[Federal Register Volume 72, Number 85 (Thursday, May 3, 2007)]
[Notices]
[Pages 24613-24615]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-8466]
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DEPARTMENT OF LABOR
Employment and Training Administration
[TA-W-58,624]
Fairchild Semiconductor International; Mountain Top, PA; Notice
of Negative Determination on Remand
On March 13, 2007, the United States Court of International Trade
(USCIT) remanded to the Department of Labor for further investigation
Former Employees of Fairchild Semiconductor Corp. v. United States
Secretary of Labor (Court No. 06-00215).
In the January 11, 2006 petition for Trade Adjustment Assistance
(TAA) and Alternative Trade Adjustment Assistance (ATAA), the company
official alleged that with regards to ``discrete semiconductor
devices'' produced at Fairchild Semiconductor International,
Mountaintop, Pennsylvania (subject firm), production ``deteriorated
because of a transfer of production'' abroad and that its customers are
``purchasing similar devices from other suppliers with locations in
foreign countries such as Korea and China.'' AR 3-4.
The initial investigation revealed that semiconductor wafers were
produced at the subject firm during the relevant period, AR 27-28, 30,
42, the subject firm shifted semiconductor wafer production to China,
AR 27-28, and the subject firm did not import semiconductor wafers
after the shift. AR 7, 27, 59.
The Department did not conduct a customer survey because the
subject firm exported 100% of its semiconductor wafers. AR 46. Thus,
since the subject firm had no domestic customer base, there could be no
increased customer imports of semiconductor wafers that are like or
directly competitive with those produced by the subject firm.
On February 28, 2006, the Department issued a negative
determination regarding workers' eligibility to apply for TAA and ATAA
for those workers of the subject firm. AR 41. The Department's Notice
of determination was published in the Federal Register on March 24,
2006 (71 FR 14954). AR 55.
By application dated March 20, 2006, the petitioner requested
administrative reconsideration of the Department's negative
determination. The request for reconsideration stated that the subject
firm produces ``semiconductor wafer chips'' and that semiconductor
wafer chips are like or directly competitive with discrete
semiconductor devices. AR 57.
By letter dated April 26, 2006, the Department dismissed the
petitioner's request for reconsideration, stating that discrete
semiconductor devices are not like or directly competitive with
semiconductor wafer chips and that the subject firm was not directly
impacted by increased imports of semiconductor wafers. AR 60. The
Department's Dismissal of the Application for Reconsideration for the
subject firm was issued on May 1, 2006. AR 63. The Department's Notice
of dismissal was published in the Federal Register on May 10, 2006 (71
FR 27292). AR 64.
In a letter filed with the USCIT on June 21, 2006, the Plaintiff
sought judicial review. In the complaint, the Plaintiff made several
allegations, including that: semiconductor wafer production shifted to
Asia, imports of ``like products'' have increased, the shift of
semiconductor wafer production abroad was due to the need to be cost-
competitive, and the workers should be certified for TAA like their
predecessors (workers covered by TA-W-53,335 certification issued
December 2, 2003).
On March 13, 2007, the USCIT directed the Department to explain why
the Plaintiffs should be treated differently from their ``similarly-
situated predecessors'' (semiconductor devices producers who were
certified under TA-W-53,335). The USCIT also directed the Department to
determine whether the subject workers are eligible to apply for TAA and
to support the determination.
Worker Group Covered by TA-W-58,624 Are Different From Workers Covered
by TA-W-53,335
If the subject workers ``comprised 100 percent of the remaining
subdivision of workers covered by defendant's previous
certification[s]'' as alleged in the complaint, issuing a negative
determination to them may seem unjustified. However, characterizing the
subject workers as members of the worker group certified under TA-W-
53,335 is not accurate because the subject workers at issue here
produced a different article from the article produced by the previous
TAA-certified workers.
Based on the investigation here, the subject workers were
semiconductor wafer producers during the relevant period of the
investigation under TA-W-58,624. The accurate characterization of the
subject workers is based on the article that the subject firm produced
during the relevant period of January 2005 through December 2005--
semiconductor wafers, not semiconductor devices.
As stated in the previous TA-W-53,335 determination, the worker
group covered by the certification consisted of workers engaged in the
production of semiconductor devices because the workers were not
separately identifiable by product line. While semiconductor wafers
were also produced at the subject firm during the investigation period
for TA-W-53,335, the workers producing the component part
(semiconductor wafers) were not separately identifiable from those
workers producing the finished article (semiconductor devices). As
such, workers who may have been producing semiconductor wafers used in
the firm's production of semiconductor devices were treated along with
the firm's other workers as ``workers producing semiconductor
devices.''
When the subject firm ceased producing semiconductor devices during
2003, it became engaged in the production of another article--
[[Page 24614]]
semiconductor wafers, a component part of those semiconductor +devices.
Once the distinction is made between the worker groups investigated in
TA-W-53,335 and TA-W-58,624 (workers producing semiconductor devices
versus workers producing semiconductor wafers), it is apparent that the
determinations are not inconsistent and do not result in disparate
treatment of the two worker groups.
