How To Reach C&ENACS Membership Number


November 3, 2003
Volume 81, Number 44
CENEAR 81 44 p. 10
ISSN 0009-2347


Industry group wrestles with issues of money, resignations, and image


The American Chemistry Council (ACC) put on a stoic face at its annual meeting last week in Houston. Its officers pledged to cut costs, increase efficiency, and upgrade the industry's image while confronting resignations from companies complaining about the trade group's failure to do these very things.

Just days before the meeting, Lyondell Chemical and Chevron Phillips Chemical quit ACC. Chevron Phillips CEO James L. Gallogly said ACC would have to make substantial improvements in operational efficiency and advocacy efforts for his company to consider returning. And Lyondell CEO Dan F. Smith cited ongoing concerns about priorities, governance processes, and efficiency at ACC, as well as continued disappointment with the way in which the merger between ACC and the American Plastics Council (APC) has been implemented.

"We are disappointed anytime a member leaves the organization," responded ACC CEO Greg Lebedev, "and are hopeful that they will reconsider once the benefits of our initiatives become more apparent."

In late July, Huntsman Corp. resigned as well. CEO Peter R. Huntsman said in a letter to Lebedev that ACC's "inability to deal effectively with its diverse membership makes reaching consensus on issues of advocacy extremely difficult, if not impossible. The resulting gridlock is frustrating at best. At worst, it prevents ACC ... from accomplishing much that is essential to the industry's very survival."

Huntsman also mentioned problems in the area of financial accountability, noting that he had not seen ACC undertake any of the cost cutting its members have had to endure. A company spokesman said, however, that the resignation wasn't tied to ACC's planned image campaign.

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The three resignations take away a reported $3.5 million of ACC's annual revenues. ACC still has about 145 member companies, but with overall revenues expected to fall, it intends to reduce spending while funding key programs. To avoid future revenue upheavals, ACC has changed its membership policy, now requiring a six-month dues commitment and notice for resignation.

In presenting the planned ACC budget to attendees, Jeffrey M. Lipton, Nova Chemicals' CEO, said there would be a greater focus on activities that are of the highest priority for industry and that serve the entire membership. The idea, he added, is to build a budget around "core activities and operations while working at optimum efficiency."

Overall core expenses are to decline from $58 million in 2003 to about $45 million by 2006. The proposed budget would cut spending on a refocused long-range research initiative from $24 million this year to $18 million by 2006. Spending levels for Responsible Care and government relations efforts would fall between 7 and 12%, whereas that for communications would increase.

However, just before the meeting, ACC Vice President of Communications Morrie Goodman left the organization after only about five months there. One of his major tasks had been to lead communication efforts to broaden the public's understanding of the industry.

ACC has been working toward the launch of a long-term reputation initiative to help improve the industry's image at a cost of hundreds of millions of dollars. On Oct. 26, however, ACC postponed until January a decision on moving forward. The delay arose in part from budgetary issues that remain between ACC and APC.

The reputation initiative has been a sore spot in some camps because of its cost and design. At roughly $20 million per year, the campaign now is to be funded in part from ACC's cash reserves to avoid any dues increase in 2004.

Raj L. Gupta, CEO of Rohm and Haas and chairman of ACC's executive committee, chastised the "defectors," noting that ACC is "listening to member concerns" and trying to "do more with less." He added that the group has served the industry for many years, pointing to what he says are recent successes in advancing chemical facility security and responding to natural gas supply issues and the emerging European Union chemicals policy (see page 15).


Chemical & Engineering News
Copyright © 2003 American Chemical Society

Related Story
Disappointed, Huntsman to leave ACC
[C&EN, Aug. 4, 2003]

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