E6-20059. Central Penn Sewing Machine Company, Inc., Bloomsburg, PA; Notice of Negative Determination Regarding Application for Reconsideration

By application dated October 1, 2006, petitioners 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 September 14, 2006 and published in the Federal Register on September 26, 2006 (71 FR 56172).

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 misinterpretation of facts or of the law justified reconsideration of the decision.

The petition for the workers of the Central Penn Sewing Machine Company, Inc., Bloomsburg, Pennsylvania engaged in production of industrial sewing machines was denied because the “contributed importantly” group eligibility requirement of Section 222 of the Trade Act of 1974, as amended, was not met, nor was there a shift in production from that firm to a foreign country in 2004, 2005 or January through August, 2006. The “contributed importantly” test is generally demonstrated through a survey of the workers' firm's customers. The survey revealed no imports of sewing machines during the relevant period. The subject firm did not import sewing machines nor did it shift production to a foreign country during the relevant period.

The petitioner states that the affected workers lost their jobs as a direct result of a loss of customers in the apparel industry. The petitioner alleges that major declining customers of the subject firm increased imports of apparel or were negatively impacted by imports of apparel. As a result, they decreased their purchases of sewing machines from the Central Penn Sewing Machine Company, Inc., Bloomsburg, Pennsylvania. The petitioner also states that several of the subject firm's customers were certified eligible for TAA based on an increase in imports of various apparel products. The petitioner concludes that because industrial sewing machines are used to manufacture apparel and sales and production of industrial sewing machines at the subject firm have been negatively impacted by increasing presence of foreign imports of apparel on the market, workers of the subject firm should be eligible for TAA.

In order to establish import impact, the Department must consider imports that are like or directly competitive with those produced at the subject firm. The Department conducted a survey of the subject firm's major declining customers regarding their purchases of industrial sewing machines. The survey revealed that the declining customers did not increase their imports of industrial sewing machines during the relevant period.

Imports of apparel cannot be considered like or directly competitive with industrial sewing machines produced by Central Penn Sewing Machine Company, Inc., Bloomsburg, Pennsylvania and imports of apparel are not relevant in this investigation.

The fact that subject firm's customers are importing or were import impacted is relevant to this investigation if determining whether workers of the subject firm are eligible for TAA based on the secondary upstream supplier of trade certified primary firm impact. For certification on the basis of the workers' firm being a secondary upstream supplier, the subject firm must produce a component part of the article that was the basis for the customers' TAA certification.

In this case, however, the subject firm does not act as an upstream supplier, because industrial sewing machines do not form a component part of apparel and other textile products. Thus the subject firm workers are not eligible under secondary impact.

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 at Washington, DC, day 20th of November, 2006.

Elliott S. Kushner,

Certifying Officer, Division of Trade Adjustment Assistance.