The state of the U.S. plastics industry in the global marketplace for the next 10 years looks pretty grim — unless people in the industry rethink their politics and technical focus, a consultant said.
Anti-trade policies of U.S. poli- ticians are forcing polymer pro- duction offshore and making fabrication ``invisi- ble'' in the manufacturing landscape, said Roger Jones, president of Broomall, Pa.- based Franklin International LLC.
The November presidential and congressional elections will be the most important of the past 20 years for the plastics industry, Jones said at the Society of Plastics Engineers' Antec conference, held May 4-8 in Milwaukee.
``This is an area where we have to get the attention of the politicians that we are electing to office and say, `My job matters; my industry matters. I want to know where you stand on this,' '' Jones said. ``Don't let them off the hook; don't let them wiggle on that. They have to give you an honest answer.''
Jones said the major U.S. presidential candidates and some members of Congress are advocating new taxes and regulations — some designed to curry favor with environmentally sensitive voters — that will continue to drive manufacturing to lower-cost countries that have fewer environmental regulations.
He pointed to Congress' recent decision to let the research and development tax credit expire, and lawmakers' lack of a vote on the proposed U.S.-Colombia free-trade pact as evidence that politicians are setting back U.S. businesses. He blasted subsidies for alternative forms of energy such as wind turbines, which he said drive up energy costs.
Jones labeled current pro-ethanol incentives, which have seen 30 percent of the nation's corn crop used to make fuel, ``a disaster'' for food and polylactic acid production. Meanwhile U.S. officials from farm-belt states keep up barriers to imported, cheap Brazilian sugar cane, another bioplastics material.
He criticized politicians for barring oil companies from exploratory drilling in the Arctic National Wildlife Refuge in Alaska, for stalling permits for new liquefied natural gas terminals, for denying permission for further offshore oil drilling within 200 miles of the U.S. coastline and for failing to allow construction of the first new U.S. oil refinery in 30 years by Arizona Clean Fuels Yuma LLC.
``At the same time, the Chinese national oil company, CNOOC, is drilling for oil under Cuban auspices,'' he said. ``There's something wrong there.''
Meanwhile, Mexico's state-run oil company, Petroleos Mexicanos (Pemex) has failed to keep its refineries up to date, meaning the No. 2 exporter of oil to the United States could dry up as a source within five to eight years, he said. Since Pemex is barred from accepting foreign investment, that's a distinct possibility, Jones added.
He also criticized U.S. firms for failing to react to globalization and rising feedstocks prices. He said the Big Three automakers reacted slowly to higher raw-material costs increases, compared with Japanese competitors with North American plants.
``The people who are servicing those Japanese transplants are finding out they're in better shape because Japanese transplants are always willing to work with their parts suppliers in terms of raw-materials cost problems,'' Jones said. ``Unfortunately Ford, GM and Chrysler have not shown that kind of willingness and as a result, almost all of their parts suppliers are currently in bankruptcy.''
Innovation is another area where the U.S. is falling behind, he said, while companies in growth markets such as China and India have increased R&D spending dramatically, he said.