Hall of Fame: After saving NPE 2009 from the brink, Carteaux enjoying rebound

WASHINGTON — Bill Carteaux said this is a great time to be working for the Society of the Plastics Industry Inc. and representing the third-largest U.S. manufacturing sector.

The shale gas boom is lowering costs for energy and some major plastic resins. Processors are beefing up automation.

“We can compete with anyone in the world today, because we've increased so much in productivity. That's why it's even more enticing for people to reshore now, because the cost-structure's changed,” he said. “It's changed  from the abilities on the other side of the ocean — now when you've got those shipping costs and everything else, and now we can do it more inexpensively here.”

As president and CEO of SPI since 2005, Carteaux has seen the changing face of manufacturing in Washington.

“When I came D.C., the president at the time was talking about becoming a service society. Trying to get a meeting with members of Congress to talk about manufacturing, it just wasn't on their radar screen. And that's all changed,” he said. “The manufacturing sector overall, as part of the economy, has done well. Manufacturing helped lead the country out of recession. And people realize that to have a middle class in this country, we need manufacturing.”

SPI faced a huge challenge during the Great Recession. NPE 2009 was in doubt as major exhibitors began pulling out as their sales plunged. Leaders of SPI, the trade show organizer, worried about a ripple effect as other companies looked to withdraw.

Carteaux and the other leaders worked quickly — and used his industry contacts forged during a career in plastics machinery — to come up with an “economic stimulus package” of discounts. The show was saved. But the stimulus plan caused SPI economic pain, and the association restructured and laid off employees.

NPE's commitment to Orlando

Then came a blockbuster announcement: SPI was moving NPE from McCormick Place in Chicago, the exposition's longtime home in the heart of the industrial Midwest, to lower-cost Orlando, Fla., for the shows in 2012 and 2015.

At NPE 2015, Carteaux said, SPI is announcing that the trade association has contracted with Orlando for NPEs through 2018 and 2021, and has dates reserved there for the NPE 2024 show. The show runs every three years.

Carteaux revealed that earlier talks fell apart with Chicago government and union leaders that could have alternated NPEs between the two cities.

“In the fall of 2013, we went back to Chicago and said, ‘We'd like to talk to you about starting a rotation of NPE between Chicago and Orlando, in 2021. Because we were already locked in to Orlando for 2018. We had in-depth discussions,” Carteaux said.

They couldn't come to an agreement, he said.

And this week at NPE 2015 — in Florida — Carteaux enters the Plastics Hall of Fame.

Building upon past experiences

Carteaux, 55, discussed his machinery background, working in Washington D.C. and what should be the biggest NPE ever this week in Florida, during an interview at SPI's new offices on K Street.

The SPI leader was nominated for the Plastics Hall of Fame by Jay Gardiner, president of Gardiner Plastics Inc. in Port Jefferson Station, N.Y. Gardiner also is president of the Plastics Academy, which administers the hall.

Carteaux's machinery career began in his hometown of Avilla, Ind., at Autojectors Inc., the vertical-clamp insert molding press maker owned by Group Dekko. Later, he was a top official of Demag Plastics Group, a multinational machinery maker, where he saw the integration of Van Dorn Demag.

But at his high school in Indiana's farm belt, he wanted to be an auto mechanic.

“My dad was an electrician at International Harvester so I grew up in a blue collar family. He and my grandfather also owned a tavern for 30 years,” Carteaux said.

He was a mechanic for about a year at an Oldsmobile dealership. Then he joined the Air Force for training in aircraft maintenance, and a way to pay for college. But after 30 days, he was honorably discharged, thanks to a detached retina suffered when he got hit in the eye by a football in high school.

Carteaux was able to save some money working at a gas station through high school. He enrolled at Purdue University, the first one in his family to attend college. He got a degree in agricultural systems management. His senior year was all paid for, as he won a coveted job as a resident adviser — using experience as a squad leader in his month in the Air Force.

At Purdue, Carteaux and other ag students organized a trade show at the local armory, complete with a parade of tractors through town. The AG Expo was his first trade show. And making connections is a big part of any show (including NPE of course), and that's how he got a job after college: at the Indiana Farm Co-Op.

