WASHINGTON — The head of the Society of the Plastics Industry Inc. is threatening to pull his company out of the American Plastics Council, unless APC resumes talks about merging the organizations.
H. Patrick Jack, Fina Oil & Chemical Co. senior vice president, told APC officials at a mid-January APC meeting that Fina will pull out of the group unless some progress is made toward merging APC and SPI by May. Fina's grievance, and its threatened split, are unusual for APC, normally a unified organization.
Jack is SPI chairman and sits on the APC board in that capacity. He was very involved in contentious, and ultimately unsuccessful, talks last year to merge the industry's two largest trade groups.
``I have been pushing aggressively to get to the point where we have a single trade voice,'' Jack said. ``There were challenges both in SPI and APC to get down that path.''
But Ron Yocum, the new APC president, said most APC companies do not think talks should restart.
``There will not be exploratory talks,'' Yocum said. ``I think everybody respects Pat's position. [But] the vast majority still feel that if there is going to be unification, we need a cooling-off period.''
Yocum said APC has a reasonable chance to get Dallas-based Fina to reconsider. But Jack said he will need to see ``substantive discussions'' to remain.
``My patience is worn thin,'' Jack said.
The lengthy merger talks broke off in November, after APC leaders rejected an SPI request to resume negotiations. Leaders of both Washington-based groups continue to say publicly that they ultimately favor unification.
The two sides quarreled over who would lead a combined group, with SPI negotiators favoring that group's current president, Larry Thomas. Also, some SPI members repeatedly expressed reservations about maintaining a focus on smaller companies. At one point, divisions between SPI processors and suppliers resulted in a processor-led negotiating team being replaced.
``The debate was too concerned with the name of the group and who would lead it, rather than talking about the benefits of a single trade group,'' Jack said.
Fina's departure would leave a hole of more than $1 million in APC's annual budget of roughly $38 million. In August, Exxon Chemical Co. of Houston left SPI because it said SPI could not represent resin companies. Industry officials said they do not expect any other large companies to leave the groups in fallout from the merger talks.
Jack said the industry needs to create a single trade group, and can save $3 million to $5 million a year from the roughly $50 million both groups spend on core functions.
``I think there are many people who share my disappointment there isn't one trade association,'' he said. ``A lot of people are concerned about duplicative expenses.''
Without a merger, the U.S. plastics industry could be headed toward being represented by two separate groups, one for processors and one for material suppliers, Jack said. APC is made up entirely of resin companies, while SPI draws resin producers, processors and equipment manufacturers. APC began as an offshoot of SPI, and many of its members also belong to SPI.
APC members pay for all of the $17 million national plastics advertising campaign. Jack said the APC members would feel ``uncomfortable debating the spending of advertising money in a broader setting.''
Some of the leadership questions that plagued the merger debate probably reflected unfairly on SPI's Thomas, Jack said.
When asked whether resin companies think Thomas is an effective leader of SPI, Jack said: ``You probably hear a lot of diverse opinions on that.''
But the frustration really stems from SPI's diverse structure, and not from Thomas —who, Jack said, is an effective leader and treats both large and small companies equally.
He added that SPI has taken the lead on issues important to resin suppliers, such as the rail shipping crisis and food packaging issues.
SPI is working to decentralize power from Washington and give more money and authority to business units. But because ``Larry and his staff have been part of the old structure, it is hard to separate that out,'' Jack said.
Thomas said companies have not told him they are frustrated with his leadership, but said if some firms consider SPI too diverse, that is a ``false perception'' because the group gets strength from the variety of its membership.
He said giving more financial control to business units is a recognition that SPI was too centralized.
Phillips Petroleum Co. of Bartlesville, Okla., is the only other firm to have left APC. Phillips withdrew in 1994 because officials did not think APC's advertising effort would work, Yocum said. Fina's departure would leave APC with 25 members.