[Federal Register Volume 76, Number 193 (Wednesday, October 5, 2011)]
[Notices]
[Pages 61746-61747]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-25712]



[[Page 61746]]

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DEPARTMENT OF LABOR

Employment and Training Administration

[TA-W-72,949]


Western Digital Technologies, Inc.: Hard Drive Development 
Engineering Group Irvine (Formerly at Lake Forest), CA; Notice of 
Negative Determination on Remand

    On May 26, 2011, the United States Court of International Trade 
(USCIT) granted the Department of Labor's request for voluntary remand 
to conduct further investigation in Former Employees of Western Digital 
Technologies, Inc. v. United States Secretary of Labor (Court No. 11-
00085).
    On November 25, 2009, former workers of Western Digital 
Technologies, Inc., Hard Drive Development Engineering Group, Lake 
Forest, California (subject firm) filed a petition for Trade Adjustment 
Assistance (TAA) on behalf of workers at the subject firm. AR 1. 
Workers at the subject firm (subject worker group) are engaged in 
engineering functions for the development of hard disk drives.
    The initial investigation revealed that the subject firm had not 
shifted abroad services like or directly competitive with those 
provided by the subject worker group, had not acquired such services 
from abroad, and there had not been an increase in imports of articles 
like or directly competitive with those produced or services supplied 
by the subject firm. AR 72-77. Additionally, with respect to Section 
222(c) of the Act, the initial investigation revealed that the subject 
firm could not be considered a Supplier or Downstream Producer to a 
firm that employed a TAA-certified worker group. AR 72-77. On August 5, 
2010, the Department of Labor (Department) issued a Negative 
Determination regarding eligibility to apply for TAA applicable to 
workers and former workers of the subject firm. The Department's Notice 
of negative determination was published in the Federal Register on 
August 23, 2010 (75 FR 51849). AR 82.
    By application dated September 14, 2010, the petitioning workers 
requested administrative reconsideration of the Department's negative 
determination. AR 83. In the request, the petitioners alleged that 
increased imports of articles that were produced using the services 
supplied by the subject worker group contributed importantly to worker 
separations at the subject firm. AR 83.
    To investigate the petitioners' claim, the Department issued a 
Notice of Affirmative Determination Regarding Application for 
Reconsideration on October 7, 2010. AR 84. The Department's Notice of 
Affirmative Determination was published in the Federal Register on 
October 25, 2010 (75 FR 65517). AR 286.
    During the reconsideration investigation, the Department obtained 
information from the subject firm regarding the petitioners' claims and 
collected data from the U.S. International Trade Commission regarding 
imports of articles like or directly competitive with those produced 
using the services supplied by the subject worker group. AR 89-125, 
126, 127.
    Based on the findings of the reconsideration investigation, the 
Department concluded that worker separations at the subject firm were 
not caused by a shift in services abroad or increased imports of 
services like or directly competitive with those provided by the 
subject worker group. AR 89-125. Further, the reconsideration 
investigation revealed that the subject firm did not import articles 
like or directly competitive with those produced directly using 
services supplied by the subject worker group (AR 89-125) and U.S. 
aggregate imports of articles like or directly competitive with hard 
disk drives declined in the relevant time period. AR 126, 134-136, 137, 
141-142, 143-145. Consequently, the Department issued a Notice of 
Negative Determination on Reconsideration on February 4, 2011. AR 129-
130. The Department's Notice of determination was published in the 
Federal Register, on February 24, 2011 (75 FR 10403). AR 287.
    In the complaint filed with the USCIT on April 11, 2011, the 
Plaintiffs claimed that their separations were directly caused by the 
subject firm's foreign operations and increased imports of hard disk 
drives and provided information in support of these claims. The 
Plaintiffs stated that the subject firm trained foreign engineers at 
the Lake Forest, California facility, who then returned to their 
respective countries to perform the same services as the Plaintiffs and 
provided a list of job announcements for engineers posted by the 
subject firm in Malaysia at the same time as the domestic layoffs. 
Additionally, the Plaintiffs provided import statistics pertaining to 
hard disk drives, specifically pointing to increased imports of these 
articles from Malaysia.
    In a letter submitted to the Department on June 13, 2011, the 
Plaintiffs provided additional information surrounding the layoffs of 
the workers, including supporting information relating to the 
allegations made in the complaint to the USCIT. 154-182. The Plaintiffs 
provided a list of several engineering positions and functions that 
shifted to Asia from the Lake Forest, California facility and included 
statements on how engineering functions were transferred abroad, 
presenting details regarding the training of foreign workers who 
returned overseas to perform the same functions as the Plaintiffs. AR 
154-182.
    The intent of the Department is for a certification to cover all 
workers of a subject firm, or appropriate subdivision, who were 
adversely affected by increased imports of articles produced or 
services supplied by the firm or shifts in production or services, 
based on facts obtained during the investigation of the TAA petition. 
Therefore, the Department requested voluntary remand to address the 
allegations made by the Plaintiffs, to determine whether the subject 
worker group is eligible to apply for TAA under the Trade Act of 1974, 
as amended (hereafter referred to as the Act), and to issue an 
appropriate determination.
    The group eligibility requirements for workers of a Firm under 
Section 222(a) of the Act, 19 U.S.C. 2272(a), can be satisfied if the 
following criteria are met:

