International Union, United Auto., Aerospace and Agricultural Implement Workers of America, UAW v. Marshall

• Decision Date: 30 October 1978
• Docket Number: No. 76-1554,76-1554
• Citation: 584 F.2d 390,189 U.S.App.D.C. 232
• Parties: INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, UAW, Petitioner, v. F. Ray MARSHALL, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 390

584 F.2d 390

189 U.S.App.D.C. 232

INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, UAW, Petitioner, v. F. Ray MARSHALL, Respondent.

No. 76-1554.

United States Court of Appeals District of Columbia Circuit.

Argued Nov. 1, 1977.

Decided June 8, 1978.

As Amended Oct. 30, 1978.

John A. Fillion, Detroit, Mich., with whom Stephen I. Schlossberg, Washington, D. C., was on brief, for petitioner.

Anna K. Holmberg, Atty., Dept. of Labor, Washington, D. C., with whom Alfred G. Albert, Acting Sol., Donald S. Shire, Associate Sol. of Dept. of Labor, Washington, D. C., were on brief, for respondent.

Before LEVENTHAL, MacKINNON and WILKEY, Circuit Judges.

Opinion for the Court filed by LEVENTHAL, Circuit Judge.

LEVENTHAL, Circuit Judge:

At issue in this case are determinations by the Secretary of Labor that certain members of the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (hereinafter UAW) are not entitled to worker adjustment assistance under the Trade Act of 1974, 19 U.S.C. §§ 2101-2487 (1976). Because we do not find sufficient detail in the record to ascertain the Secretary's rational basis for denying worker assistance, we remand to the Secretary for further consideration in light of this opinion.

I. BACKGROUND

The Trade Act of 1974 was intended "to foster the economic growth of and full employment in the United States and to strengthen economic relations between the United States and foreign countries through open and nondiscriminatory world trade," while, at the same time, providing "adequate procedures to safeguard American industry and labor against unfair or injurious import competition, and to assist industries, firm(s), workers, and communities to adjust to changes in international trade flows." ¹ Worker protection is provided principally through a scheme of worker adjustment assistance, by which a worker who is totally or partially separated because of import competition is generally guaranteed 70% Of his average weekly wage during the period that he is out of work. ²

On December 18, 1975, the UAW filed two petitions for worker adjustment assistance with the Department of Labor. One petition involved employees of the General Motors Corporation (GM), the Ford Motor Company and the Chrysler Corporation engaged in the production of standard (full-size) automobiles. The other petition covered GM and Ford workers involved in the production of subcompacts.

The Department of Labor assigned separate case numbers to each location covered by the petitions and held a hearing on all cases in Washington on January 26, 1976. The UAW participated in that hearing. On April 23, 1976, the Department of Labor issued its decision regarding GM's employees. The decision classified employees by plant groups, certifying some plant groups and denying relief to others.

On May 10, 1976, the decision regarding Ford workers issued. It also followed a pattern of selective relief on a plant by plant basis.

The UAW sought reconsideration of the denial of relief to four locations: GM's plants in South Gate, California, St. Louis, Missouri, and Wilmington, Delaware; and Ford's plant in Louisville, Kentucky. The UAW's petition for reconsideration was denied, and it then sought review in this court under § 250 of the Trade Act. ³

Section 222 of the Trade Act of 1974 specifies those determinations that the Secretary must make before certifying a group as eligible for adjustment assistance: (1) that a significant number or proportion of workers in a firm or an appropriate subdivision of a firm have become totally or partially separated; (2) that sales or production of that subdivision have decreased absolutely; and (3) that "increases of imports of articles like or directly competitive with articles produced by such workers' firm or an appropriate subdivision thereof contributed importantly" to the separations and the decline in sales or production. ⁴

One determination pertinent to all plants in this case was whether there had been "increases of imports" of standards and subcompacts during the relevant period. ⁵ The Secretary found that the years 1974 and 1975 were not good ones for the car industry generally and the domestic car industry in particular. Retail sales of new cars in the United States declined 18.3% From Model Year (MY) 1973 to MY 1974 and declined 14.4% From MY 1974 to MY 1975. ⁶ Sales of domestically produced cars fell more rapidly: by 19.6% From MY 1973 to MY 1974 and by 20.4% From MY 1974 to MY 1975.

