E7-21355. Philip Morris Products International, LLC; McKenney, VA; Notice of Negative Determination Regarding Application for Reconsideration

By application postmarked October 10, 2007, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, Local No. 358 requested administrative reconsideration of the Department's negative determination regarding eligibility to apply for Trade Adjustment Assistance (TAA), applicable to workers and former workers of the subject firm. The denial notice was signed on August 27, 2007 and published in the Federal Register on September 11, 2007 (72 FR 51845).

Pursuant to 29 CFR 90.18(c) reconsideration may be granted under the following circumstances:

(1) If it appears on the basis of facts not previously considered that the determination complained of was erroneous;

(2) if it appears that the determination complained of was based on a mistake in the determination of facts not previously considered; or

(3) if in the opinion of the Certifying Officer, a mis-interpretation of facts or of the law justified reconsideration of the decision.

The petition for the workers of Philip Morris Products International, LLC, McKenney, Virginia engaged in production of partially stemmed tobacco was denied because the “contributed importantly” group eligibility requirement of Section 222 of the Trade Act of 1974, as amended, was not met. The “contributed importantly” test is generally demonstrated through a survey of the workers' firm's declining customers. The investigation revealed that all partially stemmed tobacco produced by the subject firm was exported to other countries and the subject firm had no domestic customers. The investigation further revealed that there was no shift in production from that firm to a foreign country which is a party to a Free Trade Agreement with the United States or a beneficiary country, nor did the subject firm import partially stemmed tobacco in 2005, 2006 and January through July 2007.

The petitioner stated that even though the workers of the subject firm produced partially stemmed tobacco, Philip Morris also produces cigarettes and workers of the subject firm should be considered as workers supporting production of cigarettes. The petitioner further stated that the parent company of the subject firm closed cigarette production facilities in Cabarras, North Carolina, which would result in increased imports of cigarettes into the United States. The petitioner alleges that because of these imports of cigarettes, the workers of the subject firm who produce partially stemmed tobacco should be certified eligible for TAA.

The Department contacted the company official for further clarification. The company official stated that Philip Morris Products International, LLC, McKenney, Virginia is an Export Processing Facility, which exclusively produces partially stemmed tobacco for export. The company official also confirmed that none of the partial stemmed tobacco from the subject firm was sold to any U.S. facilities in 2005, 2006 or 2007. The company official further stated that the employees of the subject firm did not support production at any domestic facility, including the domestic production facility in Cabarrus, North Carolina. The official further stated that the production from the subject facility is being shifted to Italy, Portugal, Malaysia, Russia, Greece and the Ukraine, countries which are not parties to a free trade agreement with the United States or beneficiary countries. The subject firm is not increasing imports of partially stemmed tobacco after the shift.

In order to establish import impact, the Department must consider imports that are like or directly competitive with those produced at the subject firm. Imports of cigarettes cannot be considered like or directly competitive with partially stemmed tobacco produced by Philip Morris Products International, LLC, McKenney, Virginia and imports of cigarettes are not relevant in this investigation.

The subject firm reported no imports of partially stemmed tobacco and there are no domestic customers who purchase partially stemmed tobacco from the subject firm and who might have increased imports of partially stemmed tobacco during the relevant time period.

Conclusion

After review of the application and investigative findings, I conclude that there has been no error or misinterpretation of the law or of the facts which would justify reconsideration of the Department of Labor's prior decision. Accordingly, the application is denied.

Signed in Washington, DC, this 25th day of October, 2007.

Elliott S. Kushner,

Certifying Officer, Division of Trade Adjustment Assistance.