ITAA, AeA chiefs explain merger plans

Increased pressure from a weak U.S. economy and growing global competitiveness are driving the merger discussions between the Information Technology Association of America and AeA, formerly the American Electronics Association, according to the organizations' presidents.

The groups announced Sept. 11 that they were discussing a possible merger. Such consolidations "respond to the members' needs to get more action with their dollars," said Phil Bond, president of ITAA. "Secondly, for a whole host of historical reasons, we've grown up with too many IT and technology-related associations. We think this latest move could be really part of a tipping point to even more consolidations of associations."

It's a matter of strength in numbers and economies of scale, he added.

Over time, having so many organizations makes less and less sense, said Chris Hansen, AeA's president and chief executive officer. Member companies benefit when two complementary organizations combine and aggregate their value because "not only do they not have to support so many organizations, but they get more value out of what they are paying for," he added.

"Both Chris and I saw the need to have a stronger presence in Washington" and use the associations' grass-roots structure to effect policy change and have a stronger domestic and global presence, Bond said.

He added that both organizations have nearly identical positions on important policy issues, including international trade, the multinational workforce and cybersecurity. "That's something the new administration is going to have to tackle," he added. "And as they do that, we want to make sure that on those fundamental issues, our industry has the kind of voice it deserves."

"We are fundamental to the innovative capacity of America, and that innovative capacity is our only hope to compete" globally, he added.

Citing such monolithic trade groups as the National Association of Manufacturers and the Motion Picture Association of America, Bond said the goal is to be the national voice of IT rather than one voice among many.

Hansen said he approached Bond soon after he joined AeA in November 2007 to discuss a possible merger because Bond has long been an advocate of fewer but stronger industry associations in which smaller companies are better represented. "We've been talking ever since," Hansen added.

It's too soon to say whether there are any stumbling blocks to an eventual merger because the due-diligence process is under way, he said. "But so far, in terms of the general concept, the way that we would picture it working [and] the overall structure of an organization, I don't think that we've really had major issues."

Hansen said there is no target date for completing either the due diligence or the merger talks between the two boards of directors.

"We're not really being driven by a date," he said. "Early in 2009, we'd like to be together if that is to be and start gearing up to do the work that we have to do."