WASHINGTON - The American Plastics Council and the American Chemistry Council plan to merge, but the details about how that will affect many APC programs remain unclear.
The trade associations announced the merger late Sept. 13. They said the combination will let them work more closely on issues, plus save at least $5 million a year.
The new group will retain the American Chemistry Council name and will be led by Frederick Webber, president and chief executive officer of the current ACC. But it will include an operating board of plastics executives who will control plastics industry programs that will retain the APC name, said APC spokeswoman Susan Moore.
The prospect of a merger has some plastics industry officials concerned. One Washington plastics industry official worried that the relatively good public image of plastics, cultivated in part with $20 million a year in advertising, could be damaged by a closer association with the chemical industry.
Moore said officials recognize that danger and will work to see that plastics are not damaged.
``That is very much on the minds of every board member in both organizations,'' Moore said. ``The fact that APC will retain its identity in its focused work on plastics issues will assure that the plastics-specific objectives of the board continue to be met.''
Officially, the industry's other big Washington trade group, the Society of the Plastics Industry Inc., took a positive tack. APC actually grew out of SPI a decade ago, and they once shared the same office space, but the groups had a falling out after merger talks between them failed several years ago. Following that, many APC members pulled out of SPI. Since then, the groups have worked to overcome that acrimony.
``We [SPI] believe we have developed a good working relationship with the APC, establishing a foundation for working cooperatively on matters of mutual concern and interest to our individual memberships and the industry,'' SPI said in a statement. ``We hope to maintain that relationship in whatever form APC or its programs take.''
After its relationship soured with SPI, APC moved into ACC's office building in Arlington, Va. APC and ACC share many common large chemical and resin manufacturer members, and the groups work closely, particularly on increasingly important chemical health issues such as phthalates and vinyl medical products.
At this point, the APC-ACC announcement leaves as many questions as answers. Many structural and staffing details remain unresolved.
While both APC and ACC will develop independent budgets for 2002 based on independent dues structures, Moore could not rule out changes in the future. ``There will be further opportunities for additional budget revisions for 2002 and beyond,'' she said.
She said plastics officials will not need ACC approval for spending and activity on advertising, customer outreach and communications programs, the only three APC programs mentioned by name in the group's joint statement. Other plastics programs could be treated similarly, but Moore said she could not specify which ones.
Moore said officials do not anticipate any changes in the autonomy of the plastics programs, but she added, ``I can only speak for the immediate year.''
APC and ACC expect layoffs and changes in staff assignments but said specifics have yet to be worked out. It is not yet determined who will head the APC unit, Moore said. APC President Ron Yocum is retiring, a decision he announced back in January.
The two groups anticipate the merger saving between $5 million and $7 million a year, about 10-15 percent of their core budgets, Moore said.
The new organization also wants to narrow its focus to key issues, she said.
``Member companies want the new organization to focus on fewer issues and concentrate more resources on the high-priority issues,'' Moore said. ``Individual issues and programs are being examined to achieve sharper focus and improved effectiveness.''
One area that processors interact most closely with APC is in the organization's state government unit, which is by the far the plastics industry's largest state and local lobbying organization. APC officials have said they spend about $3 million a year on that.
Moore said APC officials ``will maintain and continue to grow the partnerships we have with our downstream customers, including the processor community. That continues to be a vital capability of APC.'' She said she could not say how the merger will affect the state government unit.
One question mark that some observers have about the merger is how APC will be affected by ACC's desire to improve the image of the chemical industry.
One executive noted earlier this summer that ``the chemical industry is not valued by thought leaders and the general public in anywhere near the way it ought to be valued.''
But some observers note that since the plastics industry spends $20 million a year on its campaign, the chemical industry might need a similar increase to make headway. That could dwarf any savings, one industry observer said.
The chemical and plastics industries generally see eye to eye on issues, but they have differed on some important topics. Initially, the plastics industry was much more vocal about opposing railroad industry consolidation, a position that the chemical industry adopted after service meltdowns from mergers in the Gulf Coast region paralyzed industry shipping.