Statistical services
Accounting
Edueatioaaad training
Labor relations
Business standards
Legal services 114
C&EN FEB. 6, 1967
A C&EN FEATURE Senior Editor, DAVID M. KIEFER Chemical & Engineering News, Washington, D.C.
the
TRADE ASSOCIATIONS: The Chemical Hftsmrs Mumtongued M e t he diversified operations of a major chemical company spread throughout the entire chemical industry and extend, as well, into many related fields. Such a company is interested, moreover, not only in its own business but also in that of its customers and its suppliers. Consequently, its officers and employees are likely to have frequent contact with MCA and SOCMA, with NPFI and NACA, SPI and NPVLA, not to mention PMA, NPC, PA, SDA, CSMA, and DCAT, and perhaps with CGA, NLA, IME, and a dozen other groups as well. Fresh evidence of the spreading maze of government bureaucracy? Not at all. One of the major functions of this alphabetical jungle, in fact, is to act as a buffer between the harried businessman and the similarly acronymous government agencies. For these are the initials of chemical industry's trade associations, whose steadily expanding activities touch, in one way or another, on most aspects of a chemical company's business. Nobody seems to know for sure how many trade associations are active in the United States. The figure probably is approaching 20,000-employing more than 30,000 executives and staff specialists—if you count in the regional and local as well as the national groups. Only about 10% operate on a national or international scale, however. More than 30 national trade groups are active in the chemical industry alone, if you define the industry in
T
broad terms (as the Government does with its standard industrial classification 28) to include drugs, synthetic fibers, paints, fertilizers, detergents, adhesives, explosives, and a host of specialty products in addition to basic industrial chemicals. Several other groups, although primarily concerned with other industries, have close ties
to the chemical industry because their members either have diversified into chemical operations or are suppliers or customers for producers of chemicals. The chemical associations are a varied lot. Oldest and perhaps most widely known is the Manufacturing Chemists Association. MCA's mem-
TYPICAL SERVICES A N D ACTIVITIES OFFERED BY TRADE ASSOCIATIONS: Government relations: liaison with government agencies, representation before legislative bodies, information on legislative and regulatory developments, guidance on company-government relations Public and community relations: publications, contacts with news media, speakers bureaus, institutional advertising, films Statistical services: industrywide data on production, sales, orders, inventories, backlogs, wages and salaries, operating costs, profits, safety Product promotion: cooperative advertising, trade shows, technical and field service, films, exhibits Education and training: seminars, workshops, short courses, manuals for management and other employees; scholarships and teaching aids Labor relations Research and development programs on new or improved materials, applications, and equipment; safety research; pollution control; technical publications Accounting: cost accounting manuals, comparative operating ratios, uniform accounting systems, information on financial practices Standardization, simplification, inspection, grading, and certification programs Traffic and transportation information and studies Conventions, meetings, and social outings Business standards and codes of ethics Legal services and advice Insurance programs Credit programs and collection services Accident prevention and industrial hygiene programs, safety aids
FEB.
6, 1967 C&EN 115
T h e r e ' s no end t o m e e t i n g s a n d c o n v e n t i o n s , a m o n g t h e m o s t p o p u l a r — a n d v i s i b l e — o f t r a d e association a c t i v i t i e s . A t t h e s e m i a n n u a l m e e t i n g of t h e M a n u f a c t u r i n g C h e m i s t s A s s o c i a t i o n in N e w Y o r k last fall, M C A members had the opportunity to . . .
Have lunch with Mayor John V. Lindsay
bership of more than 200 includes most major chemical producers in the U.S. and Canada. (Some exceptions: Sherwin-Williams, Glidden, Emery Industries, several leading drug companies.) MCA claims to represent more than 90% of the U.S. chemical industry's productive capacity, although the figures to substantiate this claim are obscure. And it serves as the most lofty spokesman to the public and the government for the industry as a whole. Other trade groups, such as the Society of the Plastics Industry, the Pharmaceutical Manufacturers Association, the National Paint, Varnish and Lacquer Association, and the National Plant Food Institute, represent segments of the chemical industry which are broad enough almost to be classified as separate industries. Still others limit their activities to much narrower product lines. The Chlorine Institute, the National Lime Association, the Institute of Makers of Explosives, and the National Fertilizer Solutions Association are examples. Sizes range from the Calcium Chloride Institute, with four member companies, and the American Potash Institute, with seven, up to NPVLA and SPI, both of which have 1000 or more corporate members. Budgets run from less than $100,000 a year for groups like the Pulp Chemicals Association and American Coke and Coal Chemicals Institute to more than $1 116 C&EN FEB. 6, 1967
million a year for MCA, PMA, and SPI. None of the chemical industry trade groups rank among the nation's largest, several of which have staffs of more than 100. Among associations representing manufacturing industries, for example, the American Petroleum Institute has a staff of more than 250 and the American Iron and Steel Institute about 125. MCA, with a 65man staff, has more employees than any of the other chemical groups. API budgeted nearly $2 million last year for air and water pollution research alone, though, more than MCA spent for all of its activities. Together, however, the work of the chemical groups adds up to a mighty effort. They spend more than $10 million a year and are staffed by close to 500 full-time employees. These figures represent only part of the endeavor, however, probably the smaller part. All trade associations rely heavily on assistance volunteered from their member companies. "Our influence stems not from our staff but from the cumulative efforts of our individual members," says James R. Carnes, director of government relations for MCA. "The staff's function is to coordinate and guide these efforts." No one has yet calculated the total cost to the industry—in executive time and travel expense, for example— of attending association meetings or participating in association programs.
Listen to experts debate weighty economic problems . . .
And talk business with old friends
Is it worth it? Most businessmen apparently think that it is. Otherwise, why would so many firms join— and continue to belong to—so many organizations? A survey of the attitudes of trade association members, conducted by Opinion Research Corp. in late 1965 for the Association Service Department of the U.S. Chamber of Commerce, indicates that members generally have high regard for their trade groups. Nearly two thirds consider them "very valuable"; only lc/c describe them as "not very valuable." About four out of five look for an even greater need for trade associations in the future. A similar study conducted during 1965 by the National Industrial Conference Board reached much the same conclusions. The NiCB survey found that most companies believe that, "on balance, their memberships are paying off."
