UNITED STATES TARIFF COMMISSION

HEELS, SOLES, AND SOLING SHEETS GOODYEAR TIRE AND RUBBER CO.

WINDSOR, VT.

Report to the President Worker Investigation No. TEA-W-117

Under Section 301 (c)(2) of the Trade Expansion Act of 1962

TC Publication 441 Washington, D. C.

December 1971

UNITED STATES TARIFF COMMISSION

Catherine Bedell, Chairman

Joseph 0. Parker, Vice Chairman

Glenn W. Sutton

Will E. Leonard, Jr.

George M. Moore

J. Banks Young

Kenneth R. Mason, Secretary

Address all communications to United States Tariff Commission

Washington, D.C. 20436

CONTENTS

Page

Report to the President 1 Finding of the Commission 2 Considerations supporting the Commission's finding 3

Information obtained in the investigation: Description of articles under investigation A-1 U.S. tariff treatment:

Soligg sheets A-2 Heels and soles of rubber or plastics A-3 Leather soling material A-4 Leather heels and soles A-4

Nonrubber footwear A-5

U.S. production A-8 U.S. exports A-10 U.S. imports A-10 Data relating to Goodyear Windsor plant:

Corporate structure, plant, and equipment A-13 Product A-14

Appendix A. Statistical tables A-21 Appendix B. Statement to employees from manager of

Windsor plant A-30

Appendix Tables

1. Heels, soles and soling materials of rubber, plastics or leather: U.S. rates of duty applicable to specified TSUS items, June 18, 1930-December 31, 1971 and final stage of Kennedy Round scheduled to be-

come effective January 1, 1972 A-22 2. Nonrubber footwear: U.S. rates of duty applicable to

specified items in schedule 7, part 1A, of the Tariff Schedules of the United States (TSUS), Aug. 31, 1963 - Dec. 31, 1967, 1971, and the final stage of Kennedy Round concessions A-23

3. Nonrubber footwear: Total U.S. imports, all nonrubber footwear and leather footwear, and U.S. tariff rates and imports by specified TSUS items and by specified types, 1964-70, January-June 1970, and January-June 1971- A-25

4. Nonrubber footwear: U.S. rates of duty applicable to specified types under the Tariff Act of 1930, June 18, 1930-Aug. 30, 1963 A-26

CONTENTS

Page

5. Nonrubber footwear: U.S. production, imports for con-sumption, and apparent consumption by types, 1966-70 January-June 1970, and January-June 1971 A-28

6. Nonrubber footwear: U.S. imports for consumption, by types and TSUS items, 1965-70 A-29

Note. --The whole of the Commission's report to the President may not be made public since it contains certain information that would result in the disclosure of the operations of individual concerns. This published report is the same as the report to the President, except that the above-mentioned information has been omitted. Such omissions are indicated by asterisks.

REPORT TO THE PRESIDENT

U.S. Tariff Commission, December 3, 1971.

To the President:

In accordance with section 301(f)(1) of the Trade Expansion Act

of 1962 (76 Stat. 885), the U.S. Tariff Commission herein reports the

results of an investigation made, under section 301(c)(2) of that

act, in response to a workers' petition for a determination of eligi-

bility to apply for adjustment assistance.

The petition for this investigation was filed on October 14, 1971,

by the attorneys for the International United Rubber, Cork, Linoleum

and Plastic Workers of America, AFL-CIO, CLC, on behalf of the workers,

and members of Local Union No. 289, URW, formerly employed by the

Goo0year Tire and Rubber Company, Shoe Products Division, Windsor, Vt.

The Commission instituted the investigation (TEA .4-117) on October 12,

1971, and gave public notice thereof in the Federal Register on

Oc',ober 16, 1971 (36 F.R. 20195). No public hearing was requested,

and none was held.

The purpose of the Commission's investigation was to determine

whether, as a result in major part of ccncessions granted under trade

agreements, articles like or directly competitive with heels, soles,

and soling strips and sheets produced by the aforementioned firm are

being imported into the United States in such increased quantities as

to cause, or threaten to cause, the unemployment or underemployment of

a significant number or proportion of the workers of that firm.

The information in this report was obtained principally from the

petitioner, from officials of the Goodyear Tire and Rubber Co. (Windsor

plant), and from the Commission's files.

2

Finding of the Commission

On the basis of its investigation, the Commission 1/ finds that

articles like or directly competitive with soles, heels, and soling

strips and sheets produced by the Goodyear Tire and Rubber Company,

Shoe Products Division, Windsor, Vermont, are not, as a result in

major part of concessions granted under trade agreements, being im-

ported into the United States in such increased quantities as to

cause or threaten to cause, unemployment or underemployment of a sig-

nificant number or proportion of the workers of the division of such

firm.

Chairman Bedell and Commissioner Sutton did not participate in the decision.

3

Considerations Supporting the Commission's Finding

Our determination in this investigation is in the negative be-

cause all of the criteria established by section 301(c)(2) of the

Trade Expansion Act of 1962 have not been met. Before an affirmative

determination could be made, it would have to be established that

each of the following conditions had been satisfied:

(1) Articles like or directly competitive with those pro-duced by the workers concerned are being imported in increased quantities;

(2) The increased imports are in major part the result of concessions granted under trade agreements;

(3) A significant number or proportion of the workers are unemployed or underemployed or are threatened with unemployment or underemployment; and

(Ii) The increased imports resulting in major part from trade-agreement concessions have been the major factor causing or threatening to cause the unemployment or underemployment.

If any one of the above criteria is not satisfied, we must make

a negative determination. In the instant case, condition (4) has not

been satisfied, namely, that any increased imports of articles like

or directly competitive with those produced at the Windsor plant of

the Goodyear Tire and Rubber Company where the petitioning workers

were employed have not been the major factor causing any unemployment

or underemployment of the workers of that plant. Under the circumstances,

we are not required to reach a conclusion respecting the first three

conditions, and we have not done so.

The Windsor plant, which is still in operation, is one of two

establishments of the Goodyear Company in which footwear components

of rubber or plastics--soles, heels, combination soles and heels,

soling slugs, and soling and top-lift sheets--are produced. About

* * * of the output is sold to shoe manufacturers and is uti-

lized in the production of nonrubber footwear of various types for men,

women and children; the balance is used in the repair of nonrubber

footwear.

