[Federal Register: August 5, 2005 (Volume 70, Number 150)]
[Notices]
[Page 45438-45439]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05au05-93]
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DEPARTMENT OF LABOR
Employment and Training Administration
[TA-W-55,495]
Tesco Technologies, LLC, Headquarters Office, Auburn Hills,
Michigan; Notice of Negative Determination on Remand
On May 25, 2005, the United States Court of International Trade
(USCIT) granted the Department of Labor's motion for voluntary remand
in Former Employees of Tesco Technologies, LLC v. United States (Court
No. 05-00264).
In the August 19, 2004 petition, three workers identified the
subject company as Tesco Engineering, Headquarters, Auburn Hills,
Michigan and the article produced as ``designs for tooling and
production lines for General Motors automotive assembly plants.'' The
petitioners alleged that Tesco Engineering was shifting production to a
foreign country (India).
During the investigation, it was revealed that Tesco Engineering
manufactured production and assembly line equipment, while workers at
Tesco Technologies, LLC (``Tesco Technologies''), a subsidiary of Tesco
Engineering, created mechanical design drawings which are used to build
machinery for the production of automotive parts. Given that the
petitioners created designs and did not produce equipment, the
Department identified Tesco Technologies as the proper subject company.
Because the Department considered design work not to be production
work, the designers of Tesco Technologies could be certified only if
they supported an affiliated, TAA-certifiable, domestic, production
facility. Although Tesco Technologies' designs accounted for an
insignificant portion of the equipment produced at Tesco Engineering,
the Department nonetheless fully investigated whether during the
relevant period, there were increased imports of production/assembly
equipment or a shift of production from Tesco Engineering to overseas.
The expanded investigation revealed that Tesco Engineering neither
shifted production to a foreign country nor imported any equipment
during the relevant period. Further, a survey of Tesco Engineering's
major declining customers revealed that, during the relevant period,
none of the customers increased their import purchases while decreasing
their purchases from the subject firm.
On September 27, 2004, the Department issued a negative
determination regarding workers' eligibility to apply for TAA and ATAA
for those workers of Tesco Technologies, LLC, Headquarters Office,
Auburn Hills, Michigan. The negative determination was based on the
findings that there was neither an increase in imports of equipment by
Tesco Engineering or its major declining customers, nor a shift of
production overseas by Tesco Engineering. The Department published the
Notice of determination in the Federal Register on October 26, 2004 (69
FR 62460).
By application dated October 22, 2004, the petitioner requested
administrative reconsideration of the Department's negative
determination. Because factual discrepancies were identified during the
careful review of the request for reconsideration and the previously-
submitted documents, the Department issued a Notice of Affirmative
Determination Regarding Application for Reconsideration for workers of
the subject company on December 7, 2004. The notice was published in
the Federal Register on December 20, 2004 (69 FR 76017).
In the request for reconsideration, the petitioner identified the
subject company as ``Tesco Technologies, LLC, Auburn Hills, Michigan''
and asserted that ``we the petitioners are connected to General Motors
tooling only,'' reiterated that designs are a product (``the physical
drawings themselves should apply as a downline manufactured product
required to build the tooling'' and designers are ``directly connected
to the manufacturing process'') and inferred that designers are de
facto production workers producing automobile parts for General Motors.
The petitioner also inferred that the subject company's major customer,
General Motors, had outsourced work to India.
During the reconsideration investigation, the Department contacted
a Tesco Technologies official, the General Motors officials identified
by the petitioner, and the General Motors official who supervised the
design contract at issue.
As a result of the reconsideration investigation, the Department
confirmed that the petitioners use application software, such as
Unigraphics, to develop tooling designs which are used to build
equipment for the production of automobile parts for General Motors.
The design drawings are developed at Tesco Technologies, Auburn Hills,
Michigan and sent to the customer via electronic means (such as the
Internet) and tangible means (such as CD-Rom and paper), with the mode
of delivery to be determined by the customer.
According to one General Motors official identified by the
petitioner, General Motors did not outsource design work to any foreign
source. Another General Motors official contacted by the Department
stated that design work was awarded to another domestic company and
that some design work was moved in-house.
On January 11, 2005, the Department issued a Notice of Negative
Determination Regarding Application for Reconsideration which provided
that there was neither a shift of production abroad by Tesco
Technologies nor any outsourcing of design work overseas by General
Motors. On January 21, 2005, the notice was published in the Federal
Register (70 FR 3228).
