[Federal Register Volume 69, Number 126 (Thursday, July 1, 2004)]
[Notices]
[Pages 39966-39968]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-14919]


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DEPARTMENT OF LABOR

Employment and Training Administration

[TA-W-52,766]


American Suessen Corporation, Charlotte, NC; Notice of Negative 
Determination on Reconsideration on Remand

    The United States Court of International Trade (USCIT) granted the 
Secretary of Labor's motion for a voluntary remand for further 
investigation in Former Employees of American Suessen Corporation v. 
U.S. Secretary of Labor, Court No. 03-00803.
    The Department's initial negative determination for the former 
workers of American Suessen Corporation, Charlotte, North Carolina, a 
subsidiary of Spindelfabrik Suessen, Suessen, Germany (hereafter 
``American Suessen'') for Trade Adjustment Assistance (``TAA'') was 
issued on September 25, 2003. The Notice of determination was published 
in the Federal Register on November 6, 2003 (68 FR 62832). The 
determination was based on the findings that workers only serviced 
textile machinery parts and did not produce an article within the 
meaning of section 222(c)(3) of the Trade Act of 1974.
    In a letter dated November 9, 2003, the Petitioner requested 
reconsideration of the Department's denial of certification. The 
Petitioner alleged that American Suessen produced modernization 
products through 2001 when the company returned to a component parts 
business. The Department denied the Petitioner's request for 
reconsideration on December 2, 2003 stating that the Department was 
unable to consider production that occurred in 2001 because it was 
outside the relevant one-year time period, August 28, 2002 to August 
28, 2003. The Department also informed the Petitioner that reworking 
component parts of customer equipment did not qualify as production of 
an article under the Trade Act.

[[Page 39967]]