those of competing industries. More and more, they see themselves taking on a broader responsibility as brokers of ideas that will widen the horizons not only of their own members but of the public as well. They have been described as "a part of a great experiment in democracy, a bulwark against government dictatorship, a protector of our free enterprise system." They aim to create a favorable image for their industry, thereby fostering a rapport between their members and the world at large. Not surprisingly, then, trade groups may seem to fill a psychological need for many businessmen, as well as an economic one. They provide an outlet for the busy business leader who fears that he is not doing enough for the world outside his narrow business arena—or getting credit for what he may do. Through his trade association, he hopes, he can make a contribution to the world at large and receive, in turn, some measure of recognition. One association executive has called trade associations "the outstanding contribution of present times to sound economic development in this country, . . . an essential part of the American system of private competitive enterprise, . . . a medium through which all firms may join forces and work together for the common good." Paraphrasing the well-known razor commercial, another executive more
Solves common problems What does a trade association do that arouses the herd instinct in hardheaded, cost-conscious, usually individualistic businessmen? Trade associations generally have been organized to solve some common problem or problems which competitors within an area of business are unable to solve alone, at least not so easily or economically. An association, if it is effective, serves to help remove common
burdens from its members* shoulders. It helps its individual members operate more efficiently; it serves as a forum for united action and as a conduit for legitimate business information. The ties binding it together are the mutual business and economic interests of the competitors who make up its membership. MCA president Gen. George H. Decker puts it this way: "Our main purpose is to do for our members collectively what they can't do as well individually and to provide a means of communication in the common interest of our industry." "A trade association is an organization for mutual benefit, which substitutes knowledge for ignorance, rumor, guess, and suspicion," says another advocate. "It tends to substitute research and reasoning for gambling and piracy, without closing the door to adventure or lessening the value of prophetic wisdom." Many of the activities of trade groups result in tangible or visible benefits: favorable legislation, safety standards, statistical information, marketing material, technical aids, research data, educational workshops. But the trade group that is on its toes tries to provide intangible values that may be even more worthwhile. Trade associations no longer limit their work to talking to Congressional committees and government agencies or to promoting their members' products over
FEB. 6f 1967 C&EN 117
succinctly sums up their purpose as: "To make their members look good, feel good, be good." The latter goal, he admits, is attained probably all too rarely. Dissenting opinion Not everyone, certainly, is convinced that trade associations are as effective or as useful as many people in the business contend. One sharp critic is E. B. Weiss, vice president of the New York advertising firm of Doyle Dane Bernbach. Mr. Weiss has charged that associations are inadequately staffed and financed, immobilized with fears, impotent, and lacking in strategic concepts for moving their entire industry ahead. He adds that they are too prone to "play it safe," are lacking in dynamism, and generally are "in a deep, deep rut." The Chamber of Commerce survey turned up complaints that associations tend to follow when they should be leading, to straddle the fence when they should take a firm stand on matters of importance, and to slight the needs of their smaller members. NICB found a handful of firms who see few if any benefits in association membership. One characterized the desire to belong as a "national hobby"; another felt that members join only because "it's the thing to do"; a third wondered, "would things have been much worse if there had not been some effort on the part of these associations?" Other critics think the trade groups too often are obstructionists in their attitudes toward economic or social evolution—tending to support the status quo over any legislative change. Although "lobbying" is neither illegitimate nor unethical, most trade organizations shrink from using that term to describe their government relations efforts, and few are registered under the Federal Regulation of Lobbying Act. Even so, many trade groups consider their role in influencing federal, state, and local legislation one of their most important functions. They argue that they have a vital job in ensuring that business gets a fair and equal hearing for its case alongside that of labor, farmer, professional, veteran, consumer, and other organized segments of the public. Some people contend, too, that trade association staffs try too hard to make themselves look good. This is natural, of course. Unless they can convince 118 C&EN FEB. 6, 1967
their members that what they are doing is important they may not get the funds needed to support their programs. But as a result they may be self-serving and overcautious or fail to view their industry's needs with broad perspective or imagination. A frequently heard complaint is that there are too many associations, too much wasted energy and duplication of effort and expense. "At a time when most well-run businesses are consolidating operations for greater efficiency and effectiveness, it appears that more and more associations are springing up with overlapping functions and aims," complains one business executive. Jealousies hinder
cooperation
Petty jealousies among association officials may hinder industrywide cooperation. Associations may even compete with one another rather than put their members' interests first. They may create crises merely to justify their continued existence. Even association executives themselves question the proliferation of trade groups. "There are too many trade groups who meet too often," says one. "We beat through the same straw too frequently and are run ragged attending meetings. Our members would be better off if there were fewer, but better, associations; there are too many today that are not doing as good a job as they might and are not worth what they cost to run." Admittedly, the effectiveness of many associations is limited by their small staffs and meager budgets. Ad-
mittedly, too, their influence, both with the government agencies and with the public at large, is dissipated when many muffled voices try to speak for a single industry at the same time. As a result, some observers see a developing trend—already apparent in the apparel and some other industries —toward association mergers. "To develop legislative and regulatory effectiveness," says Donald C. Burns, executive vice president of the California Association of Life Underwriters, "the associations are going to follow the lead of private industry; they will pool and merge." Mr. Burns looks for the evolution of large umbrella organizations, representing an entire industry, which will absorb the smaller, overlapping organizations. The surviving organizations will be stronger and more vital than ever, he believes. Many of the chemical industry's present associations have grown through consolidation. MCA, for example, combined with the Plastic Materials Manufacturers' Association in 1950. The National Plant Food Institute was formed when the National Fertilizer Association joined forces in 1955 with the American Plant Food Council. (APFC had been formed about 10 years earlier by some of NFA's larger members who had split off after NFA ran into antitrust problems.) The Pharmaceutical Manufacturers Association stems from a combination of the American Drug Manufacturers Association and the American Pharmaceutical Manufacturers' Association in 1958. The International Acetylene Association merged into the Compressed Gas Association in 1962. No urge to merge Several other chemical industry trade groups with related interests have considered mergers in the past 10 years, but backed away. Some have recognized many areas of duplication with another association but have concluded that a single consolidated organization would only tend to split anyway into separate divisions, each pulling in a different direction. Others have decided that they can handle their members' special needs better by working as a small group than by tying themselves to a larger, more comprehensive association, even though they might save money by sharing overhead costs and speak with more authority as part of a larger organization.
To provide its members with first-hand insight on technicai developments abroad, the National Paint, Varnish and Lacquer Association sponsored a European tour, including a visit to this English furniture manufacturer
Several independent groups—such as the Synthetic Organic Chemical Manufacturers Association, the Chlorine Institute, and the Institute of Makers of Explosives—have considered affiliation with MCA at one time or another in the past, for example, but the smaller group everytime has considered its own problems so distinct that formal ties would be undesirable. Although the National Plant Food Institute is the largest watchdog organization for fertilizer producers, the Agricultural Ammonia Institute and the National Fertilizer Solutions Association also actively promote the use of fertilizer products to farmers, as does the research-oriented American Potash Institute. (A great number of state organizations, many of which are affiliated with NPFI, also exist in the fertilizer industry.) The chief interests of both AAI and NFSA are sales promotion (of equipment as well as materials) and the distribution of educational information. Both work primarily at the distributor level, providing dealers with information on the use and safe handling of anhydrous ammonia or solutions. They look on NPFI as an organization primarily representing manufacturers of dry fertilizers—a view which NPFI disputes— and both consider the problems of dealers (who are not eligible for membership in NPFI) as sufficiently different from those of the manufacturers to justify separate trade groups. Though AAI and NFSA have considered joining forces, with each other as well as with NPFI, so far no concrete steps have been taken. AAI, meanwhile, is planning to change its name and broaden its activities to encompass other forms of nitrogen fertilizer.