Imports of footwear components like those produced at the Windsor

plant have been small. Such articles are not separately classified in

the official U.S. import statistics, but the Commission estimated the

volume of imports from data supplied by importers. According to these

estimates, U.S. imports of such footwear components more than doubled

in the period 1966-70 and the imports supplied about five percent of

U.S. consumption of such articles in 1970. In the investigation at

hand, the evidence indicates that sales of products produced at the

Windsor plant have not been significantly displaced by imports of like

products.

About * * * of the output of the Windsor plant was sold to

* * * leading footwear manufacturing concerns in 1970. Although each

of these customers had reduced their purchases of products from the

Windsor plant in 1971, only one substituted imported products for the

articles purchased from Windsor. * * *

5

Another factor that affected output of the Windsor plant was the

establishment by Goodyear in June 1967 of an additional plant at

Madisonville, Kentucky for the production of footwear components like

those produced at the Windsor plant. The evidence shows that produc-

tion at the Windsor plant of each type of footwear component declined

as output at the Madisonville plant expanded. Thus, the Madisonville

plant supplied an increasing share of Goodyear's total sales of foot-

wear components.

In this case, representatives of the petitioning workers have

claimed that increased U.S. imports of nonrubber footwear were a pri-

mary factor responsible for the unemployment of workers at the plant.

Commissioners Moore and Young have not made a determination respecting

this issue. It is their view that even if imported nonrubber footwear

were, for purposes of the statute, like or directly competitive with

articles produced at the Windsor plant, increased imports of such foot-

wear were not the major factor causing or threatening to cause unem-

ployment or underemployment of workers at the Windsor plant of the

Goodyear Company.

In the view of Vice-Chairman Parker and Commissioner Leonard,

the problems confronting Goodyear's Windsor plant are those brought

on in large part by increased imports of nonrubber footwear, but such

imports are not of an article like or directly competitive with the

articles made at the plant. In other words, the increased imports are

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of the final product on which the footwear components are used. 1/

However, under the Trade Expansion Act of 1962, even taking into con-

sideration section 405(4) of that statute (which further defines

"directly competitive with"), it cannot be said that an imported shoe

or a heel, sole, or combination heel and sole on an imported shoe is

an article directly competitive with the products made by the petitioner.

Section 405(4) of the Trade Expansion Act of 1962 reads:

An imported article is "directly competitive with" a domestic article at an earlier or later stage of pro-cessing, and a domestic article is "directly competitive with" an imported article at an earlier or later stage of processing, if the importation of the imported arti-cle has an economic effect on producers of the domestic article comparable to , the effect of importation of arti-cles in the same stage of processing as the domestic article. For purposes of this'paragraph, the unprocessed article is at an earlier stage of processing.

The House Report accompanying the Trade Expansion Act explains

part of the provision as follows:

Your committee has incorporated in the bill a pro-vision which has the effect of permitting an extension of the scope of the term "directly competitive." Under this provision, an imported article may be considered "directly competitive with" a domestic article, or vice versa, if the one is at an earlier cr later stage of processing than the

1 It is noteworthy that the manager of the Windsor plant, in a statement to the employees (see appendix B of this report) proposing that they forego scheduled wage increases as a prerequisite to keeping the plant open, made no mention of increased imports of articles like those produced at Windsor; rather he stated that "the increase in shoe imports has been responsible for the closing of many U.S. shoe plants and has cost many American shoe workers their job. * * * * Goodyear employees also have been affected. The import increase has reduced the demand for Goodyear soles and heels and has resulted in the lay-off of approximately one-fourth of the hourly employees at Windsor."

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other, or if one is a processed and the other an unprocessed form of the same article, and if the economic effect of im-portation of the imported article is comparable to the effect of importation of articles in the same stage of processing as the domestic article.

The term "earlier or later stage of processing" contem-plates that the article remains substantially the same during such stages of processing, and is not wholly transformed into a different article. Thus, for example, zinc oxide would be zinc ore in a later stage of processing, since it can be proc- essed directly from zinc ore. For the same reason, a raw cherry would be a glace cherry in an earlier stage or processing, and the same is true of a live lamb and dressed lamb meat (sec. 405(4)). J

In the context of the statute and the House report, a shoe cannot

be deemed to be a heel, sole, soling sheet, etc., at a later stage of

processing. A shoe is a different article from a heel, sole or

soling sheet. It is a combination of components which have been

transformed into a shoe. A heel or sole by itself, without other

major components, is not a shoe and cannot function as a shoe. Under

the statute, therefore, we are not permitted to regard an imported

shoe or a heel, sole, or combination heel and sole on an imported shoe

as directly competitive with the products made by Goodyear's Windsor

plant.

In view of the above, our determination in the instant case is in

the negative because any increased imports of articles like or directly

competitive with the articles made by the workers at the Windsor plant

are not the major factor causing or threatening to cause any unemploy-

ment or underemployment of the workers of this establishment of the

Goodyear Company.

1/ House Report number 1818, 87th Cong., 2d Sess., p. 24.

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INFORMATION OBTAINED IN THE INVESTIGATION

Description of Articles Under Investigation

The Goodyear Tire and Rubber Co. plant in Windsor, Vt. (hereinafter

referred to as the Windsor plant) which is still in operation produces

the following: heels and combination heels and soles, accounting for

about * * *

f the production; soles, * * * ; soling and

top-lift sheets (from which soles and heels, are die cut) for * * *

*** ; and soling slugs (roughly shaped crude rubber pieces for molding

of soles) and plastic heels, * * * . These products are of rub-

ber or plastics; 1/ a number of them are produced under several trade

names, including the well-known brand, "Neolite." The Windsor plant

does not produce leather soles or heels, which in recent years have

been used on about 15 percent of the nonrubber footwear produced in

the United States.

