03-6404. Komtek, Worcester, MA; Notice of Negative Determination Regarding Application for Reconsideration

By application of December 1, 2002, the United Steelworkers of America, District #4, Local Union No. 2936, requested administrative reconsideration of the Department's negative determination regarding eligibility for workers and former workers of the subject firm to apply for Trade Adjustment Assistance (TAA). The denial notice was signed on November 1, 2002 and published in the Federal Register on November 22, 2002 (67 FR 70460).

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 TAA petition, filed on behalf of workers at Komtek, Worcester, Massachusetts engaged in the production of forged aerospace products (such as fuel combustion swirlers, fuel nozzles, blades, vanes, and fittings) and medical devices, was denied because the “contributed importantly” group eligibility requirement of Section 222(3) 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 customers. The Department conducted a survey of the subject firm's major customers regarding their purchases of forged aerospace products and medical devices in 2000, 2001 and January through August 2002. None of the respondents reported increasing imports while decreasing purchases from the subject firm during the relevant period. Imports did not contribute importantly to layoffs at the subject firm.

The petitioner alleges that the company has a plant in Tunisia that supplies production to one of their major customers, and that this foreign production replaced subject plant production, leading to production declines and layoffs at the subject firm.

Further review revealed that Komtek did engage in a partnership with a Tunisian plant for the purposes of supplementing their domestic production of fuel combustion swirlers specifically to service a major customer. A review of this customer's purchasing trends revealed that the customer did begin importing competitive fuel combustion swirlers in the January through August 2002 time period. However, this customer also increased their purchases from Komtek's domestic facility in January through August of 2002 period compared to the same period in 2001. As there were no declines in purchases from the domestic subject plant in the period when imports began, there is no evidence of import impact. Further, contact with the company confirmed that the sales numbers provided by the customer in the relevant time frames of the investigation were correct. The company further stated that the subject plant continues to supply fuel combustion swirlers to this customer.

The union further appears to claim that the plant manager of the subject plant was the most knowledgeable source in regard to import impact on subject firm production, but was on vacation at the time that the company data was provided in the initial investigation. They asserted that the company official who did provide the information did not “understand the amount of work we have lost due to the work being done in other countries.”

The plant manager was contacted in regard to this matter. In response to these allegations, he stated that the domestic plant had not been impacted by any foreign production. He asserted that the fall out of 9/11 on the aerospace industry attributed for any subsequent declines that the company had experienced. (This coincides with the period in the beginning of 2002 when layoffs actually occurred.)

In regard to the major customer supplied with fuel combustion swirlers by the Tunisian facility, the plant manager stated that, in 2002, the domestic plant actually signed an agreement to produce a larger percentage of the customer's total production needs of competitive products.

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, this 26th day of February, 2003.

Edward A. Tomchick,

Director, Division of Trade Adjustment Assistance.