Chemicals In The Steel City

Earlier this week I attended Pittsburgh Chemical Day. The event is a one day meeting followed by a gala dinner. Local Pittsburgh firms—Bayer, Lanxess, Nova, Koppers–put it on. Many other firms attend from out of town, most of them from the East Coast. The event is also heavily attended by chemical distributors.

The organizers have complained that attendance for Pittsburgh Chemical Day, which has been held for 43 years, has been waning. They opined that it was emblematic of the decline in the U.S. chemical industry as a whole.

But from my perspective, it wasn’t so bad. Although the event seemed scaled down from the last time I attended—in 1999—they did get about 400 people to show up. And dinner was sold out that night. From what I overheard, they even had to add more tables.

The keynote speaker at the dinner was Greg Babe, CEO of Bayer Corp., the U.S. arm of German pharmaceutical, polymer, and agricultural chemical maker Bayer AG.

Babe called for a renewal of U.S. manufacturing and a reversal of the thinking that says that in another ten years, the U.S. chemical industry will be irrelevant on the global stage.

He did point fingers at the public, saying their indifference about whether chemical manufacturers move capacity overseas is part of the problem. The public clamors to help other industries, like car makers—as when Chrysler and GM got bailed out right alongside the troubled banks. “The big three has their problems, but lack of public support isn’t one of them,” he says.

Babe said that the industry needs to do a better job of communicating with the public about accidents and contamination. He even referenced a 2008 incident where an explosion killed two workers and nearly ruptured a methyl isocyanate (MIC) tank at Bayer’s plant in Institute, West Virginia. MIC was the chemical behind Union Carbide’s Bhopal disaster in 1984. “We fell short both in terms of communicating the incident and keeping stakeholders apprised of the latest developments,” he said.

This may sound a little like blaming the public for the chemical industry’s problems. It is the chemical industry executive themselves that decide to take their capital and invest it in the Middle East and Asia. And they do so for the relative competitive advantages those places offer. The public and the chemical industry making nice would indeed be helpful, but not helpful enough to reverse that momentum all by itself.

On the other hand, at an earlier press conference Babe made the same point but applied it to American manufacturing more generally. That makes for a better point. People pay lip service to manufacturing moving abroad, but they continue buying cheap Chinese junk.

Incidentally, Terry Yosie, CEO of the World Environment Center, spoke during the dinner. Some might remember him from his time with the American Chemistry Council. He had some thoughts on manufacturing as well. He called for convening of pro-manufacturing stakeholders like companies and labor to reach a common ground on how they can reinvigorate American manufacturing. “It is time to reexamine the assumption that the U.S. cannot be a preeminent manufacturing center for the world,” he says.

Author: Alex Tullo

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