Whether Workers Are Eligible To Apply for TAA Under TA-W-58,624
There are two ways for a worker group to be certified eligible to
apply for TAA as workers of a primary firm under section 222(a) of the
Act:
I. A significant number or proportion of the workers in such
workers' firm (or appropriate subdivision of the firm) have become, or
are threatened to become, totally or partially separated; sales or
production, or both, of such firm or subdivision have decreased
absolutely; and increases (absolute or relative) of imports of articles
produced by such workers' firm or an appropriate subdivision thereof
contributed importantly to such total or partial separation, or threat
thereof, and to such decline in sales or production; or
II. A significant number or proportion of the workers in such
workers' firm (or appropriate subdivision of the firm) have become, or
are threatened to become, totally or partially separated, and there has
been a shift in production by such workers' firm or subdivision to a
foreign country of articles like or directly competitive with articles
which are produced by such firm or subdivision; and the country to
which the workers' firm has shifted production of the articles is a
party to a free trade agreement with the United States, is a
beneficiary country under the Andean Trade Preference Act, African
Growth and Opportunity Act, or the Caribbean Basin Economic Recovery
Act or there has been or is likely to be an increase in imports of
articles that are like or directly competitive with articles which are
or were produced by such firm or subdivision.
Under the definition codified at 29 CFR 90.2, ``increased imports''
means that imports have increased, absolutely or relative to domestic
production, compared to a representative base period. The regulation
also establishes the representative base period as the one-year period
preceding the relevant period. The relevant period is the twelve month
period preceding the petition date.
As stated earlier, the relevant period for TA-W-58,624 is January
2005 through December 2005 when the subject firm produced semiconductor
wafers, and the subject workers were engaged in the production of
semiconductor wafers.
On remand, the Department determined that a significant number or
proportion of the workers in such workers' firm was totally separated
and that both sales and production of semiconductor wafers at the
subject firm have decreased absolutely. Therefore, the remaining two
issues regarding the certification of the subject workers under Section
222(a) are whether there were either (1) increased imports during the
relevant period (January 2005 through December 2005) of articles like
or directly competitive with semiconductor wafers produced by the
subject workers or (2) actual or likely imports of articles like or
directly competitive with semiconductor wafers produced by the subject
workers following the subject firm's shift of semiconductor wafers
production abroad.
The Department affirms its previous determination that increased
imports of finished semiconductor devices cannot be the basis for
certification of a petition applicable to workers engaged in the
production of semiconductor wafers because those two articles are
neither like nor directly competitive with each other.
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.
While semiconductor wafers are a component part of semiconductor
devices, they are not substantially identical in inherent or intrinsic
characteristics. Further, because semiconductor wafers are a component
part of semiconductor devices, they are not substantially equivalent to
each other for commercial purposes. In addition, the semiconductor
wafer has to be further processed before it can be used as a component
part of the semiconductor device.
During the remand investigation, the Department also considered
whether the subject worker group qualifies as adversely affected
secondary workers as suppliers of component parts to a manufacturing
firm primarily affected by increased imports or a shift of production
abroad. In order to make an affirmative determination and issue a
certification of eligibility for secondary workers to apply for
adjustment assistance, the following group eligibility requirements
under Section 222(b) must be met:
(1) A significant number or proportion of the workers in the
workers' firm or an appropriate subdivision of the firm have become
totally or partially separated, or are threatened to become totally or
partially separated;
(2) The workers' firm (or subdivision) is a supplier or downstream
producer to a firm (or subdivision) that employed a group of workers
who received a certification of eligibility to apply for trade
adjustment assistance benefits and such supply or production is related
to the article that was the basis for such certification; and
(3) Either--
(A) The workers' firm is a supplier and the component parts it
supplied for the firm (or subdivision) described in paragraph (2)
accounted for at least 20 percent of the production or sales of the
workers' firm; or
(B) A loss of business by the workers' firm with the firm (or
subdivision) described in paragraph (2) contributed importantly to the
workers' separation or threat of separation.
As previously stated, the subject firm did not have any domestic
customers that purchased semiconductor wafers produced by the subject
workers during the relevant period because all semiconductor wafer
production was exported. AR 46. Therefore, the subject company did not
have any customers that employed a group of workers who received a
certification of eligibility to apply for trade adjustment assistance
benefits. As such, the Department determines that the subject worker
group did not consist of adversely affected secondary workers.
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 the subject workers'
eligibility to apply for ATAA. Since the subject workers are denied
eligibility to apply for TAA, the workers cannot be certified for ATAA.
Conclusion
After reconsideration on remand, I affirm the original notice of
negative determination of eligibility to apply for worker adjustment
assistance for workers and former workers of Fairchild Semiconductor
International, Mountaintop, Pennsylvania.
[[Page 24615]]
Signed at Washington, DC, this 27th day of April 2007.
Elliott S. Kushner,
Certifying Officer, Division of Trade Adjustment Assistance.
[FR Doc. E7-8466 Filed 5-2-07; 8:45 am]
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