WASHINGTON (July 7, 5:20 p.m. EDT) — Donald Duncan was named head of the Society of the Plastics Industry Inc. Feb. 2, replacing Larry Thomas, who retired after almost 12 years in the position. Duncan had been president and chief executive officer of DuPont Dow Elastomers LLC, a $1 billion joint venture between the two rival chemical giants.
Duncan has a full plate at SPI — rebuilding the group after membership defections and restoring good relations with the American Plastics Council. Plastics News managing editor Donald Loepp and reporter Steve Toloken sat down with Duncan June 5, in his Washington office. What follows are edited remarks.
Q. Can you talk about what you've learned about the organization and what changes you might bring to it?
A. I guess the place I'd like to start is just saying some obvious things. Here is an organization that has a very rich past, some 63 years of fantastic accomplishments that mirror the success of the plastics industry. That is very important. I've been very pleasantly surprised with the strength of the organization. We have a lot of very good people who have been through some very challenging times, and that can be difficult for an organization. That can be difficult for individuals.
The thing I've been impressed with is the high level of expectation and high level of commitment that the staff of SPI has for our mission, and to meet the needs of the industry. I've been very, very delighted to see that.
I will also tell you possibly the most critical resource we need to maximize is the contribution of our members. In today's business environment, with all of the downsizing and increased span of control, the ability of senior management to participate in trade associations is a very challenging trade-off of priorities for most of them. Most of them simply don't have the kind of time they had five years ago, certainly 10 years ago and 15 years ago.
Q. There have been a number of attempts over the years — dues cuts in particular — to get more processors on board. When you came to SPI we quoted SPI board member David Hidding saying that he felt SPI's attempt to get more processors on board has not worked as well as anticipated. Why do you think that is?
A. Well, I don't know what the history is, and what David was commenting on, so I won't try to address that particular issue. I'm going to deal with member involvement and member participation and membership as a whole. One of our goals for the year 2000 and beyond is to improve our membership participation and levels in SPI. That includes both the level and number of participation. It is a major goal of SPI.
Q. So both more members and more participation from existing members?
A. Yes. If we're going to be successful in doing that, we have to have an offering that is relevant to those members. Whether it is processors, resin producers and machinery or mold makers, we have to have an offering that is relevant to what they think is important to them.
We may have been distracted a little bit by some things going on, but the concept that we have to be relevant to increase the number of members and increase member participation, the fact that we have to be relevant, has been well understood for some time.
We have been trying to ... do a better job of listening to what our members consider to be relevant. Safety assistance, training assistance, codes and standards, regulatory affairs, state and federal activities. There is not a lot new there and we are already fairly active in those areas.
The next area (includes) things that are not so classic but represent what is going on here in the 21st century, or certainly the latter part of the 1990s. We deal with things like e-commerce, work-force development, expanding our statistical base, such that the value of knowing what is going on in our industry is promulgated through more segments of our industry. We've had very important statistical bases, but sometimes they've been only relevant to a single segment of our industry. We have a very competent statistical capability. There are other places throughout this industry who have not had statistical bases. Can we use what we've learned and excelled in one place and develop statistical competencies in another place?
E-commerce, to go back and pick up on that in a generalized way, is an area where, like every one of our members, we absolutely, positively must become more proficient. I think there is a role here for SPI to assist in areas where some of our members don't have the expertise or knowledge, but where they want to pool their resources with colleagues to create a situation that they can't do on their own. Now what do I mean by that? Purchase opportunities, auctions — E-bay type — distribution of information. I'm talking about forming relationships with e-commerce organizations or organizations that have the capability to bring e-commerce-type practices to parts of or the entire SPI membership.
Q. Can you talk about work force development and what you see SPI doing? You're launching this Plastics Learning Network, which is another kind of technology. You're trying to get state funding for that. Can you talk about what role you see SPI playing in work force development down the road?
