Tuesday, September 16th, 2014

A Skills Gap Needs a Skills Bridge: SPI Launches PlasticsU

The manufacturing industry accounts for more than 17.4 million American jobs and nearly 12 percent of the nation’s GDP, but it should account for more.

The skills gap separating manufacturing from fulfilling its true contributive potential for the American economy has been well documented, and at this point isn’t even a recent, new or isolated phenomenon. On both a global and strictly American basis, jobs in the skilled trades have been among the most abundant, and yet the most difficult to fill, for many years now, although it should be noted that part of the issue keeping people from taking jobs in this field is perception.

More than a century has passed since the first assembly line developed for the manufacture of the Ford Model T began operating, but tell someone today to picture a job in manufacturing and the image that pops into their head is still a sepia-toned photo crowded with men in flat caps and overalls performing menial tasks over and over again, until a whistle signals their release. Americans often view the factory as the product of a less enlightened era, stranded in time like a mosquito in amber, but the reality is that today’s factories are nothing like your grandfather’s. Manufacturing as an industry has kept pace with the modern world—technologically, operationally and environmentally—and in many ways it even functions ahead of its time, providing excellent support for employees and their families, enabling the innovations that MFGDay2014Logomake modern life possible and ratcheting up the possibilities for what the future will eventually look like. Events like Manufacturing Day exist to pull back the curtain on the nation’s factories, and dispel the myth that these state-of-the-art facilities are somehow antiquated.

As manufacturing in the U.S. confronts its perception gap, it’s also working to combat its more-easily-quantified skills gap: the difference between the number of workers needed, and the number of workers qualified, to keep factories humming. For the plastics industry, the nation’s third-largest manufacturing sector that already comprises nearly 900,000 American workers, the first block in the bridge that closes the plastics industry manufacturing skills gap is PlasticsU, officially launched Monday by SPI and Tooling U-SME, a leading workforce development and training provider.

“Our industry has some of the best and brightest workers, operating top-of-the-line equipment and technology,” said SPI President and CEO William R. Carteaux. “Unfortunately, many of the technological advancements made recently are being held back by a growing manufacturing skills gap, which is why SPI partnered with Tooling U-SME to launch PlasticsU.”

SPI Plastics-U-final-outlinesAimed directly at the heart of the manufacturing skills gap, PlasticsU provides manufacturers a new suite of online training programs tailored specifically to the plastics industry. Courses were designed and added in order to meet the needs of the broadest selection of stakeholders possible, meaning companies throughout the supply chain can find something helpful when it comes to training and developing their workforce. Expertise levels range from basic introductions to the most advanced studies, with more than 400 courses and more than 60 instructor-led training titles all conveniently available through the PlasticsU portal, offering companies the ease and flexibility that they need to design new workforce development programs or to augment their existing programs.

“The plastics industry will not realize its full capacity for growth and production unless companies take an active approach to workforce development,” Carteaux added. “PlasticsU offers these companies flexibility and convenience to make this process easy.”

Manufacturing in the U.S. has already made enormous strides since the recession and is poised to become an even greater part of the American economy. The industry continues to combat its perception gap, an effort to which SPI has been proud to contribute. But the manufacturing skills gap is real, and so are its limiting effects. A modernized manufacturing industry is one that has modern problems, and the manufacturing skills gap is a perfect example: a modern problem to which PlasticsU is a modern solution. As the manufacturing industry continues to build the bridge that will close its skills gap, SPI and PlasticsU makes a bold case for the bridge being made out of plastics.

Learn more about PlasticsU here.

Thursday, September 11th, 2014

A Crazy, Upside-Down World: Brand Owners, the Plastics Supply Chain and History’s Most Informed, and Most Fickle, Consumers

In the broadest terms, the challenges facing brand owners hinge on the fact that today’s market operates in a world wherein information is more available than ever before, but in a way that continues to defy logic. Consumers now make decisions about the products they buy based on information that could be correct, exaggerated, patently false or a modern combination of all three, and rely more on emotional appeal than traditional market functions such as quality, price, value or convenience.

Additionally, consumer behavior now more easily shapes the general public’s perception of a product. A liter of water could be packaged in the most recyclable container that science and progress can create, but the consumer that buys it is still required to deposit it in another container and put it out on their curb on the correct day, or, in some cases, make the effort to actually travel to a local recycling facility, with the container in tow.bottles_shutterstock_12202219

But when a consumer doesn’t do that, and the water bottle lands in the gutter or in the ocean or in the landfill, other consumers don’t blame the person that didn’t recycle that bottle. They blame brand owners.

