United They Stand, Divided They Fall

Editor's Note: The "At Issue" series is a year-long, in-depth look at key topics and challenges impacting the metal finishing business. This story examines the significance and potential ramifications of a merger between the industry's three major trade associations.

A 12-year quest to unite the three leading metal finishing industry trade associations may finally be coming to an end.

Officials from the American Electroplaters and Surface Finishers (AESF), Metal Finishing Suppliers' Association (MFSA) and National Association of Metal Finishers (NAMF) recently agreed to proceed with plans to dissolve their respective boards of directors and recreate a single board that represents the best interests of the organizations. The move is considered a major step in merging the three entities under the Surface Finishing Industry Council (SFIC) umbrella organization, which organizes industry events such as the SUR/FIN trade show and Washington Forum.

MFSA and SFIC President William Saas made the announcement during the June 14 MFSA-NAMF luncheon at SUR/FIN in St. Louis. "No association wants to say, 'Why did we give up our proud heritage,'" Saas told attendees at the event. "We have to do it because the world is changing and associations are changing."

The groundwork for a single industry trade association is expected to be laid during a facilitated retreat in early December. There, a 21-person committee consisting of seven members each from AESF, MFSA, and NAMF will discuss merger plans. "It's important for people to come in with an open mind and represent not just the individual associations who appointed them, but represent the entire industry," NAMF President Dave Jacobs says.

Topping the agenda is creating an association that includes corporate and individual memberships. "You can have all individual or corporate memberships, or somehow create a hybrid of the two," Jacobs speculates. "There are great examples of each (concept) that exist in a wide realm of trade associations."

The founding fathers will be particularly challenged to create a mission statement, taking into account that each association has its own objectives and wish list. "I think this can still be done within the framework of an association that has strong committees," Saas says.

The intertwining of mandates from each organization will be tricky, industry members concur. For instance, AESF views the preservation of a “home” for the individual technical professional to be a "must-have" aspect of any consolidation. "The core AESF programs of support for research, a venue for technical paper presentation, development of training materials and support for individual scholarships, as well as a worldwide recognition of professional accomplishment through a voluntary certification program (CEF/MSF designations) are considered vital to the satisfaction of AESF member needs," declared AESF President Fred Mueller.

Despite facing these and other challenges, AESF, MFSA and NAMF officials are confident they can come together. After all, synergies exist among the three groups. For instance, the associations are headquartered in Orlando, Fla. in a shared office space and managed by one firm—Barrack Association Management. Last year they agreed to put all industry events under the direction of SFIC.

"This is similar to the action taken about five years ago when oversight of the government advisory committee was moved to SFIC's control," notes David Barrack, SFIC executive director. "Furthermore, at the most recent meeting of the SFIC board of directors, motions were passed to dissolve each association's board within the framework of their respective by-laws and to focus on defining an organizational structure that reflects the diverse needs and interests of each organization.”

The dissolution process is not cut and dry, industry members say, and resistance is expected from some association affiliates. "A much clearer picture of the governance will be required to gain the branch support needed according to the AESF by-laws," Mueller says. "We hope that the retreat will supply an acceptable framework."

Plans for creating a single industry trade association are expected to be finalized by the next SUR/FIN show, to be held in Milwaukee in September 2006. "We may lose some membership along the way," admits Tony Revier, MFSA's immediate past president. "But we’d like to think if the new organization we put together is a united group, it will bring the rest of the folks into the fold."

Sticking Points
Merger talks have been ongoing between AESF, MFSA, and NAMF for more than a decade, according to industry watchers. "The leadership of the three associations understood the economic advantages of consolidating expenses, using shared resources more efficiently in light of the decline in both dues and non-dues revenues impacting all aspects of the inter-related industry segments," Mueller recalls.

Issues that prevented a quick and simple coming together included how to meld the different association cultures, how to create a membership and dues composition that takes into consideration company and individual members, and how to establish a board and committee structure representative of all members and addresses the mission of each organization. "These same issues remain the primary obstacles to consolidation today," SFIC's Barrack observes. "Positive steps have been taken, however, to help the process evolve."

When did the associations decide to make the consolidation dream a reality? According to industry insiders, officials reached this consensus during a meeting held the week prior to SUR/FIN in June. "Enough of us were there that said, 'Look, we've come this far and it would be a shame if we don’t take it all the way,'" MFSA’s Revier said. "That's when we forced the issue with the motion that was made to effectively make SFIC the controlling and governing body."

Membership Benefits
It remains to be seen how a consolidated organization will serve the diverse needs of respective members. Association leaders say it will reduce or eliminate redundancies such as multiple boards of directors, committees, staffs, publications, financial reports and Web sites. "It is clear that all three associations will have a tough time surviving in their current configurations and that change is demanded to deal with the changes in the industry that we all serve," AESF's Mueller says.

While it may be difficult to measure, the overall effect of consolidation has already led to a more efficient use of available resources to provide member services, present events, reduce the prospects of dues increases, and promote the surface finishing industry and its members. "They (association members) stand to gain by having services equivalent or better, provided for them in a more affordable fashion," MFSA's Saas says.

The impact on government relations efforts cannot be understated, experts say, providing the industry with a coordinated voice in Washington. "It's most important when you can go in and say you represent 1,000 companies and another 2,000 or so individual members," Saas points out.

How will the current makeup of the trade associations be affected by the merger? For the moment, officers continue serving their terms while the identity and governance of each association has not experienced much change.

"At the same time," Barrack says, "additional responsibilities have been placed upon all association leaders, members and staff as a result of the decision to move towards consolidation."

The realization that each group is nearing the end of its run is a difficult pill to swallow, observers say, particularly for loyalists. Turning over decision-making on spending funds and allocating resources to a joint board of directors will require a lot of getting used to. "“But all three organizations face the same impediment," Mueller notes.

"There is a huge psychological barrier with this consolidation," NAMF’s Jacobs adds. "If we truly are interested in having a single entity representing the industry, then we have to come to the realization there will be no more NAMF, MFSA, and AESF at the end of the day. But this single entity will represent the interests of all three trade associations."