What's the next step? Our suggestion: keep talking. The Society of the Plastics Industry Inc. has rejected the American Plastics Council's proposal for a merger of the two groups. We're not surprised. APC's plan didn't seem fair to SPI's broad membership base.
But the best course now is for both sides to take a closer look at the issues and decide how to compromise and keep the discussion moving.
The main issue keeping the two sides apart: How much control should resin suppliers have of the merged group?
Since resin suppliers would contribute far more than half of the dues, APC members believe they should have a proportionally large share of the decision-making power.
APC negotiators think it's fair for resin suppliers to have 50 percent control of key decisions. But they say 50 percent isn't total control: In order to pick a chief executive officer, for example, they'd first have to get all resin suppliers to agree on one person, then they'd have to find at least one more vote from outside the resin supplier ranks to make the decision stick.
That's not exactly a slam dunk. And on day-to-day decisions, resin companies would take a smaller, but still undefined, share of the control.
APC's stance makes sense if you look at the merger like a corporate buyout, with APC acquiring SPI. But this is not an acquisition. This is a merger that makes sense for both groups and their members.
SPI doesn't come to the table with the bigger budget, but it does bring a larger and more diverse membership base, which includes processors, machinery suppliers, mold makers and resin suppliers. And SPI also controls another pretty significant asset — the NPE trade show.
How that plays out in the negotiations could be interesting, especially if APC members continue to abandon SPI.
APC members like that their group is the more nimble and responsive of the two, an important point that has to be considered.
Another intriguing issue is APC's proposal that all resin companies would have to pay for resin-industry-related programs in the merged association.
That part makes sense. From their members' perspective, APC has paid hundreds of millions of dollars to change public attitudes about plastic. Resin suppliers who aren't in APC haven't paid their fair share. It's hard to imagine an SPI/APC merger that wouldn't address this issue.
Still, the specifics are likely to cause friction. Engineering thermoplastic and thermoset resin manufactures haven't been under the same pressure as commodity resin suppliers, so they may not feel the need to fund an expensive image campaign.
The bottom line remains the same: the U.S. plastics industry would be better served by having one strong trade group representing the entire industry.
The ball now is in SPI's court. It must come up with a better proposal that addresses APC's concerns.
For its part, APC negotiators need to keep an open mind — and be willing to negotiate on the points that, until now, they've said are nonnegotiable.