Industry / Business
New trade assistance program takes effect For workers, companies, communities hurt by rising imports, benefits will be larger and easier to get than with old program In Parkersburg, W.Va., about 1700 former workers at FMC Corp.'s defunct rayon complex are pinning their hopes for a new form of government assistance on the difference between the terms "major factor" and "importantly." By the end of the month, and certainly no later than June 3, the workers expect to know whether or not they will receive special unemployment benefits, retraining, and relocation aid because imports pulled their jobs out from under them. If they qualify, the benefits will become available to them under the new trade adjustment assistance provisions of the Trade Act of 1974. The new program replaces the late and unlamented trade adjustment assistance provisions of the Trade Expansion Act of 1962. The terms "major factor" and "importantly" make up only one of the important differences between the old and new programs. The new trade adjustment assistance program became effective April 3, and
U.S. rayon production has been declining for years... Millions of lba 12001
when the Department of Labor opened its doors that morning, it found two petitions for adjustment assistance waiting in the mail. One was from the Textile Workers Union of America on behalf of the former FMC workers in Parkersburg. Another was from Inmont Corp. Inmont furloughed about 180 workers when it closed its vinyl-coated fabrics plant in Winthrop, Me., earlier this year. Because the Labor Department must render a decision within 60 days after it receives a petition, both groups of workers apparently will know soon whether they qualify. Realistically, neither group should get its hopes up too high. In reviewing the cases, the Department of Labor must determine whether the workers lost their jobs as a result of imports "of articles like or directly competitive with articles produced by the firm." In Inmont's case, this probably isn't so. Inmont's vinyl-coated fabric goes into the shoe market, where it is used for shoe uppers. Most likely, it is the old and serious problem of shoe imports, rather than imports of the vinylcoated fabric itself, that caused Inmont to withdraw from the market and to close its Winthrop plant. The former FMC workers in Parkersburg probably have a better case, but it is a tenuous one nonetheless. In its petition, the Textile Workers Union points out that imports of cellulosic filament yarn have grown from 3.6 mil-
... as have imports of rayon into the U.S. Millions of lba 1501
1100
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1968 69 70 71 a Includes yarn, staple, and tow. Source·: Textile Economics Bureau, Stanford Research Institute
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lion lb in 1970 to 18.1 million lb in 1973. But this is cellulosic filament, which includes acetate as well as rayon. The union also claims that increased imports of synthetic fabric and garments have hurt domestic rayon production. Imports of these materials have grown from 2.8 billion sq yard equivalents in 1970 to 3.4 billion sq yard equivalents in 1973. But again, these are not "like or directly competitive articles." There is no doubt that domestic rayon production has been declining over the past several years. Output of rayon (yarn, staple, and tow) has dropped from just over 1 billion lb in 1965 to 817 million lb last year. But it is competition from newer synthetic fibers that is doing rayon in, not imports. Rayon imports also have been declining and have slipped from 12.4% of U.S. production in 1968 to 4.6% last year. That doesn't bode well for the case of the Parkersburg workers. In fact, when FMC announced that it was closing its Parkersburg filament plant last July, the company blamed "escalating production costs" and "permanently altered market conditions" (a diminishing demand). Then, in October, when FMC said that it also would shut down the rayon staple plant in Parkersburg, the company said that the plant was too small to be profitable and concluded that it couldn't justify the capital needed to expand and modernize it. Regardless of how poor the prospects are that the former FMC workers will receive adjustment assistance, they are infinitely better under the new assistance program than they would have been under the old one. The reason is the huge difference in the eligibility requirements. Under the old Trade Expansion Act, workers were eligible for assistance only when increased imports were "in major part" the result of trade concessions and were the "major factor" that caused workers to lose their jobs. "Major factor" generally was interpreted to mean a cause greater than all other causes combined. Much easier eligibility criteria are written into the Trade Act of 1974. Under the new provisions, workers are eligible for trade adjustment assistance if an absolute or relative increase in imports "contributes importantly" to the workers' unemployment. "Importantly" is a much easier standard than "in major part" or "major factor." The
Senate Finance Committee, in its report on the trade bill, notes that imports may have "contributed importantly" even though they contributed less than another single cause of the job displacement. The strict eligibility criteria of the old trade adjustment assistance program turned what was a good idea in 1962 into a disaster. One government official describes it as a "12-year series of broken promises." Between 1962 and November 1969, the Tariff Commission (now the International Trade Commission) denied all 26 petitions (from both companies and worker groups) that it received. In late 1969 the commission acted favorably on three breakthrough cases by interpreting the eligibility requirements more liberally. Over the life span of the old program, the commission considered 263 petitions from worker groups, 68 from companies, and 28 from industries (escape clause actions). Other petitions were sent directly to the Department of Commerce or the Department of Labor. Out of all these, the Commerce Department approved assistance proposals for only 19 companies. The total amount of technical, financial, and tax assistance approved under the program was a meager $42 million. The Labor Department certified about 54,000 workers in 110 groups under the old trade adjustment assistance program. Through the end of last year, the worker assistance cost $75 million. The new adjustment assistance program not only contains easier eligibility criteria, but it offers much better benefits as well. Like the old program, it covers workers (through the Department of Labor) and companies (through the Department of Commerce). Unlike the old program, it will grant assistance to communities that are disrupted by increased imports. As a result, the new program probably will be more costly than the old one. Congressional committee reports cite $335 million as the first-year cost of the worker program and $23 million for the company program. The cost will be covered by funds taken out of Customs duties. Individual workers will find it easier to qualify. A worker must have been employed by the same import-injured company or subdivision for 26 out of the 52 weeks preceding his separation. The old requirements were 78 out of 156 weeks. Weekly adjustment assistance allowances have been increased from 65% to 70% of a worker's average weekly wage. The maximum allowance has been increased from 65% of the national average weekly wage in manufacturing to a full 100% of the average. In addition, qualified workers are entitled to receive counseling, testing, and replacement services; training; job search allowances; and relocation expenses.
