Wednesday, January 21st, 2015

SPI President and CEO William R. Carteaux Responds to the 2015 State of the Union

William R. Carteaux, President and CEO, SPI

William R. Carteaux, President and CEO, SPI

Like many of you, I was pleased when President Obama highlighted America’s positive economic growth during his annual State of the Union address last night. The declining unemployment rate and more affordable gasoline prices boost consumer confidence, therefore creating a more favorable overall environment for business.  The plastics industry continues to expand because of professionals who invest financial and human resources into new technologies and advancements that enable us to be competitive.

While Washington is usually associated with challenging gridlock, we are hopeful that the President’s promise to reach across the aisle will be a reality during the 114th Congress.  Many of our industry’s most important issues are ripe for bipartisan solutions in 2015.  Among them is continued access to natural resources that provide not just the power to run our facilities, but also constitute our primary supply of raw materials.  Other key priorities include a long overdue update to the Toxic Substances Control Act (TSCA) to ensure that chemical regulation takes a risk-based approach going forward, modernization of America’s antiquated tax code and action on multi-lateral trade agreements that break down export barriers.

Importantly, where consensus cannot be reached, we will continue to defend our industry from ill-advised legislative and regulatory proposals.  We are troubled by some of the President’s tax policy proposals outlined last night, particularly those that could deter investors from risking capital, and others that would negatively impact family-owned plastics industry businesses.  We will also continue to respond vigorously to attempts at regulatory overreach.  There simply must be an enhanced focus on science-based decision making by plastics industry regulators.

SPI has a world-class advocacy team that is deeply committed to representing the plastics manufacturing industry.  We were on Capitol Hill when 13 new senators and 58 new members of the House took the oath of office earlier this month, and the sense of urgency in tackling the nation’s priorities was tangible.

We appreciate support from our members as we proudly advocate for an ever-brighter future for us all.

Tuesday, January 20th, 2015

How the President and Vice President Came to Visit SPI Member Techmer PM

Three carloads of Secret Service personnel arrived at SPI member Techmer PM’s plant on Jan. 3, and they didn’t leave for another six days. “They never left our plant until the president was gone,” said John Manuck, Techmer’s chairman and CEO.

President Barack Obama and Vice President Joe Biden visited Techmer’s Clinton, Tenn. facility on Jan. 9, touring the plant as part of an effort to promote American manufacturing and spotlight the creation of the administration’s newest manufacturing innovation hub. While the visit only lasted about an hour, its origins for Techmer were years in the making.TechmerWebShelbyCobra

To paraphrase Hemingway, a visit from the president and vice president happens two ways: gradually, then suddenly. “The Department of Energy (DOE) is always looking for collaboration with private industry,” Manuck said. “About two years ago, the Oak Ridge National Laboratory (a DOE facility) became familiar with our capabilities and asked us to join them in a project of theirs in developing a new process to produce carbon fiber.” After his company connected with Oak Ridge, which is a 30-minute drive away from Techmer’s Clinton facility, Manuck said his company began working with the lab enough to build a relationship.

Then, early in 2014, Oak Ridge approached Techmer about a 3D printing project. “The word kind of got around that there’s this company down the road and we’re really easy to work with,” he said. Techmer and Oak Ridge began working and the results were two 3D-printed cars: one that Manuck said “was more like a dune buggy” and contained some of Techmer’s materials, and another that was a replica Shelby Cobra made entirely from Techmer’s materials.

But the two vehicles weren’t the only fruit that the positive working relationship between Techmer and Oak Ridge would eventually come to bear. When the White House began to plan its trip to the Knoxville area shortly after the 3D printing project had been completed, they naturally reached out to Oak Ridge, whose directors suggested that the president include a visit to Techmer’s facility.

Tom Drye, managing director of Techmer’s Engineered Solutions subsidiary and the company’s main point of contact for Oak Ridge, eventually received a phone call from the White House on Dec. 23, 2014, when staff members called asking for photos of the facility. Manuck managed to get hold of his assistant, who swore herself to secrecy both for security reasons and because by that point, only two short weeks before the visit actually happened, it still was not a guarantee. The day after Christmas Techmer’s phones rang again, with officials saying that they wanted a smaller Secret Service team to visit their facility the next Friday, Jan. 2. “We were scheduled to be closed that day and we let them know that, but that was actually probably a good thing to keep this confidential,” Manuck said.

