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March 09, 1998 01:00 AM

CI BOARD OF DIRECTORS SEEKING SPLIT FROM SPI

Steve Toloken
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    WASHINGTON — Leaders of the Composites Institute, one of the largest divisions of the Society of the Plastics Industry Inc., say they want to leave SPI and form a rival trade group.

    CI leaders are asking their members whether they want to leave, contending that SPI is of ``questionable value'' to CI members, has high dues that have stifled CI's ability to grow and has instituted a restructuring that left CI with a deficit that could be as high as $500,000.

    ``We really feel we would be more effective without the encumbrance of the SPI as it is currently structured,'' said Robert DeRoma, CI chairman and a senior vice president of Interplastic Corp. in St. Paul, Minn.

    CI officials wrote that SPI dues ``support a Washington organization of questionable value to the CI and ... programs which support the thermoplastic resin industry.''

    But SPI officials defended their support of CI and said some CI claims are misleading.

    SPI officials said CI's deficit will be about $200,000, and that SPI will cushion the financial impact of the restructuring on the composites group. They added that the restructuring and a dues cut of about $300,000 came about in large part because CI members demanded it.

    If CI leaders decide to depart, SPI is vowing it will keep the CI name and keep the organization going with its current staff executive director, Catherine Randazzo, and whatever companies remain.

    The proposed split comes after Owens Corning pulled out of CI's trade show in January and urged the industry to consolidate its trade groups, and after several earlier attempts to merge or foster more cooperation among composites industry groups.

    Both sides had been negotiating for weeks.

    Now CI's 404 members, about one-fifth of SPI's total membership, have until March 6 to respond to a poll on what the group should do.

    CI officials said they probably will release results after a March 11 meeting in Chicago.

    DeRoma said CI board members have not determined what specific steps they will need to take next if members vote to leave.

    CI leaders said in their Feb. 20 letter to members that they want to form another trade organization, base it in Washington, and merge it or closely affiliate it with other composites industry groups, including the Composites Fabricators Association, the International Cast Polymer Association and the Society for the Advancement of Material and Process Engineering.

    The CI board voted unanimously to leave SPI.

    Some CI companies contacted by Plastics News seemed inclined to leave SPI.

    Lowell Miles, chief executive officer of Miles Fiberglass and Plastics Inc. in Portland, Ore., said March 2 he was not sure how he would vote, but said CI leaders do have a good case because it has been difficult for CI to work with SPI.

    Miles has a long history of involvement in composites associations, serving in the past on the SPI board, as president of CFA, and currently as a co-chair of a joint CFA-CI convention planned for 2000.

    Rita Duhrman, the president of Advanced Fiber Products Inc. in La Crosse, Wis., said her company voted to leave because the ``people in the industry who spend a lot of time on these committees ... usually make good recommendations.''

    Zehrco Plastics Inc., an Ashtabula, Ohio, composites molder and CI member, will make a group decision on how to vote. Clint Jackson, manager of sales and marketing, said he wants to discuss it with company owners Bill and Chuck Meadors before voting. He said he thinks both sides could keep negotiating, if they really wanted a resolution.

    ``I would hope there's a happy medium to be found,'' he said.

    Jackson ``thought it was very noble'' that SPI reduced dues, ``but I did not have the impression when that new plan was rolled out, that in turn there was going to be a deficit forced on the CI, or any other unit of SPI.''

    Tom Philipps, senior vice president of research-and-development firm Isorca Inc. in Granville, Ohio, said his company voted to remain in SPI.

    ``We voted, but we're still not happy with any of the answers,'' said Philipps, who thinks both groups ignore the thermoplastic composites sector.

    The split between SPI and CI is not being fueled by fabricators alone.

    Alpha/Owens Corning LLC, a top unsaturated polyester supplier, also is leaning away from SPI.

    ``A/OC supports the CI board's recommendation to withdraw from SPI,'' Gerald Griffith, president and chief executive officer of the Collierville, Tenn.-based resin supplier, said in a March 4 telephone interview.

    ``We would prefer not to form a new trade organization, but that may be necessary as part of the whole process,'' Griffith said.

    With regulatory and environmental issues such as styrene emissions looming on the horizon, A/OC is pushing for a united composites industry, he said.

    ``We just don't think that's possible under the current situation,'' he said.

    SPI spokesman Ron Bruner said officials feel they have gone as far as possible in accommodating CI.

    SPI officials said they've agreed to CI demands to:

    Move CI to Washington from New York, with SPI picking up the $500,000 tab. SPI is based in Washington.

    Make an effort to convince the SMC Automotive Alliance to stay as part of CI, but leaving the decision to SMCAA members.

    Let CI's board evaluate the CI executive director's performance, along with SPI President Larry Thomas.

    Cut dues to attract new companies. CI membership has grown to 404, from 359, in the past year.

    However, SPI refused two CI demands: To let it collect its own dues and pay an affiliation fee to SPI; and to keep the SMCAA as part of CI and not let it become a separate division within SPI, the CI letter said.

    Thomas said letting CI collect its own dues — rather than have SPI collect them and distribute the money back to CI — would be unfair to other business units and would make it difficult for SPI to manage collective challenges for the industry.

    SPI officials declined to estimate what the financial impact of an exodus of composites companies would be. CI's Randazzo said more than 60 percent of CI members belong to another SPI unit, which may make them more willing to stay.

    Randazzo said she has not been approached by CI leaders about a position in any new organization. DeRoma said Randazzo and the rest of the staff are performing very well, and Randazzo is a ``very strong candidate'' for any new group.

    Randazzo, who said she agrees with SPI's position, added: ``We are going to continue CI. We believe we have the member support and allocation of dues.''

    CI members will not have to pay additional dues, at least for the first year after the restructuring, she said. The group expects a profit of more than $300,000 from its trade show, up from $260,000 a year ago, she said.

    But the CI letter said its leaders have been struggling with problems with SPI for three years.

    CI wants to bring the composites trade groups more closely together, and has been hampered by SPI's structure in doing that, DeRoma said.

    ``What is driving it really is freedom. Freedom to have greater control over dues income. A vision that the industry really is fragmented through trade associations and that there might be some strength in unification,'' he said.

    But CFA President Fred Dierks wrote in a Feb. 18 letter to Plastics News that CFA feels ``there is value in having several independent associations, each filling a niche in the industry.'' He said CFA does not oppose collaboration, such as the current government affairs collaboration.

    SPI's Thomas said other composites groups have been leery of merging.

    CI's board also said it is concerned about increasing federal and state regulation of styrene emissions, as well as the Environmental Protection Agency's use of case-by-case maximum achievable control technology for air quality.

    The CI letter said the composites industry position ``on these matters might very well be in conflict with that of other SPI groups,'' but DeRoma said he could not provide specifics.

    ``The simple fact is that what is good for the composites industry might not be good for the thermoplastic industry or its suppliers,'' DeRoma said.

    Randazzo said she could not remember an issue where CI's position conflicted with other SPI groups.

    Plastics News staff reporters Bill Bregar and Craig Urey contributed to this story.

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