In the manufacture of soling sheets, synthetic rubber and various

chemicals are combined and mixed. The mixture is then extruded and

transferred onto cooling conveyors. After cooling, the strip is cut

into sheets. The sheets are fed into a large mill where the material

is again mixed. It is then extruded, cut into sheets measuring

36 by )4 inches, and placed in presses for vulcanization. The sheets,

ranging in thickness from 1/16 inch to 3/4 inch, are then ready to be

cut into soles. heels, or top-lifts. The thicker heels for men's foot-

wear are made individually on small vulcanizing presses in lots of 30

at a time. The moles, heels, heel and sole units, and soling sheets

are sold to footwear producers and to distributors for use in the

1/ The term "rubber or plastics" means rubber (which is mostly syn-thetic), plastics, or combinations of rubber and plastics.

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shoe-repair trade. About * * * of the output of the Windsor

plant is utilized in the production of nonrubber footwear of various

types for men, women, and children. The balance of the plan -Vs pro-

duction is utilized by the shoe-repair trade in the repair of non-

rubber footwear. The products made at the plant are not ordinarily

used in the production of rubber footwear (i.e., sneakers and protective

footwear).

U.S. Tariff Treatment

Soling sheets

Soling sheets andtop -lift sheets of rubber or plastics (except

crepe) are reported under Tariff Schedules of the United States (TSUS)

item 771.42, which provides for flexible film, strips, and sheets of

rubber or plastics (except in imitation of patent leather). Under the

Tariff Act of 1930, sheets in imitation of fancy leather (not including

patent leather) were dutiable, by virtue of the similitude provision

in paragraph 1559, at the rates applicable to such leather. The trade-

agreement (column 1) rate established in the TSUS, effective August 31,

1963, was 12.5 percent ad valorem, representing the estimated average

of the trade-agreement rates previously applicable. Concessions were

granted under the Kennedy Round of the General Agreement on Tariffs

and Trade (GATT) as shown in table 1 of appendix A. The current (1971)

rate is 7 percent ad valorem.

Soling sheets of crepe are classified for duty purposes under

the provisions of TSUS item . 770.80, which covers expanded, foamed, or

sponge rubber or plastics and articles not specially provided for, of

such rubber or plastics (except of polyurethane, cellulose, or

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natural rubber). Under the pre-TSUS schedules of the Tariff Act of

1930, the soling sheets now dutiable under item 770.80 were dutiable

at various rates arrived at by virtue of the similutude provision in

paragraph 1559. The trade-agreement (column 1) rate originally estab-

lished in the TSUS in 1963 was 25 percent ad valorem, reflecting the

estimated average trade-agreement rate then applicable to the small

volume of imports covered; the statutory (column 2) rate in the TSUS

is 50 percent ad valorem. Effective October 1, 1966, the 25-percent

rate was reduced to 24 percent pursuant to a concession granted by the

United States under article 28 1/ of the GATT. The current (1971) rate

is 14.5 percent ad valorem, reflecting the fourth stage of the five

stage GATT concession granted during the Kennedy Round (table 1).

Heels and soles of rubber or plastics

Heels and soles of natural rubber were originally dutiable under

paragraph 1537 of the Tariff Act of 1930 at 25 percent ad valorem.

That rate was reduced to 12.5 percent, effective September 10, 1955,

pursuant to a GATT concession. When such articles of plastics were

imported after World War II, they were probably dutiable at the same

rate as the articles of natural rubber by virtue of the similitude

provision of paragraph 1559. These articles of rubber or plastics

are now reported under TSUS item 772.30, which provides for wearing

1/ Article 28 provides for compensatory concessions between the contracting parties.

apparel (including rainwear) not specially provided for, 1/ of rubber

or plastics, and dutiable at 12.5 percent ad valorem, the 1955 conces-

sion rate on articles of natural rubber.

Leather soling material

Imported leather of the type used for soles and heels is dutiable

under TSUS item 121.57 at the current rate of 6 percent ad valorem.

The rate of duty established under the Tariff Act of 1930 for such

leather was 12.5 percent ad valorem. That rate was reduced to 10 per-

cent ad valorem on January 1, 1939, and further reduced to 9 percent ad

valorem on January 1, 1968, reflecting the first stage of the five-stage

concession granted in the Kennedy Round (table 1).

Leather heels and soles

Leather heels and soles are dutiable under TSUS item 791.25 at the

current rate of duty of 6 percent ad valorem (table 1). Such articles

were dutiable under the Tariff Act of 1930 at 12.5 percent ad valorem.

That rate was reduced to 10 percent ad valorem, effective Jan. 1, 1939,

and to 9 percent ad valorem, effective Jan. 1, 1968, reflecting the

first stage of the five-stage Kennedy Round concession.

1/ General Headnote 10(h) of the TSUS provides that, unless the con-text requires otherwise, a tariff description for an article covers such articles, whether assembled or not assembled, and whether finished or not finished. The Bureau of Customs considers rubber heels to be parts of footwear and not unfinished footwear, and, since the TSUS has no provision for parts of footwear, rubber heels are classified as wearing apparel of rubber or plastics in Schedule 7 of the TSUS. The term "wearing apparel, of rubber or plastics" is a general one including rainwear as well as footwear, and the Customs Bureau considers that parts of footwear such as rubber heels are more specifically wearing apparel of rubber than any other designation in the tariff schedules.

Nonrubber footwear

The petitioners claim injury not only from imports of heels, soles,

combination heels and soles, and soling sheets for the manufacture of

such articles, but also from imports of nonrubber footwear, which is

classified for tariff purposes under 23 items in part lA of schedule 7

of the TSUS (table 2).

The rates of duty applicable to nonrubber footwear remained un-

changed from August 31, 1963, through December 31, 1967. On January 1,

1968, when the first stage of the concessions granted by the United

States in the Kennedy Round tariff negotiations was placed in effect,

the trade-agreement (column 1) rates for 19 of the 23 TSUS items were

reduced. Most of the U.S. concessions granted on nonrubber footwear

in the Kennedy Round are scheduled to be placed in effect in five

stages. Table 2 shows the trade-agreement (column 1) tariff rates for

nonrubber footwear during the period August 31, 1963, through Decem-

ber 31, 1967, together with the fourth stage of the Kennedy Round con-

cessions (in effect during 1971) and the fifth-and final-stage rates

scheduled to become effective January 1, 1972; it also shows the

statutory (column 2) rates.

