SPI, APC BICKER OVER MERGER TALK `PRECONDITIONS'

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WASHINGTON — Negotiators in the merger talks between the American Plastics Council and the Society of the Plastics Industry Inc. are divided over whether the survival of SPI's structure should be a precondition to the talks, according to SPI board and Machinery Division sources who spoke on condition of anonymity.

In a related development, SPI's Machinery Division met earlier this month and passed a resolution saying it would not support any merger unless SPI, ``with its current name, and associated goodwill, philosophy, culture, management, goals and objectives is the surviving entity.''

The resolution also said APC should become a program of SPI, and the merger should be voted on by the entire SPI board. A full board vote, and not ratification by the Executive Committee, was the most important point made in the resolution, one source said.

Merger negotiators from the two Washington-based trade groups met for the first time April 29, but officials provided few concrete details about the talks, other than to say they were productive but did not resolve the key question about whether the groups should merge.

SPI President Larry Thomas, APC President and Chief Executive Officer Red Cavaney, and SPI Machinery Division Chairman Martin Stark, president of Bekum America Corp. in Williamston, Mich., declined to comment.

The SPI sources who spoke to Plastics News, including one close to the negotiating team, said APC negotiators want the talks to proceed without preconditions, while at least some SPI members want some ground rules that SPI will survive any merger.

``APC wants everything open,'' one SPI board member said. ``They don't want any issues off the table.''

SPI is made up of processors, resin suppliers, machinery manufacturers and mold makers, while APC is made up mainly of resin companies.

APC members appeared united, while SPI members were ``more fragmented'' in the talks, a source said.

But the sources agreed that the talks are likely to succeed, and one said the dispute over preconditions and structure will be solved.

``I don't think any of that is a deal breaker,'' a machinery division member said. ``I think it is posturing.''

Despite the language in the Machinery Division statement, the group's members may not be adamant about all of the criteria, according to one source. He said the division is likely to support any merger, as long as the full SPI board votes on it.