Demands for high-quality, lightweight, convenient, recyclable packaging essentially gave birth to the modern plastics economy, and resulted in amazing innovations in materials, design and manufacturing. But the consumer’s list of demands never shrinks, only getting longer and longer until arriving at a point like today’s market where brand owners are being pulled in too many different directions. Today, having the best product, in every sense of the term, isn’t enough anymore.

“It’s a crazy upside down world where you could have a great product and be a great environmental steward and very conscious of those environmental takeouts and those assessments and lightweight your packaging and all of those other things, even including using post-consumer recycled material (PCR),” observed Neil Gloger, CEO of Intergroup International. “But you can still lose because you’re not winning the social market-share, as it were.”

This social market-share, as Gloger put it, operates in a supply chain that starts and ends with consumers, but swallows up businesses and even governments on the way, and as it runs its course each party takes steps to place increasingly complicated and frequently counterintuitive demands on brand owners. “A mom in the middle of the Midwest can’t find a place to recycle her kids’ juice boxes,” Gloger offered as an example. “Now everybody who makes juice boxes hears from a retailer, ‘if you ship us another truck of that type of packaging, we will reject it because it doesn’t conform to our packaging standards’ and that was $300 million in business you were doing that just went down the drain.”

This phenomenon of consumers creating and shaping demand happens more quickly today than it has at any other point in history, and to understand why it’s such a heavy burden for the plastics industry to accommodate the new normal, it helps to look at how packaging developed over time. “You have the old normal which was you packaged stuff because it started as a public health issue, and then it became a marketing tool and then it became ease of logistics and creating a lower carbon footprint,” Gloger said. “And we’ve progressed from that to a point where the product that you’re buying is not environmentally responsible because it’s packaged.”

The plastics supply chain developed to account for all of those desires among consumers—public health, marketing, logistics, a lower carbon footprint—but now it must be more environmentally-focused than might’ve previously seemed possible, a shift that brand owners have led admirably, though that’s not how they’re often portrayed by the media, consumers and environmental groups.

brandowners-logo-final-4c“Over the past 5-8 years the brand owners have really taken a leadership role in being responsible stewards,” Gloger said. “The organizations will say ‘they haven’t done anything,’ or ‘too little, too late,’ or ‘they’re only doing this because if they do that they won’t have to do the real work,’” he noted, adding that in many ways this has always been the case. “Say you have a modeling company that’s lightweighting packaging,” he said. “Their motivation wasn’t really to save the environment; their motivation was they wanted to save 40 percent on shipping.”

The point, however, is that the plastics supply chain, driven by consumers and led by brand owners, can operate with a profit interest in a way that satisfies consumer needs. “These things can work in synergy,” Gloger said. “I think the biggest challenge is being able to touch humanities at the same level as the other side does, with their messaging that packaging, everything that the company does, is not coming from an evil empire.”

It used to be that perception was only reality in marketing, but now perception is reality in most corners of the business world. Anthropologists could chalk this up to the advent of social media or other cultural forces, but in the meantime, operating in a way that suits the idiosyncrasies of today’s market isn’t a choice; it’s an imperative. Brand owners need to not only be environmental stewards, but they have to be storytellers as well. “If you have a mom in Iowa saying don’t buy this because the packaging just goes to the landfill, you have to be able to have somebody at the same level understand that there’s another story here, or a bigger story or a better story,” Gloger said. “The story just has to get out. It’s not about companies. It’s about people.”2014_AMFC

Gloger will discuss these issues and provide brand owner-specific solutions at SPI’s upcoming Annual Meeting and Fall Conference in Chicago from Sept. 17-19. Join us! Attendees can register on-site at the conference hotel.

Wednesday, September 10th, 2014

Highlights from Today’s NAM Report on the Cost of Federal Regulation

The National Association of Manufacturers (NAM) issued a report this morning detailing the enormous, burdensome costs that manufacturers bear in order to stay in compliance with federal regulations. Based on a survey of NAM members, the report, titled “The Cost of Federal Regulation to the U.S. Economy, Manufacturing and Small Business,” indicated that the average American manufacturer pays $19,564 per employee per year in compliance costs, almost double the $9,991USCapitol per employee per year that non-manufacturers pay. Overall, America’s manufacturers pay $2.028 trillion every year in order to stay compliant with federal regulations.

