Friday, July 11th, 2014

California’s New Tax Exemption Could Save Plastics Manufacturers Money

By Jane Adams, SPI Senior Director, State Government Affairs

Plastics manufacturing companies operating in California could benefit from a tax break that became effective July 1.

The new law allows certain businesses in manufacturing to purchase or lease manufacturing or research and development equipment at a reduced sales and use tax rate if the purchase occurred on or after July 1, according to the California Board of Equalization (BOE).

In an effort to clarify some of the nuances associated with the new law, SPI featured Lynn Whitaker from the BOE in a recent webinar. Whitaker discussed what is exempt, what is categorized as “qualified tangible personal property” and other important terms that determine the eligibility of purchases.

Any new machinery and equipment, control devices, pollution control equipment or other property to be used in the manufacturing process may qualify for the 3.3125 percent rate, down from the current 7.50 percent statewide tax rate. However, the BOE cautions that the exemption applies to the state portion of the sales and use tax, not to any local, city, county or district taxes.

Eligibility requires that the firm purchase qualified tangible personal property like machinery and equipment, including component parts and contrivances such as belts, shafts, moving parts and operating structures.

“Qualified tangible personal property” does not include:

  • Consumables with a useful life of less than one year
  • Furniture, inventory and equipment used in the extraction process or equipment used to store finished products
  • Items used primarily in administration, general management or marketing

The property must be purchased to be used primarily for the following uses:

  • Manufacturing, processing, refining, fabricating or recycling of tangible personal property
  • Research and development
  • Maintaining, repairing, measuring or testing property listed above.

To view an archived version of the webinar, “How to Benefit from the New Tax Exemptions for California Manufacturers,” click here.

Thursday, May 8th, 2014

War College in a Plastic World

By Kim Coghill, SPI Communications Director

While the concept of leading in a volatile, uncertain, complex and ambiguous (VUCA) world has its roots in the U.S. military, the business community has borrowed the successful approach to strategic leadership and applied it to management training across industries.

“In reality, VUCA has never been more relevant, for the military and for business,” Gen. George W. Casey Jr. (Ret.), said in a Fortune magazine article that addresses parallels between his leadership challenges in Bosnia, Kosovo and Iraq, and the current business environment.

Recognizing the value of VUCA leadership training, organizers of the 2014 Equipment & Moldmakers Leadership Summit in October have scheduled a half-day Executive Workshop designed to apply VUCA principles to plastics manufacturing management. The program, “Leading in a VUCA World,” will be taught by international business experts from the world renowned Thunderbird School of Global Management.

“Regardless of an organization’s size and footprint, the workshop is designed to equip attendees with strategies to overcome the challenges and seize the opportunities presented in a global industry,” said Jackie Dalzell, SPI’s director of industry affairs and staff leader for the Equipment & Moldmakers Council.

Leadership thinkers have been turning to lessons learned from the military to create paradigms for surviving and thriving in a turbulent, “permanent whitewater” world where old styles of managing predictability were falling short, Thunderbird professors Paul Kinsinger and Karen Walch said in an article titled, “Living and Leading in a VUCA World.”

Kinsinger and Walch said research shows that the keys to leading in a VUCA world include possessing the knowledge, mindfulness and ability to:

  1. Create a vision and “make sense of the world.” Sense-making is perhaps more important now than at any time in modern history for many companies, as we are not too many years away from the time when the global economy will actually be truly “global,” encompassing every country and in which competitors will be emanating from everywhere.
  2. Understand one’s own and others’ values and intentions. This speaks to having a core ability to know what you want to be and where you want to go at all times, even while being open to multiple ways to get there.
  3. Seek clarity regarding yourself and seek sustainable relationships and solutions. Leading in turbulence demands the ability to utilize all facets of the human mind. Even the most impressive cognitive minds will fall short in the VUCA world — it will take equal parts cognitive, social, emotional, spiritual, and physical intelligence to prevail.
  4. Practice agility, adaptability and buoyancy. This means the responsive and resilient ability to balance adroitly and right yourself to ride out those turbulent forces that cannot be avoided, and to pivot quickly to seize advantage of those that can be harnessed.
  5. Develop and engage social networks. The ability to recognize that the days of the single “great leader” are gone. In the VUCA world, the best leaders are the ones who harness leadership from everyone.

The Executive Workshop scheduled for the Summit is based on strategies developed by the U.S. Army College at the end of the Cold War to address threats that created a VUCA world.  Attendees will learn fundamental principles of a VUCA “antidote” combined with specific strategies resulting from in-depth research on trends impacting the plastics industry. The SPI 2014 Equipment & Moldmakers Leadership Summit is scheduled Sunday, Oct. 26 through Tuesday, Oct. 28, 2014, at Loew’s Ventana Canyon in Tucson, Ariz.

