As managing editor of National Public Radio has posted a story this afternoon about how the rising price of energy threatens the North American plastics industry.
Host Madeleine Brand interviewed Dow Chemical Co. CEO Andrew Liveris, who pointed out that he has been saying for years that the United States needed to do something or its chemical sector would face a crisis.
Then, host Alex Cohen talked to Tom Duffey, CEO of Germantown, Wis.-based injection molder Plastic Components Inc. (a Plastics News Processor of the Year finalist), who quoted some alarming statistics. He said that many molders have not been able to pass along resin price increases -- and the near-term future for those companies is dire:
"I've talked to a number of people in the industry who have a much broader perspective on the North American marketplace than I do, and it is their expectation that we can see an attrition rate of up to 30 percent of the molders in North America in the next 12 to 15 months. Which will involve hundreds and hundreds of companies, and thousands and thousands of employees in that industry," Duffey said.
"And a lot of these industries are heartland industries. These are Wisconsin, Illinois, Iowa, Indiana, Michigan manufacturing companies that I think are going to be in severe distress over the next year as these economic forces work at us from two different sides of the equation. One is the decreasing demand for our products just because of the economic slowdown. And the other being the dramatic increase in the price of raw material, which is clearly the biggest cost driver in our industry."
Those are some awfully sobering statistics.