E6-8777. Carolina Mills, Inc., Plant #3, Newton, NC; Notice of Negative Determination Regarding Application for Reconsideration

By application dated April 19, 2006, a company official 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 March 27, 2006 and published in the Federal Register on April 17, 2006 (71 FR 19755).

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 misinterpretation of facts or of the law justified reconsideration of the decision.

The petition for the workers of Carolina Mills, Inc., Plant #3, Newton, North Carolina engaged in production of woven textile fabrics was denied because the “contributed importantly” group eligibility requirement of section 222 of the Trade Act of 1974, as amended, was not met, nor was there a shift in production from that firm to a foreign country. The “contributed importantly” test is generally demonstrated through a survey of the workers' firm's customers. The survey revealed no imports of woven textile fabrics during the relevant period. The subject firm did not import woven textile fabrics nor did it shift production to a foreign country during the relevant period.

The petitioner states that the affected workers lost their jobs as a result of the negative impact of increased imports of gloves on U.S. glove manufacturing. The petitioner alleges that the major declining customer of the subject firm which manufactures gloves decreased purchases of the woven textile fabrics from Carolina Mills, Inc., Plant #3, Newton, North Carolina because the customer has been importing the finished glove products from abroad. The petitioner states that the sales and production of woven textile fabrics at the subject firm have been negatively impacted by increasing presence of foreign imports of gloves on the market, thus workers of the subject firm should be eligible for TAA.

In order to establish import impact, the Department must consider imports that are like or directly competitive with those produced at the subject firm. Imports of gloves cannot be considered like or directly competitive with woven textile fabrics produced by Carolina Mills, Inc., Plant #3, Newton, North Carolina and imports of gloves are not relevant in this investigation.

The petitioner also alleges that production of woven textile fabrics has been negatively impacted by “problems with yarn sourcing”, a component in the manufacturing process of woven fabrics. The petitioner provided the names of the yarn suppliers who were negatively impacted either by the shift in production of yarn abroad or increased imports of yarn.

The fact that subject firm's suppliers shifted their production abroad or were import impacted is relevant to this investigation if determining whether workers of the subject firm are eligible for TAA based on the secondary downstream producer of trade certified primary firm impact. For certification on the basis of the workers' firm being a secondary downstream producer, the subject firm must purchase articles for further production from a trade certified firm which in its turn has been impacted by shift in production to/increase in imports from Canada or Mexico.

The investigation revealed that the subject firm had only one supplier of yarn who was under TAA certification during the relevant time period. However this supplier accounted for less than one percent of subject firm's total purchases of yarn and a loss of business with this company did not contribute importantly to determine a negative trade impact on the subject firm. The rest of the companies which supplied yarn to the subject firm are not certified for TAA. Therefore, the subject firm workers are not eligible under secondary impact as a downstream producer.

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 22nd day of May, 2006.

Elliott S. Kushner,

Certifying Officer, Division of Trade Adjustment Assistance.