Other highlights of the Summit include a Brand Owner Panel discussing technology needs to support their product innovations, what equipment manufacturers and moldmakers need to know about new and reformulated materials, update on the U.S. manufacturing renaissance and re-shoring initiatives, and much more.  Register today by clicking here, seats are filling up fast!  We look forward to seeing you in Tucson.

 

 

Monday, April 28th, 2014

Chicago City Officials Vote Against American Manufacturing, 30,000 Jobs in Jeopardy

By Lee Califf, Executive Director, American Progressive Bag Alliance

Plastics industry jobs in Illinois suffered a blow on April 24 when the Chicago City Council’s environmental committee unanimously passed a partial plastic bag ban in the city. The measure is scheduled to go before the full city council this week before it is official.

This is a concern of SPI: The Plastics Industry Trade Association, who cites the jobs created from the plastics industry as a major plus for America’s economic recovery. The plastic bag manufacturing and recycling sector in the United States employs 30,800 people in 349 communities across the country. That’s a significant number of people in the total 900,000 employed by the U.S. plastics industry.

The plastics industry impact in Chicago is a snapshot of the entire country. An in-depth data analysis of the plastics industry’s 2012 performance globally and in the U.S. is detailed in the newly released reports titled, “The Definition, Size and Impact of the U.S. Plastics Industry,” and “Global Business Trends, Partners, Hot Products.”

The report contained the following numbers:

  • $41.7 billion – the U.S. plastics industry’s payroll in 2012
  • 1.4 million – the number of jobs attributed to the plastics industry when suppliers are added
  • $456 billion – the total U.S. shipments attributed to the plastics industry when suppliers are added
  • 6.7 of every 1,000 non-farm jobs – in the U.S. are in the plastics industry
  • 15.8 of every 1,000 non-farm jobs – in Michigan are in the plastics industry
  • 15.4 of every 1,000 non-farm jobs – in Indiana are in the plastics industry
  • 13.3 of every 1,000 non-farm jobs – in Ohio are in the plastics industry
  • 1 – California (because it is the largest state) has the most plastics industry employees (74,000)
  • 50 – number of states where plastics industry employees and manufacturing activities are found

SPI’s economic reports are free of charge for members. For non-members, the cost of each report is $395. Both reports may be downloaded at http://www.plasticsindustry.org/store

Thursday, May 23rd, 2013

Newly Introduced Bipartisan “Chemical Safety Improvement Act” Garnering Applause From All Sides

Yesterday in Washington, D.C., Sen. Frank Lautenberg (D-N.J.) and Sen. David Vitter (R-La.) announced they had reached what is being termed a groundbreaking agreement to revamp the 1976 Toxic Substances Control Act (TSCA). Indeed, the Chemical Safety Improvement Act of 2013 (CSIA) that they have introduced in the Senate is groundbreaking in several ways.

Despite widespread agreement that TSCA was not an effective solution to the testing of tens of thousands of chemicals found in consumer and industrial products, the Senate had been deadlocked for roughly the last two decades on how to test and regulate them.

Not only does the CSIA look ready to break that gridlock, it comes with significant bipartisan support, which everyone knows is very difficult to obtain for anything in today’s political climate. Besides Senators Lautenberg and Vitter, there are 14 other Senators co-sponsoring the Act, seven Republicans and seven Democrats. All told there are eight Senators from each side of the aisle sponsoring this long-needed reform.

Add to that the reaction from the business sectors that stand to be most impacted by the proposed Act, which has been broadly and strongly positive. William R. Carteaux, President and CEO of SPI: The Plastics Industry Trade Association issued the following statement regarding the introduction of this legislation:

U.S. Senator David Vitter (R-LA; center), is shown with Jon Kurrle (left), SPI Senior VP, Government & Industry Affairs, and Bill Carteaux, SPI President & CEO during the Plastics Hall of Fame event at NPE2012, SPI’s triennial trade show and conference held in Orlando, FL.

U.S. Senator David Vitter (R-LA; center), is shown with Jon Kurrle (left), SPI Senior VP, Government & Industry Affairs, and Bill Carteaux, SPI President & CEO during the Plastics Hall of Fame event at NPE2012, SPI’s triennial trade show and conference held in Orlando, FL.

“On behalf of SPI members and the entire U.S. plastics industry, I want to thank Senators Lautenberg and Vitter, as well as the other cosponsors, for the leadership and determination they have displayed in crafting a groundbreaking, bipartisan bill.  The legislation is a true milestone, and shows that the charged political environment inside the beltway need not take a back seat to consensus building.