    (1) A significant number or proportion of the workers in such 
workers' firm have become totally or partially separated, or are 
threatened to become totally or partially separated; and
    (2)(A)(i) The sales or production, or both, of such firm have 
decreased absolutely;
    (ii)(I) Imports of articles or services like or directly 
competitive with articles produced or services supplied by such firm 
have increased;
    (II) Imports of articles like or directly competitive with 
articles--
    (aa) Into which one or more component parts produced by such 
firm are directly incorporated, or
    (bb) Which are produced directly using services supplied by such 
firm, have increased; or
    (III) Imports of articles directly incorporating one or more 
component parts produced outside the United States that are like or 
directly competitive with imports of articles incorporating one or 
more component parts produced by such firm have increased; and
    (iii) The increase in imports described in clause (ii) 
contributed importantly to such workers' separation or threat of 
separation and to the decline in the sales or production of such 
firm; or
    (B)(i)(I) There has been a shift by such workers' firm to a 
foreign country in the production of articles or the supply of 
services like or directly competitive with articles which are 
produced or services which are supplied by such firm; or
    (II) Such workers' firm has acquired from a foreign country 
articles or services that are

[[Page 61747]]

like or directly competitive with articles which are produced or 
services which are supplied by such firm; and
    (ii) The shift described in clause (i)(I) or the acquisition of 
articles or services described in clause (i)(II) contributed 
importantly to such workers' separation or threat of separation.

