03-29267. Metso Paper USA, Inc., Logistics Division, Beloit, WI; Notice of Negative Determination Regarding Application for Reconsideration

By application of June 24, 2003, a petitioner requested administrative reconsideration of the Department's negative determination regarding eligibility for workers and former workers of the subject firm to apply for Trade Adjustment Assistance (TAA). The denial notice was signed on March 30, 2003 and published in the Federal Register on June 19, 2003 (68 FR 36845).

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 TAA petition, filed on behalf of workers at Metso Paper USA, Inc., Beloit, Wisconsin was denied because the “contributed importantly” group eligibility requirement of Section 222 of the Trade Act of 1974 was not met and production was not shifted abroad.

In the reconsideration investigation, it was revealed that the production worker group is embedded within the Logistics Division of the subject facility.

The petitioner alleges that “production has shifted to Finland for many of the spare parts supplied from Metso to U.S. papermills.” Contact from another petitioner alleged that the company was serving former and present subject firm customers with foreign production, and implies that the company is attempting to hide the fact that they are engaged in foreign production from their customers.

A history of the subject facility site revealed that the subject facility was once owned by Beloit Paper, and was sold to the current owners following bankruptcy in 2000. The purchasing company included a facility in Finland. Prior to the relevant period of this investigation, the new owners dramatically downsized the production capacity of the subject facility due to dramatically decreased demand following the bankruptcy. Contact with company officials revealed that the subject facility only produced doctor blades and headbox vanes (parts used in paper making equipment) in the relevant period, and that the majority of work performed in the Logistics Division of the Metso Beloit facility involves buying, warehousing and shipping many other spare parts purchased by, but not produced at the subject facility. The officials stated that the company had not shifted production of doctor blades or headbox vanes away from the subject facility. One official did confirm that the company did outsource many of the parts that were warehoused at the same site. However, items that are not like or directly competitive with production at the subject facility in the relevant period are not pertinent to this investigation.

The petitioner states that production of doctor blades shifted to Finland, and implies that this shifted production is being used to supply U.S. customers. Further contact with the petitioners yielded a request that we obtain a copy of a “BaaN” report from the company that would reveal the volume of doctor blades that had been sourced in Finland, and subsequently imported to the U.S.

Contact with a company official revealed that the subject facility supplied almost all of their North American business. He further stated that the Finnish facility did on rare occasions supply customers with doctor blades in cases where an unanticipated increased demand occurred. The official later clarified that they also imported Finnish doctor blades in cases where “odd ball” sizes were requested, but the doctor blades with these specifications had never been produced at the subject facility. Results of the company “BaaN” report revealed that imports represented a very small amount of total subject firm production.

The petitioner asserted that “castings” previously produced in “Beloit, Wisconsin or the “Stateline Area” surrounding Beloit” were shifted to Canada.

Castings were not produced at the subject facility in the relevant period and are therefore irrelevant to this investigation.

The petitioner alleges that coater rods and assemblies previously “machined” at the subject facility are currently being produced in finished form in Finland for U.S. customers.

In regard to this issue, a company official stated that coater rods produced in Finland are “cut to length” at the subject facility, but there has been no change in the production location in the relevant period.

The petitioner alleges that the company's customers have begun purchasing headbox vanes from competitors in Canada.

The reconsideration investigation revealed that plant production of headvane boxes declined slightly in the relevant period, while sales increased. It was revealed that the subject firm produces two different types of headvane boxes, one made of lexan (which needs to be replaced every six months or so), and the other made of graphite, which lasts for two to three years before requiring a replacement. The more durable and more expensive graphite product would account for the dip in production, as customers would not have to re-order the item as frequently. The official stated further that the only known competition in this market is domestic.

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 17th day of October, 2003.

Elliott S. Kushner,

Certifying Officer, Division of Trade Adjustment Assistance.