“It seems like everything I've done, it's been built off of something else,” he said.

That was the case when he got a job at Group Dekko, a diversified industrial group of companies founded by Chet Dekko, who Carteaux considers a mentor. There was also a lot of luck. Like countless other plastics veterans, he backed into the industry.

Chance encounter

At his gas station job, he filled up cars and maintained the car wash. A frequent customer was Bill Dice, who came in every Saturday with a Corvette from his personal collection.

“I just struck up a conversation with him. And one day he said, “So, you gonna work here the rest of your life?'” Carteaux recalled.

Carteaux explained he was going to college, for ag engineering.

“Really? When you get out of college, look me up. I'll have a job for you,” Carteaux recalled Dice telling him.

Riiiiight.

After college, Carteaux was selling equipment to farmers at the co-op when his old boss from the gas station asked him to fill in one Saturday.

“Saturday afternoon rolls around about 2 o'clock and lo and behold who drives in, it's Bill Dice. And it's a beautiful spring day. He's got one of his Corvettes out, and he gets out of his car. He looks at me and he goes, ‘Bill! How are you? What are you doing here?' I told him that Joe had called and asked me to work.”

Dice asked why Carteaux didn't look him up. He told Carteaux he was executive vice president at a big company, Group Dekko. He wanted Carteaux for an industrial sales job.

Carteaux put down his oil-stained rag. The following Tuesday morning, he went to Dekko. The company hired him in 1984. It turned out Dice was the right-hand man to Chet Dekko.

“And I had no clue when I talked to this guy at the gas station,” he said.

Starting on his kitchen table, Chet Dekko had built a $400 million, vertically integrated industrial group in wire and cable extrusion, insert molding, PVC compounding and plastic recycling. Carteaux became a sales executive at a division that launched office furniture. He was happy at Dekko, but left for five years to get some “hard-core manufacturing experience” at Guardian Industries Corp., an automotive molder.

Group Dekko lured him back with the job at Autojectors. The company began to make insert molding presses for another internal Group Dekko business, which made plugs for wiring harnesses. It was a $3.5 million business. Chet Dekko wanted to sell to other molders, directly competing with Newbury vertical machines. As general manager, Carteaux helped build Autojectors to sales topping $25 million, he said.

Then Milacron LLC bought Autojectors in 1998. Carteaux stayed for only a few weeks, and left to become vice president of marketing at Van Dorn Demag in Strongsville, Ohio. He moved up the ranks, to president, then co-executive managing director, with Helmar Franz.

Just a month after becoming top executive in 2002, Carteaux announced significant layoffs at Strongsville.

Carteaux said that in the early 2000s, work was moving to China, especially hurting Van Dorn Demag business in the United States. After the record attendance of NPE 2000, the machinery market began to slide.

“By the time I became CEO in 2002, we were less than half the size company that we were when I started there in 1998. Van Dorn went from $212 million to $70-some million,” he said. “It was because the market was cut in half during that couple-of-year period of time.  And the part of the business that left was the part that Van Dorn was really strong in — it was shoot and ship. It was low-end technology stuff.”

Excess machines

Carteaux enjoys talking about plastics machinery — a major focus at any NPE. The recession in 2009 slammed press sales, but they were already in a slow decline before the crisis. The last big boom was the late 1990s, when annual U.S. unit sales touched 7,000.

“We never should have been selling 7,000 machines,” he said. “What happened was, people weren't investing in automation. And so they were buying more machines and throwing people on the projects as opposed to investing in automation. And China could do it for freaking nothing. If we would have automated, we never would have sold 7,000 machines a year, and we would've invested in more automation, like Europe was doing.”

The resulting glut of excess machines depressed the market for new presses.

Right now, annual injection press orders are around 4,000. Carteaux said 3,800 to 4,200 is a sustainable level. Realistic.                                                                                                                                                                             

“We've slowly built our way up to that. The extrusion market's doing better in the first half of the year. Auxiliaries have continued to do well. People are investing very heavily in automation. They're taking cost out,” he said.

Carteaux likes running SPI. “One of the great things about this job is that every day is different. In 10 years, I can say that almost every day has been different than the one before,” he said.

