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International Business Machines Corporation (IBM), Storage Technology Division, Disk Substrate Manufacturing, Rochester, Minnesota; Notice of Negative Determination Regarding Application for Reconsideration

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By application postmarked July 28, 2000, petitioners request administrative reconsideration of the Department's negative determination regarding eligibility to apply for Trade Adjustment Assistance (TAA) petition number TA-W-37,735 and North American Free Trade Agreement-Transitional Adjustment Assistance (NAFTA-TAA) petition number NAFTA-3842, applicable to workers and former workers of International Business Machines Corporation (IBM), Storage Technology Division, Disk Substrate Manufacturing, Rochester, Minnesota. The denial notices were signed on June 29, 2000, and published in the Federal Register on July 24, 2000, TA-W-37,735 (65 FR 45620) and NAFTA-3842 (65 FR 45621).

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 misinterpretation of facts or of the law justified reconsideration of the decision.

The petitioners report that IBM lost a contract to build disk drives for EMC; the contract was awarded to an overseas company. IBM then decided to use glass disks in their computers. The Rochester glass plant now supplies 10% of the glass disks in IBM computers and disk drives, with the remainder being sourced from abroad. The petitioners add that they were informed the Rochester plant would never be a major supplier of these disks because the foreign competition was much cheaper, and the plant was now for research purposes. The petitioners also state that it is doubtful that the subject firm is out of the aluminum business because IBM recently signed a major contract with Compaq to be able to use each other's storage devices. Compaq uses aluminum disks and imports them.

The Department did not investigate the petitioners allegation of the subject firm's reliance on imports of disks because the Rochester, Minnesota, worker group produced disk substrates, which is a component for IBM's further production of storage disks at other locations. The Department is required to examine the impact of imports of articles like or directly competitive with those produced by the workers' firm.

The workers were denied eligibility to apply for TAA based on the finding that the contributed importantly criterion of the worker group eligibility requirements of Section 222 of the Trade Act of 1974, as amended, was not met. Layoffs of workers producing disk substrates was attributable to the change in technology. Fewer workers are required to produce glass disk substrates than the aluminum magnesium material.

The NAFTA-TAA petition investigation for the same worker group revealed that criteria (3) and (4) of paragraph (a)(1) of Section 250 of the Trade Act of 1974, as amended, were not met. The subject firm did not import from Mexico or Canada, articles like or directly competitive with the disk substrates produced by the workers of the firm. There was no shift in production from the Warrensburg plant to Mexico or Canada. The major contributing factor to the reduction in employment at the Rochester, Minnesota plant was a change in technology. The IBM Rochester plant is using glass for manufacturing disk substrates which requires fewer workers than aluminum magnesium material.


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.

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Signed at Washington, D.C. this 18th day of August 2000.

Grant D. Beale,

Program Manager, Division of Trade Adjustment Assistance.

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[FR Doc. 00-22327 Filed 8-31-00; 8:45 am]