A. About a month and a half ago, we went out and hired an individual in the field, by the name of Garrison Moore, who has an extensive background in work force development. The key, if you are going to be a force in work force development, you need to have the expertise to be able to drive it, to have a vision as to what it ought to look like, the capability to get there and the leadership to take the organization forward.
Q. Is your expectation that SPI would expand the Plastics Learning Network?
A. My expectations are that we will expand to meet the needs of the members. I don't know whether members are finding great value in the Plastics Learning Network, or Orient Me! (program), or some of the other things we started off with. I think they do. The thing I'm excited about now is that we have somebody in here who has the knowledge of what it takes to be successful and how to get some funding, things that have worked and things that haven't worked.
Q. Time frame for that?
A. I think the thing you want to be careful of, is this thing doesn't come in one big step. Within the first two weeks Gary was on the job, he had already identified a major opportunity from a funding standpoint at the federal level. We haven't consummated that. He was aware of things we didn't have a clue of.
Q. Will you be able to get state funding for PLN?
A. I'm always the optimist. Without having any clue, without having talked to anyone down there, I think it is important. As I listen to members, people who are voters, this is one of the really big issues (they've) got. If politicians are hearing the same things I'm hearing, how could they not be responsive?
There's another issue where we are trying to meet members' needs and (make them) stay part of SPI and join SPI: the whole global economy and internationalization issue. I'm kind of lecturing to the choir here, but I came out of an environment where it has become a way of life. What we are also finding out in the plastics industry, if you look at all the diverse segments, even a relatively small processor in Arkansas is beginning to understand the significance of the international competition and opportunities.
Internationalization consists of two different components. The opportunity, particularly with the Net, I could be bidding on business anywhere in the world. As well as the competitive threat, anybody can be bidding on my business. That's a bit of an oversimplification.
The idea is, and some people try to ignore it, whether we like it or not, the international aspect of what we do will only become more important. Helping our members understand that, and participate in that, is one of the issues we are trying to address.
This will certainly be, by far and away, the most internationally oriented NPE there ever was. We are going to try to build on that, to help them better understand what we are doing, what they are doing. One of our objectives for NPE is to drive the international opportunity concept. So what I'm trying to do here is go through these issues, whether it is e-commerce, work force development, international activities, and our core focus is to make up this package that SPI is worth belonging to.
We have got to make SPI more relevant to its members. And if we stuck with what we were doing 10, 15, 20 years ago, we would find ourselves not meeting some of the new needs some of our members have.
Q. There are a lot of these regional groups that have sprung up, like Mid-America Plastics Partners Inc. and California Film Extruders & Converters Association, that are trying to do some of these same things you are talking about. Their members are coming to them, instead of SPI, saying, `Let's deal with this regionally or locally,' rather than nationally.
A. I'm personally not threatened by that. I think there's an obvious need here. As big as the plastics industry is, it's not so big we can afford to waste effort or fight each other or duplicate effort to carry out the best interests of the plastics industry.
My concern is to make sure we communicate with each other, and share resources with each other. There are some places they believe if you have two voices, you are better off than one. The issue is how do you communicate? Maybe in Ohio we do it this way, in Pennsylvania we do it another way.
Q. Do you see SPI expanding its regional offices?
A. No. I'm absolutely satisfied that basically five offices have got this geography pretty well covered. What I do see is utilizing that regional capability to a much greater level of activity than is currently being expected or demanded of them.
Q. Does that mean more people in those offices?
A. No. That means more productivity, and that means giving people more tools to work with. If we need more people, hey, we'll put more people out there. Right now, I'm not sure we're anywhere close to getting the maximum effectiveness out of the organization that is already there. Right now, part of my schedule is to get out to each of the regions.
Q. People in Michigan are pretty excited about that agreement you've got with the Occupational Safety and Health Administration.
A. There's no reason why that type of relationship can't be duplicated in quite a few more states around the country.
Q. You must be talking to some other states.
A. Yes, we are.
Q. Can we look for those agreements in Indiana, in Ohio?
A. We'll look for them wherever there are two things taking place. One, where we have member support doing it, where we have a perceived need. Second, where we sense there is some willingness to work with a trade association at the state regulatory level.
