Westside Stitching, Inc., West Wyoming, PA; Notice of Negative Determination on Remand

The United States Court of International Trade (USCIT) granted the Department of Labor's request for voluntary remand of the negative determination on reconsideration in Former Employees of Westside Stitching, Inc. v. Secretary of Labor (Court No. 04-00410).

The Department's denial of Trade Adjustment Assistance (TAA) and Alternative Trade Adjustment Assistance (ATAA) for the workers of Westside Stitching, Inc., West Wyoming, Pennsylvania was issued on June 16, 2004 and was published in the Federal Register on July 7, 2004 (69 FR 40983). Workers produce motion furniture. The investigation revealed no shift of production or increased imports of motion furniture during the relevant period by the subject company or its customers.

By application of July 12, 2004, the company requested administrative reconsideration of the negative determination, alleging that the subject firm lost business due to its major customer importing lift mechanisms from China.

The Notice of Negative Determination Regarding Application for Reconsideration was issued on August 3, 2004 and was published in the Federal Register on August 11, 2004 (69 FR 48895). The request was denied because lift mechanisms are a component part of motion furniture and because the company's major declining customer did not import motion furniture.

On October 5, 2004, the USCIT granted a consent motion for voluntary remand and ordered the Department to conduct a further investigation and determine whether the petitioning workers are eligibility for trade adjustment assistance.

In response to Plaintiff's allegations regarding alleged increased imports of lift mechanisms, the Department contacted the company to ascertain whether the subject facility produced lift mechanisms. The investigation revealed that the subject company produces motion furniture and not lift mechanisms.

Pursuant to 29 CFR Section 90.2, “[a]n imported article is directly competitive with a domestic article at an earlier or later stage of processing, and a domestic article is directly competitive with an imported article at an earlier or later stage of processing, if the importation of the article has an economic effect on producers of the domestic article comparable to the effect of importation of articles in the same stage of processing as the domestic article.”

The Department has consistently determined that the economic impact of imported component parts is not competitive with the economic impact of imported final products.

The determination that components of a product are not like or directly competitive with the final product is consistent with Gropper v. Donovan, 6 CIT 103, 104, 569 F.Supp. 883, 884 (1983) where the court held that “a component, such as finished fabric, is not ‘like or directly competitive’ with an end product, such as knit fabric garments, within the meaning of section 222(3) [of the Trade Act].” Because the subject company produced only the final product, increased imports of component parts, absent increased imports of the final product, cannot be the basis for TAA certification.

The Department also conducted another survey of the subject company's major declining customer regarding import purchases of articles produced at the subject facility during the relevant period, 2002, 2003, January through March 2003 and January through March 2004. The survey revealed that the customer did not import motion furniture during the relevant period.

Because no basis for TAA certification of the subject worker group was found, an investigation to determine ATAA certification was not conducted.

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 Westside Stitching, Inc., West Wyoming, Pennsylvania.