Philadelphia Gear Corporation, King of Prussia, PA; Notice of Negative Determination Regarding Application for Reconsideration

By application dated July 27, 2000, attorneys representing the International Association of Machinists and Aerospace Workers, Lodge 1 and Local Lodge 864 (hereinafter referenced as the petitioners), request administrative reconsideration of the Department's negative determination regarding eligibility to apply for Trade Adjustment Assistance (TAA), applicable to workers and former workers of Philadelphia Gear Corporation, King of Prussia, Pennsylvania, TA-W-37,383. The denial notice was signed on June 7, 2000, and was published in the Federal Register on June 29, 2000 (65 FR 40135).

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 workers at the subject firm produced gears and gear boxes for power transmissions, speed reducers and marine drives. The petitioners submitted charts to substantiate their claim that American companies like Philadelphia Gear are suffering a trade deficit. The charts were duplicates of those which Philadelphia Gear submitted to the Department during the petition investigation. The Department conducts petition investigations on a plant by plant basis, not industry-wide. While aggregate import trends are important to a determination, in order to demonstrate import impact on the workers' firm, the Department will normally conduct a survey of the subject firm's major declining customers. In this case, however, there were no major declining customers.

The petitioners report that in 1988, the Philadelphia Gear workers were certified eligible to apply for TAA, and since that time the subject firm has continued to downsize due to market losses caused by increased import competition.

On February 26, 1988, workers of Philadelphia Gear were certified, TA-W-20,304, based on the findings that aggregate U.S. imports of industrial gears increased and the subject firm lost a contract to a foreign producer. Although the worker group was previously certified, Section 222 of the Trade Act of 1974, as amended, requires the Department to establish that increased imports contributed importantly to declines in sales or production and separations at the workers' firm or appropriate subdivision. The negative TAA determination for this petition investigation applicable to workers of the subject firm was based on the finding that this requirement was not met.

Sale declines at the subject firm were small in the relevant period while production costs rose. Philadelphia Gear made the decision to exit certain unprofitable lines. Declines were not caused by the firm's loss of its customer base due to imports. The subject firm did import some products like or directly competitive with those produced by the workers at the King of Prussia plant, but imports declined and were small relative to total sales and production.

To support the petitioners request for reconsideration, the subject firm submitted information on bookings for 1998, 1999 and projections for 2000. Bookings are not a criterion for worker group certification.

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.