02-18422. Freightliner LLC, Cleveland Manufacturing Plant, Cleveland, NC; Notice of Negative Determination Regarding Application for Reconsideration

By application dated May 8, 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 April 3, 2002, and was published in the Federal Register on April 17, 2002 (67 FR 18924).

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 denial of NAFTA-TAA for workers engaged in activities related to the production of Class 8 heavy-duty trucks at Freightliner LLC, Cleveland Truck Manufacturing Plant, Cleveland, North Carolina was based on the finding that criteria (3) and (4) of the group eligibility requirements of paragraph (a)(1) of Section 250 of the Trade Act, as amended, were not met. There were no increased company imports of Class 8 heavy-duty trucks from Mexico or Canada, nor did the subject firm shift production from Cleveland, North Carolina to Mexico or Canada. The survey conducted by the Department of Labor revealed that customer purchases of Class 8 heavy-duty trucks from Canada or Mexico were negligible during the relevant period.

The petitioner appears to be alleging that the layoffs that occurred from July 2000 through October 2000 were the result of shifts in production to Mexico by their parent, Freightliner LLC, Portland, Oregon producing trucks and parts and a sister plant Freightliner LLC Truck Manufacturing, Mt. Holly, North Carolina producing parts used at the Cleveland plant, caused a decrease in production at the subject plant.

The subject plant layoffs that occurred during July 2000 through October 2000 period are beyond the relevant period. In accordance with Section 250 of the Act, no certification may apply to any worker whose last total or partial separation from the subject firm occurred one year prior to the date of the petition. The layoffs were more than one year prior to the date of the petition (March 12, 2002). Therefore, the declines in plant production and employment during the July 2000 through October 2000 period are not relevant.

The petitioner also indicates that a meaningful portion of the subject plants' production declines were caused by an indirect affect of an increasing number of companies either closing throughout the United States or shifting their production to Mexico, thus reducing the demand for Freightliner Class 8 Trucks and causing the layoffs at the subject firm.

Customers shifting their production to Mexico or going out of business are not relevant factors in meeting the eligibility requirement of section 250 of the Trade Act.

The petitioner further states that they should be certified for NAFTA-TAA since the Portland and Mt. Holly facilities were certified eligible for NAFTA-TAA.

A review of the two NAFTA-TAA certifications pertaining to the Portland (NAFTA-4636) and Mt. Holly (NAFTA-4550) plants were based on some products produced by those two plants being shifted to Mexico. In the case of the subject plant, there was no shift in plant production to either Canada or Mexico during the relevant period. To meet the eligibility requirement (criterion 4) of a shift in subject plant production to Canada or Mexico, there must be a shift in production by such workers' firm or subdivision to Mexico or Canada of articles “like or directly competitive” with articles which are produced by the firm or subdivision.

The Department of Labor conducted an investigation for the relevant period. The investigation revealed that criteria (3) and (4) were not met as depicted in the initial decision.

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 14th day of June, 2002.

Edward A. Tomchick,

Director, Division of Trade Adjustment Assistance.