For the total imports of nonrubber footwear admitted at trade-

agreement (column 1) rates, the ad valorem equivalent of the applicable

duties was 12 percent in 1969, compared with 1)4 percent in 1967, the

year before the Kennedy Round reductions were initiated. For the types

of footwear that have accounted for the great bulk of the imports of

nonrubber footwear in recent years, the volume of imports, by tariff

rates, is shown in table 3 for 1964-70, January-June 1970, and January-

June 1971.

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Before the TSUS became effective, footwear in chief value of

leather and footwear with uppers in chief value of fibers or substitutes

therefor (regardless of the composition of the soles) were dutiable under

paragraph 1530(e) of the Tariff Act of 1930. The rate of duty originally

applicable to such articles under that act was 35 percent ad valorem for

footwear with fiber uppers and 20 percent ad valorem for footwear in

chief value of leather (except such footwear with fiber uppers). These

were the only rate provisions in the 1930 statute that specifically

named footwear. Footwear of other descriptions was dutiable at various

rates, depending on the component material of chief value. For example,

the original schedules of the Tariff Act of 1930 did not provide, by

name, for the types of footwear of rubber or plastics that now consti-

tute the bulk of the imports admitted under TSUS item 700.55. Such

footwear (exclusive of rubber zoris, which are excluded from the import

figures of table 3) is believed to have been dutiable, prior to August 31,

1963, by virtue of the similitude provisions of paragraph 1559 of the

pre-TSUS tariff schedules, principally at the rates provided for leather

footwear in paragraph 1530(e). Footwear of wood (now admitted under

TSUS item 700.83) was dutiable under the provision in paragraph 412 for

manufactures of Aaich wood or bark is the component material of chief

value, not specifically provided for.

From 1930 until January 1, 1946, very few tariff concessions were

granted on nonrubber footwear classifiable under paragraph 1530(e).

During the period January 1, 1946, to August 30, 1963, however, many

trade-agreement concessions were granted under the GATT on various

types of nonrubber footwear. The pre-TSUS trade-agreement concessions

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that reduced tariff rates applicable to nonrubber footwear classified

in paragraphs 1530(e) and 412 are shown in table 4.

Pursuant to Presidential Proclamation No. 4074, effective

August 16, 1971, the column 1 rates of duty on most imported products

were increased by the temporary imposition of an additional duty

(surtax) of 10 percent ad valorem or less, as provided for in new sub-

part C to part 2 of the appendix to the TSUS. On the imports under the

TSUS items shown in table 1, the new rates (i.e., the 1971 rates shown

in that table plus the additional rate) are as follows: item 121.57,

12.5 percent ad valorem; item 770.80, 24.5 percent; item 771.42, 17.0

percent; item 772.30, 22.5 percent; and item 791.25, 15.0 percent.

On the imports under five of the TSUS items shown in table 2--

700.05, 700.20, 700.41, 700.43, and 700.45 - -the new rates are the same

as the column 2 rates shown in that table; on the imports under the

remaining TSUS items in the table, the new rates are 10 percentage

points higher than the 1971 rates.

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U.S. Production

For the period 1963-70, 1963 and 1967 are the only years for which

complete official statistics are available on the production of heels

soles and soling sheets. Estimated figures on the value of domestic

shipments for the period 1963-70 were established on the basis of

statistics available from the U.S. Department of Commerce and data

provided by the Rubber Manufacturers Association. Total value of such

shipments declined irregularly from $135.3 million in 1963 to $108.8

million in 1970, as shown in the following table.

Heels, soles and soling sheets of rubber or plastics: Estimated value of U.S. shipments, 1963-70

(In thousands of dollars)

Year Heels soles Soling sheets : Total : : •

1963 : 30,700 : 49,100 : 55,500. 135,300 196)4 : 1/ : 1/ : 1/ : 1)40,300 1965 : 23,900 : 52,700 : 52,300 : 128,600 1966 : 22,600 : 54,100 : 56,300 : 133,000 1967 : 21,900 : 50,100 : 54,100 : 126,100 1968 : 21,600 : 52,600 : 60,400 : 13L1., 600 1969 : 19,500 : 50,000 : 60,300 : 129,800 1970 : 18,600 : 33,10o : 57,100 : 108,800

1/ No basis for estimate.

During the period 1965770, the production of heels by the member

firms of the Heel and Sole Division of the Rubber Manufacturers

Association * * * .

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The data in the following table show that the production of sole

leather, as reported by the Tanners' Council of America, Inc., de-

clined during the period 1966-70.

Sole leather: U.S. production of sole leather, by type, 1966-70

Year : Backs, bends, and : Heads, bellies, and

sides shoulders : 1,000 pieces • 1,000 pounds

1966 8,910 : 26,988 1967 8,601 : 24,353 1968 8,231 : 19,604 1969 6,753 : 14,077 1970 5,349 : 9,063

It should be noted, however, that in the same period 1966-70

production of nonrubber footwear decreased from 642 million pairs to

559 million pairs (table 5).

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U.S. Exports

The value of U.S. exports of rubber heels and soles declined by

37 percent during the period 1966-70, as shown in the following table.

Heels and soles of rubber or plastics: U.S. exports, 1966-70

(In thousands of dollars)._

Year Heels and soles 1/ •

1966 : 2,314 .1967 ---: 2,312 1968 : 2,283 1969 1,796 1970 : 1,453

1/ Exports of top-lift sheets in 1970 were valued at $1.2 million. These sheets were not separately classified prior to 1970.

U.S. Imports

Data on U.S. imports of articles like or competitive with those

produced at the Goodyear Windsor plant are not separately reported in

official statistics; such articles, when imported, are dutiable under

one of several basket categories (categories which include a number

of other articles) in the TSUS--121.57 (sole leather); 770.80 (expanded,

foamed or sponge rubber or plastics); 771.42 (film, strips, sheets, of

rubber or plastics) 1/; 772.30 (wearing apparel n.s.p.f. of rubber

or plastics); and 791.25 (leather cut or wholly or partly manufactured

into forms or shapes suitable for conversion into footwear). Although

1/ On January 1, 1971, a statistical category (771.4230) was estab-lished for flat sheets of rubber or plastics (except crepe). Total imports in this new category for the period January thru August 1971 amounted to 8.8 million square yeards, valued at about $5 million. Al, though this category includes sheets which can be used for other than soling purposes, it is believed that the vast majority are used as soling on nonrubber footwear.

