E7-5843. Alcan Global Pharmaceutical Packaging, Inc.; Plastics American Division; Centralia, IL; Notice of Negative Determination on Remand

On December 18, 2006, the U.S. Court of International Trade (USCIT) granted the Department of Labor's motion for a voluntary remand in Former Employees of Alcan Global Pharmaceuticals Packaging, Inc. v. U.S Secretary of Labor, Court No. 06-00180. SAR 47.

Case History

On March 2, 2006, the Glass, Molders, Pottery, Plastics & Allied Workers International Union, Local 267, (Union) filed a petition for Trade Adjustment Assistance (TAA) and Alternative Trade Adjustment Assistance (ATAA) with the U.S. Department of Labor (Department) on behalf of workers and former workers of Alcan Global Pharmaceutical Packaging, Inc., Plastics Americas Division, Centralia, Illinois (subject firm). AR 2-18.

Alcan, Inc. (Alcan) is a Canadian company and the subject firm is part of Alcan's North American pharmaceutical packaging network (“Plastics Americas Division”). The closure of the subject firm was announced on November 30, 2005. AR 72.

The initial investigation revealed that the subject firm produced plastic bottles; sales and production increased in 2005 from 2004 levels; the subject firm shut down on June 30, 2006; the subject firm did not import plastic bottles in 2004, 2005, or during January through February 2006; and subject firm production shifted to other domestic Alcan facilities. AR 21, 26, 37-40, 43, 69-71.

Because subject firm sales and production did not decline in 2005 from 2004 levels, the Department did not consider it to be a declining company. However, because the subject firm closed, the Department conducted a survey of the subject firm's major declining customers. The survey revealed no increased import purchases of plastic bottles during the relevant period. AR 65, 67, 68.

The negative determination, issued April 11, 2006, stated that the subject firm did not shift production abroad and that neither the subject firm nor its major declining customers imported plastic bottles during the relevant period. AR 77-80. The Department's notice of determination was published in the Federal Register on April 24, 2006 (71 FR 21044-5). AR 85-87.

In its request for administrative reconsideration, the Union alleging that “the company is sending their mold equipment to Puerto Rico * * * has reported losses * * * likely as a result of competing manufacturers from overseas.” AR 88.

The Department's May 12, 2006 letter informed the Union that the request for reconsideration was being dismissed because no evidence was presented that the Department erred in its interpretation of facts or of the law. The dismissal letter also stated that because Puerto Rico is a U.S. Territory, a shift of production to Puerto Rico is not considered to be a shift of production abroad, for purposes of the Trade Act of 1974. AR 90-91.

The Dismissal of Application for Reconsideration applicable to the subject firm was issued on May 15, 2006, AR 92, and published in the Federal Register on May 24, 2006 (71 FR 29981). AR 94. Subsequent to the dismissal of the request for reconsideration, SAR 46, the Department received additional information from the Union. SAR 2-45.

In a letter dated May 30, 2006, the Union appealed the Department's action to the USCIT. Plaintiff alleged that “[t]here is word that the company is sending their mold equipment to Puerto Rico * * * Also, the company has reported losses for years from the Centralia facility, likely as a result of competing manufacturers from overseas.” SAR 1.

In order to consider the additional information and make a redetermination regarding Plaintiff's eligibility to apply for worker adjustment assistance, the Department sought, and was granted, a voluntary remand. SAR 47.

Remand Investigation

The group eligibility requirements for directly-impacted (primary) workers under Section 222(a) the Trade Act of 1974, as amended, can be satisfied in either one of two ways:

(A)(1) A significant number or proportion of the workers in such workers' firm, or an appropriate subdivision of the firm, have become totally or partially separated, or are threatened to become totally or partially separated; and (2) the sales or production, or both, of such firm or subdivision have decreased absolutely; and (3) increased imports of articles like or directly competitive with articles produced by such firm or subdivision have contributed importantly to such workers' separation or threat of separation and to the decline in sales or production of such firm or subdivision;

or

(B)(1) A significant number or proportion of the workers in such workers' firm, or an appropriate subdivision of the firm, have become totally or partially separated, or are threatened to become totally or partially separated, and (2) 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.

