July 26, 2013 Plastics Industry Conveys Critical Concerns to Congress

Volume 16 | Issue 6

Congress, get ready, because here they come, leaders and members from eight of the nation’s most well-known plastics associations, armed

Representing the nation’s third largest manufacturing sector, these employers of nearly a million hardnosed workers have ideas and suggestions firmly in mind – and Capitol Hill had better listen.

Where does William Carteaux begin?

First, there are automobiles. Plastics and advanced plastics composites are making vehicles considerably lighter and more fuel efficient, allowing automakers to keep pace with changing and aggressive corporate average fuel economy standards.

Then there is alternative energy. Windmills are made out of plastic composites. So, too, are solar cells and fuel cells. “As you look more and more into the things we are trying to do to become more energy independent, plastics play a major, major role in that,” Carteaux says.

Let us not forget about underground piping and food packaging as well as medical devices, like blood bags, catheters, needles, and scalpels. There is plastic in all of them. “Try to go to a doctor’s office or a hospital and not to have plastics used. It is absolutely impossible,” says Carteaux, very matter-of-factly.

Plastics are everywhere, in almost everything you touch and everything you see. And that’s the point, says Carteaux, the President and CEO of SPI: The Plastics Industry Trade Association. Plastics help you do so much more with so much less, and in so many ways, regardless if you are consumer, a designer, an executive, or an engineer. There is simply no getting around it.

Not even if you are a member of Congress, it seems.

Dozens of plastics industry leaders – including Carteaux – from eight plastics associations will descend upon Capitol Hill later this month for a series of meetings that industry insiders hope will make federal lawmakers better understand what challenges the nation’s third-largest manufacturing sector, such as unresolved economic issues and ongoing business challenges.

“Plastics help you do more with less in countless ways, whether you’re a consumer, a designer, or an engineer,” says Steve Russell, Vice President of Plastics for the American Chemistry Council. “Plastics insulation products are reducing the energy it takes to heat, cool, and power our homes, and modern plastic packaging is delivering more product with less material, helping to reduce more food and packaging waste than ever before.”

The other American plastics associations that will be joining SPI in meeting with Obama administration officials and Congress members and their staffs in their Congressional offices on July 24 include:

• American Chemistry Council (ACC);
• American Mold Builders Association (AMBA);
• International Association of Plastics Distribution (IAPD);
• Plastic Pipe and Fittings Association (PPFI);
• Plastic Pipe Institute (PPI);
• Vinyl Institute (VI);
• Western Plastics Association.

Carteaux’s organization is sponsoring the one-day legislative fly-in, and while the SPI always has staffers on the ground pulling strings with federal decision makers every day, this is a unique opportunity for plastics industry manufacturers to speak with their respected district representatives themselves, in person, face to face. Remind Congress that the nation’s plastics sector is not only a large component of the economy and workforce, Carteaux says, but a critical part of other manufacturing sectors, such as automotive, agriculture, energy, construction, food processing, and healthcare.

“We want our members to tell Congress that we’re a vibrant industry and vital to the economy, but also give a reason why they personally have not been able to expand, perhaps because of regulations or taxes or the economy, and really put it into perspective using real-life examples,” Carteaux says.

At the same time, he says, the simultaneous presence will demonstrate the importance of the industry and its contribution to the American economy – which is quite generous. “Our shipments were about $380.4 billion in 2011, and if you factor in some of the downstream sectors that we also sell into, we contribute over a half trillion dollars to the economy on an annual basis.”

Carteaux adds, via a telephone interview with Industry Today, that the aforementioned figure was a 12 percent raise from 2010. The industry employs more than 900,000 in 16,298 facilities nationwide, and the sector has added approximately 33,700 jobs since the turn of the decade. In terms of trade value, plastics exports tallied $58.6 billion in 2011, yielding a positive trade balance of $16.3 billion.

Durable Products, A Durable Industry
Not even the Great Recession and subsequent seesaw economy of recent years, Carteaux says, was able to derail the manufacturing of plastics, at least not alarmingly.

When construction plummeted at the end of the last decade and was slow to recover at the beginning of this decade, a linebacker-like, helmet-to-helmet hit was delivered to the industry. “Think vinyl windows and vinyl siding, plus all of the plastic plumbing houses have today,” he says. “There are so many parts of your house that include plastics, including the equipment and tools used to build it. When there is little to no construction, all of these things take a hit.”

Still, the sector powered through, like a halfback over the top of the goal line on fourth and one, thanks largely to a profitable alternative game plan that focused more on providing supplies for packaging and alternative energy, among other industries, while waiting for construction to right itself.

“We are so strong because we are tied so much to so many other industries,” Carteaux says. “The plastics sector has proven itself to be very economically resilient. It has truly performed significantly better than other manufacturing sectors during the economic recovery, which has been spearheaded by manufacturing.”

Lately, the nation’s abundant supply of shale gas has given domestic manufacturers something of a home-field advantage, “a game changer,” as Carteaux puts it.

“It makes us, if not the lowest, then the second lowest cost producing country in the world,” he explains. “About 80 percent of the plastics made in the U.S. are made with natural gas as the feedstock. For the rest of the world, about 80 percent comes from crude oil. That is a huge advantage for us.”

