Wednesday, October 1st, 2014

At GPS, a Positive Outlook for Plastics but Risks Remain

As a manufacturing sector, plastics has outpaced its counterparts in terms of economic growth since the 1980s. The industry looks poised to continue this trend too, as a panel of economic and plastics experts testified this morning at the Global Plastics Summit (GPS) in Chicago, hosted jointly by IHS and SPI: the Plastics Industry Trade Association.

IMG_0190However, risks remain for the plastics industry, most notably the lower levels of productivity that are restraining the pace of economic growth. “That productivity issue represents some real risks,” said David Witte, senior vice president of IHS Chemical, tying the issue to a lack of education on the part of the public regarding the number and type of careers available in the plastics and manufacturing industries. “There’s some really, really good jobs out there that are more trade related and I think we have to start focusing on that shortfall.”

SPI CEO and President Bill Carteaux agreed, noting that the long period of exceptional growth in the plastics industry that has persisted since the 1980s because there were always enough workers to fill openings and keep production high. “That growth caught up with us,” he said. “The next generation of the workforce, that issue is not going to be solved in DC, it’s going to be solved on the local level, going back in to the high schools and educating the teachers and guidance counselors to steer these young people into these great careers.”

Carteaux’s point that local activism, education and regulatory support will be key to maintaining the plastics industry’s success was echoed by the rest of the panel. On a federal level, however, the picture is a bit grimmer, but the priority for plastics is educating officials and the public. “We as an industry broadly have the task to educate people on what we do and we’ve done a lousy job,” said Kurt Barrow, vice president of oil markets and downstream at IHS Energy. “What we’re up against is the NIMBY (not in my back yard) mentality and the environment al lobby that doesn’t understand unless it’s a solar cell on top of a car or bicycle. They’re the minority but they’re very vocal in the political realm, and our job is really to kind of get the government engaged.”

“The best thing the government can do is to stay the heck out of the way,” said panelist Nariman Behravesh, IHS chief economist, summarily. “Let me just leave it at that in the interest of time.”

Barrow warned that the sudden institution of strict regulations that affect plastics could conceivably restrict access, increase costs and, in a word, “throw growth off the rails.” SPI has called for regulatory reform as well, to create an environment in which plastics can not only maintain its current state and operate without costly, ill-advised rules that aren’t based on facts, but also grow even faster than its current rate.IMG_0173

Still, the labor shortage for manufacturers continues to be a growth-limiting restriction. “The regulation side is huge,” Carteaux said when asked for what the greatest threats to plastics were. “But I think the other big issue when you look at the investments in plastics is ‘are we going to have enough people to build it? Are we going to see the capacity to put those facilities up?’”

SPI in particular continues to work to eliminate these risks to the plastics industry with its aforementioned call for reform and its recently launched PlasticsU, a one-stop online warehouse of educational resources for companies seeking to train new and existing workers. Learn more about the manufacturing employment landscape here.

Wednesday, September 24th, 2014

USGBC Recognizes Plastics Industry Concerns that LEED v4 Promotes Product De-Selection – Conversation is a Good Thing, Results are Better

By Terry Peters, CAE, SPI Senior Director, Technical and Industry Affairs

There are moments in time where science and logic may prevail. The Aug. 27, 2014, press release – U.S. Green Building Council and American Chemistry Council to Work Together to Advance LEED – could be a harbinger of great things for LEED and our industry. The release announces “a new initiative designed to ensure the use of sustainable and environmentally protective products in building by applying the technical and science-based approaches to the LEED green building program. This new initiative acknowledges USGBC’s success in leading the transformation of the building environment and sets up a pathway to take advantage of the materials science expertise of ACC and its members.”   ACC logo

We applaud USGBC (U.S. Green Building Council) and ACC (American Chemistry Council) for crafting this agreement in principal.  As active members of the American High Performance Building Coalition (the collaborative of 41 organizations working with ACC), SPI is justifiably proud of this announcement and pleased that several years of intense work with Congress and federal agencies have encouraged USGBC to come to this place.

SPI has been a longtime member of USGBC and stands by previous statements supporting the higher goals of LEED (Leadership in Energy and Environmental Design). Over the years we’ve considered ourselves the loyal, if strident, opposition to the materials credits issue. Through the American High Performance Building Coalition (AHPBC) and the Flexible Vinyl Alliance, we have pressured for change.  At our invitation, Brendan Owens, LEED’s vice president, technical, has presented to our Fluoropolymer and Flexible Vinyl Division meetings about a half dozen times and heard our issues and concerns repeatedly stated.

This is beginning the discussions; nothing is yet agreed that addresses our long standing issues on material credits.  There are entrenched opinions and territories. But we are in a better place for this attempt to work together. Let us suspend our skepticism for a moment and look to the good that may come from this announcement.

LEED is the most used green building standards globally, as well as in the United States where more than 400 cities and communities, 39 states and 14 federal agencies currently require builders to meet LEED standards. That is why the plastics industry and other manufacturing associations are working diligently to get the USGBC to modify some portions of LEED, and also why they applaud some of the improvements in LEED v4.

For example, LEED v4 is pioneering the use of verified life cycle assessment data to determine the environmental impacts of products. As such, there will be a new credit when manufacturers provide Environmental Product Declarations or third-party verified life cycle assessments for their products. There also will be credits for buildings that exceed the established ASHRAE 90.1 standard for energy efficiency by 5 percent and 10 percent.

