03-8353. Erasteel, Inc., McKeesport, PA; Notice of Negative Determination Regarding Application for Reconsideration

By application of February 6, 2003, 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 January 24, 2003, and published in the Federal Register on February 24, 2003 (67 FR 8622).

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 Erasteel, Inc., McKeesport, Pennsylvania 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 customers of the workers' firm. The survey revealed that none of the respondents increased their purchases of imported cold drawn steel.

The petitioners state that their major customer imports high speed drill bits and blanks, and that these items are “like or directly competitive with articles produced by” subject firm workers. In a clarifying conversation with one of the petitioners, he stated that the steel produced at the subject firm was processed in such a way that its only possible end use was to form it into the drill bits and blanks produced by the customer.

The term “like or directly competitive” is drawn from a paragraph in section 222 of the Trade Act. In this paragraph, a “like” competitive product is described as an article which is “substantially identical in inherent or intrinsic characteristics.” A “competitive product” is described as an article which “is substantially equivalent for commercial purposes.” As the subject firm produces drawn steel and not drills bits or blanks, the subject firm products are not “like” or “identical” to potential customer imports of drill bits and blanks. Further, the drawn steel cannot be used for the same commercial purposes as the finished drill bits and blanks. Thus subject firm products are not “like or directly” competitive with alleged customer imports as stated in section 222(3) of the Trade Act.

The petitioners also allege that the subject firm imported competitive products in the relevant period. In an attempt to clarify this allegation, a petitioner was contacted. In response to a request for clarification, the petitioner stated that the subject firm briefly imported semi-finished steel coils for further processing at the subject firm; specifically, coils were imported that were sized to thinner dimensions at the subject firm. However, the subject firm stopped importing this semi-finished product prior to petitioner layoffs, according to the petitioner.

As described by the petitioner, the steel imported is not “like or directly” competitive with the steel produced by the subject firm. Further, a company official was contacted in regard to this allegation. The official clearly stated that the company did not import competitive drawn and ground bars. In response to the issue of imported coils, the official stated that the company only imported for a very brief period and that these imports did not prompt layoffs.

Finally, the petitioners acknowledge that a domestic shift in production caused the closure of the McKeesport facility.

However, they also assert that the need for Erasteel to consolidate their production was a direct result of business lost from their major customer, and that this customer was importing competitive products.

As has already been established, the major declining customer did not import “like or directly” 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 18th day of March, 2003.

Edward A. Tomchick,

Director, Division of Trade Adjustment Assistance.