DEPARTMENT OF LABOR

Employment and Training Administration

TA-W-50,170

ERASTEEL, INC.
MCKEESPORT, PENNSYLVANIA

Notice of Negative Determination
Regarding Application for Reconsideration

By application of February 6, 2003, petitioners requested
administrative reconsideration of the Department's negative
determination regarding eligibility to apply for Trade Adjustment
Assistance (TAA), applicable to workers and former workers of the
subject firm. The denial notice was signed on January 24, 2003,
and published in the Federal Register on February 24, 2003 (67 FR
8622).
Pursuant to 29 CFR 90.18(c) reconsideration may be granted
under the following circumstances:
(1) If it appears on the basis of facts not previously
considered that the determination complained of
was erroneous;
(2) if it appears that the determination complained of
was based on a mistake in the determination of facts
not previously considered; or
(3) if in the opinion of the Certifying Officer, a mis-
interpretation of facts or of the law justified
reconsideration of the decision.


The petition for the workers of Erasteel, Inc., McKeesport,
Pennsylvania was denied because the “contributed importantly”
group eligibility requirement of Section 222(3) of the Trade Act
of 1974, as amended, was not met. The “contributed importantly”
test is generally demonstrated through a survey of customers of
the workers’ firm. The survey revealed that none of the
respondents increased their purchases of imported cold drawn
steel.
The petitioners state that their major customer imports high
speed drill bits and blanks, and that these items are “like or
directly competitive with articles produced by” subject firm
workers. In a clarifying conversation with one of the
petitioners, he stated that the steel produced at the subject
firm was processed in such a way that its only possible end use
was to form it into the drill bits and blanks produced by the
customer.
The term “like or directly competitive” is drawn from a
paragraph in Section 222 of the Trade Act. In this paragraph, a
“like” competitive product is described as an article which is
“substantially identical in inherent or intrinsic
characteristics.” A “competitive product” is described as an
article which “is substantially equivalent for commercial
purposes.” As the subject firm produces drawn steel and not
drills bits or blanks, the subject firm products are not “like”
or “identical” to potential customer imports of drill bits and
blanks. Further, the drawn steel cannot be used for the same
commercial purposes as the finished drill bits and blanks. Thus
subject firm products are not “like or directly” competitive with
alleged customer imports as stated in Section 222(3) of the Trade
Act.
The petitioners also allege that the subject firm imported
competitive products in the relevant period. In an attempt to
clarify this allegation, a petitioner was contacted. In response
to a request for clarification, the petitioner stated that the
subject firm briefly imported semi-finished steel coils for
further processing at the subject firm; specifically, coils were
imported that were sized to thinner dimensions at the subject
firm. However, the subject firm stopped importing this semi-
finished product prior to petitioner layoffs, according to the
petitioner.
As described by the petitioner, the steel imported is not
“like or directly” competitive with the steel produced by the
subject firm. Further, a company official was contacted in regard
to this allegation. The official clearly stated that the company
did not import competitive drawn and ground bars. In response to
the issue of imported coils, the official stated that the company
only imported for a very brief period and that these imports did
not prompt layoffs.
Finally, the petitioners acknowledge that a domestic shift
in production caused the closure of the McKeesport facility.
However, they also assert that the need for Erasteel to
consolidate their production was a direct result of business lost
from their major customer, and that this customer was importing
competitive products.
As has already been established, the major declining
customer did not import “like or directly” competitive products.
Conclusion
After review of the application and investigative findings,
I conclude that there has been no error or misinterpretation of
the law or of the facts which would justify reconsideration of
the Department of Labor's prior decision. Accordingly, the
application is denied.

Signed at Washington, D.C. this 18th day of March 2003.

/s/ Edward A. Tomchick


EDWARD A. TOMCHICK
Director, Division of
Trade Adjustment Assistance