“As the nation’s third-largest manufacturing sector employing 900,000 men and women, the plastics industry is no stranger to regulations,” said SPI President & CEO William R. Carteaux in a response to this morning’s report. “While many of these rules and regulations are proposed and implemented with good intentions, the devil has always been in the details and as the NAM report makes clear, America’s regulatory framework is in need of a serious reboot,” he said, adding that “comprehensive reform is necessary to allow the nation’s manufacturers to grow their businesses, hire more workers and keep America competitive abroad.”

In addition to detailing the staggering costs that the manufacturing industry pays every year, the NAM report also contained several other important insights:

  • Federal regulation was by far the most frequently identified business challenge: Eighty-eight percent of survey respondents indicated that “federal government regulation was a challenge that had recently affected their firm or that they expected their business to face in the future.” Additional information provided by respondents went further, detailing the regulatory cost information for specific expenditures. “Estimating the cost of outlays for manufacturing as a whole from the respondents’ data indicates that direct expenditures related to regulation in the past year were $138.6 billion,” the report said, noting that this figure is larger than the economies of 19 U.S. states, to put things into perspective.
  • If the cost of regulatory compliance fell, the resulting funds would be reallocated in interesting places: Survey respondents were asked how their company might reallocate funds if their regulatory compliance costs were reduced. Their open-ended answers fell into one or more of five general categories: investment, employee initiatives, sales, ROI or debt reduction and other. Within the investment category, which was the most popular with 63 percent of responses, survey participants identified four areas of investment spending that would be likely to increase if regulatory compliance costs decreased: “capital investment and expenditures, growth and acquisition, research and development and general unspecified investment.” Within the employee initiatives category, which was the second most popular response with 22 percent, respondents identified three areas of employment spending that would likely increase if regulatory costs decreased: “creating or preserving jobs, employee training and wages and/or benefits.”
  • Regulation compliance takes a toll on morale in addition to each manufacturer’s bottom line: A number of themes arose in the additional comments offered by survey respondents about federal government regulations, but one important one was the fact that respondents observed deterioration in morale, well-being and work environment as a consequence of regulation. Many reported “an adversarial perspective by regulators toward businesses, where a firm ‘is approached as an evil entity’ populated by ‘bad guys.’” According to the report, in most cases these comments reflected the perspective that regulators fail to understand the circumstances of the businesses they are regulating, which in turn creates greater uncertainties.
  • The costs reported in the survey do not capture the total cost of regulations on a sector, or on the economy as a whole: While $2.028 trillion is a hefty price tag that the nation’s manufacturers pay for federal compliance, the total costs could be considerably higher. While the survey specifically asked for information regarding federal regulation and how it related to “the distribution of employees’ time; the cost of outside advisers; purchasing and maintaining tangible items; emissions credits or offsets; and costs resulting from federal government compliance-related activities,” respondents discussed other ancillary costs in their open-ended responses. According to the report, “inefficient planning as a consequence of uncertainty, including federal regulation in the production location calculus, R&D and capital investment consequences and reductions in employment and in competitiveness” were among the additional costly consequences that respondents associated with federal regulation.

A full copy of the NAM report can be found here.

Friday, September 5th, 2014

The California Bag Ban and a Lesson on How Not to Legislate

By Lee Califf, Executive Director, American Progressive Bag Alliance (APBA)

The California State Senate approved SB 270 last week, sending a fee on paper bags and the nation’s first statewide ban of plastic bags to Governor Jerry Brown (D) for consideration. Several environmental groups have all but danced in the streets to celebrate the bill’s advance, despite the fact that:

  • plastic bags comprise less than a half of a percent of the U.S. municipal solid waste stream and banning them will have little, if any, effect on reducing litter;
  • plastic bag production generates 80 percent less waste and requires 70 percent less energy to manufacture than paper counterparts; and
  • plastic retail bags are 100 percent recyclable, reusable and made with American natural gas, an environmentally-friendlier alternative to other fossil fuels.

But each of these facts obscures a bigger point about the legislative process that brought SB 270 to Governor Brown’s desk: this so-called “environmental” legislation never had anything to do with the environment.