SPI has long advocated TSCA updates that embrace 21st century scientific and technological advances, while enhancing the ability of the U.S. plastics industry to develop and utilize essential materials.  The Chemical Safety Improvement Act of 2013 encompasses a broad spectrum of stakeholder viewpoints, and I am hopeful that its introduction will usher in a new era of cooperation in the collective pursuit of TSCA modernization.”

Cal Dooley, President and CEO of the American Chemistry Council (ACC) was equally positive in his statement: “The business of chemistry creates the building blocks for 96 percent of all manufactured goods and is a key driver of the U.S. economy. Reforming TSCA in a way that supports safety, jobs and innovation is important for American consumers, U.S. chemical producers and American businesses of all kinds, as well as their workers. These principles are at the foundation of the CSIA.”

The co-sponsors of Lautenberg-Vitter “Chemical Safety Improvement Act of 2013″ include U.S. Senators Kirsten Gillibrand (D-NY), Mike Crapo (R-ID), Richard Durbin (D-IL), Lamar Alexander (R-TN), Charles Schumer (D-NY), James Inhofe (R-OK), Tom Udall (D-NM), Susan Collins (R-ME), Mary Landrieu (D-LA), Marco Rubio (R-FL), Joe Manchin (D-WV), John Boozman (R-AR), Robert Menendez (D-NJ), and John Hoeven (R-ND).

Thursday, November 29th, 2012

Once Again Fear Mongering Catches Fire, Spreads Fast

Yesterday, November 28, 2012 provided a striking example of how unfounded fear can spread across the Internet faster than a wildfire. The subject this time was flame-retardants (

e” href=”http://flameretardants.americanchemistry.com/Home-Furnishings/Fire-Safety-Requirements” target=”_blank”>FRs

), a class of chemicals that helps save lives and property during fires. FRs are not plastics, our usual topic, but they are used with plastics in numerous applications. This one is furniture—couches.

Yesterday a paper titled “Novel and High Volume Use Flame Retardants in US Couches Reflective of the 2005 PentaBDE Phase Out” was published online by Environmental Science & Technology, an American Chemical Society publication. The paper’s seven authors are from three well-known universities.

The paper’s abstract notes that California’s TB 117 furniture flammability standard is considered the main reason why chemical flame retardants (FR) are used in U.S. residential furniture. There is no federal standard.

It then says that since the phase-out of the flame-retardant PentaBDE in 2004-2005, alternative FRs have been used to meet TB 117, but it was unclear what they were. Therefore, the authors collected 102 samples of polyurethane foam from residential couches bought in the U.S. from 1985 to 2010, studied them, and found flame-retardants in 85% of them.

After naming the FRs found, and noting an increased number of FRs are now on the market, the abstract closes with, “Given these results, and the potential for human exposure to FRs, health studies should be conducted on the types of FRs identified here.”

The American Chemistry Council responded with this statement:

This study confirms what we would expect to find: Furniture manufacturers use flame-retardants to meet established fire safety standards, which help save lives. There is no data in this study that indicate that the levels of flame-retardants found would cause any human health problems.

“Statistics show that home fires from open flame ignition sources are still a significant problem. Flame-retardants can be an effective way to meet fire safety standards, and are designed to prevent fires from starting, and if a fire does occur, slow its spread and provide valuable escape time. Indeed, one recent analysis, using data from a National Institute of Justice arson study, showed flame retardants in upholstered furniture can provide valuable escape time. It’s important to remember that flame retardants

currently in use, like all chemicals, are subject to review by the U.S. Environmental Protection Agency (EPA) and national regulators around the globe.”

So it would seem open and shut, no big deal. But not if you saw the headline of Duke University’s press release: “Potentially Toxic Flame Retardants Found in Many U.S. Couches.” Mainstream media and the blogosphere saw it and reacted quickly. Before daylight on the East Coast, a wildfire of fear was spreading across the Internet, with headlines like these feeding the flames:

Toxic flame retardants common in household couches -Los Angeles Times‎

Dangerous for kids’ pajamas, safe for sofas? -Chicago Tribune‎

New Flame Retardants, Other Replacement Chemicals, Pose Same … Problems As Predecessors. -Huffington Post

Research: Toxic chemicals in your living room -CNN (blog)

Toxic Chemicals in Furniture Linked to Cancer, Other Health Risks … …Unfair to Manufacturers, Retailers. –MarketWatch/The Wall Street Journal

Duke: Bad chemicals in home sofas -Triangle Business Journal (blog)

All the stories convey variations of one message: Be afraid, be very afraid, in this case of flame-retardants, about which the average citizen knows virtually nothing. But don’t look in the press release or these articles for facts that would inform readers or at least justify the headlines. The last line of the abstract indicates that no studies that would generate the

facts have been done.