In the ethical pharmaceutical business, the 26-member National Pharmaceutical Council exists side by side —and shares practically all of its members—with the 140-member Pharmaceutical Manufacturers Association. NPC, however, concentrates on much narrower, more specialized interests. It was formed in 1953 to seek the enactment of state antisubstitution laws prohibiting pharmacists from substituting in prescriptions one brandname drug for another containing the same ingredients. Largely successful in this program, NPC decided neither to disband nor to fold itself into PMA. Instead, following the recommendation of a management consultant firm, it recently reorganized itself and is stepping up its professional relations efforts aimed at pharmacists, physicians, and state and local welfare agencies. One of its goals is to convince these groups that all brand-name drugs with identical generic-name ingredients are not necessarily equivalent and that there may be therapeutic reasons for prescribing products of a specific manufacturer. This is a controversy in which PMA also is interested, but because many of its members market both brand- and generic-name products PMA has had to treat the matter gingerly. Although NPC thinks alike with PMA on most questions affecting the drug industry, it lets PMA carry the ball on major pronouncements regarding matters of interest to the industry as a whole, as well as handle the industry's tangled relations with the Food and Drug Administration and Congress. (The interests of many of the ethical drug industry's smaller producers are represented by the Drug and AlFEB. 6, 1967 C&EN 119
Hard-working committee sessions, where company officials and association staffers can get together to share expertise and hammer out solutions to industry problems, form the backbone of most trade association programs. Here, some of the National Paint, Varnish and Lacquer Association's 40 committees are shown in action
120
C&EN FEB. 6, 1967
lied Products Guild. Because most of its 100 drug-making members, whose sales range from about $500,000 to $10 million, are primarily producers of generic drugs, DAPG's point of view does not always coincide with P M A ' s - and probably never with NPC's. "We attempt to ensure that FDA considers and protects our small flrms, interests as well as those of the big companies," DAPG executive secretary Morris Aarons explains.) The obvious disinclination of trade groups with dissimilar programs and policies to merge suggests that the chemical industry is likely to continue to have its interests watched over by many diverse and fiercely independent groups. (A proliferation of trade groups is not unique with the chemical industry, by any means; the food, petroleum, paper, and electrical industries, among others, all are represented by 20 or more national trade groups.) A few association officials in the chemical industry look for greater integration among the industry's trade groups, with eventually only a handful representing the entire spectrum of producers. Most, though, see little merit in mergers. A big association becomes too inflexible to move with the times, warns one association executive. Others feel that the special needs of their members might be ignored or neglected within the more complex bureaucracy of a large, umbrella organization. "Our small group has its own peculiar problems," says Bernard M. Fitzgerald of the American Coke and Coal Chemicals Institute. "It's better for just a couple of staff people to look after their interests alone than for them to be merely a tail on the kite of a much larger group. If you spread yourself too thin, you can't do an adequate job for anybody." Obviously, firms with specialized interests don't want to be lost in a throng. And officials of small associations feel that the concentrated attention that comes of specialization has its advantages. Associations frequently cooperate on problems of mutual concern, however, even when their views may not mesh entirely. MCA, NPFI, and the Institute of Makers of Explosives have worked closely with one another to investigate the explosion hazards of ammonium nitrate and to set up standards for its safe handling and storage. MCA's plastics committee cooperates with the Plastics in Construction Coun-
cil, a division of the Society of the Plastics Industry, to increase the use of plastics as building products. MCA and the Compressed Gas Association have met together to look into the hazards in transporting chemicals by tank barge. When the publication of Rachel Carson's "Silent Spring" focused public attention on the dangers of pesticides, the National Agricultural Chemicals Association, spokesman for pesticide producers, joined forces with MCA to repolish pesticides' tarnished image. MCA feared that the reputation of the entire chemical industry was at stake. NACA concentrated its public relations efforts at the farmer and government-agency level to counter the threat of increased government regulation. It left to MCA, with its greater resources, the job of speaking to the general public. Reaching a consensus Since a trade association is created by and supported by its members, its policies and programs naturally reflect the views of its members. What happens, then, if the members themselves cannot agree? This poses a problem for any association. The larger and more heterogeneous the membership, the more difficult the problem of attaining a consensus. Many smaller splinter groups find a niche to fill because they can take a stronger stand on issues vital to a single homogeneous segment of an industry than may be
possible for a large, umbrella association representing members with conflicting points of view. The large association's position is apt to represent the lowest common denominator of opinion among its members. The tariff question is a case in point. Many chemical companies are staunch advocates of high tariff protection. Others, however, are not. And some fear that the chemical industry's traditionally protectionist attitude has damaged its public image. A division of opinion within its ranks has led MCA, since the passage of the Trade Expansion Act of 1962, to steer clear of the controversy over the American Selling Price procedure for the valuation of imports of benzenoid chemicals. It has deferred instead to the Synthetic Organic Chemical Manufacturers Association. SOCMA has interests other than tariff policy. It is responsible jointly with Chemical Abstracts Service for the compilation of the "SOCMA Handbook of Commercial Organic Chemical Names." It sponsors two awards for organic chemical research and fosters some research (on colorants for food packaging) itself. But its prime concern is to present its members' views on foreign trade policy—analyzing the impact of proposed trade legislation, opposing reductions in tariffs that it fears would harm the U.S. organic chemical industry, and supporting the tariff barriers of the American Selling Price system. A similar interest in maintaining tariff protection for its members is shown by the Man-Made Fiber Producers Association, which operates out of the offices of a law firm in New York's Empire State Building. Compared with most trade groups, the Man-Made Fiber Producers Association is tightlipped about its activities. In addition to representing before Congress and government agencies companies that make synthetic fibers, it conducts a limited educational program aimed at schools and consumer groups. Although its members include such chemical stalwarts as Du Pont, Union Carbide, Dow, Monsanto, and Allied Chemical, the association objects strongly to having its interests tied in with those of other parts of the overall chemical industry. It prefers, instead, to identify the fiber-producing arms of its members with the textile industry. Like MCA, other trade groups have also been hindered from taking a stand, pro or con, on tariff or trade FEB. 6, 1967 C&EN
121
Relations with government officials can be happy as well as abrasive. Good spirits abound as President Johnson, after signing drug-abuse-control legislation, proffers a pen to William N. Creasy of Burroughs-Wellcome while Pharmaceutical Manufacturers Association president C. Joseph Stetler looks on benevolently
A sampling of some typical trade associations Location
Name Adhesive-and Sealant Council A d h e s i v e s M a n u f a c t u r e r s Association of A m e r i c a Agricultural/',
New York
istitute
Member Fullcorn- time pan/es1 staff
Chief paid executive
70
.
26
2
500
;
tansel, Kenyon L o o m i s , executive s e c r e t a r y
i
;
A m e r i c a n C o k e a n d Coal C h e m icals Institute
Washington
24
3
American Potash Institute
Washington
7
58
C a l c i u m Chloride Institute
Washington
4
8
Chlorine Institute
New York
Dr. J president H . B o b b i t A i k i n , Jr. president
550b
9
C o m p r e s s e d Gas A s s o c i a t i o n
New York
250
8
D r u g a n d Allied P r o d u c t s Guild
New York
140c
4
Morris Aarons, general counsel and executive secretary
Drug.
1 lew Y< >rk
750
5
H e l e n L. Bo
6
dent H a r r y L. H a m p t o n , Jr., s e c r e t a ry-treasu rer
Institute sives
Chemical of
Manufac-
and
Makers
of
Allied Explo-
New York
14
Man-Ma r Producers Association M a n u f a c t u r i n g C h e m i s t s Association
York
1: .
Washington
204
Note: In most cases, figures for annual budgets are C&EN estimates. Budget figures frequently exclude costs of special projects, such as research or product promotion, which often are paid by only part of the association's membership. Membership figures generally include
122 C&EN FEB. 6, 1967
65
70.000 60,000
1933
),000
1951
80,000
1944
.000.000 200,000
1933 1
: '.-..
