If we accept the premise that plastics recycling in North America is currently only marginally profitable, then we are led to ask the two following questions: What transpired over the recent past to create this situation?
What lies ahead?
We would propose segmenting the chronology of plastics recycling to date into three decades: the 1970s, the 1980s and the 1990s.
The 1970s, starting with Earth Day in 1972, was characterized by tremendous environmental zeal and activism in many areas of North American business and society. This was the decade of the Clean Water Act and the Clean Air Act at the federal level and numerous environmental initiatives at the state and local levels as well.
The concepts of the 1970s were brought to commercial fruition in the 1980s; organizations were formed with public and private sector funding and companies were formed to recycle plastics and other materials. Bear in mind that the recycling of ``traditional'' materials (metals, paper, glass, et al) had been going on for many decades, but the 1980s witnessed a new growth dynamic in these fields as well.
In the 1990s the whole economic culture in North America has undergone a radical transformation. Faced with the prospect of increased globalization of product markets and increased competition from developed and less-developed countries, North American product providers adopted a new business strategy/mantra: ``lean and mean manufacturing methods.''
Lowering the cost of each and every stage along the product supply chain took precedence over all other corporate concerns. The results of this low-cost crusade are quite evident today, and in pure economic terms they are outstandingly positive.
North American manufacturers in a vast number of applications and markets have become the leaders in their fields, the benchmarks of low-cost manufacturing.
However, the costs in human terms — that is, in terms of the impact on workers — have been high, and they have in many cases not been matched by corresponding benefits.
The low-cost crusade has led to a huge transformation in the constituents of the work force: fewer older workers (and, therefore, lower pension liabilities); the replacement of semiskilled workers with either lower-skilled workers or machines; increased dislocation of workers as plants and offices are relocated to lower- cost sites; the shift of employment to other countries.
The growing disparities in income arising from this rapid labor force transformation are the focus of voluminous researchby economists and sociologists alike.
One of the casualties of this rapid and dramatic transformation of the economic culture has been the infant recycled plastics industry. At a time when the participants in this industry needed a boost to pricing, revenue and profitability through either the medium of end-user, consumer and/or government support, that support evaporated, overrun by the march of the new lean and mean manufacturing mantra.
Hence, the U.S. car companies, for example, which have been in the forefront of testing and evaluating new recycled plastics materials and reprocessing technologies, could claim that they supported the recycling of plastics, but they are not willing to pay a premium for such material relative to the alternatives (i.e., virgin resins and nonplastic materials).
Mooney is president of Plastics Custom Research Services in Advance, N.C. This article is an excerpt of his presentation ``The Current and Likely Future Economics of Plastics Recycling,'' part of Session XX, to be held 8-11:30 a.m. today in Room S403AB.