03-8350. Jackson Sewing Center, Madisonville, TN; Notice of Negative Determination on Reconsideration

On February 19, 2003, the Department issued an Affirmative Determination Regarding Application for Reconsideration for the workers and former workers of the subject firm. The notice will soon be published in the Federal Register.

The Department initially denied the workers of Jackson Sewing Center, Madisonville, Tennessee because the “contributed importantly” group eligibility requirement of Section 222(3) of the Trade Act of 1974, as amended, was not met. Imports of sewn furniture parts did not contribute importantly to the layoffs at the subject plant. The workers at the subject firm were engaged in employment related to the manufacture (sewing) of upholstered furniture parts. The sewn articles were sent to other affiliated plants to be incorporated into upholstered furniture.

The petitioner asserts that company sales were down and thus the company was attempting to cut costs by importing Chinese products (cut-sewn fabric for furniture) competitive with those produced by the subject plant. The petitioner further alleges that, during September 2002, some “parts” from China were seen at an affiliated plant. The petitioner also supplied style numbers believed to be imported from China.

On reconsideration, the Department contacted the company for further clarification concerning company imports of cut-sewn fabric for upholstered furniture. In response to the style numbers supplied by the petitioner, the company indicated that, with the exception of one style number, they did not import these products. The one style number imported (7866) constituted a negligible amount in relation to production at the subject firm and the company further indicated this was a one time event during 2002, and in fact was not even produced at the subject firm, but rather at an affiliated facility. (However, the subject plant had the capability to produce that style.)

The company also reported that they imported cut-sewn leather furniture parts and tables but that they did not produce cut-sewn leather furniture parts and tables. In any event, the amount of imported cut-sewn leather furniture parts was extremely small in relation to production at the Madisonville plant during January through September 2002. In fact, the imported pre-cut and sewn leather covers were purchased from manufacturers that specialize in producing these products. The company indicated that the investment in equipment and training would far exceed any profitability they could expect in such a program.

The company also indicated that they imported tables during the relevant period. However, since the worker group does not produce this product, imported tables are not “like or directly” competitive with what the subject plant produced (cut-sewn fabric for furniture parts) and thus does not meet the eligibility requirements of Section 222(3) of the Trade Act of 1974.

The plant ships all cut-sewn fabric parts for furniture produced at the subject plant to other affiliated plants that incorporate the sewn parts into furniture; therefore, a customer survey is not relevant to this investigation.

In summary, the sum of cut-sewn fabric and one style of cut-sewn leather furniture parts imported was extremely small amount relative to what the subject plant produced during the relevant period, and therefore did not contribute importantly to layoffs at the subject plant.

The company also indicated that from 2001 to 2002 the styles of furniture have changed and thus require a smaller number of cut sewn furniture parts to produce a piece of furniture.

The company further indicated that the Madisonville plant was an extension for the sewing operation of an affiliated domestic facility. The subject plant was opened several years ago when additional sewing capacity was needed at the affiliated plant, since the labor market was extremely tight. Since less sewing is now required the company decided to shift the sewing operation back to the affiliated plant.

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 Jackson Sewing Center, Madisonville, Tennessee.

Signed at Washington, DC this 21st day of March 2003.

Edward A. Tomchick,

Director, Division of Trade Adjustment Assistance.