The Society of the Plastics Industry Inc. is considering raising dues and taking other steps to deal with a $1.5 million budget shortfall in the group's $9 million core operating fund.
SPI officials said discussions are preliminary and they did not discuss specific plans, but some board members said the situation will require difficult choices. Washington-based SPI has been battered in recent years by the departure of many business units and the economic slowdown, which cut into dues revenue.
The budget problems do not include SPI's business units, which are funded more independently.
``SPI is looking at a number of options to try to stimulate revenue,'' SPI spokeswoman Bonnie Limbach said in an e-mail response to questions. ``These include such possibilities as changes to the SPI dues structure, office facilities, overhead allocations, in-sourcing/outsourcing and mechanisms for funding programs.''
SPI is getting input from member companies, and the problem will likely be a topic of discussion at the association's board of directors meeting in mid-May.
It is unclear how a dues increase would go over with SPI member companies.
``I would support the SPI in its quest for more funds if, and only if, they can tell me it is absolutely needed,'' said SPI board member Donald Gruenberg, president of Thermal Care Inc. in Niles, Ill. ``They haven't presented the kind of details about what will happen if we don't raise dues.''
But another board member, David Hidding, said a dues increase probably is needed.
``All the easy cuts have been made,'' said Hidding, who is president of Dana Molded Products Inc. in Arlington Heights, Ill. ``If they decide no dues increase is in the offing, [SPI President] Don Duncan will have some really tough choices to make.''
The tight budget meant that the association did not do its business confidence survey this year, for example, he said. Limbach said SPI has taken other steps such as eliminating nonessential travel and consultant work.
``Your readers and our members can be assured that we have every intention of continuing to do what we do for the industry,'' Limbach said. ``We may just do it differently and more efficiently.''
SPI officials say the Washington-based association is being hurt by some of the same factors hammering many trade associations: a slowing economy that reduces dues, consolidation among member companies and less income from investments. Plus, SPI said it lags about a year behind the industry's economic situation because dues payments, which are based on sales, reflect the previous year's business.
``The economy has dealt everyone a severe blow,'' said Paul Appelblom, SPI vice chairman and president of injection molder Jatco Inc. in Union City, Calif. ``We are very much in the hope that things will rebound. We are looking forward to that.''
Hidding, who used to head SPI's Processors Council, said that the association's processor members ``do not carry as heavy a load'' financially as other segments in SPI, like machinery firms.
SPI cut processor dues dramatically in 1998 in a bid to get more members. It reduced maximum processor dues from $164,000 to $10,000, down to what the association said was a ``no-excuse level'' for joining. At the time, SPI said the change would cost it $1 million a year in revenue, but the hope was new members would offset the loss.
The change did attract some large processors, but SPI officials said it did not bring in the number of new processors they thought it would. SPI's overall processor base has declined substantially. In 1997, SPI officials said they had between 800 and 1,000 processors. Now, Limbach said, it has about 400.
The 1998 dues cut also let companies shift a percentage of dues from core programs to business units.
SPI, which historically has been an umbrella group with disparate members, has said it lost several- hundred processors in recent years when units representing segments like pipe makers, vinyl manufacturers, polyurethane roofing suppliers, composites and others left SPI. Some of those firms left to join the American Plastics Council, a fallout of the failed merger talks between the two groups.
SPI officials also confirmed that the group did for the first time take out a ``bridge loan'' to operate, rather than dip into reserves, which are down in value with the markets. Limbach said the loan was paid off at the end of April, when revenue from SPI's trade show division started coming in.
``Our accountants assure me that [a loan] is common for associations at this point in time and commonplace for many,'' Limbach said.