The tailspin in the domestic auto market followed the Arab oil boycott and the subsequent oil price increases and conservation measures that attended the "energy crisis." Understandably, full-size cars were hit harder than subcompacts in the declining market. Sales of full-size cars fell 39.6% From MY 1973 to MY 1974 and by 32.4% From MY 1974 to MY 1975. There was less impact on sales of imported full-size cars. From MY 1973 to MY 1974 the decline was in the range of 20%, ⁷ and in MY 1975 import sales of full-size cars rose dramatically, principally as a result of GM's shift of a significant part of its full-size car production to Canadian plants.

The decline in retail sales of subcompact cars was less than that of the automobile market as a whole. In MY 1974 sales of imported subcompacts dropped absolutely by 16.6% And relatively to 65.7% Of the market. There was a slight absolute decline in import sales from MY 1974 to MY 1975, but the import share of the domestic market rose to 71.7%.

The Secretary also made findings regarding other classes of automobiles the compact, luxury small, intermediate and luxury classes. ⁸ He concluded that domestic production of subcompact and full-size cars had been little affected by imports of autos outside their respective classes. ⁹

The Secretary went on to consider whether there had been separations at the various plants, whether sales and production at those plants had decreased absolutely, and whether the data indicated that increases of imports of "like or directly competitive" cars "contributed importantly" to the separations.

The UAW objects to an essential premise that underlies the Secretary's entire analysis in these cases: that "an appropriate subdivision" indeed, the largest possible "appropriate subdivision" for purposes of 19 U.S.C. § 2272 (1976) is the individual plant. The UAW argues that such an interpretation is not mandated by the Act and has not been justified by the Department of Labor. It maintains that other subdivisions such as all the manufacturer's plants involved in the production of an affected car model are equally appropriate if not preferable subdivisions.

The findings of the Office of Trade Adjustment Assistance regarding the specific plants involved in this appeal were as follows: ¹⁰

A. South Gate, California, Assembly Plant

GM's South Gate plant produced only standard cars in MY 1974. For the first part of MY 1975 it produced the subcompacts Vega and Astre. During January and February of 1975 the plant was shut down to convert to "luxury small" car production; from March to December 1975 the plant produced the luxury small Monza, Skyhawk, Starfire and Sunbird.

As regards total or partial separations, the Secretary found that total hourly employment increased from MY 1974 to MY 1975 by 29% And declined 29.3% For the first three months of MY 1976. The increased employment in MY 1975 was concentrated in the last six months.

The Secretary then looked for declines in sales and production. He concluded that "(b)ecause of the brief periods during which the South Gate plant produced subcompact and luxury small cars, it is impossible to find that production of such cars decreased." ¹¹ That is, because there was no history of subcompact or luxury small car production, the Secretary concluded that it was impossible for the group of workers at South Gate to meet the "decline in sales or production" criterion.

The UAW's appeal to this court challenged the treatment of subcompacts and luxury small cars as distinct submarkets and not "like or directly competitive" as that phrase is used in 19 U.S.C. § 2272 (1976). Prior to oral argument in this case, the Secretary of Labor agreed to reconsider the eligibility of the workers at the South Gate plant. For purposes of this reconsideration the Secretary treated the Monza as a subcompact. The end result was a determination that workers at South Gate who had been totally or partially separated between November 18, 1974, and October 1, 1975, are eligible for adjustment assistance. ¹² We therefore find no issue in controversy regarding the South Gate plant and dismiss that part of the appeal as moot.

B. Wilmington, Delaware, Assembly Plant

GM's assembly plant in Wilmington, Delaware, produced full-sized Buicks and Chevrolets until June 1975, when it converted to production of subcompacts. Average hourly employment engaged in the production of full-size cars declined 15.3% From MY 1974 to MY 1975, and production of all full-size cars declined 11% For the same period. But during this period production of full-size Chevrolets increased 44%.

The Secretary found that increased imports only affected Chevrolet production in the United States. This impact was the direct product of GM's decision to shift some Chevrolet production from the United States to Canada. Certain domestic plants were closed and production consolidated in the remaining plants. As a result of this consolidation, Chevrolet production increased at the Wilmington facility from MY 1974 to MY 1975.

The Secretary therefore concluded that increased imports had not "contributed importantly" to the separations at the Wilmington plant. Those separations were attributed to decreased production of Buicks, for which there were no "like or directly competitive" imports. As such, no worker adjustment assistance was authorized. The UAW claims that the...