E6-4294. Unimatrix Americas, Greensboro, NC; Notice of Negative Determination on Reconsideration

On February 22, 2006, the Department issued an Affirmative Determination Regarding Application for Reconsideration for the workers and former workers of the subject firm. The notice was published in the Federal Register on March 2, 2006 (71 FR 10717-10718).

The petition for the workers of Unimatrix Americas, Greensboro, North Carolina, engaged in production planning and sales of apparel products was denied because the petitioning workers did not produce an article within the meaning of Section 222 of the Act.

The company official filed a request for reconsideration in which the petitioners contend that the Department erred in its interpretation of work performed at the subject facility as a service and further convey that workers of the subject firm supported production of an affiliated firm Unifi by “pulling through Unifi's domestically-produced yarns into domestically-manufactured garments” and “supported other unaffiliated domestic apparel manufacturing facilities.” The petitioner further states that the subject firm should be considered a downstream producer for Unifi, Inc. because it assisted Unifi, Inc. in delivering and distributing their products to garments manufacturers. The petitioner concludes that because Unimatrix promoted usage of yarn manufactured by Unifi in the production of fabric and garments done by independent companies which were contracted by Unimatrix, the workers of the subject firm should be considered in support of production of yarn at Unifi, Inc. The petitioner alleges that increased foreign competition and financial health of Unifi, Inc. had a direct negative impact on Unimatrix Americas and thus workers of the subject firm should be eligible for Trade Adjustment Assistance (TAA).

A company official was contacted for clarification in regard to the nature of the work performed at the subject facility. The official stated that the petitioning group of workers at the subject firm was coordinating all sourcing activities for production of apparel done by independent contractors in Central America. The workers were responsible for “production planning and sales of domestically-produced apparel products containing fabric domestically-produced Unifi yarn.” The subject firm ordered, purchased and exported supplies and goods needed for production of garments, including purchasing of Unifi yarn and arranging its further production into fabric and garments. The workers of the subject company located different independent manufacturing contractors in Central America, monitored their production and kept customers of Unimatrix informed of all production issues and ship dates. The official stated that workers of the subject firm also coordinated importing of the goods back into the United States and handled final shipments and invoicing. The company official stated that Unimatrix served as the “middleman” between different production companies and that majority of Unimatrix' customers, who manufacture garments have moved to sourcing from abroad, thus negatively impacting the subject firm.

The sophistication of the work involved is not an issue in ascertaining whether the petitioning workers are eligible for trade adjustment assistance, but rather only whether they produced an article within the meaning of section 222 of the Trade Act of 1974.

The investigation on reconsideration revealed that Unimatrix Americas, Greensboro, North Carolina is affiliated with Unifi, Inc. Workers of Unifi, Inc. in Yadkinville, North Carolina and Madison, North Carolina manufacture polyester yarn and nylon. Further investigation revealed that workers of the subject firm did not support production of polyester yarn and/or nylon at these facilities but sold apparel, utilizing Unifi products. Workers of the subject firm purchased yarn from Unifi, outsourced production of fabric out of this yarn to independent companies, exported fabric to foreign companies for manufacturing of apparel and imported final products back into the United States.

Providing global sourcing, production planning, sales and marketing is not considered production of an article within the meaning of Section 222 of the Trade Act. Petitioning workers do not produce an “article” within the meaning of the Trade Act of 1974.

The petitioner attached a document on Unifi's Fourth Quarter Results to support the allegations.

A careful review of this document revealed Unifi's decision to focus on the internal resources to support the downstream initiatives around the globe. The document clarifies that Unifi, Inc. developed internal knowledge, expertise, and relationships to drive Unifi's products to the market and as a result it will discontinue Unimatrix Americas. All functions performed by Unimatrix Americas will be utilized within Unifi because it established a new very successful business model to have a successful sourcing.

The investigation on reconsideration supported the findings of the primary investigation that the petitioning group of workers did not produce an article.

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 Unimatrix Americas, Greensboro, North Carolina.

Signed at Washington, DC, this 10th day of March, 2006.

Elliott S. Kushner,

Certifying Officer, Division of Trade Adjustment Assistance.