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the value of total imports in each of these basket categories in-

creased in every year from 1966 thru 1970, there is no basis for

determining from official statistics the volume or trend of imports of

articles like or competitive with those produced at the Goodyear Wind-

sor plant; it is probable that such products account for only a small

part of the imports entered in each of these categories.

Questionnaires were sent to all known importers of heels, soles,

soling sheets, etc., of rubber or plastics or of leather. The fol-

lowing table, compiled from data submitted in response to these

questionnaires, shows U.S. imports of footwear products of rubber or

plastics, like or competitive with those produced at the Goodyear

Windsor plant.

Soling sheets, top-lift sheets, soles and heels, of rubber or plastics or of leather: U.S. imports, 1966-70, January-August 1970 and January-August 1971

(In thousands of dollars)

Period Soling : Top-lift : • Soles Heels 1/: Total : sheets : sheets :

1966 2,670 : 3 1967 : : 1968 : 4,248 : 1969 : 4, 261 : 1970 January-August--

: 5,464 : : :

1970 : 3,889 : 1971 : 5,774 :

3 : 2/ : 2/ : 2 , 673 14 : 7/ : 7/ : 3,283 6 : 7/ : 7/ : 4,254 1 : 153 : 2 : 4,417 5 • 109 : 26 : 5,604

: : : 1 : 2 : 15 : 3,907 1 : 171 : 3/ : 5,946

1/ Includes combined heel-sole unit. 2/ No imports reported. 3/ Less than $1,000.

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Officials of the Bureau of Customs indicate that of total imports

of leather entered in TSUS item 121.57, only that imported from

Yugoslavia is of a type generally used for soling purposes. Leather

imports from Yugoslavia were valued at $90,000 in 1966, $53,000 in

1967, $103,000 in 1968, $6,000 in 1969, and $35,000 in 1970.

Both the petitioners and officials of Goodyear contend that the

increased imports of nonrubber footwear has reduced the demand for

rubber heels, soles and soling sheets. The quantity of imports of

all nonrubber footwear which increased from 96 million pairs in 1965

to 242 million pairs in 1970 is shown in table 6 by type and TSUS

item number.

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Data Relating to Goodyear Windsor Plant

Corporate structure, plants and equipment

The Goodyear Tire and Rubber Co., with plants throughout the

United States and in numerous foreign countries, is principally en-

gaged in the production and distribution of various rubber and plastics

products, including tires, industrial and aviation products, film and

sheeting, floor- and' counter-coverings, and footwear components. Good-

year also operates an Aerospace Division engaged in the development,

production and sale of blimps, missile components, and so forth. In

addition to products of its own manufacture, Goodyear sells to dealers

and through its own stores, certain automobile and home supplies made

by others. Employees in 1970 averaged about 137,000.

The Shoe Products Division of Goodyear operates two plants, one

situated in Windsor, Vermont and the other in Madisonville, Kentucky. 1/

The original plant in Windsor was acquired in 1936 from Acme Tool.

Additional space was added in 1953 with the construction of the

banbury (rubber-processing) section, and further additions were made

in 1956 to the warehouse and engineering building. The structures are

mainly single story with some sections housing a second floor for of-

fices and for the compounding (mixing) rooms. Total floor space

covers about 326,000 square feet.

The machinery in the Windsor plant is as modern as that of other

soling manufacturers in the area. In 1966 more than $300,000 was

spent for new production machinery at the Windsor plant. Practically

1/ The petition in this investigation is filed on behalf of all the production and maintenance workers of Local Union No. 289, URW, Good- year Tire and Rubber Co., Windsor, Vt.

A-14

all of the machines are owned by Goodyear; there are, however, a few

which are leased from United Shoe Machinery Co.

Product

The Windsor plant currently produce.s.heels, _soles ! beel7an&oeole

combination units, and soling sheets (from which...heels and soles are

die-cut). Small amounts of plastic heels and uncured robber _.sole

slugs (for molding of soles) are also produced.

A-15 through A-19

A-20 .

In June 1971 the manager of the Windsor plant issued a statement

to the employees on the future of the plant (appendix B). The announce-

ment stated that while U.S. shoe industry wages in 1970 averaged $2.90

per hour, they averaged $1.25 in Italy, 80 cents in Japan and 65 cents

per hour in Spain; it further stated that the increase in shoe imports

has reduced the demand for Goodyear soles and heels and has caused the

lay-off of production workers at the Windsor plant. This announcement

called for certain concessions by the employees to enable the plant to

maintain its production volume, and stated that unless such concessions

were made Goodyear would eventually be forced to close the plant.

According to Standard & Poor's, the Goodyear Company reported on

July 27, 1971, that 431 hourly employees at its Windsor plant had

agreed to give up scheduled wage increases of 26 cents an hour in the

current year and in 1972 to keep the facility in operation.

APPENDIX A Statistical Tables

A-22

Table 1.--Heels, soles, and soling materials of rubber, plastics or leather: U.S. rates of duty applicable to specified TSUS items, June 18, 1930-December 31, 1971 and final stage of Kennedy Round scheduled to become effective January 1, 1972

TSUS : Abbreviated : 1930 : item : description : rate

121.57 : Bovine leathe • in : 12.5% : : the rough, part- ad val.: : ly finished or : : finished.

: :

770.80 : Expanded, foamed, or sponge rubber or : (esti- :

: Various :

: mated : plastics, and ar- : average : ticles, n.s.p.f.,

50% ad : of rubber or val.) : plastics.

: : : :

771.42 : Film, strips, and : 25% ad : sheets, of rubber : val. 1 or plastics.

• 772.30 : Wearing apparel : 25% ad :

(including rain- val. : : wear) n.s.p.f.,of : rubber or :

plastics. • 791.25 : Leather cut or : Various :

: wholly or partly

(esti- : manufactured into : mated forms or shapes : average : suitable for con- 15% ad : version into foot- val.) : wear, other than :

: patent leather.

Concession rates

Effective date

10% ad val. 9% ad val. 8% ad val. 7% ad val. 6% ad val. 5% ad val. 25% ad val. 24% ad val. 21.5% ad val. 19% ad val. 17% ad val. 14.5% ad val. 12.5% ad val. 12.5% ad val.

