Peer Bearing Company, v. United States
Slip Op. 01-125 (CIT October 25, 2001)
FINAL RESULTS OF REDETERMINATION PURSUANT TO COURT REMAND:
ADMINISTRATIVE REVIEW OF THE ANTIDUMPING DUTY ORDER ON
TAPERED ROLLER BEARINGS AND PARTS THEREOF, FINISHED AND UNFINISHED, FROM THE PEOPLE'S REPUBLIC OF CHINA
The Department of Commerce has prepared these final results of redetermination pursuant to the remand order of the U.S. Court of International Trade in Peer Bearing Company v. United States, Slip Op. 01-125 (CIT October 25, 2001). In accordance with the U.S. Court of International Trade's instructions, the Department of Commerce has made changes to its calculations of margins for the respondent companies in the administrative review of the antidumping duty order on tapered roller bearings and parts thereof, finished and unfinished, from the People's Republic of China covering the period June 1, 1993, through May 31, 1994. Please refer to the section of this document entitled "Final Results of Redetermination" for the revised weighted-average percentage dumping margins that resulted from making these changes.
On October 25, 2001, the U.S. Court of International Trade (the Court) issued a decision and order in Peer Bearing Company v. United States, Slip Op. 01-125 (CIT October 25, 2001), remanding to the Department of Commerce (the Department) Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China; Final Results of Antidumping Administrative Review and Revocation in Part of Antidumping Order, 62 FR 6189 (February 11, 1997) (TRBs 7). This review covered the period June 1, 1993, through May 31, 1994. The Timken Company and Peer Bearing Company had appealed the Department's decision in TRBs 7.
The Court remanded TRBs 7 so that the Department could make the following changes:
(1) correct the clerical error resulting from the application of best information available (BIA) to certain models for which factor-of-production (FOP) data were available; (2) redetermine direct labor costs on the basis of SKF India's data on labor (supplemented by facts otherwise available only to the extent necessitated by the insufficiency, if any, of SKF India's data currently on the record); and (3) determine marine insurance in a manner related to the value and the risk of transporting tapered roller bearings.
On January 4, 2002, we released the draft results of redetermination and invited interested parties to comment. On January 14, 2002, Chin Jun Industrial Ltd. and Peer Bearing Company (Chin Jun) submitted comments (Chin Jun Comments). On January 18, the Timken Company (Timken) submitted rebuttal comments. No other parties submitted comments.
In the preliminary results for the review (60 FR 49572, September 26, 1995), we applied BIA to several models imported by Peer Bearing Company from Chin Jun Industrial Ltd. on the assumption that Chin Jun had not provided the FOP data for these models. In fact, the information had been provided. Peer Bearing commented on this issue and, in TRBs 7, we agreed to correct these clerical errors. See TRBs 7, 62 FR at 6211. In the calculations for TRBs 7, however, we neglected to make the corrections. For these final results of redetermination, therefore, we have corrected the error by recalculating the margin using the FOP data Chin Jun had provided.
In TRBs 7, in determining direct labor costs, we used public-source data from "Investing, Licensing & Trading Conditions Abroad, India" ("ILT"), released by the Economist Intelligence Unit, November 1993. For certain other FOPs we used values from the annual report of SKF India. We explained in TRBs 7 that we preferred the ILT data because we were able to obtain data specific to the period of review, which would more closely reflect the costs to producers during the period of review.
The Court instructed us to redetermine direct labor costs on the basis of SKF India's labor data (supplemented by facts otherwise available only to the extent necessitated by the insufficiency, if any, of SKF India's data currently on the record).
The SKF India labor data provides information that allows us to recalculate direct labor costs. In response to our draft remand, however, Chin Jun states that, while the Court has ordered the Department to calculate a surrogate direct labor value based upon SKF Indian data, the SKF India financial report does not provide specific data for direct, indirect, or administrative workers. Therefore, Chin Jun asserts, by using a global amount the Department includes higher- paid workers such as the general manager, senior executives, accountants, and chief engineers. Chin Jun also asserts that the Department has already determined direct labor to be unskilled. Chin Jun maintains that the Department should have endeavored to determine whether there was a basis for calculating a labor rate specifically for direct workers. Chin Jun proposes a methodology for recalculating labor rates for direct labor based on ratios of indirect, direct, and administrative workers at one of the respondent firms in TRBs 7.
Timken states that Chin Jun's assertion that direct labor is unskilled and that the Department's calculation method skews the result is fallacious. Timken states that direct labor can be skilled or unskilled and indirect labor also can be skilled and unskilled. Therefore, according to Timken, Chin Jun proceeds on faulty assumptions and its argument must be rejected as false.
We disagree with Chin Jun's assertion that we have determined that direct labor to be unskilled. We state specifically in the Factors of Production memo for TRBs 7:
The actual direct labor value we used for our calculation is as follows:
Skilled Labor: 29.42*1.04=30.60 Rs.per hour
Unskilled Labor: 14.71*1.04=15.30 Rs.per hour
We have applied these rates to each respondent, weighted according to the reported amounts of skilled and unskilled labor.
See Factors of Production for the Final Results of the 1993-1994 Administrative Review of Tapered Roller Bearings from the People's Republic of China, page 2 (February 10, 1997).
