UNITED STATES TARIFF COMMISSION Washington, D.C.

APTA-W-97 TC Publication 203 April 25, 1967

TARIFF COMMISSION SUBMITS REPORT TO Xlik, AUTOMOTIVE AGREEMENT ADJUSTMENT ASSISTANCE BOARD

IN ADJUSTMENT ASSISTANCE CASE PERTAINING TO CERTAIN WORKERS OF AMERICAN MOTORS CORPORATION 1S

MILWAUKEE, WISCONSIN PLANT

The Tariff Commission today reported to the Automotive

Agreement Adjustment Assistance Board the results of its investi-

gation No. APTA-W-9, conducted under section 302(e) of the

Automotive Products Trade Act of 1965. The Commission's report

contains factual information for use by the Board, which determines

the eligibility of the workers concerned to apply for adjustment

assistance. The workers in this case were employed in the

• Milwaukee, Wisconsin plant of the American Motors Corporation.

Only certain sections of the Commission's report can be made

public since much of the information it contains was received in

confidence. Publication of such information would result in the

disclosure of certain operations of individual firms. The sections

of the report that can be made public are reproduced on the

. following pages.

U.S. Tariff Commission April 25, 1967

Introduction

In accordance with section 302(e) of the Automotive Products Trade

Act of 1965 (79 Stat. 1016), the U.S. Tariff Commission herein reports

the results of investigation (APTA-W79) concerning the possible dis-

location of certain workers engaged in the production of automobile

bodies at the Milwaukee, Wisconsin plant of the American Motors Corp.

The Commission instituted the investigation on March 8, 1967, upon

receipt on March 6, 1967, of a request for investigation from the Auto-

motive Assistance Committee of the Automotive Agreement Adjustment

Assistance Board. Public notice of the investigation was given in the

Federal Register (32 F.R. 4003) on March 11, 1967.

The Automotive Assistance Committee's request for the investigation

resulted from a petition for determination of eligibility to apply for

adjustment assistance that was filed with the Assistance Board on

February 28, 1967, by the International Union, United Automobile, Aero-

space & Agricultural Implement Workers of America (U.A.W.) and its

Local No. 75, on behalf of a group of workers at the Milwaukee plant of

American Motors Corp. Neither the petitioners nor any other party

requested a hearing before the Commission, and none was held.

The petitioners alleged that the transfer of production of auto-

mdbilesil from the Milwaukee plant to the American Motors Corp. plant

1/ Although the petition refers to automobiles supplied from the Milwaukee plant, the reference probably should have been to automobile bodies, as complete automobiles are not produced at that plant.

in Brampton, Ontario resulted in extensive layoffs at Milwaukee during

the January 1965-January 1967 period--including the permanent layoff of

2,000 workers on January 9, 1967. The petitioners further alleged that

the pre-October 1966 layoffs are attributable to a decrease in the

number of automobiles1/ supplied to the Canadian market from the Milwaukee

plant and that the layoffs beginning in October 1966 were caused by

increased imports into the United States of automobiles produced in

Canada. Both of these developments were attributed to the Automotive

Products Trade Act of 1965 (APIA).

The Commission conducted investigation APTA-W-9 concurrently with

investigation APTA-W-10, relating to the possible dislocation of certain

workers engaged in the production of complete automobiles at American

Motors Corp's., Kenosha, Wisconsin plant. Much of the information

developed in connection with APTA-W-9 is also pertinent to APTA-W-10;

because of significant differences in the two investigations, however,

separate reports have been prepared.

The information reported herein was obtained from American Motors

Corp., the major U.S. automobile manufacturers, the International Union,

U...444, the Commission's files, and through fieldwork by members of the

Commission's staff.

Hereafter in this report the American Motors Corp. is referred to

as AMC.

1/ Substitute "automobile bodies" for "automobiles"; see foOtnote on preceding page.

The automotive product involved--automobile bodies

Built-up bodies for conventional passenger automobiles are the

articles under consideration in this investigation. Such bodies may

be of either unit-body or perimeter-frame construction; they constitute

complete bodies at least to the extent that the major sheet metal com-

ponents have been welded or bolted together. Bodies for special purpose

motor-vehicles, such as the "Jeep" and "Scout", and body components that

are shipped in K-D (knock-down) kits for subsequent assembly are not

included within the scope of this investigation.