New York
C h e m i c a l Specialties t u r e r s Association
Date organized
ive v i c e
Bernard M . Fitzgerald, executive secretary
.
Annual budget1
Alfred A. Mulliken, secretary
250,000
1914
50,000
1956
100,000
1890
100,000
1913
300.000
1933
450,000
1872
.
Gen. George H. Decker, president
associate and other classes of members (these may be suppliers, equipment manufacturers, research laboratories, consultants, banks, other associations, or foreign-based companies) that usually do not have an active voice in association elections or in formulating policy.
policies because of differences among their members. Because its members could agree on nothing stronger, for example, the American Petroleum Institute issued a fence-straddling statement on petroleum imports: It favors the encouragement of foreign trade and the breaking down of trade barriers so long as competition in the petroleum industry is not distorted or the health of the domestic industry impaired. The Pharmaceutical Manufacturers Association, the Chemical Specialties Manufacturers Association, the Soap and Detergent Association, and others have avoided the tariff issue entirely because their members have conflicting opinions about foreign trade. Other programs can likewise cause dissension in the ranks. Ten years ago, to stimulate fertilizer sales at a time when producers of nitrogen fer-
tilizers were plagued with excess capacity, the National Plant Food Institute undertook an ambitious promotional and educational campaign that was budgeted at $1 million per year and managed through six regional offices. Plans for financing the program (which subsequently continued for seven years) led six potash producers to resign for a few months from NPFI. They argued that the program duplicated much of the efforts of the American Potash Institute, which they were already supporting. Some associations, too, find that programs supporting research or providing information useful primarily to small members have foundered through lack of agreement. Large companies may not want to contribute to a group research project if they think it will only develop information that they have but that their smaller
competitors may lack. Similarly, a diversified company, with products spanning many industries, may be loath to support cooperative research that might serve one product line only at the expense of another. Workshop and training programs designed to improve management and marketing procedures among small members also have run aground because large members declined to support such programs. When the chips are down, each individual member tends to put its own interests before those that bind together the industry as a whole, and the larger an association grows, the greater the likelihood some of its members will find their own interests out of step with those of other members. Does this mean that the larger members of a trade association tend to dominate its activities? Not neces-
concerned with chemicals and the chemical industry Fulltime staff 12
Name National Agricultural Chemicals Association
Location Washington
Member companies1 140
National Fertilizer Association
Peoria, III.
365
6
W. Harold Schelm, executive director
200,000
1955
50
9
R o b e r t S. B o y n t o n , executive director
225,000
1902
Robert A. Roland, executive vice president Vernon Trygstad, president
900,000
1888
300,000
1953
525,000
1955
1,250.000
1958
550,000
1881
60.000
1947
750,000
1926
1,000,000
1937
Solutions
National Lime Association National Paint, V a r n i s h Lacquer Association
Washington
1000e
Chief paid executive P a r k e C. B r i n k i e y , president
Annual budget1 300,000
Date organized 1933
and
Washington
National Pharmaceutical Council
Washington
26
10
N a t i o n a l Plant Food Institute
Washington
150
16
Paul T . T r u i t t , president
Pharmaceutical Association
Washington
1751"
50
C. J o s e p h S t e t l e r , president
P r o p r i e t a r y Association
Washington
240g
16
Dr. H o w a r d A . Prentice, executive vice president
Pulp Chemicals Association
New York
18
2
S o a p and tion
New York
119
30
E. Scott P a t t i s o n , manager
S o c i e t y of t h e P l a s t i c s I n d u s t r y
New York
1350"
A5
William T. Cruse, excutive vice president
S u l p h u r Institute
Washington
341
19
Dr. Russell C o l e m a n , president
550,000
1960
Synthetic Organic Chemical Manufacturers Association
New York
83f
8
S. S t e w a r t C secretary
250,000
1921
T e x t i l e Dye Institute
New York
22
2
Ernest S. M e y e r s , executive s e c r e t a r y
50,000
1956
Toilet Goods Association
New York
500k
5
Kathryn Fitzpatrick, executive secretary
200.000
1893
Manufacturers
Detergent
Associa-
a Includes 26 associate and foreign members. b Includes about 150 associate and 50 foreign members. c Includes 38 associate members. d Staff and office shared with Sporting Arms and Ammunition Manufacturers Institute. e Includes about 300 "Class B" members. f Includes about 35 associate members.
52
D o u g l a s E. C a m p b e l l , secretary
g Includes 140 associate members. Excludes about 1300 members who are i ndividuals rather th an companies. 1 Includes four associate members. i Includes 11 associate members. k Includes 250 associate members. 1 Approximate number.
h
FEB. 6, 1967 C&EN 123
sarily. But there is little question that they can throw a lot of weight around —when they want to—and that association executives must be particularly responsive to the large members' wishes or needs. The large members, after all, generally provide most of the association's income. (Association dues and assessments usually are based on a percentage of each member's sales of the particular line of products with which the association is involved; for a large company the amount may be several tens of thousands of dollars yearly.) It is the larger companies, too, who more often can provide people with the time and the expert knowledge required to advise or to participate in committee work and other association projects. "The big stick carries the weight," says one association executive, "and anyone who says that big companies don't have a bigger voice is being unrealistic." Yet no association wants to be a closed club. For one thing, a trade association is more effective as a spokesman for its industry if it can claim to speak for companies of all sizes. Through its trade associations, if they are representative of the entire industry, the large company can speak to government and to the public without appearing to be self-serving. And it can do so while retaining anonymity itself on controversial issues. Big business, moreover, tends to be self-conscious about its bigness, and large companies frequently are as concerned about the welfare of their smaller competitors as are many of the small firms themselves. One of the major functions of many trade associations is to provide information and services essential to the survival of small firms in an increasingly complex and competitive business world. Often these services will be largely paid for by the larger members, who really don't need such outside aid. Leading the pack Caught in the crossfire between members' conflicting ideas, can the association staff itself—and especially the top paid executive—influence policy? Most association staff people are convinced that they should. They contend that an alert trade-association executive is in a better position than most company officials to sit back and view his industry as a whole, to awaken his members to changing con124 C&EN FEB. 6, 1967
ditions, to evaluate industry problems anew, and to come up with fresh solutions. "I've spent the past five years trying to destroy the idea among my members that our association's sole job is to take on a project only when the members demand it," says the top man of one trade group. This same executive estimates that about 80% of his efforts are spent responding to members' suggestions and just 20% are initiative—that is, bringing members* attention to needs that they are not aware of and getting them to support association activities designed to head off potential problems. Many association staffers admit, in fact, that as a practical matter an association's programs and policies reflect what its members want, and that its employees have little opportunity to break new ground. At best, they help to determine policy by supplying needed information, by making sure that the proper questions are raised, and by seeing to it that all the consequences of a proposed policy are thoroughly evaluated. "An association is nothing more than the sum of its member parts," says a staff employee of one leading chemical association. "It's rare that we on the staff have convinced our directors to undertake something which they were not already considering. After all, who is going to tell Du Pont or Union Carbide what to do?" "If an association executive takes a strong position or recommends action that not all his members agree with, it's a good bet that he won't last long," says another. "The whole success of an association depends on the involvement and participation of its members. If the staff tries to set policy and the members themselves don't feel they have a part to play, they are likely to say, 'to hell with it.'" Consequently, association executives tend to spend much of their time responding to needs or reacting to problems. They tend to concentrate their efforts less on preventing fires from starting than on putting out fires after the alarm has been sounded. For one thing, most associations have neither the staff nor the money to do otherwise. In addition, according to one association executive, "it just is not the American way of business to think in terms of long-range statesmanship or to try to prevent fires before they are lit. The trade association's only job is to do what its board