Q. When we look at OSHA statistics, plastics processing tends to have a higher injury rate than manufacturing as a whole. Are you afraid if you don't get more of these partnership agreements, you are going to have OSHA targeting the plastics industry since it is a growing industry?
A. That's the glass half-empty. I guess I was taught the glass is half-full. I look at these statistics and I see a great opportunity for us to help our members.
I've been in this industry 36 years. I've dealt with OSHA, I've dealt with (the Environmental Protection Agency). I've dealt with (the National Institute of Safety and Health). I understand the (Toxic Substances Control Act) regulations. I certainly understand the implications of failing to comply as it impacts your business. I also came from an environment where if you can't do the job safely, you don't do it — end of discussion. And where safety is a condition of employment. I've had that pumped into my brain for 36 years. When I cut my grass, I still wear my steel-toed safety shoes.
I look on this situation as an opportunity. Between SPI and our members, we have a lot of competency we can share with people who don't have the same level of experience that we have. Ninety-five percent of these safety issues come down to personal attitude and training and commitment to working safely.
Q. You've touched on productivity issues. Is that another area where you can share best practices that not everybody has?
A. Absolutely. Let me bring two things together and talk about productivity and talk about safety. The whole perspective around the Michigan OSHA and SPI collaboration dealt with this apparent paradox of how do you improve productivity and improve safety at the same time. If you are aware of the background of this thing, what we had was a series of what the industry considered untenable (lockout/tag-out machinery safety) regulations imposed by federal OSHA.
What took place in Michigan was a very specific focus by the most knowledgeable people representing all of the various interests — regulatory, industrial, all of the other interested people. We did not have to dramatically sacrifice productivity in order to provide the absolute safest work environment for the people running those machines, but it takes people to look at this thing and come up with creative solutions as opposed to saying this is the way it's going to be and if you don't follow our instructions, we're going to shut you down.
Q. Are there problems with productivity in certain industry segments? Are some processors not improving productivity fast enough?
A. If you look at the three segments that make up what we describe as the principal components of the plastics industry, two of those segments have done an outstanding job with respect to productivity over the last five to eight years. One, of course is the resin producers, and they are in a position to do the obvious and substitute capital investment and automation for labor. If you look at the performance of the plastic resin segment, what you find is there was essentially no increase in employment over (the last) six-year period, in spite of a significant increase in output.
The second area that has had similar types of productivity improvements were the machinery people. They have not increased total employment despite a significant increase in output.
Now, when you come to looking at the processors, you don't see the same thing. What you see is significant growth over that time period, but you also see growth in the employment sector as well. Now, to me, this raises the question that I think reports like the SPI Economic Report should raise: Is that relevant? Is that an issue? A concern?
What we are going to try to do is take that issue back to the processors and say `Does this make sense to you guys?' What they may say is, `Let me give you a course in Processing Economics 101.' Unlike these guys who build $500 million plants and can invest in state-of-the-art technology, every time you put a new injection molding line on, you put on six more people to run that thing. I get some economics of scale as we go up, but I can't incrementally add more output with zero increase in people. This is what I think we will hear back.
Maybe that sector will peel this onion back and say well, let's not be defensive and ask ourselves this question: Is it good enough, is it headed in the right direction, should we put more emphasis on productivity? I'm not saying there is a problem in the processor area. I'm not even saying the resin producers are doing the best they could.
Q. What do you think SPI's role is in terms of helping your members to be involved politically?
A. Well, I think the first thing we've got to do is make sure people understand they are part of a bigger whole, so that when an obvious situation comes up, when they need to act as a bigger whole, they kind of know what they are a part of. It could be that bigger whole is a state group, or a regional group, or it could be part of all of North America or the world.
Q. It seems like most of the state groups are focused on issues that are bottom-line oriented — improving productivity, boosting the work force — as opposed to working with the Environmental Protection Agency on new rules (like SPI does). Do you see SPI moving more in that direction?
