WASHINGTON — The American Plastics Council is proposing that any merger with the Society of the Plastics Industry Inc. would give resin companies 50 percent of the control on key decisions — like hiring and firing a chief executive.
The APC plan would combine the industry's two largest trade groups into one organization with three distinct wings: an arm for resin companies, an arm for processors, equipment suppliers and compounders and a sort of administrative arm that would provide services to the other two.
Details were spelled out in interviews with SPI sources, but confirmed by one APC source.
Earlier rounds of talks between the two groups have been contentious, and officials stressed that both sides are still laying out proposals in this round of talks, which began in mid-December.
But one SPI member who has been active in the organization said the APC proposal is destructive to industry cooperation.
``From my perspective, it's become a power struggle,'' said Mike Noggle, president of vertical injection machine maker Vertech Systems LLC in Houston and a former section chairman and board member of several SPI units.
He said APC seems to be ``saying we're paying for all this — why don't we run the whole show.''
Resin companies would likely supply the majority of money to any combined organization: All of APC's roughly $40 million budget comes from resin manufacturers and a significant part of SPI's roughly $30 million budget comes from resin producers.
Five resin companies with leadership positions in APC have pulled out of SPI in the last 18 months. Several have said they want to see the industry unite under one organization. One, Exxon Chemical Co., reportedly said SPI could no longer effectively represent the resin industry.
APC's chief merger negotiator, Exxon Senior Vice President James Harris, said money is not driving the APC position.
``You could make good headlines with that,'' he said. ``What is more practically the case [is] when you are trying to find a way to work together, each group wants some assurances that key decisions are made unanimously.''
He said ``there is no real operative proposal'' from APC and the topic is still open for discussion.
``The way you ought to think about anything like that — both the SPI and the APC have a mission and those missions sometimes overlap but often times do not,'' he said. The merger negotiators are still searching for common ground and trying to develop a structure that accommodates that, he said.
Harris said the merger negotiators want to schedule a meeting in February: ``What that could lead to is anybody's guess.''
SPI President Larry Thomas declined to comment on the APC proposal, but confirmed key aspects of it, including that resin companies want 50 percent of the votes on making key decisions. He said that includes hiring and firing the CEO, changes in bylaws and resolving important disputes.
``It is one of the options that has been looked at,'' Thomas said. ``We want our members to consider this, and it will be part of our board meeting.''
SPI's board meets Jan. 27-29 in Arlington, Va.
APC's proposal would not use the 50 percent decision-making for resin companies in handling day-to-day matters in any combined group. For those decisions, the proposal would have 40 percent of the votes for resin manufacturers, 40 percent for processors and 20 percent for equipment suppliers and other companies, Thomas said.
SPI tries to maintain a rough balance of industry segments on its board, SPI officials said.
SPI leaders plan to consider a proposal at their board meeting that would create a 24-member executive committee for SPI, composed of eight processors, eight materials suppliers and eight equipment suppliers. That proposal is part of a broader restructuring underway at SPI.
Thomas said SPI wants that split because it wants the enthusiastic participation of processors, equipment manufacturers and resin companies.