    During the remand investigation, the Department confirmed all 
previously collected information, obtained additional information from 
the subject firm regarding domestic and foreign operations, solicited 
input from the Plaintiffs, and addressed all of the Plaintiffs' 
allegations. At the time of the remand investigation, the subject firm 
was in the process of transferring the corporate headquarters facility 
from Lake Forest, California to Irvine, California. AR 213.
    The information the Department received on remand contained more 
detail regarding the operations of the subject firm domestically and 
abroad. In order to determine whether there was a shift abroad of the 
engineering services provided by the subject worker group, the 
Department had to first determine whether the subject firm employs 
engineers at its facilities in Asia that supply engineering services 
like or directly competitive with those supplied by the subject worker 
group at the Lake Forest, California facility.
    The investigation revealed that the business model of the subject 
firm is to develop new products domestically and carry out the 
manufacturing at its facilities overseas. AR 152, 212-218, 228-231, 
244, 245-246, 271-279. After the design and development of the products 
is provided by the subject worker group, the production takes place at 
the foreign facilities, a process that the subject firm did not change 
during the relevant time period for the investigation of this petition. 
AR 152, 212-218, 228-231, 244, 245-246, 271-279.
    Although the Plaintiffs declare that the subject firm shifted out 
of the country engineering services like or directly competitive with 
those provided by the subject worker group (AR 154-182), based upon the 
data collected during the remand investigation, the Department 
determines that engineers employed at foreign facilities of the subject 
firm and the engineers employed by the subject firm domestically do not 
perform like or directly competitive functions. AR 152, 212-218, 228-
231, 244, 245-246, 271-279. Because of the stage of production at which 
the functions are performed, the work performed by the engineers 
domestically and the engineers abroad is not interchangeable. AR 152, 
212-218, 228-231, 244, 245-246, 271-279.
    The findings confirmed that the workers were not impacted by a 
shift in services or foreign acquisition of services as the work 
supplied by the worker group abroad cannot be interchanged with the 
work provided by the domestic engineers. AR 152, 212-218, 228-231, 244, 
245-246, 271-279. According to the subject firm, the engineering work 
performed abroad not only requires the engineers to be present at the 
manufacturing location, but is also different and less complex than the 
development work performed by the domestic engineers. AR 152, 212-218, 
228-231, 244, 245-246, 271-279. Therefore, the Department determines 
that the work performed overseas did not contribute importantly to 
worker separations domestically because the services are not like or 
directly competitive.
    Regarding the Plaintiffs' allegation that the subject firm brought 
foreign workers to be trained at the Lake Forest, California facility, 
the subject firm asserted that the firm's business model calls for the 
development of products domestically and for manufacturing at foreign 
facilities. AR 152, 212-218, 228-231, 244, 245-246, 271-279. However, 
the firm states that the foreign engineers still must be knowledgeable 
about the new products in order to carry out their work, so foreign 
engineers visit the United States to train on the new products to 
oversee the production at the manufacturing facilities. Consequently, 
the training of foreign workers in the U.S. does not show that the 
roles of the domestic and engineers abroad are interchangeable. AR 152, 
212-218, 228-231, 244, 245-246, 271-279.
    The Plaintiffs submitted a list of job announcements posted by the 
subject firm in Malaysia. AR 154-182. The subject firm maintains that 
at the time of the domestic reduction in force in late 2008 and early 
2009, hiring efforts on a global level were suspended. AR 208-218. The 
Department collected employment numbers of engineers at Lake Forest, 
California, Malaysia, and Thailand. AR 271-285. The numbers revealed 
that employment of engineers decreased from December 2008 to June 2009, 
but started to increase at all three locations in late 2009. AR 241, 
242, 243, 271-285. Nonetheless, the Department does not consider the 
services of the domestic engineers like or directly competitive with 
those provided by the engineers at the production facilities overseas. 
Therefore, the employment levels in these groups are not pertinent to 
the outcome of the investigation.
    Plaintiffs also alleged that increased imports of hard disk drives 
contributed to worker separations. AR 154-182. Aggregate U.S. imports 
of hard disk drives or articles like or directly competitive declined 
in period under investigation. Nonetheless, the Department determined 
that increased imports of articles could not have contributed to worker 
separations because the subject firm develops hard disk drives 
domestically and manufactures them at the facilities in Asia. 
Therefore, an increase in imports of articles could not have 
contributed to a decline in the engineering services supplied by the 
subject worker group.
    For Section 222(a)(A)(ii)(II)(bb) of the Act to be met, imports of 
articles like or directly competitive with articles which are produced 
directly using services supplied by such firm, must have increased. 
Because the subject firm does not produce articles like or directly 
competitive with hard disk drives domestically, this criterion is not 
met.
    Based on a careful review of previously submitted information and 
new information obtained during the remand investigation, the 
Department reaffirms that the petitioning workers have not met the 
eligibility criteria of Section 222(a) of the Trade Act of 1974, as 
amended.

Conclusion

    After careful reconsideration of the administrative record, I 
affirm the original notice of negative determination of eligibility to 
apply for worker adjustment assistance applicable to workers and former 
workers of Western Digital Technologies, Inc., Hard Drive Development 
Engineering Group, Irvine (formerly at Lake Forest), California.

    Signed at Washington, DC, this 23rd day of September 2011.
Del Min Amy Chen,
Certifying Officer, Office of Trade Adjustment Assistance.
[FR Doc. 2011-25712 Filed 10-4-11; 8:45 am]
BILLING CODE 4510-FN-P