Companies and communities (tradeimpacted areas) receive the same, easier eligibility requirements offered to workers. Companies may receive technical assistance or financial assistance in the form of loans or loan guarantees. Communities may receive a variety of developmental assistance, including technical assistance and direct grants that they can use to acquire and develop land and for improvements in public works and services. Although it is barely more than a month old, the new trade adjustment assistance program is attracting a lot of interest. Through the end of April, the Labor Department received 20 petitions from worker groups. That's an average of one per working day. The Commerce Department had received only two petitions from companies as of the end of April. But that is because the department was late sending out application forms. It has 65 inquiries about the program on hand and many of these are certain to be followed up with petitions. Earl V. Anderson, C&EN New York
Dow's Morand wins 1975 CMRA award M. H. P. ("Pat") Morand, vice president for marketing at Dow Chemical U.S.A., is the recipient of the Chemical Marketing Research Association's annual memorial award for 1975. The award, presented last week in New York City, cites the Dow executive for his contributions to the acceptance of marketing research within his company and throughout the industry. A $1000 grant accompanies the award. Morand, a chemical engineering graduate of the University of Cincinnati, will assign the honorarium to that school, to be used to further the study of chemical marketing research. Dow will make a matching contribution. Morand began his career at Dow in 1949, working on coating formulations. But he soon switched to selling and marketing, working his way up through the ranks. He became sales director for plastic materials and products in 1967, manager of the plastics department in 1969, U.S. area director of marketing in 1970, and vice president in 1971. "When I got this job in 1970," Morand says, "I was given the first set of instructions I ever got at Dow: Get those nets back up." After 12 successive years of price decreases and shrinking profits, "the enterprise ceased to be fun," he comments. "The first thing I did was launch a simple educational program for our salesmen —understanding what happens as you go from the top line to the bottom line, understanding how much harder you've got to work if you're dumb." He stressed two things to the sales force: "We must be useful to the customer and we must be credible."
CHECKOFF NEW PUNTS m Bisphenol-A—Entry into this key intermediate planned by USS Chemicals division of US Steel with 120 million lb-per-year plant at Haverhill, Ohio, to be completed in 1977. • Çytrel—More than doubled capacity for this man-made smoking product planned by Celanese in Cumberland, Md., for next year; initial unit of 9 million lb per year due on stream late this summer. • Indigo dye—25% expansion set by Allied Chemical in Buffalo, N.Y., by late 1975 to serve boom.-,, ing denim market. m Polystyrene foam productsPlant planned by Mobil Chemical in Temple, Tex., to begin operation about August 1975. m Thiocyanates and thioglycolates—58 million lb-per-year expansion started after delay by Witco Chemical at Taft, La., for Argus Chemical subsidiary; completion expected in late 1976 or early 1977. MERGERS m Dart Industries—Acquisition of pollution controls seller Environmental Research Corp., Arden Hills, Minn., agreed by the two companies, for $4.50 per share for 600,000 shares outstanding, subject to ERC shareholder approval at special meeting in June. m W· R· Grace—Purchase made of 83% or 1 million shares of Polumbus Corp., oil and gas firm in Denver, for $15 per share in cash and notes; offer due in near future for remaining shares; in unrelated moves, termination announced by Grace for tentative acquisitions of Transcontinental Oil and Diamond Coal. • Northern Petrochemical—Purchase agreed with Burdox for onsite oxygen/nitrogen plant built by Burdox for adjacent Northern Petrochemical complex near Joliet, Π1.; terms given as undisclosed amount of cash and return of 126,634 Burdox shares held by Northern Petrochemical. • Universal Oil Products—Pur chase of 50.5% of UOP common stock due by Signal Cos. following oversubscribed offer last month (C&EN, April 28, page 9).
May 12, 1975 C&EN
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