Imported automobile bodies are dutiable under item 692.22 of the

Tariff Schedules of the United States at the rate of 6.5 percent ad

valorem; if imported from Canada for use as original motor-vehicle equip-

ment, however, they, are duty-free under item 692.23.

American Motors Corp. and its automotive division

AMC, with headquarters in Detroit, Michigan, is a large corporation

Which had net sales valued at about one billion dollars in each of the

years 1960-66. AMC's predecessor was incorporated in Maryland in 1916

as Nash Motors Co., which, in turn, was the successor to Jeffrey Motor Co.

In 1937 the corporate name was changed to Nash Kelvinator Corp., after

merger with Kelvinator Corp.(a large manufacturer of home appliances).

In 1954 the present name was adopted, after merger with Hudson Motor Co.

4

AMC has two major divisions: Automotive and Appliance. The

Appliance Division produces and sells, under the ".Kelvinator" and

other trade names, major household appliances such as refrigerators,

freezers, dehumidifiers, laundry equipment, ranges and room air-

conditoners. The principal manufacturing facility of this division is

located in Grand Rapids, Michigan.

The Automotive Division operates one plant in Milwaukee and two

in Kenosha, Wisconsin the Main plant and the Lake Front plant), and

one in Brampton, Ontario. Although the workers herein concerned were

employed in the Milwaukee plant ) an understanding of the interrelation-

ship of the four plants is important.

AMC produces three series of automobiles: the American (the small-

est in size), the Rebel (formerly the Classic), and the Ambassador. A

separate single-model car--the Marlin, is included with the Ambassador

series for the purpose of this report. The three series are produced

in a total of 26 models.

* 4,

United States and Canadian production and trade

Since the number of automobile bodies produced during any model year

is virtually identical to the number of automobiles produced,. the data on

automobile production in the United States and Canada are used herein as

5

a measure of the number of automobile bodies produced in the two

countries

Unlike the experience of AMC which attained a record level of

production in the 1963 model year, aggregate U.S. and Canadian produc-

tion of automobile bodies increased annually in the 1963-65 model

years. Thereafter, U.S. annual production decreased slightly from a

record level of 8.8 million units in 1965 to 8.6 million units in

1966. Canadian production attained a record high of 673,000 units in

1966. Both U.S. and Canadian production was substantially lower in the

first seven months of the 1967 model year than in the like period of

1966 (table 3, page 7).

The total U.S. output of automobile bodies in the period November-

February of the 1964 model year (2.9 million) was slightly greater than

in the comparable period of 1967 (2.8 million). Canadian output was

about equal in that period of 1964 to that in 1967 (230,000 and

231,000 automobile bodies, respectively).

No trade has occurred in built-up automobile bodies as such between

the United States and Canada; such bodies enter the trade between the

two countries in the form of completed automdbiles. Before the 1965

1/ These data are based on conventional passenger automobile produc-tion by American Motors Corp., the Chrysler Corp., the Ford Motor Co., and General Motors Corp.; they do not include such special purpose motor-vehicles as the "Jeep" and "Scout". If these other motor-vehicles had been included, the aggregate data would not be significantly differ-ent from those for the four concerns. The data also do not include kits (K-D kits) prepared for export which contain body parts for assembly into automobiles in other countries.

6

model year there were no automobiles imported from Canada by the four

major U.S. automobile producers. Since then, increasing numbers have

been imported--2,000 in 1965, 94,000 in 1966 and 136,000 in the first

seven months of the 1967 model year. U.S. exports of automobiles to

Canada increased annually from 7,000 units in the 1963 model year to

59,000 units in 1966, and to 120,000 in the first seven months in the

1967 model year, As a result of these changes Canada became a net

exporter of automobiles to the United States; during the first

complete model year after the United States-Canadian automotive

agreement became effective, Canada attained a net export balance

of 35,000 units, During the first seven months of the 1967 model

year, Canada was a net exporter to the United States of 16,000

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