WASHINGTON — When the Society of the Plastics Industry Inc.'s top federal lobbyist resigned last month, he wrote the group's president a blunt letter saying SPI is becoming less effective in public policy work and has seen its membership decline to the point where it is difficult to substantiate its claim to being the industry's "principal trade association."
The April 6 resignation letter from Lewis Freeman, SPI's former chief federal lobbyist, warns that the association's ability to "be the industry leader it once was on public policy issues" is weakening because of declining resources.
Freeman, who has since said he will now pursue government-affairs consulting work, and SPI President Don Duncan declined to comment on the letter. Two sources familiar with it confirmed its contents after Plastics News obtained a copy.
Freeman, a 21-year veteran of SPI who left May 1, had been SPI's vice president of government affairs but was reassigned and given more limited responsibilities for strictly federal legislative work by Duncan, who succeeded Larry Thomas as SPI president in February 2000.
Freeman, in his letter, said his "more limited" responsibilities in the new job were "neither satisfying to me personally or satisfactory professionally."
But beyond those personal concerns, he said the group's diminished commitment to public policy work, particularly at the federal level, was starting to compromise the group's effectiveness and was placing it into the "ranks of the also-rans."
"For an industry that boasts being the fourth largest in the nation, such a lower profile is frankly puzzling to the public officials SPI seeks to influence in the Congress and the regulatory agencies, as well as to many customer and competing material trade associations with which the association interacts," Freeman wrote.
While declining to discuss the letter specifically, Duncan said generally he was not disappointed with the group's public policy work.
"I'm convinced we can do better," he said, arguing that the group has been struggling with a new internal structure designed to involve member companies more heavily. The trade association has made "a lot of progress in the last six to nine months," he said.
SPI now has a strong team of member companies involved in its government affairs efforts, Duncan said. Additionally, he said SPI needs to coordinate its activities with the American Plastics Council, in Arlington, Va.
Freeman's letter also said that SPI has seen an "alarming" decline in the number of processors — down 45 percent since 1998, and 30 percent in the past 15 months. The loss of raw materials suppliers and the absence of major product sectors, like bottles, pipe and foam, has weakened SPI's ability to be the leader it once was, Freeman wrote.
"The eroding membership base has reached a point where the claim that SPI is the `principal trade association' for the industry is difficult to substantiate," Freeman wrote.
SPI argues it is the industry's principal trade association because it has members from all segments of the industry. APC, which has only resin company members, has a much larger budget.
SPI lost some of its largest member companies as a result of its split with APC. It now has about 1,500 member companies, including 700-800 processors, Duncan said.
That is down from about 2,000 before the fight with APC. The two groups were once closely allied, but relations became very frosty after merger talks between them fell apart. The groups have made efforts to cooperate in the past year.
SPI lost several hundred members, many of them small polyurethane roofing suppliers, when some of SPI's larger business units shifted to APC, Duncan said. Some SPI companies have raised concerns about the group's struggles to attract new members. Duncan conceded that he suspects membership has remained flat, even when you remove the "APC effect" of companies leaving SPI for APC.
One government affairs source at an SPI member company, who spoke on condition of anonymity, said the attention of SPI companies has shifted away from government affairs since 1994, when Republicans took control of Congress and former Rep. Newt Gingrich, R-Ga., became House speaker.
"From the time Newt got in, at the Washington level, the industry was not looking over its shoulder every day wondering who is going to get it," the source said. "As a result the [SPI] board focused its attention on creating value as processors, equipment producers, and raw materials suppliers."