He's not a “Washington guy,” but instead, someone who has an industry background and has made tough business decisions.

“It has opened up more doors to me because I'm not a talking head,” he said.

Rebuilding relations

Carteaux also has worked hard to forge links with other trade groups. He said he has rebuilt relations between SPI and the American Chemistry Council, which had been severed for years. And he put together the North American Plastics Alliance (NAPA), and the Plastics Association Leaders (PAL). And a new group has started, the North American Plastics Recycling Alliance (NAPRA).

“Basically what we're doing is communicating about our joint initiatives and issues, and making sure we're not duplicate spending on issues across the industry,” he said. “We're talking. We're collaborating and working together.”

It hasn't been easy. In fact, SPI faced some of its biggest challenges in history. The Fantastic Plastics Works exhibit at Walt Disney World, while a success, did not attract full industry funding, so SPI was forced to use its core cash, he said.

Then came the recession and the tough NPE 2009.

“If I didn't have a business background, I'm not sure I would've survived. I had to get really creative on cash flow, and be able to make things happen, to keep us afloat. To get us to where we are today,” Carteaux said.

Saving NPE 2009

Plastics News documented the NPE 2009 controversy at the time. But Carteaux revealed some other details during a three hour interview in his D.C. office. The 2009 show was set for June in Chicago. In early February, he said, “the wheels started going off.”

Japanese injection press maker Nissei Plastic Industrial Co. and Swiss press builder Netstal-Maschinen AG issued news releases announcing they were pulling out of NPE 2009. One of Carteaux's machinery contacts said the Japanese were thinking about pulling out en masse.

“From our perspective what was happening, it was going to become a self-fulfilling prophecy. Because when people realized that these big guys were pulling out then more guys would pull out,” he said.

And if more major machinery players pulled out, that could hurt attendance, since people want to see working equipment.

Carteaux also learned the European machinery makers were teetering. They would exhibit if the Japanese were there. If not, they probably would pull out, too.

Alarm bells sounded. SPI leaders met to figure out a plan. Gunther Hoyt, a consultant and former executive at screw and barrel maker Xaloy Inc. helped set up appointments in Japan. Carteaux got on a plane to Tokyo.

“I flew over there on a Friday night,” he recalled. “I landed at 5, got to the hotel about 6:20. I took a shower and changed and at 7 o'clock I was at my first dinner. And we had meetings on Sunday, Monday, Tuesday. On Tuesday there was a very clear picture.”

Carteaux talked with Gene Sanders, SPI's senior vice president of trade shows and conferences. They talked to the executive committee. The Japanese, Carteaux reported, “were supportive, but they just didn't have the cash. So the question was, how can we give you space, give you money so you can still exhibit, and not have to take any more out of existing cash flow?”

The stimulus package was born.

Carteaux visited machinery companies in the United States and Canada. He flew to Europe. Vendors pitched in to lower costs, including Freeman Co., the general contractor.

“At the end of the day everybody stayed,” he said.

But at a price. The economic stimulus plan cost SPI $3.2 million, according to press reports. Layoffs were the result. Carteaux said SPI streamlined its operations.

“We're still not back to even close to the level that I took over in 2005. And our members will tell you we're doing multiple times more work with a lot of fewer people. But that's because we had people in places they shouldn't have been. We were doing some things we shouldn't have been doing. We have really refocused the whole organization,” he said.

And NPE moved to Orlando.

Meanwhile, SPI officials are working to diversify income sources from operations. Carteaux said NPE used to account for 60 percent of total revenue, in SPI's three-year budget. That's now down to 35 to 40 percent, he said.

SPI is on solid financial footing. The industry is healthy, as NPE 2015 kicks off.

Carteaux said SPI needs to be able to fight what he called unprecedented challenges facing the industry from the regulatory side — the bans, taxes and deselection issues that grab the headlines.

But SPI has a broader mission.

“Trade associations are repositories of information,” Carteaux said. “It's our job to take information and put it into knowledge for our industry. I think that's what we're doing. And that knowledge could be, this is how you're getting beat up in regulatory, this is what's happening on the Hill, or the state level. This is what's happening on new technology. These are things you need to do.”