03-10750. Bombardier Aerospace, Learjet, Inc., Wichita, KS; Notice of Negative Determination Regarding Application for Reconsideration

By application dated September 6, 2002, a petitioner requested administrative reconsideration of the Department's negative determination regarding eligibility to apply for North American Free Trade Agreement-Transitional Adjustment Assistance (NAFTA-TAA), applicable to workers and former workers of the subject firm. The denial notice was signed on August 9, 2002, and was published in the Federal Register on September 10, 2002 (66 FR 57454).

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 denial of NAFTA-TAA for workers engaged in the manufacture and assembly of aircraft at Bombardier Aerospace, Inc., Learjet, Inc., Wichita, Kansas was denied because the “contributed importantly” group eligibility requirement of Section 250 of the Trade Act, as amended, was not met. The subject firm did not import competitive products nor did it shift production from the subject facility to Canada or Mexico in the relevant period.

The petitioner appears to allege that the parent company stopped all repair operations for “the old existing fleet of Lear jets in lieu of just supporting what they are currently producing.”

Repair functions do not constitute production in terms of eligibility for NAFTA-TAA assistance, and are therefore irrelevant to this investigation.

The petitioner also asserts that production of the Model 31A, which had components and assembly performed at the subject facility, is being replaced by the Model 45, which has foreign-produced components for final assembly at the subject firm. The petitioner appears to be alleging that the 45 is like or directly competitive with the 31A, and therefore the Canadian-produced components of the 45 are like or directly competitive with the 31A components produced at the subject firm.

A company official was contacted in regard to this issue and clarified that production of the 31A had ceased as of January of 2003 because it had become obsolete. He also confirmed that subject firm workers had never produced components of the 45, but were only engaged in final assembly. In regard to the competitiveness of the 31A and the 45, an industry analyst at the United States International Trade Commission (USITC) was consulted, whereupon it was revealed that the 31A and 45 are not like or directly competitive. As a result, the model 45 components are not considered like or directly competitive with components of the 31A, and thus these Canadian produced components have no bearing on the petitioning workers' eligibility for NAFTA-TAA.

The petitioner also alleges that production of the Continental jet model (currently called the Challenger), although assembled in Wichita, is comprised of foreign-produced components, and thereby seems to imply that the imports of these components has import impact on subject firm workers. The petitioner further asserts that there are plans to move the assembly of this aircraft to Canada.

The Challenger model produced in Wichita is not like or directly competitive with other models produced at the subject facility and thus the import of its component parts has no bearing on worker eligibility for NAFTA-TAA. In addition, assembly of the Challenger model has not been shifted to date and any future shift is outside the scope of this investigation.

The petitioner asserts that Bombardier “is going to build a smaller version of the Model 45 to exactly replace the Model 31,” and that this new model will be mostly produced abroad. The implication appears to be that this future production will be a competitive replacement for subject firm production.

A company official responded to this allegation by stating that the company is developing a “Model 40” that is competitive with the 31A; however, this plane is not yet in production and thus it has no bearing on the scope of this investigation.

The petitioner asserts that “there has been a substantial shift of production work to Canada and much more to come.” The petitioner also asserts that Canadian and other imported aircraft parts are shipped to the U.S., thereby implying that workers should be eligible for NAFTA-TAA.

An investigation into this matter revealed that production has not been shifted from the subject firm to Canada in the relevant period. Further, as has been noted in detail above, there is no evidence of products like or directly competitive with those produced at the subject firm.

Finally, throughout the reconsideration request, the petitioner alleges that several non-manufacturing functions have been or may be shifted to domestic and Canadian facilities, including the “Training Center”, “Customization Engineering”, the “Technical Publication Department” and the “Spare Orders Department.” The petitioner appears to assert that these shifts should somehow qualify workers for NAFTA-TAA assistance.

None of the above-mentioned departments involve production in context with worker eligibility for NAFTA Transitional Adjustment Assistance, and thus have no relevance in this investigation. Only in very limited instances are service workers certified for NAFTA-TAA, namely the worker separations must be caused by a reduced demand for their services from a parent or controlling firm or subdivision whose workers produce an article and who are currently under certification for NAFTA-TAA.

In conclusion, the workers at the subject firm did not meet the “contributed importantly” group eligibility requirement of Section 250(a) 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 at Washington, DC, this 4th day of April 2003.

Edward A. Tomchick,

Director, Division of Trade Adjustment Assistance.