WASHINGTON — The merger talks between the Society of the Plastics Industry Inc. and the American Plastics Council appear to have died again, unless one side blinks and changes its position.
SPI's leaders gave a cold reception to APC's chief proposal at a board meeting near Washington in late January, saying they did not want to talk as long as APC considered several of its key points nonnegotiable.
APC said it wants resin firms to have 50 percent of the voting power on hiring and firing the president of any merged group, and on some other major decisions.
The proposal also would have all of SPI's and APC's resin company members pay for resin-industry-related programs. This would mean resin companies now only in SPI would have to start paying for programs funded by APC's current 24 members.
APC spokeswoman Susan Moore confirmed that APC considers those two points nonnegotiable.
Some SPI members complained that APC was trying to control any merged group, but APC President Ron Yocum sharply rejected that characterization.
``If you have 50 percent of the vote, you don't have control,'' Yocum said. ``If you have 51 percent, you have control.''
SPI President Larry Thomas said the proposal ``is of real concern to the broad-based membership of SPI that wants the kind of governance that generates enthusiastic participation by all industry segments.''
APC's proposal would have had a different power-sharing arrangement for day-to-day decisions, Yocum said. That could have been one-third going to each segment of resin, processor and machinery companies, or a 40-40-20 split, or some other arrangement, he said.
APC has a budget of $42 million, and SPI has $31 million, he said. All of APC's budget comes from resin manufacturers, and about half of SPI's budget comes from the resin industry, Yocum said.
That gives the resin industry about 78 percent of the funding of the two trade groups, which are the plastics industry's largest.
``If you are sitting there in a resin company and you are paying 75 percent of the bill, don't you want to have at least half of the say who the president is going to be?'' Yocum said. ``Is that unreasonable?''
Thomas said SPI did not actually vote on APC's proposal, but its leaders decided that ``if they are nonnegotiable, then certainly we don't feel like they would be acceptable in terms of adopting such a plan. Certainly we are receptive to hearing that they are negotiable.''
Yocum said APC's negotiators would decide whether to make another proposal. ``[But] it's hard for me at this point to believe we would,'' he added.
James Harris, senior vice president of Exxon Chemical Co. in Houston and APC's chief negotiator, could not be reached.
Yocum said APC members feel their group has been effective because it can make quick decisions, and they do not want to lose that ability as part of a more diverse group such as SPI.
``APC got formed because the existing organizations could not handle and were not handling the landfill and recycling issue,'' he said. ``That, by the way, is not a criticism of SPI. [SPI] is so complex it is difficult under the best of circumstances to reach fast, large decisions because you have to build too much consensus.''
APC's proposal would have merged the two groups into an organization with at least three wings: one for resin makers, one for central administrative services and one or more for molders, machinery suppliers and other SPI members.
Thomas said SPI understands the need to broaden APC's funding base, which ``is a very legitimate issue on their part because it is not fair to have one group of resin producers fund programs [when] everybody benefits.'' But those changes could result in members leaving the merged group, he said.
Yocum said that if the two groups do not merge, APC will need to make changes.
``If we are not going to merge, we will have to change what APC does because we have members of APC who are now not members of SPI, and we have to fulfill their needs,'' Yocum said.
He said he was not sure how APC's charter would broaden, if it does. But he said, for example, that APC could get into Food and Drug Administration issues that SPI traditionally has handled.
Five large resin suppliers holding key positions in APC have left SPI in the past 18 months, citing a need to watch their spending but also voicing support for unification.
``I think it has bothered them that we don't seem to get anywhere on any of these talks and ... I think they truly have looked at what has been delivered, hard deliverable facts, for the resin industry,'' Yocum said. ``They've got to look at it from their point of view.''
Leaders of SPI's largest business unit, the Composites Institute, raised similar questions about SPI's representation when they left last year. But SPI officials say they have maintained their membership at about 2,000 firms.
Thomas said those departures are not from lack of value, but because corporate budgets are tight and the industry is diverse, making it hard for one trade group to represent it.