: Aug. 31, Jan. 1,

: Jan. 1, Jan. 1, Jan. 1, Jan. 1,

: Aug. 31, : Oct. 1, : Jan. 1,

: Jan. 1, : Jan. 1, : Jan. 1,

: Jan. 1,

: Aug. 31,

1963 1968 1969 1970 1971 1972

1963 1966 1968

1969 1970 1971

1972

1963

1/

L.2;

11% ad val. : Jan. 10% ad val. : Jan. 8.5% ad val.: Jan. 7% ad val. : Jan. 6% ad val. : Jan. 12.5% ad : Aug. val. 12.5% ad : Jan. val.

10% ad val. : Aug. 9% ad val. : Jan. 8% ad val. : Jan. 7% ad val. : Jan. 6% ad val. : Jan. 5% ad val. : Jan.

1, 1, 1, 1, 1, 31,

1,

21, 1, 1, 1, 1, 1,

1968 1969 1970 1971 1972

1963

1972

1963 1968 1969 1970 1971 1972

2/

1/ The rate established in came effective on January 1,

2/ The rate established in came effective on September

the TSUS reflects a concession which be-1939. the TSUS reflects a concession which be-

10, 1955•

• • • • • • . • • • • • • . • • • • • . • .. • • • • •

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A-23

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With supported vinyl uppers

For men, youths, : • Total For women and misses and boys : Million : Million : Million : Million • elks: pairs : Pida1 : Balm

Total

A-25

Table 3.--Nonrubber footwear: Total U.S. imports, all nonrubber footwear and leather footwear, and U.S. tariff rates and imports by specified TSUS items and by specified types, 1964-70, January-June 1970, and January-June 1971

Period

Certain footwear of leather

Total, all :

•

Total, • For men, youths, : For other people • and boys (700.35) nonrubber leather

. :

. (700.43 and 700.45) 1/ • '

footwear ' T Quantity ' Tariff : : Tariff :

,, : For women Quantity rate : : • rate : Total : and misses •

Million : Percent : Million : Percent : Million : Million pairs : ad val.: pairs : ad val.: pails ! pairs

: Million : pairs

1964 : 81 • 1965 : 96 : 1966 : 102 : 1967 : 133 :

1968 :

181

1969 : 202 !

1970 242 !

January-June-- :

1970 137 :

1971 164 !

: : : :

: (

: ( :(

:( :( :

:( :(

:(

3/

2/ /

2/ -37

2/

1/

20 20 20 20

18

18 16

17 14

17

12

: : : :

:

: •

: : : :

: :

3/

2/ 3/

3/ 2/

2/ 3/

3/

20 22 30 41

21 31

7

34 28

44 36

30 18

24

• : : : : :

2

:

• : • : :

2/ -3-/

2/ 1/

2/ 1/

2/ 3/

2/ 5/

19

20

29 27

37 35

2 5 18

26 23

Certain footwear with uppers of rubber or plastics (700.55)

Quantity

Tariff rate

: Percent ad val.

1964 : 12.5 1965 : 12.5 1966-- : 12.5 1967 : 12.5 1968 : 11 1969 : 10 1970- 8.5

1970 : 8.5 1971 : 7

: ho • 37 : 7 • 55 : 48 : 9 : 51 • 44 : 6 : 67 : 62 : 7 • 90 : 83 : 8 : 97 : 89 : 10 • 109 • 101 • 16 • :

: ' 62 : 58 : 8 : 78 : 72 : 13

January-June--

• : •

29 35

.- :-33 : 50 : 69 • 71 : 77 :

: 45 • 54

1/ Before Jan. 1, 1968, in TSUS item 700.40. 7/ TSUS item 700.43. 3/ TSUS item 700.45.

Source: Compiled from official statistics of the U.S. Department of Commerce.

Rate Comment

Refer-: ence

No. (see

table 2 )

Tariff paragraph and depeription

•

Jan. 1, 1934 1/! Changes through Aug. 30, 1963

Rate of duty

20% ad val. • • •

A-26 Table 4.--Nonrubber footwear: U.S. rates of duty applicable to specified types under the

Tariff Act of 1930, June 18, 1930 -Aug, 30, 1963

• • • • Par. 1530(e):

Footwear of leather (except footwear with uppers of fibers):

Huaraches : 20% ad val.

McKay-sewed (except if at- : tached to ice skates): 2/ :

Boots and shoes: For men, youths, or boys--: For other persons

Other footwear : 20% ad val. Moccasins:

For men, youths, or boys : 20% ad val.

For other persons Turn or turned:

Boots and shoes: For women and misses For other persons

Other footwear: For women, misses, in-

fants, or children.

For other persons : 20% ad val.

10% ad val.

: 20% ad val.

• •

: Concession to Mexico, eff. : Jan. 30, 1943-Dec. 31, 1950. : Statutory rate restored, eff.

Jan. 1, 1951.

•

)

:)

: )

: )

1

: 10% ad val.

: 10% ad val.

5% ad val.

15.5% ad val. : 14% ad val.

: 19% ad val. : 18% ad val. : 17% ad val.

19% ad val. 18% ad val. 17% ad val.

4/: GATT concession, eff. Apr. /: GATT concession, eff. Apr.

;GATT concession, eff. in 3 ) stages, the first on June

: No change

: Concession to Mexico, eff. Jan. 30, 1943-Dec. 31, 1950;

: GATT concession, eff. Jan. 1, : 1948. : GATT concession, eff. Jan. 1,

: GATT concession, eff. May 30, : No change

: ?GATT concession, eff. in 3 :) stages, the first on June :)

:)GATT concession, eff. in 2 :) stages, the first on July 1, 1962 :)

:)GATT concession, eff. in 3 annual :) :) stages, the first on June 30, 1956:) : ) :)

21, 1948:) 21, 1948:)

annual .) 2 30, 1956;)

:)

:) :)

3 :)

1948 :) •

1950 0

annual :) 30, 1956' )

:) :) 4

annual :)

30% ad val. 30% ad val.

20% ad val. 20% ad val. 19% ad val. 18% ad val. 17% ad val.