A. People, groups, tend to subdivide into the smallest components in which they can rally around and do something about that which is bothering them today. What we find in the plastics industry is that those smaller components tend to consist of groups that are focused around a small geographic region, a very specific business unit, like fluoropolymers or vinyl siding, or groups that have other generic associations, like blow molding and injection equipment or extruders or mold producers. There is this natural desire to be part of an affinity group that can deal with issues that are very obvious to the people that are part of that affinity group.
I think it has become tougher for people to find the relevance of dealing with macro issues in today's environment. Part of that may be those macro-issues are not quite as well-understood or advertised or perceived as they used to be. Part of that may be we've done a pretty good job of dealing with the well-understood issues that were out there five or 10 years ago. You are faced with this dilemma — do you allow the industry to subdivide itself into a myriad of small segments to focus in on their own very unique issues? Or do you find a way to say, in addition to that, you need to maintain a perspective of a bigger whole, which is the plastics industry, and to make sure we do what is neccessary to keep this industry healthy.
Q. Let's transition from that into SPI's relationship with the American Plastics Council. Do you think the 12 or so resin companies that left SPI made a mistake? Does that hurt the industry's ability to, as you say, maintain a larger perspective that you said is so important?
A. Well, I'm going to start acting like a politician because I'm going to give you a statement that has nothing to do with your question. At least I'll be courteous enough to tell you in advance.
One of the goals that I have for SPI is to significantly strengthen the working relationship with the other associations that make up the plastics industry, such as the Society of Plastics Engineers, APC, the Canadian Plastics Industry Association, and the European plastics groups. I think there is a need to work more closely together. I think all of us are faced with some of the same issues, that (being) how do you get relevant to your constituencies in today's environment. How do we make sure we are not wasting resources, overlapping resources, even fighting each other in a competitive sense, to see who can be the first one to do something?
So one of my goals and one of the goals of SPI is to come up with a significantly improved working relationship with all of the organizations that comprise the plastics industry. Where do we stand on that? Well, I've had a couple sessions with Mike Cappelletti and the people at SPE. We're excited about what we think we can do. We have a major effort under way at NPE, where they are going to be the primary purveyors of seminars and technical programs there. We are delighted to be supportive.
We could have just as easily taken the other position and said, `Hey, this is our game, this is our show. There is only room for SPI here.' That's not the attitude we've got. It's good for SPE to be there, It's good for SPI to be there. Mike and I are looking at other ways. We have a pretty extensive education program. They have an even more extensive education program. They tend to be more on the education and scientific level, but we're both kind of converging on trying to reach the masses.
So what I'm saying is, using SPE as an example, in the first three months I've been on the job, Mike and I have met a number of times with a common objective, of trying to do more in this area of mutual cooperation. A year from now, if we have this same kind of discussion on the state of SPI, I would like to be more specific in terms of what that attitude has led to with respect to cooperative arrangements between SPI and SPE.
At NPE, I'll be meeting with the people from Canada and the people from Europe. Although I've had two meetings with Pierre Dubois from Canada, this will be really my first time listening to these people about what they think is really going on, and having a chance to tell them why I think there's a need for improved communciation and coordination and liaison among the various groups that make up the worldwide trade associations, and to start talking about specifics of what we can do together, what should we do together. I don't know where that's going to go but I know discussion is going to take place.
Now, let's deal with the last unmentioned part of that question. I think if the plastics industry in North America is going to be as successful as it can be, there has got to be significant improvement in the working relationship between SPI and APC.
Q. I assume you've met with APC President Ron Yocum. What are those discussions consisting of?
A. I think when the time is right, we ought to share with you what, if anything, we've got to say on that subject. In all honesty, I don't have anything I can tell you now that is tangible enough to be reported, other than the fact that we've met.
In all honesty, I think there's been a lot of comment on this subject by people who either have good intentions or not so good intentions that haven't always helped that situation.
