[Federal Register Volume 60, Number 238 (Tuesday, December 12, 1995)]
[Notices]
[Pages 63735-63736]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30156]



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DEPARTMENT OF LABOR
[TA-W-29,927, NAFTA--00120]


Walker Manufacturing Company, Hebron, OH; Notice of Negative 
Determination on Reconsideration

    On December 14, 1994 the United States Court of International Trade 
(USCIT) granted the Secretary of Labor's motion for a voluntary remand 
for further investigation in UAW Local 1927 and Employees and Former 
Employees of Walker Manufacturing v. Secretary of Labor (94-10-00584).
    The Department's initial denial for the Hebron workers, issued on 
August 15, 1994 and published in the Federal Register on September 2, 
1994 (59 FR 45711), was based on the fact that the increased import 
criterion and the ``contributed importantly'' test of the Worker Group 
Eligibility Requirements of the Trade Act were not met. U.S. aggregate 
imports of mufflers and exhaust pipes declined absolutely in 1993 
compared to 1992 and in the latest twelve month period from June 1993 
through May 1994 compared with the same period one year earlier.
    The Hebron plant had only one customer and that customer's import 
purchases were not important relative to Hebron's sales during the 
relevant period.
    The workers were also denied eligibility to apply for TAA on 
reconsideration. The reconsideration notice was issued on October 5, 
1994 and published in the Federal Register on October 14, 1994 (59 FR 
52194).
    The reconsideration findings show that as a result of the Hebron 
closure, the company is making Hebron's machinery available to other 
corporate North American plants including some machinery to Mexico. 
However, the capital equipment used to make exhaust systems is not like 
or directly competitive with exhaust systems themselves and as such 
would not form a basis of a worker group certification. Other findings 
on reconsideration show that no production was shifted to Mexico and 
only a very small portion of Hebron's total production, the production 
of resonator bodies, was shifted to Canada; however, the workers who 
produced resonator bodies were not separately identifiable. (AR p. 23 
and p. 28).
    The workers were also denied under a NAFTA petition (NAFTA-00120) 
on June 30, 1994 (59 FR 37997) and on reconsideration on October 7, 
1994 (59 FR 53213). The Department's denial was based on the fact that 
neither the increased import criterion nor the shift in production to 
Mexico or Canada criterion of the Worker Group Eligibility Requirements 
of the NAFTA provisions of the Trade Act was met.
    The record states that the Ohio Bureau of Employment Security 
(OBES) made a preliminary finding that the firm met the increased 
import criterion. (See AR p. 30). This state finding is only a 
preliminary finding to get the investigatory process started. The 
state's investigation was not as extensive as the Department's 
investigation. Further, under the NAFTA-TAA provisions, the state, 
unlike the Department, does not make a finding on the ``contributed 
importantly'' test, which the workers failed to pass.
    On further reconsideration, the Department has difficulty obtaining 
additional information from Walker Manufacturing especially as to a 
further breakout of Hebron's production and sales. On December 20, 
1994, the Department, however, did contact the plaintiffs' counsel, and 
other union witnesses to request any information or documentation that 
would contradict the Department's negative determinations. Counsel for 
the plaintiffs alleged that about 50 resonator workers were laid off in 
February 1994 and that 40 percent of the plant's production was shipped 
to Mexico prior 

[[Page 63736]]
to the phasedown. (See AR pp. 69-70). These allegations were not backed 
up by any supporting documentation, and none of the other union 
witnesses supplied any evidence or documentation.
    The remand findings show that the Walker plant in Queretaro, Mexico 
does not produce any goods or products like or directly competitive 
with the articles formerly produced at Hebron. The Mexican plant is a 
supplier of exhaust systems for General Motors, Chrysler and Volkswagen 
and to the replacement parts market (aftermarket) in Mexico. The 
Herbron plant, on the other hand, produced exhaust systems only for 
Ford. These customized exhaust systems are not interchangeable. (See AR 
p. 74).
    The findings also show that no production was transferred to Mexico 
as a result of the closure of the Hebron plant. (See AR p.49, p.64). 
Neither the Hebron plant nor Walker's Mexico plant supply the same 
customers. (See AR p. 49). Only the production of resonator bodies was 
transferred to Canada; however, this transfer accounted for only a very 
small portion of Hebron's total production and the workers were not 
separately identifiable by product. All other production was 
transferred to company owned domestic plants, primarily Marshall, 
Michigan and Ligonier, Indiana. (See AR p. 62).
    Other findings on reconsideration show that the Hebron plant 
closure was due to capacity concerns within Walker Manufacturing and 
Walker's desire to provide better service for Hebron's sole customer, 
Ford Motor Company. (See AR p. 62).
    On remand, the Department received a further breakout by month of 
Hebron's production and a listing of all Hebron's capital assets 
shipped to other corporate locations. (See AR pp. 118-46). These new 
findings show that Canadian corporate exports (from Cambridge) to the 
U.S. from May 1, 1992 to April 30, 1994, were less than one-tenth of 
one percent of Hebron's sales during the same period. (See AR pp. 147, 
149). Such a small proportion is too insignificant to form a basis for 
a worker group certification, especially since the Hebron workers are 
not separately identifiable by product, and thus it cannot be 
determined how many workers produced the components that are now being 
imported. (See AR p. 23, pp. 28-29).
    Other findings on reconsideration show only very small amounts of 
Hebron's assets were shipped to Mexico. (See AR pp. 118-152). Contrary 
to the contention of the plaintiffs' counsel, (See AR p. 163), the mere 
transfer of machinery from a domestic plant to a Mexican or Canadian 
plant would not, by itself, form a basis for a worker group 
certification under the NAFTA provisions of the Trade Act. Rather the 
NAFTA provisions specifically state that there must be a shift in 
production of articles from a domestic firm to a Mexican or Canadian 
plant for the workers to be eligible to apply for transitional 
adjustment assistance, not the shifts of machinery associated with 
those, or any other type of articles. (Trade Act, Sec 250(a)(1)(B), 19 
U.S.C. Sec. 2331(a)(1(B)). Since no articles formerly produced at the 
Hebron plant are now being produced in Mexico, the transfer of 
production criterion has not been met here.

Conclusion

    After reconsideration, I affirm the original notice of negative 
determination of eligibility to apply for adjustment assistance for 
workers and former workers of the Walker Manufacturing Company in 
Hebron, Ohio.

    Signed at Washington, D.C., this 5th day of May 1995.
Victor J. Trunzo,
Program Manager, Policy and Reemployment Services, Office of Trade 
Adjustment Assistance.
[FR Doc. 95-30156 Filed 12-11-95; 8:45 am]
BILLING CODE 4510-30-M