WASHINGTON — Optimists hoped that the end of contentious merger talks between the Society of the Plastics Industry Inc. and the American Plastics Council would let the industry's two largest trade groups return to normal.
Such optimism appears misplaced.
Since the talks sputtered in February, APC has forged ahead with a plan to broaden its mission, in a way that SPI officials say will drive a wedge between them.
And several units of SPI now find themselves weighing whether the departures of resin companies from SPI in favor of APC will make it difficult for them to remain in SPI. Industry officials expect more resin company departures from SPI.
While the situation is in flux and officials stress no decisions have been made, the infighting could significantly reshape the groups that are the industry's chief representatives in Washington and state capitals.
APC's leaders plan to meet March 2 to discuss taking on services that SPI traditionally provided, such as Food and Drug Administration work, federal government lobbying and compilation of resin statistics, said Ron Yocum, chief executive officer of APC.
``We have five members who have left SPI,'' he said. ``You already have five major corporations who need these services. My sense is that the number of five will be higher before the end of the year.''
APC and SPI officials said they want to work together, but the head of SPI's merger negotiation group, Sid Rains from Van Dorn Demag Corp., said in a Feb. 24 telephone interview that if APC broadens its mission it would be difficult for SPI and APC to cooperate.
Rains, vice president of sales at Van Dorn, wrote in a letter to Plastics News that ``there is a strong feeling among a wide range of industry leaders that certain resin producers are engaged in a misguided attempt to drive APC into a competitive position with the SPI as a so-called `full-service trade association.'*''
Yocum disputed that, and added that APC is only considering services its members want. But he acknowledged relations between SPI and APC are strained.
``In the short term, I think it will get highly emotional and it probably will be difficult,'' he said. ``I think in the long term, we will be able to work it out.''
SPI Board Chairman Harry Ussery said that if APC broadens its charter, it ``will just create more confusion in the industry and more potential conflicts of territory. I would hope after they have their deliberations we might see a different view on their part.''
But an executive for Nova Chemical Corp., which left SPI last year, said his company prefers APC representation, even though membership to APC is much more expensive.
``APC at a macro level does a lot more for us in the sense that it is protecting the whole plastics industry,'' said Gerry Finn, Nova vice president of government and industry relations.
Nova found the most value in SPI's business units, like the Polystyrene Packaging Council, but did not make much use of SPI's core functions, which include lobbying and administration, he said.
Several of SPI's business units are looking at whether they should remain in SPI, including the PSPC, the Plastics Pipe Institute and the Vinyl Institute. Units could chose to be independent, or affiliate with other groups.
VI officials said their review is related to hiring an executive director, not resin firm departures.
Nova, North America's largest PS maker, would like to see PSPC align itself with APC, Finn said. When Nova was in SPI, Nova was part of PSPC.
Yocum said representatives of between two and 10 business units of SPI have approached APC in the past six weeks asking about conditions for affiliating. APC can have business units, but all resin companies that join the unit must also pay for APC's expensive core services, including advertising.
APC is not seeking out SPI units, Yocum said.
Ussery said some SPI business units are in a vulnerable position.
``I do know that if more APC companies would resign from SPI, it would put some strain on some business units,'' he said. ``There are some business units that would find it hard to be financially viable if they lost a big part of their supplier base.
``We can't say how many APC members might leave SPI,'' Ussery said. ``That determines how many business units are in question.''
SPI has about 60 resin firm members, 19 of which also belong to APC. Those 19 make up about 20 percent of SPI's core services budget of $12.5 million, Ussery said. About 45 percent of SPI's total $30 million budget comes from its roughly 60 resin companies.