What’s more, with American manufacturing poised to go through a major renaissance, industry forecast models show that sunny skies are ahead. “The recession helped point out that we need manufacturing for many reasons, if nothing else to maintain a middle-class livelihood in this country,” Carteaux explains.

Well, if that’s case, then all is presumably well in the plastics sector then, right? There certainly cannot be much to discuss, at least nothing serious, not with an industry as tough as a $2 steak. July’s meetings will be quite quick, in and out in just a few moments, yes?

That’s wishful thinking.

Plenty To Talk About
Carteaux has organized events like this before. It is an annual thing now, and the list of talking points, rebuttals, and statistical analysis from industry leaders and government decision makers are always extensive, comprehensive, and well thought-out.

The main objective of the day, Carteaux says, is building stronger, more long-lasting relationships with those who control the fate of regulations that police the industry.

“The worst thing that can happen to any industry, especially ours, is that an issue comes up and we need to get in touch with someone (in Congress) right away to discuss the issue but we do not have a relationship with anyone,” he says.

The local touch really goes a long way toward making each side – frustrated manufacturers and self-justifying lawmakers – understand where they are coming from, Carteaux says. In these meetings, they walk in each other’s shoes. They untie them, swap them, then walk again, gaining perspective and insight they otherwise would have missed out on.

Therefore, Congress members have to listen – though most are happy to anyway, considering the importance of the industry to the nation as a whole, says Steve Russell, Vice President of Plastics for the American Chemistry Council.

“The plastics industry contributes to economic growth in every state in America,” he tells Industry Today. “Members of Congress appreciate hearing from their constituents on the challenges they face and how better public policy can contribute to healthy growth in jobs, ongoing innovation that helps address some of society’s greatest needs, and a stronger economy.”

“That is why it is important that the entire plastics industry point out the economic challenges and difficulties we face to those who can do something to remedy them – Members of Congress,” he says. “We want to make them aware of where we are coming from on the other side and provide them with real-life examples of how certain regulations or laws have curtailed certain businesses and manufacturers, or how it could curtail these businesses in the future.”

A lack of a comprehensive energy policy could do such a thing, he says.

“We consume a lot of energy when we run our machines and we tend to use natural gas as our feedstock to make plastic,” he explains. “We want to make sure they understand how important shale gas is and make sure we are utilizing and developing all energy sources available to us.”

Richard Doyle, President and CEO of The Vinyl Institute, could not agree more, saying in a statement, “We are pleased to work with the entire plastics industry to create a policy framework that will advance the manufacturing, use and responsible recycling of our industry’s products.”

Not providing better oversight of agencies like the Environmental Protection Agency, Occupational Safety and Health Administration, and National Labor Relations Board could also inflict similar curtailing, Carteaux suggests.

“We are a much-regulated industry. We have been for years and we always will be, and we understand that,” Carteaux says. “But we also ask that regulators address proposed laws and policies with a risk-based approach.”

According to Carteaux, such an approach would require federal authorities to base their decisions on scientific data rather than emotions, public opinion or a precautionary principle. “We can now test substances to parts per trillion,” he says. “Just because you have one part per trillion of a specific chemical in your body does not mean it is bad for you.”

With a God-like ability to put companies out of business and employees out of jobs with the stroke of a pen, it is vital that Congress deeply understand the importance and possible consequences of all proposed regulations, particularly those that could adversely affect plastics and its adjoining industries.

For instance, take fracking – and any policies that may soon be proposed that would put roadblocks in place to obtaining natural gas. “When new regulations come out, truly look at the risks involved, such as consequences on jobs and the economy, before you sign them into law,” Carteaux says.

However, perhaps most importantly, there simply needs to be a dramatic increase in economical stability – a rational economic policy, if you will, for all economical sectors, coast to coast, including manufacturing. Much doubt remains over the much talked about, but postponed, debt ceiling deadline and the nation’s continuously growing overall debt.

“Given that much of the plastics sector is made up of small- and medium-sized enterprises, Americans are having a hard time investing in plastics – or any business really – because they don’t really know what’s going to happen in the immediate term,” Carteaux says. “When Congress gets tangled up with itself and cannot properly address some of nation’s most important economical issues, it puts everything on hold.”

Jon Kurrle, SPI Senior Vice President of Government and Industry Affairs, echoes similar sentiments, saying he has also heard from members that “there is still too much uncertainty for them to make critical decisions about the future.”

He adds, “To support lasting expansion, overall U.S. economic policy must provide the business community with the certainty needed to stimulate confidence, investment, growth, and accompanying job creation. That is a key message that the plastics industry leaders will bring to members of Congress.”

SPI: The Plastics Industry Trade Association, founded in 1937, promotes growth in the $380 billion U.S. plastics industry. Representing approximately 900,000 American workers in the third largest manufacturing industry nationwide, SPI delivers advocacy, market research, industry promotion, and the fostering of business relationships and zero waste strategies. The association is structured to meet the diverse needs of the entire plastics industry. www.plasticsindustry.org

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