E7-2165. Hoover Precision Products, Inc.; Washington, IN; Notice of Revised Determination on Remand

On December 13, 2006, the United States Court of International Trade (USCIT) granted the Department of Labor's request for voluntary remand in Former Employees of Hoover Precision Products, Inc. v. United States (Court No. 06-00381).

In the September 11, 2006 Trade Adjustment Assistance (TAA) and Alternative Trade Adjustment Assistance (ATAA) petition, a company official indicated that Hoover Precision Products, Inc., Washington, Indiana (subject facility) was a distribution and warehouse center of carbon steel balls, that the facility was scheduled to close on September 15, 2006, and that three workers would be separated as a result of the closure. In support of the petition, the company official cited NAFTA-4916 (certified on June 18, 2001; shift of production to Mexico).

During the initial investigation, it was revealed that the subject facility was engaged in warehousing and distributing articles produced at an affiliated facility in Mexico, and that the warehousing and distributing functions were shifting to an affiliated facility in Georgia.

Based on information obtained during the initial investigation, the Department determined that the subject workers were ineligible to apply for TAA because they did not produce an article within the meaning of Section 222(a)(2) of the Trade Act of 1974.

On September 15, 2006, the Department issued a negative determination regarding workers' eligibility to apply for workers adjustment assistance for the subject workers. The Department's Notice of determination was published in the Federal Register on September 26, 2006 (71 FR 56172).

By application dated September 29, 2006, three workers requested administrative reconsideration of the Department's negative determination. In the request for reconsideration, the workers stated that “Washington, IN is a distribution facility. We distributed components to companies who manufactured them into their finished products. Hoover Precision in Indiana has lost a substantial amount of business from at least 3 companies who are TAA certified. This qualifies our company in Washington, IN as secondary workers affected by foreign trade.”

For purposes of the Trade Act, a secondarily-affected company is a company that either supplies components parts for articles produced by a firm with a currently TAA-certified worker group or is an assembler or finisher for a firm with a currently TAA-certified worker group.

In order to be certified as eligible to apply for TAA as workers of a secondarily-affect company, the following eligibility requirements must be met:

(1) The workers' firm or appropriate subdivision produced an article during the one year period prior to the petition date; and

(2) A required minimum of the workforce has been laid off in the 12 months preceding the date of the petition or is threatened with layoffs (3 workers in groups of fewer than 50, or 5% of the workforce in groups of 50 or more); and

(3) Loss of business (during the relevant period) as a supplier of component parts, a final assembler, or a finisher for a firm that is currently TAA-certified contributed importantly to an actual decline in sales or production, and to a layoff or threat of a layoff.

By letter dated October 3, 2006, the Department dismissed the workers' request for reconsideration because the subject facility did not produce an article, the workers were service workers who processed imported articles, and the workers were not eligible for TAA as workers of a secondarily-affected company. The Department's Notice of Dismissal of Application for Reconsideration for the subject facility was published in the Federal Register on October 16, 2006 (71 FR 60766).

By letter dated October 9, 2006, the workers appealed to the USCIT for judicial review. The Plaintiffs alleged that they were production workers and provided personal statements in support of the allegation. After careful review of the complaint and the administrative record, the Department filed a motion for voluntary remand.

On December 13, 2006, the USCIT granted the Department's motion for voluntary remand to conduct further investigation and to make a redetermination regarding the Plaintiffs' eligibility to apply for worker adjustment assistance (TAA and ATAA).

To be certified as eligible to apply for TAA, the following criteria must be met:

(1) A significant number or proportion of the workers in such workers' firm (or appropriate subdivision of the firm) have become, or are threatened to become, totally or partially separated;

(2) Sales or production, or both, of such firm or subdivision have decreased absolutely; and

(3) Increases (absolute or relative) of imports of articles produced by such workers' firm or an appropriate subdivision thereof contributed importantly to such total or partial separation, or threat thereof, and to such decline in sales or production, or

(4) There has been a shift in production by such workers' firm or subdivision to a foreign country of articles like or directly competitive with articles which are produced by such firm or subdivision; and the country to which the workers' firm has shifted production of the articles is a party to a free trade agreement with the United States, is a beneficiary country under the Andean Trade Preference Act, African Growth and Opportunity Act, or the Caribbean Basin Economic Recovery Act or there has been or is likely to be an increase in imports of articles that are like or directly competitive with articles which are or were produced by such firm or subdivision.

During the remand investigation, the Department reviewed previously-submitted information, contacted the Plaintiffs, and requested additional information and clarification from Hoover Precision Products, Inc. (subject firm).

During the remand investigation, the subject firm provided new information which revealed that a majority of the subject workers' activities was related to production and that the remaining activities consisted of warehousing and shipping functions. Based on this new information, the Department determines that, for purposes of the Trade Act, workers of the subject facility were engaged in production.

Information obtained during the remand investigation confirmed previously-submitted information that the subject facility ceased to operate in September 2006 and that the subject firm faced increased foreign competition during the relevant time period.

During the remand investigation, the Department received additional information which revealed that increased imports of articles like or directly competitive with carbon steel balls produced at the subject facility contributed importantly to the subject workers' separations.

Based on new information and confirmations obtained during the remand investigation, the Department determines that TAA criteria (1), (2) and (3) have been met.

In addition, in accordance with Section 246 the Trade Act of 1974, as amended, the Department herein presents the results of its investigation regarding certification of eligibility to apply for ATAA for older workers.

The group eligibility criteria for ATAA that the Department must consider under Section 246 of the Trade Act are:

1. Whether a significant number of workers in the workers' firm are 50 years of age or older.

2. Whether the workers in the workers' firm possess skills that are not easily transferable.

3. The competitive conditions within the workers' industry (i.e., conditions within the industry are adverse).

The Department has determined in the case at hand that ATAA criterion (1) has not been met. For purposes of the ATAA program, a significant number means at least three or more workers in a firm with a workforce of fewer than 50 workers.

During the remand investigation, the Department confirmed with the subject firm and the Plaintiffs that one worker at the subject facility is age 50 or over.

Conclusion

After careful review of the facts generated through the remand investigation, I determine that increased imports of articles like or directly competitive with carbon steel balls produced at the subject facility contributed to the total or partial separation of a significant number or proportion of workers at the subject facility.

In accordance with the provisions of the Act, I make the following certification:

“All workers of Hoover Precision Products, Inc., Washington, Indiana, who became totally or partially separated from employment on or after September 11, 2005, through two years from the issuance of this revised determination, are eligible to apply for Trade Adjustment Assistance under Section 223 of the Trade Act of 1974.”

I further determine that all workers of Hoover Precision Products, Inc., Washington, Indiana, are denied eligibility to apply for alternative trade adjustment assistance under Section 246 of the Trade Act of 1974.

Signed at Washington, DC, this 30th day of January 2007.

Elliott S. Kushner,

Certifying Officer, Division of Trade Adjustment Assistance.