    On December 18, 2003, the Department issued a Dismissal of 
Application for Reconsideration that was published in the Federal 
Register on December 29, 2003 (68 FR 74972).
    The Petitioner appealed the Department's denial of his request for 
reconsideration to the USCIT on November 4, 2003 asserting that 
``[a]lthough [American Suessen] was originally established as a sales 
and service subsidiary of [its] parent company, [American Suessen] did 
engage in the production of products to more cost effectively serve a 
declining textile industry * * *.'' The Department filed a motion 
requesting that the Court remand the case for further investigation, 
and the Court granted the motion.
    On remand, the Department conducted an investigation to determine 
whether the subject worker group is eligible for certification for 
worker adjustment assistance benefits. The remand investigation 
consisted of requesting additional information from the company 
regarding the functions of the subject worker group, contacting members 
of the subject worker group, and surveying the customers that the 
Petitioner alleged had increased their imports of re-tooled machines 
and parts.
    To better understand the nature of American Suessen's activities, 
the Department requested information from American Suessen in a letter 
dated February 4, 2004. From American Suessen's response to this letter 
and through discussions with company officials, the Department 
discovered that American Suessen distributes machinery and parts 
designed and manufactured by its parent corporation, Spindelfabrik 
Suessen, in Germany. American Suessen operates as a showroom/retail 
store for machinery and parts and as a service shop. When repairing 
machines, American Suessen workers disassemble, reassemble, and test 
machinery parts to determine the cause/scope of the machine malfunction 
or to ascertain if the part has been repaired successfully.
    Because the Petitioner specifically mentioned GVA machines in a 
submission, the Department sought clarification from the subject 
company on that matter. In response to the Department's inquiry, a 
company official informed the Department that the GVA machines were 
manufactured in Germany and put into operation by American Suessen. The 
official also wrote that during the 1980s and 1990s, the company 
modified parts on the GVA machines. This was done as needed. However, 
the official also stated that no production had occurred at American 
Suessen's Charlotte, North Carolina Facility since 1998 and that 
refurbishing operations had ceased in 2001.
    The Department also requested information from the former workers 
of American Suessen. Two workers sent a letter stating that American 
Suessen had the capability to produce products and machine components 
between August 2002 and August 2003. These two workers also wrote that 
American Suessen ``re-work[ed]/refurbish[ed]/modif[ied] rotor spinning 
parts and component parts.'' In a telephone call, one of these former 
workers explained this process. Customers sent broken textile machine 
parts to American Suessen, and then the workers cleaned, repaired, and 
returned the part to the customer. The former worker also explained 
that the customer was charged for labor and replacement parts but was 
not buying a new product; that no production took place on the 
premises; and that the subject facility was a parts warehouse, 
showroom, sales, and repair shop. Finally, the former worker stated 
that because customers wanted newer machines and did not want to repair 
the older machines, the repair work disappeared, thereby causing the 
workers to lose their jobs.
    Another former worker stated that the workers ``remanufacture'' 
machinery and parts and that the ``re-manufactured'' items constitute 
an article. This former worker also communicated that customers sent 
malfunctioning machines and broken parts to the subject facility for 
repair. The machines were fixed, the broken parts were replaced, and 
then the parts were returned to the customer. According to this worker, 
the repaired machines were not resold, and the facility operated 
primarily as a repair service shop.
    Finally, the Department contacted several customers identified by 
the Petitioner. The customers stated that they viewed the machines at 
American Suessen's showroom and placed purchase orders for machinery 
and parts with American Suessen. The purchase order included shipping 
the machines and parts from Germany, assembly of the machinery at the 
customer's facility, and installation of the machines per customer's 
instructions.
    The customers also had service contracts with the subject company. 
If a customer's machine needed to be repaired or a part needed to be 
replaced, an employee from American Suessen would work on-site to 
satisfy the terms of the service contract. At times, workers 
disassembled part of the machinery and take the problem part(s) back to 
American Suessen for extensive repair work. The repair work could 
include replacing a broken component with a new one, per the terms of 
the service agreement. The fixed part would then be returned and 
installed into the customer's machinery by the American Suessen worker.
    The TAA program helps primarily trade-affected workers who have 
lost their jobs as a result of increased imports or shifts in 
production abroad to specific countries. Workers employed by a company 
that is a supplier or downstream producer to a trade-affected company 
may also qualify for TAA assistance as secondarily trade-affected 
workers. The former workers of American Suessen do not quality for TAA 
assistance as primarily or secondarily trade-affected workers.
    First, the subject facility did not produce an article within the 
relevant time period, August 28, 2002 to August 28, 2003. No production 
has occurred at the company since 2001.
    Second, although the former workers assert that American Suessen 
re-works, refurbishes, and modifies component parts, these processes, 
as described by the former workers, company officials, and customers, 
do not qualify as production under the Trade Act because they do not 
result in a new article. The workers are simply repairing an old 
article that is used for the same purpose before and after the repair 
process. Accordingly, these activities fall into the category of 
service rather than production. The Department has consistently 
considered repair work as service and not production because the nature 
and purpose of the serviced goods are the same at the end of the repair 
process as at the beginning of the repair process.
    Finally, the former workers of American Suessen do not qualify as 
secondarily trade-affected workers. To be certified as a secondarily 
trade-affected worker, per the Trade Act, a worker must be employed by 
a company that produces or supplies ``component parts for articles that 
were the basis for a certification of eligibility'' of a group of 
primarily trade-affected workers. 19 U.S.C. Sec.  2272(c)(4). American 
Suessen's customers produce textiles. Because American Suessen supplies 
its customers with machinery and parts, which are not components of 
textiles, the former workers of America Suessen do not qualify as 
secondarily trade-affected workers.
    For the reasons stated above, as well as the intent and historical 
application of the TAA program, the Department has determined that the 
subject worker group is not engaged in activity

[[Page 39968]]

primarily or secondarily related to the production of an article within 
the meaning of section 222 of the Trade Act of 1974.

Conclusion

    After reconsideration on remand, I affirm the original notice of 
negative determination of eligibility to apply for TAA for workers and 
former workers of American Suessen Corporation, Charlotte, North 
Carolina.

    Signed at Washington, DC this 10th day of June 2004.
Elliott S. Kushner,
Certifying Officer, Division of Trade Adjustment Assistance.
[FR Doc. 04-14919 Filed 6-30-04; 8:45 am]
BILLING CODE 4510-30-M