of directors wants it to do. If an association executive gets too far ahead of the pack, he is likely to parlay himself right out of a job. All of us in the association business have to know how to pull in our necks like a turtle." There is no question, though, that reacting rather than leading can cut down on the effectiveness of associations. Preventive measures often are the least expensive. The top official of one trade group, whose members are faced with a threat of burdensome antipollution legislation, describes his problem this way: "We could see problems on the horizon, and we tried to convince our members to increase our budget for research and public relations so as to head them off. But it's much easier to get $500,000 for a crash program once some state legislator has introduced a restrictive law than to get $200,000 for a preventive program two years earlier. The easiest and quickest way to get a board to approve a new program is to walk into the meeting with your coattails on fire." Recognizing this, many executives of trade groups believe they must do more long-range planning. "Not faced with the day-to-day problems of running a business, my view of industry problems is different, and oftentimes broader, than that of our members," says Edwin A. Olsen, secretary-treasurer of the Compressed Gas Association. "One of my most difficult jobs is to create an awareness among our members not of yesterday's problems, or even today's, but of those the industry may face several years ahead." But, Mr. Olsen adds, "with limited time available on the part of the staff and the association members to handle current association work, it is extremely, difficult to get action on future problems. However, we must find the time to plan ahead." If the association staff is to exert creative leadership, other trade-group officials emphasize, it must do so by indirection, even by devious means. "We are sensitive to developments which most of our members are too busy—or too parochial—to worry about," says another trade-group officer. "But to prepare for them we have to be quietly persuasive, patiently planting the seed of a new idea in the members' minds and making them feel that they are the ones who are doing the leading, even when they aren't. The staff must be prepared to make some mistakes, of course, and
willing to change its recommendations if they run into members' objections." It helps, too, if at least a couple of influential industry executives are on the staff's side from the beginning. "The amount of leadership you can exert depends on how much vision two or three corporate executives have," E. Scott Pattison, secretary of the Soap and Detergent Association, notes. "An association chief won't get to first base unless he has at least one strong supporter in his industry." SDA, in an example of effective trade association leadership, did much to convince its members of the need to switch to biodegradable detergents during 1965. But Mr. Pattison credits a large share of SDA's success to the recognition by one leading member that without the voluntary plan regulation was certain to be forced on the detergent industry sooner or later. Leadership is accomplished more readily, too, when a well-staffed organization has a membership consisting largely of many small firms. Thus some of the best examples of association leadership in the chemical industry—and clear-cut examples are scarce —come from well-organized groups, such as the Society of the Plastics Industry and the National Paint, Varnish and Lacquer Association, serving
industries in which most firms are relatively small and individually weak. SPI, for example, moved effectively several years ago when children playing with polyethylene bags were accidentally suffocating themselves. Acting on the advice of several federal and medical agencies, SPI launched an ambitious educational program. Its aim: to reduce accidental deaths in-
volving plastic bags, to convince government authorities that the industry could accomplish this without burdensome legislation, to gain the support of other interested organizations, and to protect the good name of the plastics industry. In a crash six-month, $1 million advertising and public relations program, SPI distributed pamphlets and placards for use by dry cleaners, ran newspaper and spot radio advertisements, prepared film clips for use on television, and paid for magazine ads in child-care and drycleaning magazines. A drop in the number of accidental deaths blamed on plastic bags testifies to the campaign's success. Because it was concerned about the lack of facilities for gathering data on smog formation (and fearful lest unneeded or unreasonable regulation might be adopted by local agencies as a result), the National Paint, Varnish and Lacquer Association convinced its members last year to help support the installation of a smog chamber at Battelle Memorial Institute in Columbus, Ohio. Battelle will pay for the construction of the chamber; NPVLA and some of its member firms will finance the operation of the chamber for at least three years. During this time the chamber, which is slated for completion shortly after mid-year, will be used to study the smog-forming characteristics of vapors of organic solvents used in formulating paints. In a different area, NPVLA in the past few years has gathered a large amount of data on operating costs, salaries, consumption of raw materials, and product sales in the paint industry. It also has just published a cost manual as a guide that its members may use in establishing meaningful accounting procedures. Five years ago many NPVLA members were reluctant to get involved in cost and sales surveys; they feared that gathering such statistics might be questionable under the antitrust laws. Now, however, many of the association's small members find the data highly useful in keeping their own operating costs in line with industry averages and in permitting them to identify—and eliminate —unprofitable products that they had not recognized previously. "An association that is doing its job must take the initiative in gathering information and providing guidelines," says Everett Gall, who heads NPVLA's management information program, "even when its members may not rec-
ognize the need for such information immediately. If the association staff sees some industrywide problem developing, even though it is a distant or nebulous one, it should move quickly to counter the problem by gathering statistical information or by adopting a position and establishing a way of conduct. If it sees that the industry is doing a poor job in some of its operations, it should take steps to bring about a change, even though it treads on the toes of some of its members in the process." The functions of a trade association indeed are in some ways paradoxical. As a nonprofit organization, its ultimate goal is to increase the profits of all its members. Dependent for the most part on its larger members for funds, expert knowledge, and voluntary help, it probably provides service and assistance that is more vital to the small businessman who is a member than to the big firms. And in a competitive world, a trade association provides a means for cooperative action—all the while cocking a cautious eye at the Justice Department's antitrust lawyers. As one authority has put it, "a trade association is an organization of competitors trying to save themselves from one another in a lawful manner." The shadow of antitrust The fear that trade associations have of running afoul of the antitrust laws puts a constraint on many of their programs. Some areas are clearly out of bounds. The antitrust laws prohibit any concerted action by competitors to fix prices, to control production, to allocate sales, or to monopolize channels of distribution. But many gray areas exist. Antitrust law is based not only on legislation itself but also to a large extent on court decisions interpreting that legislation, which tend to muddle the situation. Courts have been known to change their minds and overturn precedents. Trade associations must not just avoid overt action obviously in restraint of trade. An association, if it is not careful, can become involved merely by serving as a vehicle through which its individual members engage in illegal activities. As one legal authority puts it: "Antitrust prosecutors will hardly be persuaded that important business executives will forgather from great distances, at great expense, to play golf or otherwise relax with FEB. 6, 1967 C&EN 125
Many associations sponsor trade shows, such as the Society of the Plastics Industry's National Plastics Exposition, to serve as a showcase and a market place for their industry. Opening the plastics show at New York's Coliseum last summer, SPI president Harry M. Jenkins (left) and former Under Secretary of Commerce LeRoy Collins snip a plastic ribbon with plastic scissors while being serenaded by a high school band playing on plastic instruments
competitors unless benefits are to be derived therefrom." If the benefits result from legitimate joint action, no problem arises. But if some legitimate common need or purpose is not clearly evident, the association's motives may be suspect. Industrywide cooperation is a legitimate goal only so long as competition is not eroded in the process. Associations are particularly vulnerable on matters related to prices and distribution. Says one association official, "If someone mentions the word 'price' at one of our meetings, all the staff goes out the door." The problem lies, moreover, not only in what goes on at formal sessions. It can arise in the social activities that accompany or follow a formal meeting. "You get a bunch of guys around a bar together or in a golf match, and there is bound to be talk about business and you may have trouble," one association executive admits. Economist Adam Smith summed up the danger succinctly nearly 200 years ago: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public or some contrivance to raise prices." Good fellows all Even so, social activities play an important part in most associations' programs. "Fellowship and the social