TechmerWebObamaEventually more Secret Service members arrived, and the security protocols began, a process Manuck described as a “learning experience.” “I guess since the assassination attempt on President Reagan, the Secret Service does not like the president getting in and out of a car in a public place,” he said. “They pull the car inside, so they wanted to come in the back of the plant and we had to move some storage racks, which we did.”

While securing Techmer’s facility, Manuck also happened upon a new application for some of the company’s materials. “Our Gaylord boxes are filled with plastic pellets, and the Secret Service guys saw them and said ‘a bullet couldn’t get through this,’” he said. “So they had us move the Gaylords, and wherever he (the President) was going to go, we had a path laid out, part of which was made by stacking Gaylords where we wouldn’t normally have them.”

The day of the actual visit there was a final security follow-up from 7am-9am (“Bomb sniffing dogs, the whole thing,” according to Manuck) and then eventually, upon the President’s arrival, Manuck led him on a tour and had a chance to talk with the President. “I had made notes, and some were what I’ll call ‘self-promotional’ notes,” he said. “I wanted to promote manufacturing in the United States. I wanted to promote private companies, and that how, as a private company, we’re nimble. Most of these I was able to talk to the president about. We had a real dialogue, and that was my intention.”

Certain questions Manuck was able to prepare for ahead of time. “He was going to pepper me with questions. He’s not going to try to trick you, but he’s going to want some real information,” Manuck said. “He asked me how I started the business and I had prepared for that mentally, so I told him that I started off as an engineer working for a big company and just decided that I could do it better.” The President eventually referenced this response in the remarks he gave at the end of his visit.

Additionally, Manuck did research beforehand to dig up some information about his company that he thought the president might find interesting. “I dug up our employment stats and from Dec. 2008 to Dec. 2014, our employment had grown 33%, but that included an acquisition. If you exclude that it was still up 20%.” The President asked what kind of hires Manuck had made, whether they were college grads, two-year college grads or other. “All of the above,” he said, delving further into details about his workforce and hiring philosophy. “Out of high school, they’re not ready. It’s not only the math and the writing, it’s the soft skills, which is what I’ve found to be the biggest problem,” Manuck added. The President agreed with him.TechmerWebObamaManuckBiden

It’s not every day that the president and vice president come to visit a factory, but Techmer clearly made the most of it, from their organizational flexibility and teamwork to Manuck’s preparation. “For us the obvious benefit is the positive publicity that we’ve gotten globally,” Manuck said. “People are still buzzing about it.” A great deal of time and work went in to the successful visit, obviously, but for Techmer and other manufacturers who open their doors for elected officials, and everyone else to see, the process of doing is its own benefit. “Some people have asked ‘was it worthwhile?’” Manuck said. “For us it’s a no brainer.”

Tips from the Presidential Visit to Techmer:

  • Make Connections: Had Techmer not made friends with a nearby government lab more than two years ago, and worked openly and productively with them in whatever way they could, the Presidential visit would never have happened.
  • Be Flexible: Techmer shut down its plant and rearranged its operational schedule in order to meet its visitors’ needs and make up for any downtime.
  • Be Prepared: It might seem obvious, but when you’re hosting an elected official or policymaker, don’t miss your opportunity to leave an impression.
  • Say Yes: Manuck said that the Secret Service repeatedly remarked on how accommodating his team was, which apparently isn’t always the case. “Whether it’s corporate red tape or whatever, companies will just say no to stuff,” Manuck said. “For us, the attitude of my people and I was that if the White House is coming here and they want something, we’re going to provide it.”

Thursday, January 15th, 2015

SPI and the APBA Concur with Texas Gov.-Elect Abbott Regarding its “Patchwork Quilt” of Harmful Regulations

SPI and the American Progressive Bag Alliance (APBA) agree with recent comments made by Texas Governor-Elect Greg Abbott: numerous local regulations on a variety of issues are undermining Texas’ reputation as a friendly place to do business. Last week Texas’ first new governor in 14 years got a great deal of press for his vocal opposition to these regulations, specifically “bag bans, fracking bans [and] tree-cutting bans.” Abbott’s position was clearly stated in a Houston Chronicle article on the subject:

“Texas is being California-ized and you may not even be noticing it…We’re forming a patchwork quilt of bans and rules and regulations that is eroding the Texas model. We need to peel back some of these ridiculous, unnecessary requirements.”