By letter dated February 8, 2005, the petitioners appealed to the
USCIT for judicial review. On May 25, 2005, the USCIT granted the
Department's motion for voluntary remand to clarify the Department's
basis for the negative determination on reconsideration and to request
additional information in the
[[Page 45439]]
Department's efforts to clarify the reasons for the previous
determinations.
In the request for judicial review, the petitioners allege that at
least as early as October 2002, engineers were brought in from India to
train at Tesco Technologies. After about six months, the engineers were
sent back to India to a General Motors facility and that ``work is sent
over to India via satellite in the evening and sent back for check and
inspection in the morning'' (inferring that designs were being
imported).
Even if petitioners' allegation of work shifting to India is
correct, in order to meet the statutory criteria for TAA certification
as primarily-affected workers, (1) a significant portion or number of
workers at the subject company must be separated or threatened with
separation, and (2) there must be either (i) an increase in imports of
articles like or directly competitive with those produced by the
subject worker group (section 222(a)(2)(A)) or (ii) a shift in
production of articles like or directly competitive with those produced
by the subject worker group (section 222(a)(2)(B)).
With regards to the immediate case, it has been shown that at least
five percent of workers at Tesco Technologies were separated during the
relevant period. Thus, the first criterion for TAA certification has
been met.
The only issues at hand, therefore, are whether there was a shift
of production abroad of articles like or directly competitive with
those produced by Tesco Technologies during the relevant period and
whether there were increased imports of articles like or directly
competitive with those created at Tesco Technologies during the
relevant period.
Under the Department's interpretation of ``like or directly
competitive,'' (29 CFR 90.2) ``like'' articles are those articles which
are substantially identical in inherent or intrinsic characteristics
and ``directly competitive'' articles are those articles which are
substantially equivalent for commercial purposes (essentially
interchangeable and adapted to the same uses), even though the articles
may not be substantially identical in their inherent or intrinsic
characteristics.
During the remand investigation, the Department confirmed that the
designs created by the subject workers are not mass-produced but rather
adhere to the customer's specifications and accommodate the specialized
processes or program needs dictated by the customer. Accordingly, there
are no articles which are ``like'' or ``directly competitive'' to those
designs created by Tesco Technologies because each design is a unique
engineering solution which is created for the sole purpose of
satisfying a specific customer's particular need. Thus, there are no
articles which, for commercial purposes, are essentially
interchangeable or can be adapted to the same use as a Tesco
Technologies design.
It is obvious that a design for a drill is not interchangeable with
a design for newspaper-folding machine, and a design for a taffy-
pulling machine can not be adapted to the same use a bomb-defusing
robot. In the same manner, a design of a drill with a speed of 7
inches/second, a weight of 55 pounds, and a torque rating of 120
inches/pound could not be substituted for a design of a drill with a
speed of 20 inches/second, a weight of 60 pounds, and a torque rating
of 125 inches/pound. If a customer requested a design for a drill with
the former specifications, the design with latter specifications would
clearly not suffice for the customer's purpose. As the Court recently
found in Former Employees of Murray Engineering, Inc. v. Elaine L.
Chao, United States Secretary of Labor, articles that are ``neither
interchangeable with nor substitutable'' for the petitioner's designs
are not considered directly competitive. 2005 WL 1527642 (CIT 2005)
(citing Machine Printers & Engravers Ass'n v. Marshall, 595 F.2d 860,
862 (D.C. Cir. 1979).
Because each Tesco design is custom made to satisfy a customer's
specific requirements and is an inherently unique product, it cannot be
considered ``like'' or ``directly competitive'' with any other designs;
and therefore, neither section 222(a)(2)(A) nor section 222(a)(2)(B) of
the Trade Act, as amended, can been satisfied.
The Department has determined that the criteria set forth in the
Trade Act of 1974, as amended, for TAA certification has not been met.
Further, since the workers are denied eligibility to apply for TAA, the
workers cannot be certified for ATAA, pursuant to section 246 of the
Trade Act of 1974, as amended.
Conclusion
After reconsideration on remand, I affirm the original notice of
negative determination of eligibility to apply for adjustment
assistance for workers and former workers of Tesco Technologies, LLC,
Headquarters Office, Auburn Hills, Michigan.
Signed in Washington, DC this 25th day of July 2005.
Elliott S. Kushner,
Certifying Officer, Division of Trade Adjustment Assistance.
[FR Doc. E5-4211 Filed 8-4-05; 8:45 am]
BILLING CODE 4510-30-P