E6-12620. Citation Corporation, Camden, TN; Notice of Negative Determination on Remand

On January 23, 2006, the U.S. Court of International Trade (USCIT) granted the Department of Labor's motion for a second voluntary remand in Former Employees of Citation Corporation v. Elaine Chao, U.S. Secretary of Labor, Court No. 04-00198.

On December 1, 2003, the Tennessee AFL-CIO (Union) filed a petition for Trade Adjustment Assistance (TAA) and Alternative Trade Adjustment Assistance (ATAA) on behalf of workers of Citation Corporation, Camden, Tennessee producing ductile iron castings (subject worker group). The Department of Labor (Department) terminated the investigation for TA-W-53,753 because no new information or change in circumstance was evident which would have resulted in the reversal of a prior negative determination applicable to the same worker group (TA-W-51,871). The Notice of Termination was issued on December 11, 2003. The Notice was published in the Federal Register on January 7, 2004 (69 FR 940).

After the Department dismissed the Union's request for reconsideration (April 6, 2004; 69 FR 18107), the Union appealed to the USCIT for review.

During the first remand investigation, the Department determined that the worker group and the circumstances of the workers' separations in TA-W-51,871 and TA-W-53,753 were the same and that termination of the investigation of TA-W-53,753 was proper because a final decision was issued in TA-W-51,871. The Notice of Negative Determination on Reconsideration on Remand was issued on March 9, 2005 and published in the Federal Register on March 28, 2005 (70 FR 15646).

On January 23, 2006, the USCIT directed the Department to conduct a second remand investigation to determine whether the subject worker group is eligible to apply for TAA.

To determine whether the subject worker group is eligible to apply for TAA, the Department conducted an investigation to ascertain if the criteria set forth in 29 CFR 90.16(b) was met:

(1) A significant number or proportion of the workers in such workers' firm (or appropriate subdivision of the firm) have become, or are threatened to become, totally or partially separated;

(2) Sales or production, or both, of such firm or subdivision have decreased absolutely; and

(3) Increases (absolute or relative) of imports of articles produced by such workers' firm or an appropriate subdivision thereof contributed importantly to such total or partial separation, or threat thereof, and to such decline in sales or production.

Pursuant to 29 CFR 90.2, “increased imports” means that imports have increased, absolutely or relative to domestic production, compared to a representative base period. The regulation also establishes the representative base period as the one-year period preceding the date twelve months prior to the date of the petition.

Because the date of TA-W-53,753 is December 1, 2003, the relevant period is December 1, 2002 through November 30, 2003 and the representative base period is December 1, 2001 through November 30, 2002. Therefore, increased imports is established if import levels during December 1, 2002 through November 30, 2003 are greater than import levels during December 1, 2001 through November 30, 2002.

During the second remand investigation, the Department confirmed that Citation Corporation, Camden, Tennessee (subject facility) produced ductile iron castings until production ceased on December 9, 2002. SAR 66-68, 72. Due to the domestic shift of production, there were worker separations as well as sales and production declines at the subject facility during the relevant period. SAR 16, 74. Therefore, the Department determines that 29 CFR 90.16(b)(1) and 29 CFR 90.16(b)(2) have been met.

To determine whether 29 CFR 90.16(b)(3) has been met, the Department also requested during the second remand investigation information from the Union, SAR 22, 27-28, Citation Corporation (subject firm), SAR 3-21, 42-75, 81-121, 123-126, 129-130, 133, 136, 138, and the individuals identified by the Union as having relevant information. SAR 26-41, 76-80.

During the second remand investigation, the Department received information that indicates that the subject facility did not increase its imports of ductile iron castings. SAR 12-13, 21, 72, 74, 111. Because the subject firm retained all of its business, SAR 21, 86-87, 111, 123-125, 140-142, and sales had increased at the subject facility prior to the plant closure, SAR 16, 85 the Department did not inquire whether the subject firm's customers were purchasing from foreign sources instead of purchasing from the subject firm.

In response to the Union's assertion that increased foreign competition caused the consolidation of the subject firm's operations and the subsequent closure of the subject facility, SAR 15, the Department sought clarification from the subject firm, SAR 14, 81-138 and the individuals identified by the Union (former and current subject firm officials). SAR 29-41, 76-80. According to the subject firm, any statement about mergers as a result of foreign competition was a general statement about the domestic foundry and automotive industries. SAR 21.

Further, one of the three individuals identified by the Union as having relevant information recalls hearing that the Chinese government had built furnaces, but could not clearly identify the source of the information and was unable to identify the product the furnaces were built to manufacture. SAR 80.

Another individual identified by the Union did not recall meeting any Union representative and stated that the workers were aware of the subject firm's concerns regarding the high cost of maintaining the facility (the facility was old and in need of much repair). SAR 80. The third individual did not recall any comment made to or from the Union about foreign competition at any meeting, including the December 9, 2002 meeting. SAR 74.

During the second remand investigation, the Department determined that production had not shifted abroad from the subject. SAR 16. Rather, the Department concluded that production had shifted from the subject facility to other domestic subject firm facilities producing similar products. SAR 16, 74, 120-121, 124, 141.

If the subject firm as a whole suffered decreased sales or production prior to the subject facility's closure, the Department may determine that the subject firm was adversely impacted by increased imports and that the closure was part of the subject firm's efforts to stay viable. The Department, therefore, also requested during second remand investigation corporate-wide sales and production figures of articles like and directly competitive with ductile iron castings for 2001, 2002, and 2003, SAR 113, 118-121, 123-138, and sales figures for the subject firm's major customer. SAR 126, 130, 133.

The subject firm provided information for fiscal year 2001 (October 1, 2000 through September 30, 2001), fiscal year 2002 (October 1, 2001 through September 30, 2002), and fiscal year 2003 (October 1, 2002 through September 30, 2003). SAR 115-116, 120-121, 124-125.

For purposes of determining whether the closure of the subject facility was part of the subject firm's efforts to stay viable, the Department inquired into the subject firm's sales and production levels during time periods other than the time periods identified in the initial investigation. These alternative time periods are necessary because the subject facility ceased production on December 9, 2002. For purposes of only this portion of the second remand investigation, the “relevant period” is October 1, 2001 through September 2002, and the “base period” is October 1, 2000 through September 2001.

The data shows that the subject firm's fiscal year 2002 sales were stable when compared to fiscal year 2001 sales and that the subject firm's fiscal year 2002 production level was relatively stable when compared to fiscal year 2001 production level. SAR 122. The data also shows that subject firm sales to its largest customer remained stable during the relevant period. SAR 141-142. Given the stable production levels, sales levels and customer base, the Department determines that the subject firm was not adversely impacted by increased imports of ductile iron castings and that increased imports of ductile iron castings did not contribute importantly to the closing of the subject facility. Further, as indicated by a former subject firm official, the subject facility was old and in need of much repair. SAR 80.

Finally, in accordance with Section 246 of the Trade Act of 1974, as amended, the Department herein presents the results of its investigation regarding certification of eligibility to apply for ATAA.

In order to apply the Department to issue a certification of eligibility to apply for ATAA, the subject worker group must be certified eligible to apply for TAA. Since the workers are being denied eligibility to apply for TAA, they cannot be certified eligible to apply for ATAA.

Conclusion

After careful review of the findings of the second remand investigation, I affirm the notice of negative determination of eligibility to apply for worker adjustment assistance for workers and former workers of Citation Corporation, Camden, Tennessee.

Signed at Washington, DC, this 26th day of July 2006.

Elliott S. Kushner,

Certifying Officer, Division of Trade Adjustment Assistance.