Timken Company v. United States
Slip Op. 01-96 (CIT August 9, 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 Timken Co. v. United States, Slip Op. 01-96 (CIT August 9, 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, 1995, through May 31, 1996. We have also corrected a clerical error that we made in the calculations of the cost of manufacture for some companies in that review. 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 August 9, 2001, the U.S. Court of International Trade (the Court) issued a decision and order in Timken Co. v. United States, Slip Op. 01-96 (CIT August 9, 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, 62 FR 61276 (November 17, 1997) (TRBs 9). This review covered the period June 1, 1995, through May 31, 1996. The Timken Company had appealed the Department's decision in TRBs 9.
The Court remanded TRBs 9 so that the Department could make the following changes: 1) determine direct labor costs without relying on labor hours and, if necessary, open the record; 2) exclude the "purchases of traded goods" from its calculation of the cost of manufacturing (COM); 3) adjust United States price by recalculating marine insurance pursuant to a value-based methodology; and 4) correct clerical errors in the calculation of the weight of scrap for one of the Chinese producers.
On November 7, 2001, we released the draft results of redetermination and invited interested parties to comment. On November 14, 2001, the petitioner submitted a letter to the Department in which it stated that it concurred with the draft results.
1. Redetermination of Direct Labor Costs
In TRBs 9, we calculated the direct labor cost for each respondent by calculating averages based on rates for average monthly direct labor costs for skilled, semi-skilled, and unskilled workers in various industries that appeared in the Economic Intelligence Unit's Investing, Licensing & Trading Conditions Abroad, India (November 1996) (IL&T). The appropriate averages were applied to the proportions of skilled, unskilled, and assembly direct labor hours, as reported by each of the respondent companies, in order to calculate a direct labor cost for each respondent. In order to calculate overhead labor cost, we had multiplied the reported ratio of overhead-labor-hours-to-direct-labor-hours by the direct labor cost. Similarly, we had calculated the labor component of selling, general and administrative (SG&A) expenses by multiplying the reported ratio of SG&A labor-hours-to-direct-labor-hours by the direct labor rate. Finally, we had used the reported ratios of indirect-labor-hours-to-direct-labor-hours as the basis for the percentages used to attribute labor costs of SKF Bearings India Ltd. (the surrogate company) in the calculation of overhead, SG&A, and profit percentages.
The Court instructed us to determine direct labor costs without relying on labor hours and, if necessary, to open the record. We have reviewed the record and find that it provides a basis upon which to calculate direct and indirect labor costs at different rates, thereby allowing us to determine the allocation of SKF India's direct labor costs without relying on the ratios of labor hours reported by the respondent companies.
The IL&T information, upon which we based our wage rates for direct labor, provides information about wage costs for indirect labor. From this information, we have calculated hourly wage rates for overhead and SG&A labor using the same methodology that we employed in TRBs 9 to calculate the hourly wage rates for skilled, unskilled, and assembly direct labor. We have applied these rates to calculate new amounts for indirect labor expenses incurred. Moreover, we have calculated an average hourly direct labor rate for each respondent, taking into account the differing amounts of skilled, unskilled, and assembly labor used by each respondent.
This direct labor rate, along with the hourly wage rates for overhead and SG&A labor, provides the basis for the apportionment of SKF India's labor costs on a cost basis instead of an hourly basis. When the hourly rates are applied to the percentages of direct, overhead, and SG&A labor hours reported by the respondents, we can derive percentages of the different types of labor on a cost basis. The percentage derived for direct labor cost determines the portion of SKF India's labor costs to be attributed to direct labor costs in the calculation of the overhead, SG&A, and profit percentages.
For a detailed description of our calculations of direct and indirect labor rates and percentages, see our "Memorandum to the File" regarding redeterminations of direct labor costs and marine insurance expense pursuant to remand (October 26, 2001).
2. Exclusion of the "purchases of traded goods" from the COM
In TRBs 9, we designated the line item "purchases of traded goods" in the 1995-96 financial statements of SKF India as a material cost to be included in the calculation of the COM. The COM was then used in the denominator to calculate the overhead, SG&A, and profit ratios. In its remand opinion, the Court found that the "purchases of traded goods" category should not have been included in the COM since the Department had not demonstrated how the value of already-manufactured goods constituted a material cost incurred in the process of manufacturing the subject merchandise. The Court therefore instructed us to exclude the value of this category from the calculation of COM.
For these final results, we have removed the category from our calculation of the COM for each respondent and, in doing so, have revised the calculations of overhead, SG&A, and profit ratios.
3. Recalculation of Marine Insurance Expense
In TRBs 9, 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 Peer Bearing Co. v. United States, 12 F. Supp. 2d 445, 458-59 (CIT 1998), and Timken Co. v. United States, 59 F. Supp. 2d 1371, 1380 (CIT 1999), the Court found that this methodology was improper 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 a "Memorandum to the File" regarding the redeterminations of direct labor costs and marine insurance expense pursuant to remand (October 26, 2001). In recalculating the marine insurance expense, we relied upon information that was not part of the original record. This information, consisting of 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, is attached to our memorandum.
4. Correction of Clerical Errors Pursuant to Court's Instructions
The Court directed the Department to correct clerical errors in the calculation of the weight of scrap for one of the Chinese producers. In accordance with the Court's instructions, we have made these corrections. We determined that the information pertaining to scrap weights reported by respondent Luoyang Bearing Factory for a component was unreliable since the sum of the reported net weight of the component and its reported scrap weight consistently exceeded the total gross weight of the steel. Therefore, for these final results, we have changed our calculations for Luoyang Bearing Factory so that the scrap weights reported for this component are not entered into the calculation of the cost of domestic steel.
5. Correction of Additional Clerical Errors
In performing our recalculations pursuant to the Court's instructions, we discovered that we had incorrectly calculated COM for Guizhou Machinery, China National Machinery Import and Export Corp., Premier Bearing and Equipment, Ltd., Liaoning MEC Group Co., Ltd., and Luoyang Bearing Factory. In TRBs 9, we had applied a percentage, based on total material and labor costs, to a sum that included only materials and direct labor costs in our calculation of COM for these firms. However, since the percentage was based on total material and direct and indirect labor costs, we should have added indirect labor costs to the sum of materials and direct labor costs in order to apply our formula properly. Therefore, for purposes of these final results, we have modified the calculation of COM for these companies so that the indirect labor costs are added to the sum applied to the percentage.
FINAL RESULTS OF REDETERMINATION
As a result of recalculating the antidumping duty margins for the respondent companies in accordance with the remand order, the weighted-average dumping margins for these companies for the period June 1, 1995, through May 31, 1996, 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) Peer Bearing Co. and Chin Jun Industrial Ltd. 3.09 (1) 3.07 China National Machinery Import and Export Corp. (CMC) 0.39 3.05 Guizhou Machinery Import and Export Corp. 21.79 31.05 Liaoning MEC Group Co., Ltd. 0.17 0.61 Luoyang Bearing Factory 2.35 3.84 Premier Bearing and Equipment, Ltd. 5.43 5.60 Shandong Machinery and Equipment Import and Export Corp. 17.76 19.13 Wanxiang Group Corp. 0.03 0.11 Xiangfan Machinery Foreign Trade Corp. 0.39 0.49 Zhejiang Machinery Import and Export Corp. 0.18 0.17
This redetermination is in accordance with the order of the Court in
Timken Co. v. United States,
Richard W. Moreland
1. The rate for Peer/Chin Jun is the rate resulting from Final Results of Redetermination Pursuant to Court Remand, October 19, 1999, Slip Op. 99-6.