[Federal Register Volume 64, Number 168 (Tuesday, August 31, 1999)]
[Notices]
[Pages 47527-47528]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-22591]
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DEPARTMENT OF LABOR
Employment and Training Administration
[NAFTA--01994]
Champion Aviation Products, Weatherly, PA; Notice of Negative
Determination on Remand
On June 4, 1999, the United States Court of International Trade
remanded this matter to the Secretary of Labor for further
investigation in Former Employees of Champion Aviation Products v.
Secretary of Labor, No. 98-02-00299 (Ct. Int'l Trade 1999).
The Department's initial negative determination of eligibility to
apply for NAFTA Transitional Adjustment Assistance (``NAFTA-TAA'') for
the workers and former workers of Champion Aviation Products,
Weatherly, Pennsylvania was issued on December 11, 1997 and published
in the Federal Register on January 6, 1998, see 63 FR 577 (1998). The
denial was based on the finding that criteria (3) and (4) of the group
eligibility requirements of Section 222 of the Trade Act of 1974, as
amended, 19 U.S.C. 2231(a)(1)(A)(iii) and (B), were not met: i.e.,
there were no increases in imports from Mexico or Canada of articles
like or directly competitive with articles produced by the workers'
firm or appropriate subdivision that contributed importantly to the
workers' separations; and there was no shift in production of such
articles from the workers' firm or subdivision to Mexico or Canada. See
Administrative Record (``AR'') 58-60.
The petitioners' request for reconsideration resulted in a negative
determination, which was issued on January 27, 1998 and published in
the Federal Register on February 6, 1998, see 63 FR 6208 (1998). The
Department's determination reaffirmed its finding that imports did not
contribute importantly to the workers' separations and that the
workers' firm did not shift production of aircraft displays or power
supplies to Mexico or Canada. AR 63-66.
On remand, the court ordered the Department to make additional
findings (1) determining the appropriate subdivision in light of the
intent of NAFTA-TAA and accounting for the possibility that a two-step
shift in production may have occurred; (2) providing a more detailed
explanation of whether the articles produced at the Pennsylvania
facility are like or directly competitive with the articles produced in
Mexico; and (3) describing the types and amount of equipment that moved
to Mexico from Pennsylvania. Champion Aviation, No. 98-02-00299, slip
op. at 10. In addition, the court suggested that the Department develop
a methodology that does not rely on product lines alone to determine
what constitutes the appropriate subdivision in a ``shift in
production'' case. Id. at 7.
The court further suggested that the Department.
1. Describe the parent company's (Cooper Industries) organizational
structure and the Weatherly's plant's position within it; id. at 8;
2. Interview other sources besides the former Weatherly plant
manager, id. at 9; and
3. Provide evidence that it did not base its denial of the
plaintiffs' two-step shift-in-production argument on the sole ground
that the workers at the Sparta, Tennessee facility did not apply for
adjustment assistance, ibid.
The Department contacted the successor parent firm of Champion
Aviation--Federal Mogul Corporation--to obtain the additional
information required by the Court.
New Methodology
At the outset, the Department respectfully disagrees with the court
that a new methodology for determining the appropriate subdivision in a
shift-in-production case is either apposite or warranted by the statute
or its legislative history. It is well settled under the Trade
Adjustment Assistance provision for group eligibility of the Trade Act,
19 U.S.C. 2271(a), that the ``determination of what constitutes an
appropriate subdivision must be made along product lines.'' See Kelley
v. Secretary, United States Dep't of Labor, 626 F Supp. 398, 402 (Ct.
Int'l Trade 1985). The Department's use of the same methodology for
determining what an appropriate subdivision is under the NAFTA-TAA
increased-import criterion for group eligibility, 19 U.S.C.
2332(a)(1)(A), is not in dispute. The court's broader interpretation of
the same ``firm or appropriate subdivision'' language in the NAFTA-TAA
``shift in production'' criterion for group eligibility, 19
U.S.C.(a)(1)(B), seems to rest on its inference that because Congress
intended to expand coverage of workers in NAFTA-TAA by adding that
criterion, it must also have intended to use these terms more
expansively in that criterion. We think that Congress achieved the
intended expansion by adding the ``shift in production'' criterion,
which accounts for over half of the certifications under NAFTA-TAA, and
that the Congressional desire to expand the program does not evince an
intent to use terms with a well-established judicial meaning in a
radically different manner.\1\
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\1\ In this regard is revealing that the court's quotation of
the NAFTA-TAA legislative history, Champion Aviation, No. 98-02-
00299, slip op. at 6 (``[T]he new program is designed to remedy what
has been identified as one of the current shortcomings of the
current TAA program'') omits the explanatory preceding clause ``By
expanding eligibility to include those who lose their jobs as a
result of shifts in production to Mexico or Canada, not only as a
result of increased imports,'', Senate Proceedings and Debates of
the 103rd Congress, First Session, 139 Cong. Rec. S16092-01, S16107
(Nov. 18, 1993). Contrary to the court's interpretation, this
passage demonstrates Congress's intent to expand coverage by adding
a new criterion but provides no evidence of a Congressional desire
to redefine established terms within that new criterion in a way
that would further expand coverage.
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Appropriate Subdivision and Like or Directly Competitive Articles
The petition was filed on behalf of workers and former workers who
produced aircraft power supplies (power converters) and cockpit
displays in the Weatherly, Pennsylvania plant, part of Cooper
Automotive's Ignition/Aviation Products Division, see Supplemental
Administrative Record (``SAR'') 28, 32. Weatherly was the only Cooper
facility that made these products before its closure, see SAR 36, and
it produced only these articles during the period covered by the
investigation. The articles were produced from 1994 until the plant
closed. The plant had previously manufactured automotive headlamps, but
production of these articles was stopped before 1994 and moved to
Cooper's Hampton, Virginia facility. See SAR 17. Workers who lost their
jobs as a result of this transfer of automotive headlamps cannot be
certified on the present petition because the transfer was domestic and
because any such workers lost their jobs more than a year before the
NAFT-TAA petition was filed.\2\
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\2\ The petition was received by the Commonwealth of
Pennsylvania on October 27, 1998. See SAR 35.
