Ripley Gage, chairman of Gage Industries Inc.; Robert Hoffer, president of Hoffer Plastics Corp.; and William Bradbury, former president of PMS Consolidated; and former treasurer Bruce Ray, president of Ray Products Co. Inc. A copy of the letter was obtained by Plastics News.

Jack responded that many of the issues in the letter have been solved. Both SPI and APC have agreed that SPI's balance between processors, machinery makers and resin suppliers and its name will be maintained after any merger.

He said: ``I don't have any reason to believe the balance in a unified organization will be any different than it is now.''

Concern over the shape of any potential merger is also bubbling up from the ranks of SPI, with the Molders Division board unanimously passing a resolution at its March 12 meeting reflecting ``strong feelings'' that SPI remain a processor organization, according to Donald Dew, division chairman and president and chief executive officer of Diemolding Corp.

``If there was an alternative structure, it potentially has a negative impact on support they would get for processor issues'' such as workers certification, dues restructuring and the Framework for the Future, he said.

The SPI Moldmakers Division also is considering a resolution on the ``terms and conditions'' of any merger, said Jerry Lirette, the SPI board representative for mold makers and president of D-M-E Co.

``Everyone is in favor but the question is under what terms and conditions,'' he said.

SPI President Larry Thomas declined to comment and APC President and CEO Red Cavaney said the letter is an internal SPI matter. APC Chairman Robert Gower, chairman of Lyondell Petrochemical, did not return a telephone call.

SPI and APC officials previously have said that their merger talks are in a ``feasibility study'' phase. APC is made up largely of resin suppliers. APC members are also part of SPI, but that organization gets about 40 percent of its core dues from processors, 40 percent from resin suppliers and 20 percent from machinery makers and others.

The letter from the former SPI officials said that a single organization to represent the plastics industry is preferred to the current split, and said the signers are ``grateful for the helping hand'' from chemical company CEOs who lead both APC and the Chemical Manufacturers Association.

``On the other hand,'' the officials wrote, ``we do not believe the APC's 26 members should now create a plastics industry crisis by seeking to take over SPI or have it bend to APC's will.''

Jack said that ``the perception that the chemical industry is taking over the plastics industry trade association — I have a hard time understanding that.''

Members need to let the task force studying unification do its work, he said.

He said he was ``disappointed'' that the letter writers were not aware that SPI's board passed a resolution on Jan. 24 saying that preserving the group's organization and name are ``high priorities.''

Several officials who signed the letter said they could not give specific examples of why they suggested that chemical companies want to ``take over,'' but William Mericle, SPI chairman from 1983-84, suggested larger companies may not like that a small injection molding company has the same voting power as DuPont. Robert Hoffer, SPI chairman from 1973-74, said the concern about how APC would change SPI is more of a what-if situation.

The letter said APC should return to its original missions of solid waste and advertisements to promote plastics, and ``should not be using its resources on matters like mold lien legislation, the creation of state organizations and the like.''

APC and SPI combined their state government lobbying arms in January, an effort for which APC pays about 90 percent of the cost, said APC President and CEO Red Cavaney. The two groups simply combined their existing state lobbying efforts and expenses, he said.

A statement of unification principles adopted by APC Jan. 14 said that ``if preliminary prospects for unification are not deemed likely, such efforts should be sunsetted and the joint state government affairs arrangement revisited.'' Cavaney said that APC is committed to the joint effort and has found it ``extraordinarily successful'' but said that if the two organizations do not ``come together, the larger question of who pays for what will have to be discussed.''