Thus, in TRBs 7, we did not regard direct labor entirely as unskilled. However, we agree with Chin Jun that the global figure from the SKF India data may include indirect overhead, including highly paid managerial employees, and that an adjustment should be made for these workers. Accordingly, using the cost ratios in TRBs 7 for skilled and unskilled labor and the ratios for direct and indirect workers provided by one of the respondents, we have recalculated the direct labor costs. For a detailed description of our calculations of direct labor rates, see the "Memorandum to the File" concerning Redeterminations of Direct Labor Costs and Marine Insurance Expense Pursuant to Remand (January 28, 2002) (Redetermination Memo).
3. Recalculation of Marine Insurance Expense
In TRBs 7, we calculated the marine insurance expense by multiplying a per-kilogram surrogate marine insurance rate by the per-unit net weight of the merchandise. Citing Timken Co. v. United States, F. Supp. 2d 1371, 1380 (CIT 2001), the Court found that this methodology was flawed and instructed us to recalculate marine insurance expense on a value basis instead of a weight basis. We have complied with this instruction and have detailed our value-based calculation in the Analysis Memo. To recalculate the marine insurance expense, we relied upon information that was not part of the original record. We used publicly available data from the petition in the less-than-fair-value investigation of the antidumping duty order on imports of sulfur dyes from various countries (filed on April 10, 1992) and information from the International Monetary Fund's International Financial Statistics, which is attached to the Redetermination Memo.
4. Other Comments
Chin Jun states that the Department has miscalculated overhead in its remand calculation for Chin Jun. Chin Jun states that, in TRBs 7, the Department calculated overhead using the following formula:
(MC + LC)/(1-overhead rate)-(MC + LC) = Overhead(1)
In support of this assertion, it includes a section of the analysis memorandum for Chin Jun issued with TRBs 7.
In the Department's January 4, 2002, draft results of redetermination, according to Chin Jun, the Department calculated overhead differently by using the following formula:
(MC + LC)/(1-overhead rate)-(MC + LC) +(0.3*LC)= Overhead.
Chin Jun requests that the Department use the original formula the Department applied in TRBs 7.
We have examined the original TRBs 7 analysis memorandum and calculations. We found that, while the formula in the analysis memorandum for Chin Jun issued with TRBs 7 did not include the full formula for calculation of overhead, the actual calculations in TRBs 7 did include the full formula for calculation of overhead. Therefore, it was appropriate to use that formula for the draft results of redetermination we issued on January 4, 2002. Because the Court did not remand the calculation of overhead, for these final results of redetermination, we have not changed the formula for calculation of overhead.
Chin Jun also states that the new best-information-available (BIA) rate the Department calculated in preparing the draft results of redetermination is punitive and that the Department should not use this rate for Chin Jun. With respect to the BIA rate, Timken responds, the rate the Department used in TRBs 7 was a cooperative rate and Chin Jun makes no claim that the Department changed its methodology for the draft results of redetermination. Timken adds that the draft results and draft analysis memorandum clearly describe the changes required by the Court and that these changes have nothing to do with the BIA methodology.
In fact, the calculation of BIA is not an issue before the Department in this remand. The methodology we used in the draft remand calculations is the same methodology we used in TRBs 7 in which we used the highest calculated rate for any respondent (i.e., the rate we calculated for Jilin Province Machinery Import and Export Corporation (Jilin)). Therefore, we have not changed the draft results of redetermination with respect to the calculation of the BIA rate. As a result of modifying the methodology for calculation of direct labor costs, as discussed above, the rate for Jilin changed which, in turn, changed the BIA rate.
FINAL RESULTS OF REDETERMINATION
In accordance with the remand order, we have recalculated the antidumping duty margins for the respondent companies. The weighted-average dumping margins for these companies for the period June 1, 1993, through May 31, 1994, with respect to tapered roller bearings and parts thereof from the People's Republic of China, changed as follows:
Original Recalculated margin margin Company (percent) (percent) Premier Bearing and Equipment Ltd., 25.56 60.95 Guizhou Machinery Import and Export Corp. 1.22 9.06 Henan Machinery and Equipment Import and Export Corporation 0.16 0.61 Luoyang Bearing Factory 0.00 0.57 Shanghai General Bearing Company 0.04 0.05 Jilin Province Machinery Import and Export Corporation 25.56 60.95 Chin Jun Industrial Ltd. 4.28 10.00 Wafangdian Bearing Factory 1.28 13.36 Liaoning MEC Group Co., Ltd. 4.01 7.24 China National Machinery Import and Export Corp. (CMC) 0.00 0.06 China Nat'l Automotive Industry Machinery Import and Export Corp. (Guizou Automotive) 0.46 .96 Tianshui Hailin Import and Export Corp. 0.00 16.55 Zhejiang Machinery Import and Export Corp. 4.32 10.08 PRC Rate 25.56 60.95
These final results of redetermination are pursuant to the remand from the CIT in Peer Bearing Company v. United States, Consol. Court No. 97-03-00419, Slip Op. 01-125 (CIT October 25, 2001).
Signed March 12, 2002
1. Where MC = materials cost and LC = labor cost.