The Bag “Bargain”

In the process of making environmental policy choices, it often doesn’t take long for the discussion to veer away from the scientific and toward the emotional. Broad considerations for the planet’s future touch deep ideological nerves, so this makes sense, but it can often stifle conversations about actual science, as well as the real environmental ramifications of the policy proposal.apba logo_2012

Recognizing this, proponents of SB 270 decided never to entertain the very good environmentally-friendly reasons to vote against the bill, some of which are outlined above, but instead stood on the assumed truths that have similarly derailed so many other policy discussions. Furthermore, money spoke louder than environmental imperatives or the supposedly inherent evil of plastics, as supporters of the bill made grocers and unions an offer they couldn’t refuse: support SB 270 and we’ll direct the fees collected from the paper bags to you.

The Future

The bill’s lack of real environmental bona fides, along with its enactment via back-room deal, should lead anyone to scoff at the suggestion that SB 270’s success will somehow amount to a win, for any constituency, environmentally-focused or otherwise. For them it’s a symbolic victory, and while they’re celebrating the nation’s only statewide bag ban, all the baggage that comes with this deal isn’t commendable.

In many ways, the bill effectively scams consumers out of billions of dollars in bag fees. It’s a tax, of sorts, but typically taxes go back into state coffers to further benefit the public. In SB 270’s case, the fees collected from consumers won’t be used to pay for a road, a fire truck, a better school or even a marginal environmental benefit; they’ll be used to line the pockets of California grocers.

California has created a prime example of how not to legislate (fleecing consumers and damaging the state economy, all in the name of an imaginary environmental benefit), and other states might not be too eager to follow in California’s footsteps for that very reason, as well as some additional legal concerns. Most states probably won’t be willing to put this kind of fee on bags and give the money to grocery stores, and even if they were willing to do so there are some serious constitutionality questions about that. In effect it’s a tax that’s not going to the government. The private interest gets the money.

But on a more basic level, most states also wouldn’t, or shouldn’t, want to enact a tax on their citizens that essentially amounts to a form of corporate welfare for grocers, all while threatening the state’s economy. SB 270 puts 2,000 Californians that are employed at risk of being unemployed, all for the sake of a dirty deal between California grocers and union bosses. APBA stands with those workers, and with all Californians, as we continue to fight this dangerous and misguided piece of legislation.

Wednesday, September 3rd, 2014

SPI Members Champion Plastics in State Capitals

By Jane Adams, SPI Senior Director, State Government Affairs

Following meetings with Assemblymember Dr. Richard Pan (D-9) and Assemblymember Roger Dickinson (D-7) at the state capitol, Mike Miller, president and CEO of Sacramento-based Plastic Package Inc. (pictured), secured commitments from the lawmakers to tour his facility.

Following meetings with Assemblymember Dr. Richard Pan (D-9) and Assemblymember Roger Dickinson (D-7) at the state capitol, Mike Miller, president and CEO of Sacramento-based Plastic Package Inc. (pictured), secured commitments from the lawmakers to tour his facility.

As part of its mission to represent plastics manufacturing industry at all levels of government, SPI is actively working in the state capitols to influence public policy on issues of concern to the industry. Recently Sacramento-based Plastic Package Inc. President & CEO Mike Miller experienced firsthand the value  of the advocacy team’s work through his experience meeting with California assemblymembers. Miller, who is an active member  of SPI and the Rigid Plastic  Packaging Group, met with Assemblymember Dr. Richard Pan (D-9) and Assemblymember Roger Dickinson (D-7).

Miller briefed Pan and Dickinson on his operations and secured commitments from both men to visit his manufacturing facility. Plastic Package Inc. (www.plasticpack.com) is a source for high-quality, thin-gauge, thermoformed-plastic-packaging containers and trays. Miller also offered to organize a town hall during the visits so that company employees would have the opportunity to engage with their elected officials.

During separate visits wiAdvocacy Plastic Packaging Logo 4th other assemblymembers, SPI also briefed lawmakers about the plastics manufacturing industry’s contribution to jobs and the gross domestic product (GDP) at both the state and national levels. Discussions also included the industry’s ongoing concerns with the Safer Consumer Products regulation and its potential impact on food packaging and food contact materials. Other discussion topics focused on the state’s recycling and recovery programs, the industry’s opposition to plastic product bans and taxes as well as support for K-12 education initiatives in science, technology, engineering and mathematics.