: 20% ad val.

: 10% ad val. 51 : 10% ad val. 2./

Welt, valued per pair--Not over $2

: 20% ad val.

: 20% ad val.

Over $2 but not over $5

Over $5 but not over $6.80--: 20% ad val.

See footnotes at end of table.

19% ad val. 18% ad val. 17% ad val. 500 per pair, but not more than 20% ad val. 400 per pair 380 per pair 360 per pair 340 per pair 10% ad val.

40O per pair 384 per pair 360 per pair 340 per pair

:)GATT concession, eff. in 3 annual :) :) stages, the first on June 30, 1956:) :)

• : Concession to the United Kingdom,

) : eff. Jan. 1, 1939.

) 6 : GATT concession, eff. Jan. 1, 1948 :) :)GATT concession, eff. in 3 annual :) :) stages, the first on June 30, 1956:) :) : Concession to the United Kingdom, :) : eff. Jan. 1, 1939. :) : GATT concession, eff. Jan. 1, 1948 :) :)GATT concession, eff. in 3 annual :) :) Stages, the first on June 30, 1956:) :)

5

With molded soles laced to : uppers:

For men, youths, or boys----: 20% ad val.

For other persons

• : 20% ad val.

20% ad val.

Slippers (for housewear)

Other: For men, youths, or boys----: 20% ad val.

A-27 Table —Nonrubber footwear: U.S. rates of duty applicable to specified types under the

Tariff Act of 1930, June 18, 1930-Aug. 30, 1963 - -Continued

Rate of duty

▪ Refer- : ence

No. (see

:table 2)

Tariff paragraph and description

Changes through Aug. 30, 1963

Jan. 1, 1934 1/! Rate Comment

For other persons : 20% ad val. Footwear with uppers of fibers: :

With soles of leather - -: 35% ad val. •

With soles of other material : (except india rubber or : substitutes for rubber /);:

Footwear known as alpar- : 35% ad val. gates, the uppers of which are of cotton.

Par. 412: Footwear of wood

• • • •

• • • •

: 10% ad val. : Concession to the United Kingdom, :)

:

•

400 per pair : GATT concession, eff. Jan. 1, 1948 :) eff. Jan. 1, 1939. :)

:) : but not lees : : than 5% ad : :)

:) 8 val. 01 : 380 per pair, :)

but not less :) : than 5% ad :)

:) : val. :)GATT concession, eff. in 3 annual :) : 360 per pair, :) stages, the first on June 30, 1956:)

but not less :) : than 5% ad :)

val. :) : 5% ad val. :)

: 10% ad val. J: Concession to Mexico, eff. : )- . : Jan. 30, 1943-Dec. 31, 1950; :)

9 GATT concession, eff. Jan. 1, 1948:)

: 10% ad val. /: GATT concession, eff. Apr. 21, 1948:)

: 10% ad val. : Concession to Mexico, eff. :) Jan. 30, 1943-Dec. 31, 1950; 10 GATT concession, eff. Jan. 1, 1948:) •

• : 10% ad val. : Concession to Mexico, eff. :)

: Jan. 30, 1943-Dec. 31, 1950. : ) :

▪

20% ad val. : Statutory rate restored Jan. 1- :) 11 : June 5, 1951. :)

: 10% ad val. : GATT concession, eff. June 6, 1951 :) No change : 12

:

•

25% ad val. : Concession to Czechoslovakia, eff. • : Apr. 16, 1938-Apr. 22, 1939. :) 13

:

•

20% ad val. : GATT concession, eff. Apr. 21, 1948:) • • • • • •

: Concession to Argentina, eff. :) Nov. 15, 1941; GATT concession, :) eff. Jan. 1, 1950. :)

:)GATT concession, eff. in 3 annual :) :) stages, the first on June 30, 1956:) 14

) : ) ; GATT concession, eff. Jan. 1, 1950 :) :)GATT concession, eff. in 3 annual :) :) stages, the first on June 30, 1956:) :)

: GATT concession, eff. June 6, 1951 :)

) 15 :)GATT concession, eff. in 2 annual :) :) stages, the first on July 1, 1962 :) : GATT concession, eff. Sept.10, 1955: 16

:

▪

GATT concession, eff. Apr. 21, 1948:

▪

) : GATT concession, eff. May 30, 1950 :) 17

Par. 1530(e) --Continued Footwear of leather - -Continued :

Welt, valued per pair-- Continued

Over $6.80

: 20% ad val.

17.5% ad val.

: 16.5% ad val. 15.5% ad val. 15% ad val.

With uppers of vegetable : 35% ad val. : 17.5% ad yell' fibers other than cotton. : : 16.5% ad val.

: 15.5% ad val. : 15% ad val.

With soles and uppers of : 35% ad val. :

•

17.5% ad val. wool felt.

:

•

15.5% ad val. : 14% ad val.

Other-- --------- ___----: 35% ad val. : 25% ad val. •

• 33-1/3% ad val.: 25% ad val.

• : 16-2/3% ad • • : val. • :) • • • •

1/ Except as noted, the rate on Jan. 1, 1934, was the same as the original rate in the TailiVAct of 1930, effective June 18, 1930. 2/ Footwear with permanently attached skates or snowshoes is not covered by part 1(A) of schedule 7 of

the TSUS (see headnote 1(i) to that subpart). - V Effective Jan. 1, 1932, the statutory rate of 20% ad valorem was increased to 30% ad valorem, pursuant

to sec. 336 of .the Tariff Act of 1930.' 11/ Same rate in effect Apr. 16, 1938,Apr. 22, 1939, pursuant to a trade-agrement concession granted to

Czechoslovakia. V Effective Jan. 1, 1932, the statutory rate of 20% ad vai4OM was reduced to 10% ad valorem, pursuant to

sec. 336 of the Tariff Act of 1930. ' / Footwear with uppers of fibers and soles of Judie rubber or substitutes for rubber is currently included

in item 700.60 and therefore is not covered by this investigation. / 2/ If-known as alpargatas, 17.5Cad valorem, effective Nov. 15, 1941, pursuant to a concession granted

A .48

Table 5.--Nonrubber footwear: U.S. production, imports for consumption, and apparent consumption by types, 1966-70, January-June 1970, and January-June 1971

(Quantity figures in millions of pairs)

Period and item ;Athletic

: 1 Slippers 1 :

:

• • All other

For : For : Work : men : women : : and : and :

: boys : misses :

For • children .; Total

and infants 2/:

1966: Production : Imports :

: 7 : 1 :

94 1

• :

38 : 1 :

: 113 : 18 1

: 320 : 70 :

: 70 : 1 1 :

642 102

Apparent consumption : Ratio (percent) of imports to :

consumption :

1967: Production : Imports :

8 :

13 :

7 : 1 :

95

•

96 1

•

:

: :

39 : :

3 :

39 : 1 :

131 : . :

14 :

110 1

22 :

390 : :

18 •

286 : 96 :

81 : .

