01-3297. Pennzoil-Quaker State Company, Rouseville, PA; Oil City, PA; Reno, PA; Roosevelt, UT; Deerfield, OH; Rock Hill, SC; Notice of Negative Determination on Reconsideration

By application of August 8, 2000, the petitioner, 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 July 25, 2000 and published in the Federal Register on August 25, 2000 (65 FR 51848).

The Department initially denied TAA to workers of Pennzoil-Quaker State Company producing refined petroleum products because the “contributed importantly” group eligibility requirement of Section 222(3) of the Trade Act of 1974, as amended, was not met. The denial was based on criterion (3) not being met. Aggregate statistics and customer responses indicated that importation of refined petroleum products like and directly competitive with those produced by the subject firm were not major contributing factors to the layoffs at the subject plant.

The petitioners filing the application asserted the following:

(a) That the Rouseville refinery lost their “tote” business to eastern Canadian distribution centers.

(b) In the months preceding the sale of the Rouseville facility, a lot of the neutrals they blended into motor oils essentially came from Canada, Venezuela and South America, thereby eroding the company's competitiveness.

(c) Crude oil needs to be over $20 a barrel to be profitable for crude oil producers; the low price of crude was the reason for the layoffs at Pennzoil-Quaker State Company.

(d) The flooding of the world market with cheap was products by both the Chinese and Japanese added to the demise at the Rouseville facility.

On reconsideration, the Department requested that the Pennzoil-Quaker City State Company provide additional information concerning the factors addressed by the application.

Additional information provided by the company indicated that during April 2000, the Pennzoil-Quaker State Company sold a portion of the Rouseville refinery and earlier in the year the company discontinued operating the balance of the refinery. As a result of this sale/discontinuance of the refinery operations the Rouseville Packaging plant was discontinued and transferred to other domestic packaging plants. The workers in the “tote” business filled the totes with lubricants and shipped them to Canada. The empty totes would then be shipped back to the Rouseville to be refilled and the cycle would begin again. Sometime during 1997 and 1998 the Canadian customer that was receiving the totes began receiving the finished lubricant product via semi-truck. The customer then filled their own totes and retained them in Canada. The business of filling the totes is a service and therefore those workers could only be considered for eligibility if the workers producing the lubricants at the subject firm were certified eligible for TAA.

In response to factors (b) and (c) depicted above, neutrals and crude oil are raw materials in the refinery process and even if they were imported, do not meet criteria (3) for eligibility. The product imported must be a product that is produced at the subject firm to be considered for import impact.

The flooding of world markets with cheap wax is not a factor in the layoff at the subject plant. Waxes accounted for only a small percentage of output at the plant. Wax sales and production at the subject plant increased up to the sale of the wax operation, therefore imports were not an important contributing factor to the layoffs at the subject plant.

Conclusion

After reconsideration, I affirm the original notice of negative determination of eligibility to apply for worker adjustment assistance for workers and former workers of Pennzoil-Quaker State Company, Rouseville, Oil City, and Reno, Pennsylvania, Roosevelt, Utah, Deerfield, Ohio, and Rock Hill, South Carolina.

Signed at Washington, D.C., this 25th day of January 2001.

Linda G. Poole,

Certifying Officer, Division of Trade Adjustment Assistance.