That is a perfect way of incentivizing builders to reach those levels because it allows you as a designer or builder to choose the material that works best. It doesn’t tell you to use fiberglass or foam, or what not to use. The energy chapter of LEED is an excellent chapter. It is performance-based and material-neutral.

Since it was formed two years ago, the AHPBC has consistently argued that USGBC has developed its LEED standards with a disregard for science, without involving industry and without using a consensus-based approach as is done by organizations such as the American National Standards Institute (ANSI).

LEED has helped make buildings more energy- and resource-efficient. But the latest version disparages and discriminates against vinyl and other materials. As pointed out by my colleagues at The Vinyl Institute, “USGBC’s own Technical and Scientific Advisory Committee examined the environmental impacts of PVC and other materials and concluded that credits to encourage avoidance of any material could lead to use of less-desirable products. Unfortunately, USGBC utterly ignored its own scientific conclusions in LEED v4.”

SPI agrees. This material discrimination should be eliminated. The best materials should be judged by application. We hope this overture of partnership, applying our real world material science to the aspirations of LEED, can work.

Thank you, USGBC.  Now, let’s get to work.

Friday, September 19th, 2014

Curbside Collection for Capital Assets: CAMS Extends Zero-Waste Philosophy to Plastics Manufacturing Machinery and Equipment

The earliest forms of curbside recycling for consumers date back to the mid-1970s, and even today this system is the primary way that U.S. citizens participate in the effort to recycle and recover plastics. The plastics industry has set itself a goal of zero waste, and in many ways consumers are often thought of as the foot soldiers in this effort. While brand owners take much of the heat, and confusion often swirls around the technical details of what can be recycled and how, it often comes down to consumers recycling the plastics they use, and the industry processing them into new products, in a way that ideally closes the loop, gives plastic items second lives and saves high-quality usable material from the landfill.

2013-SPI-capital-asset-logo-cmyk-2SPI is committed to making it easier for consumers to recycle and reuse the plastics they encounter in their everyday lives, but has also enlisted the entire plastics industry in the pursuit of zero waste. In particular, SPI’s Recycling Committee has continually worked to educate the industry on zero-waste strategies and initiatives while also fostering expansion in the market for recycled material. Launched last year, RecyclePlastics365.org is an online plastics recycling marketplace that connects buyers and sellers of scrap plastics materials and recycling services “without the ‘needle in a haystack’ chore of sorting through the clutter of an Internet search,” said SPI Director of Recycling & Diversion Kim Holmes, adding that “SPI is committed to helping the industry divert all plastics from the landfill.”

Holmes’ statement is indicative of the supply chain-wide approach SPI has taken to reaching a 100 percent diversion rate for plastics. But while this effort has primarily focused on recovering plastic products and packaging, it’s only recently expanded to facilitate the recovery and reuse of plastics machinery and manufacturing equipment.

The plastic materials that have gone into some of the most life-changing, orbit-altering innovations of the last half a century weren’t plucked from trees. They were designed, processed and manufactured using increasingly state-of-the-art equipment on factory floors. They then went on to become the products that end up on suburban street corners once a week, in blue containers marked with the chasing arrow. While consumers can take their bottles out to the curb and their bags to the grocery store for recycling, a plant that produces or processes plastics doesn’t have those options when it comes to their old equipment. Firstly, they don’t make blue containers big enough, and moreover hauling used, underused or outdated machinery to the side of the road is a waste that would likely yield only fines and penalties.

In short, there’s never been a curbside pickup for capital equipment and machinery, but that’s what SPI, in partnership with Meadoworks, hopes to change with its recent launch of Capital Asset Management Services (CAMS). Through its online interface, similar to RecyclePlastics365.org, manufacturers can appraise their assets, dismantle and remove obsolete equipment and even find a new home for used equipment.

CAMS is both an example of the zero-waste philosophy in action and an investment in the plastics industry’s future. “The success of the entire plastics industry depends on the success of today’s manufacturing equipment,” said SPI President and CEO Bill Carteaux. “As companies continue to grow, so too must the technology they use.” Through CAMS, companies can upgrade their manufacturing equipment while also giving other companies in the market the opportunity to buy their used equipment that’s still worth using, and in the end, all parties benefit. “While participating in this program makes good business sense for today,” Carteaux said, “it also helps our competitiveness in the future.”

Columbus-recycling-binWhat makes CAMS similar to a curbside pickup service for manufacturers looking to recycle their machinery is the fact that in the same way that curbside pickup exists for the consumer’s convenience, CAMS exists for the manufacturer’s. “The key advantage of this program is that you don’t have to be an expert in asset management to benefit from expert knowledge,” said Meadoworks President Brian Walsh. “From the moment you decide to be a part of the marketplace, everything from valuation to marketing and eventually removal will be taken care of for you.”

Trading in and trading up when it comes to plastics manufacturing and processing equipment has often been a complicated, daunting process simply because there was no centralized marketplace. CAMS fills that void by connecting buyers and sellers around the world, while also providing the expertise and convenience necessary to benefit manufacturers of all sizes, supporting their growth and cementing their commitment to industrywide sustainability. At its simplest, CAMS presents an opportunity for manufacturers and processors to invest in the future of the plastics industry, which works best when it works together, inching closer and closer to zero.

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.

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.