14 :

62 : 12 :

71.14

14

600 133

Apparent consumption : Ratio (percent)of imports to

consumption :

1968: : Production : Imports :

8 :

13 :

: . 8 :

2 :

97

1

105 3/

•

:

.

: :

40 :

3 ! :

36 : 2 :

132 : :

17 :

• . 114 :

30 :

382 : :

25 :

: 317 : 133 :

74 • .

. • 16 :

62 : 114 :

733

18

642 181

Apparent consumption : Ratio (percent) of imports to : consumption :

1969: Production : Imports :

1.0 : .

20 :

9 : ? :

105

4/

101 1

:

:

: :

38 :

5 :

. : 36 : 2 j

144 :

21 :

: 105 : 38 :

4;0 ' .

30 :

: 267 : 139 :

76 : :

18 :

:

:

823

22

,c0g Apparent consumption _ : Ratio (percent) of imports to :

consumption : • . 1970: •

Production : Imports :

11 :

la ; •

• 10- : .4 :

1 02

, 1

.

-10-7 3/

:

: :

:

:

38 :

5 :

:

143 : .

27 : •

-YOE: 49 :

406 : .

34 :

165 :

79 : .

25 :

:- '49:: . El 2

779

26

-5' 242

-36—: 2 :,

Apparent consumption : Ratio (percent) of imports to :

consumption :

Jan.-June: 1970: Production

: :

Imports

14 : :

29 :

:

:

107

4/

52 3/

:

:

:

:

. 5 : :

: 18 : 1 :

1

32

:

54 : 26 :

Ito :

. •

133 : 96 :

le •

30 :

26 : 12 :

30

288 137

Apparent consumption : Ratio (percent) of imports

to consumption :

1971: : Production Imports :

7 :

29 :

: 5 : 3 :

52

4/

. 47

3/

:

.

:

19 :

5 :

: 19 : 1 •

80 :

33 :

: 53 : 33 :

229

42 :

: 125 : 112 :

38 :

32 :

: 28 : 14 :

425

32

276 164

Apparent consumption : Ratio (percent) of imports to:

consumption :

8 : :

38 :

47

4/

:

-

20 i

5 :

86 1 :

38 :

237 . : •

47 :

42 i •

33 :

440

37

1/ Import data relate only to the type of leather slippers reported under TSUS item 700.32; imported nonrubber slippers of other construction and material are included in the import figures relating to All other" footwear. 2/ Production data include the output of footwear not specified by kind, which amounted to 3 million

pairs in 1970- 3/ Less than 500,000 pairs. 7/ Less than 0.5 percent.

Source: Compiled from official statistics of the U.S. Department of Commerce and partly estimated by the .U.S. Tariff Commission.

Note: Data in this table do not include production in Puerto Rico. Such production amounted to (in millions of pairs) 8 in 1966, 11 in 1967, 14 in 1968, 13 in 1969, and 14 in 1970.

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APPENDIX B Statement to Employees From Manager of

Windsor Plant

A-31

TO: Windsor Plant Employes

The U.S footwear industry is being strangled by the steady growth

of shoe imports. Imports already account for more than 40 per cent of

the American market and, if they continue to increase at their present

pace, they could claim more than half of the market in the next few years.

The reason that imported shoes are having such success in this

country is that they cost less than American-made footwear. Foreign

manufacturers are able to sell their shoes at lower prices because the

cost of their wages and fringe benefits are far below those of the U.S.

While U.S. shoe industry wages in 1970 averaged $2.90 per hour,

they averaged $1.25 in Italy, 80 cents in Japan and 65 cents per hour

in Spain.

The increase in shoe imports has been responsible for the closing

of many U.S. shoe plants and has cost many American shoe workers their

jobs. Since 1968, more than 90 factories have been closed in New England

and approximately 25,000 jobs have been lost.

Goodyear employes also have been affected. The import increase has

reduced the demand for Goodyear soles and heels and has resulted in the

lay-off of approximately one-fourth of the hourly employes at Windsor.

There is no evidence that this trend will reverse itself in the foreseeable

future.

CI] 0 irq is q 11 '6 ' r'r p

1.,?_) JUN 28 1971

(more)

OFFirT OF \al' 1Zai.

to the point where the plant will be forced to close.

, IV/

a,A4.144.%1 2 Richard G Cummings/0 Plant Manager 6/

A.:32

In answer to the questions that have been raised by union

representatives at Windsor about the future of our Shoe Prrlucts

operation, it is the opinion of Goodyear management that we cannot

continue to operate under present conditions.

We believe the Windsor plant could be salvaged and the production

ticket increased by taking the following steps: (1) Excluding the

plant from company-wide wage bargaining; (2) bypassing agreed-upon

wage increases for this year and for the foreseeable future, and

(3) rolling back wage rates to a competitive level with other U.S.

shoe product plants.

This formula is similar to that agreed upon last year by local

employes, the United Rubber Workers International Union and Uniroyal,

Inc., in effecting the economies which enabled Uniroyal's Naugatuck,

Conn., footwear plant to continue in production.

Such an appruach at Windsor could help us prevent further losses

and re-establish the confidence of our customers so that we could

maintain our present production volume and have an opportunity to

increase it.

Regrettably, we have had no favorable reaction from representatives

of our Shoe Products employes following our response to their questions.

Unless a satisfactory solution can be reached, we must consider

allocating production to the plant which can provide us with the most

efficient and economical operation, for it is obvious that under

present conditions, manufacturing operations at Windsor will decline