03-7917. American Greetings Corporation, Corbin, KY; Notice of Negative Determination Regarding Application for Reconsideration

By application of November 25, 2001, petitioners 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 October 10, 2001, and published in the Federal Register on November 5, 2001 (67 FR 67422).

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 mis-interpretation of facts or of the law justified reconsideration of the decision.

The petition for the workers of American Greetings Corporation, Corbin, Kentucky 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 petitioners allege that criterion (3) was acknowledged as having been met by the Department, as established by a determination in connection with TA-W-41,255 regarding subject firm workers. To provide proof of this, they attach an untitled page of this determination.

In fact, this page was extracted from a determination which was issued as a “Notice of Negative Determination Regarding Application for Reconsideration”, issued as the result of an investigation that followed the original “Negative Determination Regarding Eligibility To Apply for Worker Adjustment Assistance.” However, in this determination, the word “not” was inadvertently omitted in the statement “increased imports did contribute importantly to worker separations.” A corrected republication in full explaining the inadvertent omission was issued and published in the Federal Register on July 24, 2002 (67 FR 48484).

The petitioners allege that “we have been told from various sources of management that approximately nine percent of the work done at the Corbin plant has been outsourced to other countries.” They also claim that “American Greetings plans to outsource 75 percent of the work previously done at the Corbin plant to foreign countries within the next two years.

A review of the initial investigation revealed that somewhat less than nine percent of greeting card sheet production has been outsourced to offshore facilities. However, as subject firm workers are not separately identifiable, the production of party goods, gift wrap and bows (ribbons), and candles must also be taken into consideration when looking at the percentage of plant production affected by this outsourcing. When considering imports of greeting card sheets in context with the total plant production, imports constitute a negligible percentage. In regard to any future outsourcing referenced by the petitioners, any future imports are beyond the relevant period.

The petitioners also assert that sales and production have “declined in the last eight years” and that “we have been told the record shows that imported goods * * * hurt the company sales.” At one point, they allege that layoffs have been occurring for the last three years, and recommend that the Department look at the last five years in assessing company trends.

In establishing worker eligibility for trade adjustment assistance, the Department considers declines that occurred in the year preceding the date of the petition. To establish whether the declines exist, the investigation requires the most recent two years of data for corresponding periods in order to ascertain whether declines have occurred in the most recent period relative to the previous period. Thus periods of five and eight years are not relevant. Further, a review of the initial investigation revealed that all sales and production declines of party goods, gift wrap and bows (ribbons) and candles that occurred in the relevant period are attributable to domestic transfer. Production of greeting card sheets increased in 2001 relative to 2000, but began to decline in January through March, 2002 relative to the corresponding period of 2001. As mentioned above, imports of greeting card sheets were negligible relative to overall production.

The petitioners also assert that laid-off company personnel are united in the belief that import impact affected layoffs, and state that “the records and data have proved” that imports contributed importantly.

No “records and data” were made available in regard to this request for reconsideration. In regard to attachments to the petition and request for reconsideration provided in a previous investigation for this worker group (TA-W-41,255) regarding competitive company imports (a company email discussing offshore shipments, labels indicating import shipments), the Department contacted the company, which provided specific information as to whether competitive imports had occurred, where production had been shifted, and specific percentages of import volume versus total plant production. In all cases where competitive imports occurred, the volume of imports was deemed negligible. It was on the basis of this specific information that the determination was made.

Finally, the petitioners enumerate the three criteria for eligibility and assert that they meet all three criteria.

As noted above, an investigation of the information available reveals that subject firm workers of American Greetings Corporation, Corbin, Kentucky do not meet the “contributed importantly” group eligibility requirement of Section 222(3) of the Trade Act of 1974, as amended.

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 in Washington, DC, this 7th day of March, 2003.

Edward A. Tomchick,

Director, Division of Trade Adjustment Assistance.