This may be the most delicate of negotiations or discussions that are taking place in this industry. I honestly believe, like so many other things, if they are going to be successful, they are probably best carried out in an atmosphere where you can rebuild trust, you can rebuild cooperation, you can rebuild the relationships that have been damaged in the last couple of years. I'm going to do everything I can to try to make that happen.
Q. How do you think that is working so far?
A. I don't think I have an opinion on it. Are we where we want to be? No. Do we understand the need to get this issue resolved? You bet.
I don't want to personify this and talk about Ron and myself. We are probably the two least important people in this whole equation. If you want to talk about who the decision makers are, I think you've got to talk about the people who make up the board of directors of these two organizations.
Somehow or other, with Ron's and my help, or some other way, we have to get those boards to agree that there is a better way to serve the needs of this industry than what we have displayed in the last 12-18 months.
I suspect that Ron is a lot like me. We know how to follow directions, we know who our bosses are. We can help them to understand the issues. And I'm optimistic that some of the changes that have already taken place, that maybe this will be somewhat conducive to people kind of reconsidering how best to move forward. I'm optimistic.
Q. It seems that in some cases, a minority of board members could actually have created this rift. The problem is there are not enough people speaking out and saying that they don't want it to be this way.
A. You would never get me to disagree with that assessment.
If I can generalize a second and we'll come back to your point, one of the things I've known for a long time before I came to SPI, is that people participate in trade associations for a variety of reasons. Sometimes, you are fortunate enough and you get the very best people, the most enlightened people you can imagine, who make the time to take on the leadership responsibility, recognizing it is beyond their normal scope. Sometimes those people elect to sit on the sideline and let someone else do it.
Q. Do you think the selection committee picked you to head SPI because of your resin company experience? Does that give you credibility with APC?
A. I think it's a lot more important that you pick someone with the right leadership skills to run an organization. I would like to think the reason I was chosen is they looked at me and my experience, and maybe even talked with someone about what skills I have and made their decision on that basis.
I certainly believe that at this point in time, in addition to having good leadership skills, there is the additional desirability to having someone who knows something about the resin producers and who may in fact even know some of the key players at the resin producers. That is an extra kicker.
I'm trying to find a way in which all those organizations that purport to be interested in the health of the plastics industry figure out a way to work together. I think we are not doing as good a job as we should be (doing) in that very simple area. I think there's a lot of room for improvement there.
If that's as far as we can get, and we wind up with a division of labor and it meets the needs of the industry and does it in the most efficient way possible, then I'm not disappointed. However, if the ultimate solution to those things is we all get under one roof, then it's something we should evolve in, once the respect and the confidence is developed.
I'm certainly not going to be an impediment to that type of an objective, if that's where we ought to be.
Q. That's an interesting point. In previous efforts to merge APC and SPI, one of the impediments was picking a leader.
A. If that's where we want to be, and there's someone out there better than me, let them have it. That's one of the advantages to having a 36-year successful career with an organization like DuPont and Dow. I won't say I'm not without ego, but I certainly have accomplished a lot more than I ever thought I would be able to.
Q. How big is the issue of endocrine disrupters? I'm thinking of whether environmentalists, who had some success on the issue of phthalates in toys, will try to phase out polycarbonate in some applications. How do you see that issue playing itself out?
A. I'll tell you upfront: The answer is an opinion. One would hope good science prevails.
I was coming down on the train this morning. I had a chance to read through one of the discussions on genetically modified food. There's a lot of similarities here. You've got a whole segment of science saying genetically modified foods are good. We certainly have a tremendous economic potential with respect to how crops are raised. There's a significant segment of the scientific community that says there is absolutely nothing wrong.
There is another small segment, very small segment, that says well, we don't know what is wrong with them, (and) until someone can come up and 100 percent say there is no potential for damage from genetically modified foods, we ought to stay away.
I think there is a lot of similarity with some of the issues being raised here. The only way I know how to address them is to say hopefully, good science will prevail.