The release and the articles use words such as “may pose risks”, “probable”, “suspected”, and “has been linked to”, but never “this causes that.” Why bother? The writers already know their readers are afflicted with chemophobia or plastiphobia, so if the facts disagree with what they believe, they will ignore or deny them.Rich Text AreaToolbarBold (Ctrl / Alt+Shift + B)Italic (Ctrl / Alt+Shift + I)Strikethrough (Alt+Shift+D)Unordered list (Alt+Shift+U)Ordered list (Alt+Shift+O)Blockquote (Alt+Shift+Q)Align Left (Alt+Shift+L)Align Center (Alt+Shift+C)Align Right (Alt+Shift+R)Insert/edit link (Alt+Shift+A)Unlink (Alt+Shift+S)Insert More Tag (Alt+Shift+T)Toggle spellchecker (Alt+Shift+N)▼
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Yesterday, November 28, 2012 provided a striking example of how unfounded fear can spread across the Internet faster than a wildfire. The subject this time was flame-retardants (FRs), a class of chemicals that helps save lives and property during fires. FRs are not plastics, our usual topic, but they are used with plastics in numerous applications. This one is furniture—couches.
Yesterday a paper titled “Novel and High Volume Use Flame Retardants in US Couches Reflective of the 2005 PentaBDE Phase Out” was published online by Environmental Science & Technology, an American Chemical Society publication. The paper’s seven authors are from three well-known universities.
The paper’s abstract notes that California’s TB 117 furniture flammability standard is considered the main reason why chemical flame retardants (FR) are used in U.S. residential furniture. There is no federal standard.
It then says that since the phase-out of the flame-retardant PentaBDE in 2004-2005, alternative FRs have been used to meet TB 117, but it was unclear what they were. Therefore, the authors collected 102 samples of polyurethane foam from residential couches bought in the U.S. from 1985 to 2010, studied them, and found flame-retardants in 85% of them.
After naming the FRs found, and noting an increased number of FRs are now on the market, the abstract closes with, “Given these results, and the potential for human exposure to FRs, health studies should be conducted on the types of FRs identified here.”
The American Chemistry Council responded with this statement:
This study confirms what we would expect to find: Furniture manufacturers use flame-retardants to meet established fire safety standards, which help save lives. There is no data in this study that indicate that the levels of flame-retardants found would cause any human health problems.
“Statistics show that home fires from open flame ignition sources are still a significant problem. Flame-retardants can be an effective way to meet fire safety standards, and are designed to prevent fires from starting, and if a fire does occur, slow its spread and provide valuable escape time. Indeed, one recent analysis, using data from a National Institute of Justice arson study, showed flame retardants in upholstered furniture can provide valuable escape time. It’s important to remember that flame retardants currently in use, like all chemicals, are subject to review by the U.S. Environmental Protection Agency (EPA) and national regulators around the globe.”
So it would seem open and shut, no big deal. But not if you saw the headline of Duke University’s press release: “Potentially Toxic Flame Retardants Found in Many U.S. Couches.” Mainstream media and the blogosphere saw it and reacted quickly. Before daylight on the East Coast, a wildfire of fear was spreading across the Internet, with headlines like these feeding the flames:
Toxic flame retardants common in household couches -Los Angeles Times‎
Dangerous for kids’ pajamas, safe for sofas? -Chicago Tribune‎
New Flame Retardants, Other Replacement Chemicals, Pose Same … Problems As Predecessors. -Huffington Post
Research: Toxic chemicals in your living room -CNN (blog)
Toxic Chemicals in Furniture Linked to Cancer, Other Health Risks … …Unfair to Manufacturers, Retailers. –MarketWatch/The Wall Street Journal
Duke: Bad chemicals in home sofas -Triangle Business Journal (blog)
All the stories convey variations of one message: Be afraid, be very afraid, in this case of flame-retardants, about which the average citizen knows virtually nothing. But don’t look in the press release or these articles for facts that would inform readers or at least justify the headlines. The last line of the abstract indicates that no studies that would generate the facts have been done.
The release and the articles use words such as “may pose risks”, “probable”, “suspected”, and “has been linked to”, but never “this causes that.” Why bother? The writers already know their readers are afflicted with chemophobia or plastiphobia, so if the facts disagree with what they believe, they will ignore or deny them.
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