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By contrast, the Sparta, Tennessee facility is a part of Cooper's
Automotive Lighting Products Division. See SAR 29. The Sparta plant
produces automotive incandescent miniature lamps, halogen capsules and
molds, and assembles some automotive interior lighting fixtures. SAR
18. There were no common or similar products or production processes at
the Weatherly and Sparta plants from 1994 through the closure of the
Weatherly plant. See SAR 4, 18. The aviation display products produced
at Weatherly cannot
[[Page 47528]]
reasonably be considered like or directly competitive with the Sparta
automotive headlamps that were transferred to Mexico. The two products
are not substantially identical in their inherent or intrinsic
characteristics, nor are they commercially interchangeable or
substitutable. The aviation lamps made in Weatherly were very different
in size and method of production from the automotive lighting produced
in Sparta. See SAR 4, 18. Aviation lamps and automotive lamps are
produced by very different processes. See SAR 21, 24. Aviation lamps
are made by a very manual process. SAR 24. ``The lamp is extremely
small and the assembly requires the use of a microscope. The automotive
lamps are made of highly automated production lines and are of a much
larger size.'' Ibid.
In view of the fact that the Weatherly plant, the plaintiffs'
plant, was the only Cooper facility that produced aviation products
during the period covered by the investigation and that Weatherly
produced only those products during that period, I find that Weatherly
was the appropriate subdivision for determining wheather a shift in
production occurred. I have considered whether the automotive articles
produced at Sparta were sufficiently similar to Weatherly's aviation
products to warrant finding Sparta an appropriate subdivision. I
conclude, however, that the products' differences in inherent or
intrinsic characteristics, production process and commercial use
preclude such a finding. I also note that the facts that the two plants
that made these products belonged to different divisions of Cooper and
that neither plant made components or finished products for the other
provide additional support for my conclusion.
Two-Step Shift in Production
According to a vice president of Cooper, there was no relationship
between the transfer of automotive products from Sparta to Matamoros,
Mexico and the transfer of aviation lamp production from Weatherly to
Sparta. See SAR 4, 18. The same official stated that the move of
aviation lighting from Weatherly to Sparta could have happened even if
Cooper had not moved any operations to Mexico; in his opinion, the two
transfers were totally unrelated. See SAR 24. He also observed that the
Weatherly production that was moved to Sparta was a very small lamp
assembly operation, especially in comparison to the automotive lamp
production in Sparta. See ibid.
Both in our initial investigation and in our remand investigation,
the former Weatherly plant manager (who co-signed the plaintiffs'
petition for administrative reconsideration, see AR 62) asserted that
the plaintiffs lost their jobs because of the shift in production of
automotive lamps from Sparta to Mexico. See AR Business Confidential
Information (``BCI'') 5, 36; SAR 23. As noted above, however, a Cooper
vice president flatly rejected this contention. When informed of the
conflict the former plant manager's and the higher company official's
views on this matter, Cooper told us that the plant manager had no
responsibility for Sparta and that the vice president was more
knowledgeable about Sparta's operations. See SAR 24.
I also note that, during the initial investigation, the former
Weatherly plant manager gave us an inconsistent explanation of why his
plant closed. At that time, he attributed the closing to the plant's
loss of 80% of its capacity when it shifted its automotive line to
another Cooper domestic plant in 1992. See BCI 36 (``The Weatherly
plant is being closed because you can't support this size plant with
what's left''). As noted earlier, a 1992 domestic transfer of
production is not a ground for certifying workers who lost their jobs
in late 1997 or early 1998 under the NAFTA-TAA shift-in-production
criterion.
I conclude that the record does not support the theory that the
plaintiffs lost their jobs because of a two-step shift in production
form Weatherly to Mexico. The unrelated nature of the domestic shift of
aviation lamp production from Weatherly to Sparta and the shift of
automotive lamp production from Sparta to Mexico, and the great
differences between these two product lines both refute the notion that
a two-step shift in production occurred here. This conclusion is
further supported by the finding of our original negative determination
that the real cause of the plaintiff's separation was their employer's
failure to procure avionics contracts that were awarded to domestic
competitors. See AR 59.
Equipment Moved From Pennsylvania to Mexico
Notes taken during the initial investigation indicated that some
equipment was transferred from Weatherly to Mexico. On remand, the
Department queried Cooper executives and the former Weatherly plant
manager about the company's equipment transfers. The former plant
manager clarified his comments and stated that the only equipment
Cooper moved from Weatherly to Mexico consisted of two large air
compressors, which are not production equipment. See SAR 23. Two Cooper
vice presidents stated that the company transferred no equipment from
Weatherly to Mexico. Production equipment from Weatherly was either
sold at auction or transferred either to Cooper's Liberty, South
Carolina or Sparta, Tennessee facilities. See SAR 18, 24, 34.
Conclusion
After careful consideration of the results of the remand
investigation, I affirm the original notice of negative determination
of eligibility to apply for NAFTA-TAA for workers and former workers of
Champion Aviation Products, Weatherly, Pennsylvania.
Signed at Washington, DC this 17th day of August 1999.
Grant D. Beale,
Program Manager, Office of Trade Adjustment Assistance.
[FR Doc. 99-22591 Filed 8-30-99; 8:45 am]
BILLING CODE 4510-30-M