This “patchwork quilt” of regulation that he references is easy enough to understand: companies that face a hodgepodge of statutes and requirements within a state often find it difficult to do business in that state in general. And when companies have to spend more time complying than innovating—more time adjusting to ever-changing standards than catering to and satisfying customers—everyone suffers: consumers, businesses and the state economy as a whole.

Remarkably, Texas long ago acted to prevent such a “patchwork quilt” of regulation. As Abbott stated in August, in his role as the state’s Attorney General:

“A court would likely conclude that a city ordinance prohibiting or restricting single-use plastic bags is prohibited by subsection 361.0961(a)(1) of the Health and Safety Code…[and]…a court would likely conclude that section 361.0961(a)(3) prohibits a city from adopting an ordinance…on the sale or use of a single-use plastic bag.”

In other words, the state enacted legislation to prohibit local action on this issue; local governments simply have chosen not to comply with it. Given this recent opinion regarding plastic bag regulation, Abbott’s feelings about it and similar local ordinances should come as no surprise. Texas Retailers Association President Ronnie Volkening, in an article posted on My Fox Austin’s website, summed up the business community’s reaction to Abbott’s comments on the subject:

“We supported Abbott when he was attorney general, when he issued an opinion that there’s an existing state statute which holds that local governments are prohibited from enacting these kinds of ordinances. We support that position and we are encouraged to hear Abbott speak out on that today.”

SPI and the APBA agree: local statutes in Texas regulating the sale or use of plastic bags are erroneous, serious and in violation of state law. The good news is that all the state needs to do to stop its “California-ization” on this issue is enforce the state law that already exists.

Monday, January 12th, 2015

The Disaster that is the Dallas Bag Tax

IBag2Bag-in-store-160wmplementation of the Dallas, TX bag tax began on Jan. 1, and less than two weeks into its implementation, the statute has proven to be overly complicated at best, disastrous at worst.

Plastic bag taxes, including the one enacted in Dallas, are based on a fundamental misunderstanding of the realities of litter reduction and the recyclability of plastic bags, and they are inherently regressive, placing the greatest burden on those who can least afford it, at a time when American families still struggle. By enacting a plastic bag tax, Dallas placed myth ahead of reality, ignoring the fact that plastic bags are 100 percent recyclable – and recycled. Over 90 percent of Americans have access to plastic bag recycling, and it is the fastest growing sector of the recycling industry at large. Most importantly, plastic bags comprise less than 0.5 percent of the municipal waste stream and traditionally less than one percent of litter. And while no amount of litter is acceptable, taxing plastic bags doesn’t lead to a reduction in litter or municipal waste because the environmental impact of plastic bags is so minimal to start with. Plastic bag taxes simply encourage shoppers to take their business elsewhere—in this case, beyond Dallas’ borders, as recent reports from residents suggest.

In addition to the unintended consequences that loom over bag taxes generally, the Dallas statute in particular contains several onerous requirements that already have led to widespread confusion and will continue to yield negative economic consequences. First, the ambiguity surrounding the list of entities required to comply with the legislation has left retailers uncertain about how to implement it. The ordinance was designed to encourage residents to use so-called reusable bags (of course, plastic bags are reusable; 9 out of 10 consumers report reusing them for other household purposes) but requires all retailers, not just grocers, to levy the fee. Residents rarely bring reusable bags into settings other than grocery stores.

Further, the Dallas bag tax statute includes arcane details about what constitutes a “reusable” bag under the ordinance. In one instance, a Dallas resident tried to reuse a traditional plastic bag but was told by a retailer that she had to pay the bag fee, despite the fact that she brought the bag from home and was reusing it as per the legislation’s intent. Dallas residents and consumers are likely to continue to be frustrated with this poorly written statute—especially if retailers choose to charge the tax across the board, even when the legislation doesn’t require it. Such are the unintended consequences—and costs to consumers—when retailers find it difficult to operate in this regulatory minefield.

This isn’t the only aspect of the Dallas ordinance that will dramatically increase the costs of consumers and businesses. The statute also requires merchants to purchase bags that are branded with their businesses names and test the reusability and thickness of the bags themselves. Small businesses and mom-and-pop shops who previously gave customers generic “Thank You” bags will be required to purchase their own customized bags—at great cost, which undoubtedly will cut into profits or require an increase in costs passed on to consumers.

