[Federal Register Volume 72, Number 25 (Wednesday, February 7, 2007)]
[Notices]
[Pages 5749-5750]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-1955]


-----------------------------------------------------------------------

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