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Box Makers Brace for Change
November 8, 2008 By: Packaging online staff Official Board MarketsOn Jan. 20 Barack Obama will become the 44th president of the U.S. Although some box makers would argue that it is too early to say how his presidency will impact their businesses, other industry executives argue change is inevitable. And this change could result in some bitter pills to swallow.
“The big item that concerns me for our independent box making members is the Employee Free Choice Act,” says Dwight Schmidt, president, Fibre Box Association, Chicago. (See feature article on this proposed legislation in the Sept. 20 OBM, p. 28).
This legislation would greatly ease union organizing efforts by allowing “card check” unionization instead of elections. A box maker would automatically be unionized if just over 50 percent of its employees sign union authorization cards.
“On the positive side, our independent members are great citizens, great mentors to their employees,” states Schmidt. “They create a culture that insulates them [from unions]. But it’s scary to think that it could happen without your knowledge. Most people do a great job of creating a larger family-type feel [at their plants]. But it’s still out there and is definitely how Barack got all the union support. Just think about the implications that could have not only on our industry but also on the retail industry. Huge.”
The day after the election, Schmidt was listening to a National Association of Manufacturers phone conference on what to expect now and he heard a salient point.
“The Democratic leadership has a problem,” he says. “It has tried to broadcast the net so wide that you now have to ask who is a Democrat and how do you get any of them to move in the same direction? The Republicans lost some key races because they tried to separate themselves from Bush and some of the party’s benchmark policies. They look like Democrats. And some Democrats won by making themselves not so obviously a contrast to a Republican.
“Both sides start coming toward the middle a little bit. So how do you get legislation or activity through, even in your own party anymore? We saw that with the [Wall Street] bailout.”
Too Soon--
For decades Mort Ackerman, president, Ackerman Consulting Group, LLC, Fort Lee, N.J., has been helping independent box plant run their businesses better. He believes it’s too soon to draw conclusions as to how the new president will help or hurt his clients.
“During the process of trying to get elected everybody promises the moon,” he says. “Now, once they’re there, realism will set in. And I’m not sure either party could do anything they thought they could do.”
That remains to be seen. What’s certain is that this country is going through its greatest financial crisis since the 1930s.
“The talk recently is that we will probably see another stimulus package like a tax cut,” says Mark Wilde, managing director, Deutsche Bank, New York City. He follows the paper industry closely. “I think Obama has been on the record in terms of supporting it.
“The Fed has been trying to unfreeze the credit markets. It’s a big issue right now for big and small businesses. Because of this, it’s creating a lot of distortions in the markets. This is probably one of the factors behind a cratering in recovered paper pricing. The reason the Asian producers aren’t buying any pulp or recovered paper is if you don’t have access to credit or you’re worried about your bank lines tightening up, one of the ways you can raise cash, other than going to the bank, is just shrink you inventory base.
“We’re in the process of deleveraging the system. And this is probably a multi-year process. There aren’t any quick fixes here.”
The FBA’s Schmidt agrees but also stresses that the industry has to be vigilant and ready to respond to the country’s representatives and senators as soon as it hears of new proposed legislation.
“Things are going to change environmentally,” he adds. “The concern we would have is that they would change too rapidly. Positive environmental rules are ok, but they have to be economical and reasonable. In addition, the time lines have to be something that the industry can achieve. We’re moving ahead rapidly without legislation and the concern is we may try to get someplace faster through legislation.”
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