126 C&EN FEB. 6, 1967
benefits of trade associations are very helpful in selling goods and cementing relationships," says Paul Truitt of the National Plant Food Institute. "Everybody goes away happy from a meeting at the Greenbrier." (The Greenbrier hotel, at White Sulphur Springs, W.Va., is an elegant old resort where many associations hold annual meetings, even though another association executive notes that the pull of the Greenbrier's golf courses is so strong that a serious meeting is hardly possible there.) "The single most valuable benefit of an association is that it puts you on a first-name basis with your competitors," says another association official. "Our organization has made many friendships within the industry," adds Morris Aarons, executive secretary of the Drug and Allied Products Guild. "Competitors are sitting down together for the first time now and talking over their mutual problems. A few years ago they hardly knew one another." Important as it is, however, fellowship is not the main reason for most associations' existence. Not any more, at least. "The social aspects of our programs are a light cement—a fringe benefit, really—but membership rests primarily on the economic advantages of belonging," explains S. Stewart Graff, secretary of the Synthetic Organic Chemical Manufacturers Association. "You have to have solid programs and provide a tangible return if you are to attract members." "Social factors are very important," says another trade-group officer. "Lack of communication within an industry and lack of familiarity breed prejudices. But businessmen are changing, and social relations aren't as important as they used to be," he adds, a bit wistfully. "The older generation liked to drink and to go out to night clubs. These things mean less to younger executives. They are nineto-five people, trained in scientific management. They are not looking for someone to buy them a drink. They are still interested in association activities, but in a different way. And trade associations themselves will have to change accordingly." Recognizing that the antitrust laws pose a constant threat, trade association officials are careful to set safeguards. Some insist that legal counsel be present at all meetings. As with many trade groups, MCA provides
Dp is where the cost of everything
has gone. each of its committee members with a guide to the trade-association aspects of the antitrust laws, which spells out in detail what members should and should not do at MCA-sponsored functions. MCA staff members have strict orders to stop any discussion of pricing at association affairs and to report such improper discussions immediately to their superior and to the MCA general counsel. MCA, in fact, tends to steer a relatively conservative course to avoid the antitrust shoals. "In order to stay pure, we usually stand far b a c k maybe too far back—from any questionable or potentially vulnerable practices," says one MCA staff member. Even so, MCA—like many another trade organization—has been to court. Four years ago, the Federal Trade Commission charged that eight producers of trisodium phosphate, operating through MCA, had conspired to fix prices and eliminate competition among themselves. MCA and each of the companies vehemently denied the charges, but rather than fight a long and costly court battle they agreed to an FTC consent order barring the alleged conspiracy. One upshot of the case is that discussion of any matter relating to trisodium phosphate now is taboo at any MCA meeting. Even when an association itself is not directly a party to an antitrust case, it can find that antitrust action against its members may put a crimp in its activities. Member companies may avoid participation in association programs after charges are leveled against them, for one thing. And when seven of nine chlorine-caustic producers accused by the Justice Department of fixing prices agreed late last year to settle the litigation through a consent judgment, one of the terms of the judgment was that the seven would no longer take part in any activities of the advisory committee of the Chlorine Institute. Gathering
statistics
Fear of entanglement in antitrust problems is one reason, too, why MCA does not gather or report industry statistics of its own, an activity in which many trade groups are deeply involved. The popularity of statistical services would seem to indicate that statistics, if handled discreetly, do not pose an antitrust problem. Supreme Court decisions made more than 40
To carry its message of drug prices to opinion leaders and the public, PMA ran this ad in several leading newspapers and trade magazines last year. Paid advertising, although one of the most direct ways to reach a broad audience, has been little used by trade associations in the chemical industry to date
X Ho, ; not i firfthing*
PH&MAWmTiCAL MANUFACTURERS ASSOCIATION -
years ago also indicate that statistical activities, by themselves, are entirely legitimate. Yet there also seems to be no clear-cut rule of thumb by which an association can determine whether, in a specific case, this common and undoubtedly useful activity flouts the antitrust laws or not. The problem arises in the way that the statistics are used. It is when a statistical program becomes a foundation of a scheme for fixing prices or allocating markets that it runs into trouble. Even when such a scheme does not exist, a statistical program sometimes may give the appearance that illegal agreements exist among association members. Despite the wide popularity of statistical programs, therefore, many associations—including a few which do gather industry data—have misgivings about them. The Soap and Detergent Association at one time collected figures on soap and deteigent sales broken down into about 20 product categories, but now it reports only broad totals of volume and value. The Compressed Gas Association gathers no statistics, even though its secretary-treasurer, Edwin Olsen, thinks they might be useful, because its members want to stay clear of antitrust difficulties. The Sulphur Institute has similar feelings; although the institute attempts to evaluate the effects of technological change on sulfur consumption, it carefully avoids making any estimates of future pro-
duction or doing any research on production economics; "We keep our skirts clean so far as antitrust regulations are concerned," resident Russell Coleman asserts. The National Plant Food Institute also avoids statistical programs for much the same reasons. MCA takes a similar position. At one time it had considered working up an index of chemical production, but decided not to. "For antitrust reasons we concluded that we don't want to collect data on company production and have it in our files," secretarytreasurer Maurice F. Crass, Jr., says. Another reason for MCA's no-statistics policy, though, is that there is little demand from MCA members for this type of information. For several years until 1961, MCA put together an annual survey of capital spending for chemical plants, but it dropped the survey after concluding that the results were not worth the time and effort spent in putting them together. Now MCA makes only occasional special surveys, such as two it did in 1962 (and now plans to bring up to date) on the industry's air and water pollution control efforts. MCA's sensitivity to antitrust matters also is reflected in the way it is organized. Its committee structure is set up primarily along functional rather than product lines because MCA prefers to avoid, as far as possible, any discussion of individual products at its meetings. The few committees that do have a product FEB. 6, 1967 C&EN 127
orientation, such as its committees on plastics and on ammonium nitrate, limit their interest to such clearly legitimate activities as research and safety. MCA's reasoning is that company representatives might too easily drift into questionable conversation if they sat down together to talk about specific types of products. This is less likely to happen when representatives of companies producing a broad range of products get together to talk of such general topics as safety, environmental health, taxes, or transportation. The profusion of smaller associations in the chemical business probably is one consequence of this policy. When manufacturers of a specific product line—whether it be chlorine, explosives, or agricultural chemicals —find they can't discuss their own special problems under MCA's umbrella, they naturally tend to form a group in which they can do so. As a result, a number of trade groups have sprung up to serve the narrower, more-specialized interests of separate segments of chemical industry. Many of these organizations tend to let MCA worry about such industrywide questions as pollution, taxes, or community relations. They concentrate, instead, on the distinct problems that affect their own members directly. An interest in products An important function of many an industry association is to increase its industry's sales or to protect those sales against the inroads of products from other industries. Because the chemical industry makes such a diversity of products this, too, is a job MCA has never found itself in a position to tackle directly. Other associations dealing with narrower product areas in the industry have filled the gap, therefore. The National Paint, Varnish and Lacquer Association, for one, attempts to build markets for coatings by developing articles on the use of paint and color for publication in consumer and trade magazines. It distributes how-to-do-it brochures for the doit-yourself painter, and it sponsors, through its National Clean Up-Paint Up-Fix Up Bureau and its Cleanest Town contest, community improvement campaigns. The Cleanliness Bureau, an arm of the Soap and Detergent Association, prepares guid128 C&EN FEB. 6, 1967