Further, one of the following must be satisfied:

1. 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, or

2. the country to which the workers' firm has shifted production of the articles is a beneficiary country under the Andean Trade Preference Act, African Growth and Opportunity Act, or the Caribbean Basin Economic Recovery Act; or

3. 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.

Because the subject firm shut down, AR 21, the Department determines that a significant number or proportion of workers at the subject firm have become totally separated and that the sales or production of the subject firm decreased absolutely.

In order for criterion (A)(3) to be satisfied, it must be shown that increased imports of plastic bottles during the relevant period “contributed importantly” to the workers” separations and subject firm sales and/or production declines.

Per 29 CFR 90.2, “increased imports” means that imports have increased, absolutely or relative to domestic production, compared to a representative base period. The regulation also establishes the representative base period as the one-year period proceeding the relevant period (the twelve-month period prior to the date of the petition).

Because subject firm sales and production increased in 2005 from 2004 levels, there were no apparent sales and/or production declines during the relevant period. Rather, subject firm's sales and production declines occurred after the relevant period. Therefore, there were no sales or production declines at the subject firm to which increased imports could have contributed importantly.

Assuming, however, that there were subject firm sales and/or production declines during the relevant period, the Department conducted a survey of the subject firm's major declining customers regarding their import purchases of plastic bottles. SAR 50-51, 189-199, 207-221, 226-227. None of the respondents reported increased imports, either direct or indirect, of plastic bottles or articles like or directly competitive with plastic bottles during the relevant period. SAR 49-50, 207, 215-216, 219-220, 226-227, 233.

Further, the subject firm did not have any imports of plastic bottles during the relevant period. AR 43.

During the remand investigation, Alcan explained that the subject firm's sudden closure (sales and production increased in 2005 from 2004 levels and the plant closure was announced in November 2005, AR 72) was the result of the loss of two major contracts. SAR 49, 71-72, 74-75. When the Department contacted the two “lost” customers, the Department was informed by both customers that the contracts were not “lost” because of any import factors and that the contracts were awarded to other domestic vendors. SAR 52, 216, 226-227.

Given the above-stated reasons, the Department determines that TAA criterion (A)(3) has not been met.

The Department affirms that a shift of production to Puerto Rico is not considered a shift of production abroad, for purposes of the Trade Act, because it is a U.S. Territory. Therefore, a shift of production to Puerto Rico cannot be a basis for satisfaction of TAA criterion (B)(2).

In response to Plaintiff's allegation that subject firm production shifted abroad, the Department requested that Alcan identify those domestic facilities to which subject firm production shifted and explain the documents which indicate that machines were shipped to Brazil and Australia. SAR 49, 52-71.

Alcan stated that subject firm production was either discontinued or shifted to Alcan production facilities in Des Plaines, Illinois or Youngsville, North Carolina, SAR 73, 228. Alcan also stated that the machines identified by Plaintiff were surplus equipment, SAR 49, 71; that the surplus equipment sent to Alcan's Brazilian facility was used to produce articles for the Brazilian market, SAR 49, 71; and that the surplus equipment sent to Australia was sold to third-party vendors only. SAR 71.

Given the above-stated reasons, the Department determines that TAA criterion (B)(2) has not been met.

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

In order to apply the Department to issue a certification of eligibility to apply for ATAA, the subject worker group must be certified eligible to apply for TAA. Since the workers are denied eligibility to apply for TAA, they cannot be certified eligible to apply for ATAA.

Conclusion

After careful review of the findings of the remand investigation, I affirm the notice of negative determination of eligibility to apply for worker adjustment assistance for workers and former workers of Alcan Global Pharmaceutical Packaging, Inc., Plastics Americas Division, Centralia, Illinois.

Signed at Washington, DC this 19th day of March 2007.

Elliott S. Kushner,

Certifying Officer, Division of Trade Adjustment Assistance.