Judging by the howls of residents and retailers who are opposed to the implementation of this bag tax, it’s safe to say that the statute has been a disaster. But the great irony of it all is that the law isn’t even constitutional, and the city of Dallas knew it. Last August, in response to a legislator’s inquiry, then Texas Attorney General Greg Abbott (now Governor) provided his considered opinion on Dallas’ tax, summarizing that, under Texas state law, “a court would likely conclude that a city ordinance prohibiting or restricting single-use plastic bags is prohibited.”

So not only has Dallas’ plastic bag tax confused retailers, angered residents, raised costs on both and failed to have any impact on litter, it also has violated Texas state law. If these were the Dallas City Council’s goals, they succeeded. That is unlikely. Instead, their misguided attempts to legislate a 100 percent recyclable product has negatively impacted the city’s economy, made business operations more onerous and saddled residents with a regressive tax.

Promoting recycling and recycling education would have been a much better plan.

Wednesday, January 7th, 2015

A Deep Dive: Achieving Zero Pellet Loss

FriendlyTurtle_AnimatedWebPlastic pellets are the number one business expense for all processors and converters. In addition to saving money, pledging to zero pellet loss will strengthen your company’s reputation in the community, operational efficiency, contribution to water quality and wildlife, as well as any existing safety and sustainability programs.

Looking beyond the company, pellet loss has many negative impacts on the entire plastics industry as a whole. Consider this:

  • Slips and falls are a major cause of industry accidents
  • Accidents mean lost work time, higher workers’ compensation costs and lower employee morale
  • Violations of stormwater regulations in states like California can result in civil penalties of up to $3,000 per incident (e.g., Cal. Code. Regs. title 23 § 13385). Any person discharging unauthorized waste in violation of CWC § 13264 could be found guilty of a misdemeanor and fined up to $1,000 per day in violation
  • Spilled pellets can eventually end up in our waterways and the ocean. Whether they’re handled in an inland plant or a seaside facility, pellets can be transported to storm drains that lead to rivers and then to the ocean — resulting in litter and posing a threat to marine life such as sea birds, turtles and fish

When your employees and vendors handle resin pellets responsibly, pellets are kept out of the natural environment. The more resin material that stays in your product line rather than becoming waste, the more efficient your overall business operations will become. Additionally, your company enhances its reputation as a good steward of the environment, which is an increasingly important factor for attracting the investment community and high quality employees.

SPI’s ultimate goal is to help all plastics manufacturers, processors, converters and transporters keep plastic pellets out of the environment and improve the state of our industry for a better future.

FIVE STEPS TO ACHIEVING ZERO PELLET LOSS

1. Commit to making zero pellet loss a priority.

2. Assess your company’s situation and needs.

  • Comply with all environmental laws and regulations that address pellet containment
  • Conduct a site audit
  • Determine if you have appropriate facilities and equipment
  • Determine if employees have and are following appropriate procedures
  • Identify problem areas and develop new procedures to address them
  • Communicate your experiences to peers in the industry

3. Make necessary upgrades in facilities and equipment as appropriate.

4. Raise employee awareness and create accountability.

  • Establish written procedures (The procedures and checklists in this manual may be modified to suit your needs. They are available in the checklists section of the Operation Clean Sweep website).
  • Make certain the procedures are readily available to employees.
  • Conduct regular employee training and awareness campaigns on Operation Clean Sweep.
  • Assign employees the responsibility to monitor and manage pellet containment.
  • Encourage each worker to sign the employee commitment pledge.
  • Solicit employee feedback on your program.
  • Use workplace reminders such as stickers, posters, etc.

5. Follow up and enforce procedures – when management cares, employees will too.

  • Conduct routine inspections of the facility grounds – production areas and parking lots, drainage areas, driveways, etc.
  • Continuously look for ways to improve the program. Share best practices through the Operation Clean Sweep website

SPI and ACC have created a number of management checklists to assist all plastics processors in implementing OCS. The checklists are divided into two categories: Management and Employees. The checklists have been created so they can be downloaded and customized for your company. These enhancements will make it easy to create forms and materials that have the greatest value for your company.

Take the pledge today at  www.opcleansweep.org