ance material—aimed primarily at low-income consumers—stressing the benefits of cleanliness and advising on the proper use of household detergents. The Society of the Plastics Industry extols the virtues of plastics in press releases, product literature, and seminars with representatives of industries using plastics. SPI's product divisions spend about $400,000 a year to promote their materials to industrial customers. The Chemical Specialties Manufacturers Association is becoming more involved with consumer programs to promote the marketing of its members' products. Last year its aerosol division arranged for a panel of six typical consumers to select the winners of its annual aerosol packaging contest. Pleased with the results, CSMA plans to have similar—though largerpanels judge packaging contests this year for its other five product divisions (automotive specialties, detergent and cleaning compounds, disinfectants and sanitizers, insecticides, and waxes and polishes) as well. Not only are the contests expected to generate publicity about specialty products, but the comments of the panel members may prove helpful to packaging designers and marketing executives of CSMA members. Other associations plow an even narrower area. The chief interest of the four-member Calcium Chloride Institute, for example, is to increase the use of calcium chloride for dust and ice control on highways and as an accelerator for curing cement. It sponsors engineering research and distributes information on the use of calcium chloride. Its three field engineers provide technical service to road engineers and highway officials in the East and Midwest. In the past five years, it has expanded its program to reach the general public, through newspapers and television, with information about the benefits of treating highways with calcium chloride and suggestions about caring for cars exposed to the salt. The National Lime Association likewise centers its attention on expanding outlets for a single product. It is trying to increase use of lime for soil stabilization and in the basic oxygen steel process. It promotes these applications through publicity releases, movies, talks, and a modest advertising campaign in highway trade magazines. The Glycerine Producers' Associa-
Building a "good neighbor policy" for the chemical industry is a function of the Chemical Industry Councils, autonomous local groups that have been formed with the encouragement and support of MCA in centers of chemical production throughout the country. As part of its community relations program, New Jersey's CIC awards a $1000 scholarship each year; last year's winner was Walter E. Donovan of Camden Catholic High School, shown above receiving his check from state CIC officials
tion, a division of the Soap and Detergent Association, has carried on joint research and promotion since the 1920's to widen the use of glycerine and stave off competition from other polyols. Because glycerine is not now in oversupply, however, its current efforts are relatively modest compared with those of earlier years. The Pulp Chemicals Association's major efforts are devoted to developing markets for tall oil and sulfate turpentine. The association (formerly named the Tall Oil Association) supports research on such problems as analytical methods for tall oil fatty acids and the use of tall oil products in paint and other materials, as well as on methods for increasing the recovery of tall oil and turpentine. The Textile Dye Institute strives to increase the sales of dyestuffs by distributing educational material to home economists and by conducting marketing surveys—of consumers' color preferences, for example—which it passes along to textile manufacturers. Although TDI's members also belong to the Synthetic Organic Chemical Manufacturers Association, TDI concentrates its interests on textile end uses of dyes and lets SOCMA carry the ball on questions of trade and tariff policy. A few other trade groups focus their efforts on promoting their products through application research. The American Potash Institute, for one, hopes to expand the use of fertilizer in general and potash in particular by
conducting research in agronomy and distributing educational material dealing with fertilizers to farmers, dealers in farm supplies, county agents, and the staffs of agricultural colleges. Its educational program—including field meetings, diagnostic clinics, and workshops conducted by the institute's field staff of 15 agronomists for farmers, dealers, county agents, and professors—has become one of its chief activities in the U.S., although the institute still supports agricultural research at more than 40 state agricultural schools. Now, however, the institute is stepping up its foreign research operations, largely through its own staff of agronomists located in East Asia, Australia, and Latin America. The Sulphur Institute, a worldwide organization of about 30 sulfur producers whose output accounts for roughly three fourths of Free World tonnage, is another research-oriented organization. The Sulphur Institute's staff in Washington and London oversees a broad research program on applications of sulfur. It also evaluates the technology and economics of important sulfur-consuming products and processes, such as the production of phosphate fertilizers. Other groups that have a technical orientation include the Compressed Gas Association, the Chlorine Institute, and the Institute of Makers of Explosives. CGA's interests focus on the safe handling of industrial gases and safety regulations governing their transportation, storage, and use. The
Chlorine Institute, with 59 members (producers, equipment and plant builders, suppliers of raw material, and a few distributors in the U.S. and Canada) similarly is deeply involved with safety, transportation, and related regulatory matters. IME, with 14 producers of explosives as members, works with government agencies and lawmakers, especially at the local level, on safety in producing, storing, shipping, and using high-intensity explosives. About half of its budget, however, is devoted to its public relations work, primarily its safety program for blasting caps. Through films for spot use on television, posters, and brochures, it tries to alert the public— especially children—about the dangers of picking up or playing with blasting caps lost or stolen from construction projects. [Even more specialized types of trade groups are those set up under the Webb-Pomerene Act of 1918. This legislation was enacted to promote export trade by enhancing U.S. firms' ability to compete effectively against foreign cartels for overseas commerce. It exempts export (WebbPomerene ) associations registered with the Federal Trade Commission from certain provisions of the antitrust laws so that they may fix prices, allocate sales, and engage collectively in other marketing practices in export markets. Four Webb-Pomerene associations handle chemical products: Carbon Black Export, Inc.; Concentrated Phosphate Export Assocation, Inc.; Potash Export Association, Inc.; and Sulphur Export Corp. A detailed discussion of Webb-Pomerene associations was published in C&EN, Nov. 1, 1965, page 92.] When the chips are down The moment of truth in a trade association's life comes, though, not through workaday programs, no matter how much they aid its members' overall economic well-being. It comes, rather, when a crisis of major proportions looms over the industry: when the industry finds itself caught in the uncomfortable glare of unfavorable publicity; when its traditional business practices are attacked and its ethics questioned. Then, if ever, the chips are down and an association has the opportunity to really demonstrate its effectiveness. The Pharmaceutical Manufacturers Association has done much soul FEB. 6, 1967 C&EN 129
searching since t h e late Senator Kefauver launched his investigation of the drug industry late in 1959. From that time until today, PMA and its industry have been subject to almost constant public scrutiny and have been engaged in frequent and sometimes acrimonious dialogues with Congress or the Food and Drug Administration. Could PMA have averted its problems of the past seven years? "We ask ourselves this question often," says president C. Joseph Stetler. "Why has a handful of people been able to exploit our unfavorable aspects while we have been unable to focus attention on the good our industry does? Is there something we should have done that we have neglected?" Unquestionably, PMA and its members were unprepared when the Kefauver hearings began. The organization had been formed only the year before from two smaller predecessors. Its staff totaled only nine full-time employees. More important, its member companies were mostly a closely knit group, publicity-shy and generally little known to the public. PMA itself, mainly interested in scientific and technical matters, was politically naive. The past six years have seen major changes at PMA as the association regrouped its forces to coordinate the defense of the drug industry and to open up channels of communication with the public. The movement began even before the Congressional onslaught. The merger of the American Drug Manufacturers Association and the American Pharmaceutical Manufacturers' Association in 1958 probably was the first indication the drug industry recognized its need to band together into a single, more effective voice. In the past six years, PMA has been building a broad public relations program that eventually, it hopes, will give the drug industry better rapport with the public. It has undertaken a considerable amount of economic research to better document its case. And PMA is still changing. Last year the management consulting firm of Booz, Allen & Hamilton completed a thorough study of PMA's operations. The study's recommendations, most of which are now being put into effect, focus more on organization than policy. But they provide some clues to PMA's future activities. For one thing, PMA is expanding its international operations by raising them to divisional status, headed by a newly appointed vice president. The 130 C&EN FEB. 6f 1967
