[Federal Register: February 7, 2007 (Volume 72, Number 25)]
[Notices]
[Page 5749-5750]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07fe07-141]
-----------------------------------------------------------------------
DEPARTMENT OF LABOR
Employment and Training Administration
[TA-W-55,495]
Tesco Technologies, LLC, Headquarters Office, Auburn Hills, MI;
Notice of Revised Determination on Second Remand
On November 9, 2006, the United States Court of International Trade
(USCIT) remanded Former Employees of Tesco Technologies, LLC v. United
States (Court No. 05-00264) to the Department of Labor (Department) for
further investigation.
In the August 19, 2004, Trade Adjustment Assistance (TAA) and
Alternative Trade Adjustment Assistance (ATAA) petition, three workers
identified Tesco Engineering as the subject company 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.
During the investigation, it was revealed that Tesco Engineering
manufactured equipment, while workers at Tesco Technologies, LLC
(``Tesco Technologies''), a subsidiary of Tesco Engineering, created
mechanical designs used to build equipment for automotive part
production. Since the petitioners created designs and did not produce
equipment, the Department identified Tesco Technologies as the proper
subject company.
Because the Department considered design creation not to be
production, the Department concluded that 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 an overseas facility.
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, no
customer increased its import purchases while decreasing its purchases
from the subject firm.
On September 27, 2004, the Department issued a denial regarding
workers' eligibility to apply for TAA and ATAA for workers of Tesco
Technologies, LLC, Headquarters Office, Auburn Hills, Michigan. The
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 determination. On
December 7, 2004, the Department issued a Notice of Affirmative
Determination Regarding Application for Reconsideration due to factual
discrepancies identified during the review of the request and of
previously-submitted documents. The Department's 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, and inferred
that designers are de facto production workers producing automobile
parts for General Motors. The petitioner also implied 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.
During the reconsideration investigation, the Department confirmed
that the petitioners used application software to develop tooling
designs which were used to build equipment for the production of
automobile parts for General Motors; the designs 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 General Motors did not outsource work overseas but awarded
the work to another domestic company and moved some design work in-
house.
On January 11, 2005, the Department issued a Notice of Negative
Determination Regarding Application for Reconsideration which stated
there was neither a shift of production abroad by Tesco Technologies
nor any outsourcing of design work overseas by General Motors. The
Department's Notice was published in the Federal Register on January
21, 2005 (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 Department's efforts to clarify the
reasons for the previous determinations.
In the request for judicial review, the petitioners alleged that
engineers were brought in from India to train at Tesco Technologies;
later, the engineers were sent back to India to a General Motors
facility; and ``work is sent over to India via satellite in the evening
and sent back for check and inspection in the
[[Page 5750]]
morning'' (implying that designs were being imported).
In order for the Plaintiffs to be certified for TAA based on a
shift of production, it must be shown that there was:
(1) A significant portion or number of workers at the subject
company separated or threatened with separation during the relevant
period; and
(2) either--(a) A shift in production of articles like or directly
competitive with those produced by the subject worker group to a
country that is party to a free trade agreement with the United States,
or a country that is named as a beneficiary under the Andean Trade
Preference Act, the African Growth and Opportunity Act or the Caribbean
Basin Economic Recovery Act, or (b) a shift of production abroad
followed by actual or increased imports of articles like or directly
competitive with those produced by the subject worker group.
Because it was shown that at least five percent of workers at Tesco
Technologies were separated during the relevant period, the worker
separation criterion was met.
Because India is not a country that is party to a free trade
agreement with the United States, or a country that is named as a
beneficiary under the Andean Trade Preference Act, the African Growth
and Opportunity Act or the Caribbean Basin Economic Recovery Act, the
only issue in the first remand investigation was whether, during the
relevant period, there was a shift of production abroad of articles
like or directly competitive with those produced by Tesco Technologies
followed by actual or threatened increased imports of articles like or
directly competitive with those created at Tesco Technologies.
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 first remand investigation, the Department determined
that because each design created by the workers is ``unique,'' there
could not be any articles which are like or directly competitive with
any design produced by Tesco Technologies and, consequently, the shift
of production criterion could not be met.
The Notice of Negative Determination on Remand applicable to the
subject workers was issued on July 25, 2005 and the Notice of
determination was published in the Federal Register on August 5, 2005
(70 FR 45438).
In its November 9, 2006 opinion, the USCIT remanded the case at
hand to the Department for further investigation.
Since the Notice of Negative Determination on Remand applicable to
the subject firm was issued, the Department has clarified its policy to
acknowledge that, under certain circumstances, there may be articles
which are like or directly competitive to a ``unique'' article.
Reviewing the relevant facts with the foregoing in mind, the
Department has determined that, during the relevant period, a
significant portion of workers was separated from the subject facility,
design production shifted abroad, and the subject firm increased its
imports of designs following the shift.
In accordance with Section 246 the Trade Act of 1974 (26 U.S.C.
2813), as amended, the Department herein presents the results of its
investigation regarding certification of eligibility to apply for ATAA
for older workers. In order for the Department to issue a certification
of eligibility to apply for ATAA, the group eligibility requirements of
Section 246 of the Trade Act must be met. The Department has determined
in the case at hand that the requirements of Section 246 have been met.
A significant number of workers at the firm are age 50 or over and
possess skills that are not easily transferable. Competitive conditions
within the industry are adverse.
Conclusion
After careful review of the facts generated through the second
remand investigation, I determine that a shift in production abroad of
articles like or directly competitive to that produced at the subject
facilities followed by increased imports of such articles contributed
to the total or partial separation of a significant number or
proportion of workers at the subject facility. In accordance with the
provisions of the Act, I make the following certification:
All workers of Tesco Technologies, LLC, Headquarters Office, Auburn
Hills, Michigan, who became totally or partially separated from
employment on or after August 19, 2003, through two years from the
issuance of this revised determination, are eligible to apply for
Trade Adjustment Assistance under Section 223 of the Trade Act of
1974, and are eligible to apply for Alternative Trade Adjustment
Assistance under Section 246 of the Trade Act of 1974, as amended.
Signed at Washington, DC this 26th day of January 2007.
Elliott S. Kushner,
Certifying Officer, Division of Trade Adjustment Assistance.
[FR Doc. E7-1955 Filed 2-6-07; 8:45 am]
BILLING CODE 4510-FN-P