new division reflects the growing commitment of U.S. drug makers to overseas business. It will attempt to protect the interests of U.S. companies abroad by working with local associations and with U.S. government agencies. Among other things, it hopes to head off regulations abroad as restrictive as those put into effect during the past few years in the U.S. PMA also is beefing up its public and government relations programs, which now are likewise under the direction of a new vice president. During 1966, for the first time, it tentatively launched an institutional advertising campaign aimed at the general public; its first ad, which appeared in five leading newspapers and two trade magazines in the communications field and dealt with drug prices, may be followed by others during 1967. PMA is considering publishing a slick quarterly magazine for circulation to "opinion leaders." It is moving cautiously, too, into the marketing area. Until recently, PMA had avoided anything dealing with market research, sales, or distribution so as to escape the taint of antitrust problems that might lurk in these fields. Some staff employees felt that it was lax in doing so; marketing is a major factor in the drug business and an area where the industry is vulnerable to attack. Now, however, PMA has set up a committee that will attempt to work out a mechanism—a working code—to curb promotional errors and improve the standards of the industry's marketing procedures. "We must continue to improve the job that we are doing in government relations and public affairs," says Mr. Stetler. "Then," he adds hopefully,
"our next trip to Capitol Hill will be a different story. Not only will we be in a better position to respond, but our inquisitors will be in a poorer position to attack us." Executives of other associations have watched the attacks on the drug industry, the pesticide industry and, more recently, the automobile industry with painful interest. And they have wondered: "Could we fend off a similar inquisition if our number came up?" Some are convinced that no association can forearm itself against a free-swinging onslaught, that the best it can do is react once the nature and the direction of the attack is apparent. Others are taking some steps to build defenses in advance. Three years ago, for example, MCA commissioned Jules Backman, an economics professor at New York University, to prepare a study of competition, prices, and profits in the chemical industry. Although the $125,000 study was never needed to rebut an attack against the chemical industry's practices, MCA finds it useful as a publicrelations tool. Focus on environmental
health
More than anything else at present, MCA's interest is focused on environmental health. As the association views it, this involves not only water and air pollution but also industrial hygiene and safety. During 1966, MCA touched off an ambitious program in this field, budgeted to cost $167,000 in the fiscal year ending next May. When the program is fully implemented within the next five years, MCA expects to be spending $675,000 a year. By then the association staff may be devoting roughly three fourths of its time to environmental health problems, compared to about 4 0 % during the past couple of years and even less before that. The program will involve about a third of MCA's present 28 functional and technical committees (with the work of them all coordinated by the environmental health advisory committee MCA set up two years ago). MCA is sponsoring workshops and seminars throughout the U.S. and Canada with the dual purpose of educating local plant officials regarding pollution problems and presenting the industry's case to local government people, the press, and the general public. As an aid to its members, it is publishing technical information, standards, and guidelines for pollution
abatement. MCA also wants to collect up-to-date data on what individual chemical companies are doing on their own to alleviate pollution; now it must rely on information it gathered four years ago in pleading the industry's cause. It is also stepping up the amount of research it sponsors on pollution control. Currently it is supporting a $45,000-a-year project at Washington University in St. Louis that is attempting to determine the behavior of organic chemicals in water. Research grants to other institutions for supporting work on odorous chemicals and other aspects of controlling the quality of water and air will follow. The chemical industry's confrontations with government during the past few years over such matters as air and water pollution, tariffs, pesticide hazards, and food and drug regulations are straws in the wind, many businessmen fear. Clearly, the day has passed when major companies could adopt the once-common attitude that the best approach to questions of public concern was to "keep your head down and stay out of the spotlight." The industry has become more complex; its products are more ubiquitous in the public environment; government is more pervasive. Some businessmen contend that individual companies, on their own, should take the initiative in presenting industry's case to legislators, government regulation, and the general public. Many large, well-heeled companies are doing just that. The individual, they argue, is in the best position to speak out strongly and persuasively on controversial issues. But other businessmen are just as convinced that the job of keeping the industry's fences mended and its image unsullied must fall increasingly on the shoulders of its trade associations. They feel that a well-led trade association need not water down public statements until they conform to some common denominator of industry opinion. They assert, too, that associations must not only take a firm stand on matters that have a direct bearing on their own industry but should also attempt to exert influence on issues that affect the business community as a whole. Trade groups must not ignore the big picture while concentrating on their own special problems. The growing importance of public affairs and the need for industry to speak out with a single, loud, clear voice, many trade-group officials reason, may lead to the development of super trade associations out of the uncoordinated and fragmented groups active today. Such super associations would consolidate the views of all segments of an industry.
Integrated Circuits Process Development Engineers Several positions are available for engineers with a BS in Chemistry,. Physics or Engineering and a minimum of three years' experience in semiconductor processing. One position involves the investigation of diffusion systems not in use in our manufacturing area including diffusion from present glass doped sources. The second position requires an engineer to obtain a fundamental understanding of the photoresist process and develop a reliable resist process for one micron line or smaller. The third engineer will engage in activities in both the photoresist and diffusion areas. The integrated circuit process development group is responsible for developing new and unique processes to be used in the manufacture of integrated circuits. These processes include, multilevel interconnections, MOS processing, surface stability studies, investigating new diffusion systems, improving photoresist processes, thin film work, metalization studies and thick film processing. You are invited to direct your resume to Mr. Robert F. Hammond. SEMICONDUCTOR
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So far, there are no unequivocal indications that the diverse chemical industry wants—or could long live with —such an amorphous, all-encompassing group. What is clear, though, is that chemical associations more and more are aware that public affairs—on an international as well as a national scalewill demand more and more of their attention. MCA's board of directors, for instance, recently set up a special committee to study ways in which MCA might improve its government relations efforts. Among smaller groups, the Compressed Gas Association recently inaugurated a public relations program aimed at creating a greater awareness of its functions within the industry and among outside groups, such as officials of state and local governments, with whom its members must deal. The Chlorine Institute likewise is thinking of undertaking a modest public relations program, and the Agricultural Ammonia Institute is becoming more involved with government regulation and public affairs. Most other trade groups could furnish similar examples. Robert A. Roland, executive vice president of the National Paint, Varnish and Lacquer Association, sums it up this way: "The single most unorganized force in the world today is business. Trade associations will have to become more articulate in speaking for industry. And they will have to become more effective in awakening and directing businessmen's consciousness of public affairs."
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