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Limousines from Canada

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Limousines from Canada LIMOUSINES FROM CANADA Determination of the Commission in Investigation No. 701-TA-300 (Preliminary) Under the Tariff Act of 1930, Together With the Information Obtained in the Investigation Determination of the Commission in Investigation No. 731-TA-438 USITC PUBLICATION 2220 (Preliminary) Under the Tariff Act SEPTEMBER 1989 of 1930, Together With the Information Obtained in the Investigation United States International Trade Commission Washington, DC 20436 UNITED STATES INTERNATIONAL TRADE COMMISSION COMMISSIONERS Anne E. Brunsdale, Chairman Ronald A. Cass, Vice Chairman Alfred E. Eckes Seeley G. Lodwick David B. Rohr Don E. Newquist Staff assigned: Mary Trimble, Office of Investigations Michael Hagey, Office of Industries Howard Gooley, Office of Economics James Stewart, Office of Investigations Craig McKee, Office of the General Counsel Robert Carpenter, Supervisory Investigator Address all communications to Kenneth R. Mason, Secretary to the Commission United States International Trade Commission Washington, DC 20436 i CONTENTS Determinations •••••.••••• 1 Views of the Commission. 3 Additional views of Vice Chairman Ronald A. Cass •• 19 Information obtained in the investigations. A-1 Introduction. ............... A-1 The product ••. A-2 Description and uses. A-2 Substitute products •• A-3 Manufacturing process •• A-4 Stripping •• ... .. ... A-6 Cutting •.•• .... A-6 Extension •• . • .. A-6 Painting ••• A-6 Interior finishing ••. A-6 Exterior finishing ••• . ......... ·.A-) Suspension upgrade and alignment •• . A-7 U.S. tariff treatment ••••.••••••••••• A~7 The nature and extent of alleged subsidies •• A;,_7 The nature and extent of alleged sales at LTFV •• ......... ·.. A-8 The U.S. market.~ •• • •••••••••• 9: A--·8 Background ••• A-8 Seasonality •••• A-10 Apparent U.S. consumption~ A-10 U.S. producers ........... A-:-11 U.S. importers •••••••••••• ......... A-14 Channels of distribution •• A-15 Consideration of alleged material injury .to an industry in the United States . ................ A-18 U.S. production, capacity; and capacity utilization •••• A-19 U.S. producers' domestic shipments, company transfers, and export shipments •••••.•• .... 'A-20 Domestic shipments. A-20 Export shipments ••• . .. .A-:21 Total shipments •..•• A-21 U.S. producers' inventories •• A-22 U.S. employment, wages, and productivity. •... A-23 Financial experience of U.S. producers •• A-25 Overall establishment operations .••.•• ... :. A-25 Operations on limousines •••••••••••••• A-25 Investment in productive facilities •• A-25 Capital expenditures·•••••••••••••• A-30 Research and development expenses. A-30 Capital and investment •••••••••••• A-30 Consideration of the question of threat of material injury •••••• A-31 U.S. importers' inventories. A-32 Foreign producers ............. ~ ............................. A-33 Consideration of the causal relationship between imports of the subject merchandise and the alleged material injury. A-35 U.S. imports . ........................................ A-35 U.S. market penetration by the subject imports ••••••.•••••••••••••••• A-36 ii CONTENTS Information obtained in the investigations--Continued Consideration of the causal relationship between imports of the subject merchandise and the alleged material injury--Continued Prices .............................................................. A-37 Market characteristics . ........................................... ~ A-37 Chassis and conversion, the elements of cost and price ••••••.•••••• A-38 Questionnaire price data . ......................................... A-39 Price trends . ................................................... A-40 Domestic limousine prices . .................................... A-40 Canadian limousine prices . .................................... A-42 Price comparisons and margins of underselling •••..•••••••••••.•.• A-42 Margins of underselling and overselling, by company •••••••..••••• A-44 Lost revenue . ....................................................... A-45 Lost sales . ......................................................... A-47 * * * .............................................................. A-48 Exchange rates . ..................................................... A-48 Appendix A. Federal Register notices ••••••••.•.•••••••..•••••••.••••.••• B-1 Appendix B. List of witnesses .......................................... B-9 Appendix C. Interference in the CoIIDnission's investigations ••••••.•••.•• B-13 Appendix D. Impact of imports on U.S. producers' growth, investment, development and production efforts, and ability to raise capital ••••• B-17 Figures 1. A car becomes a limo. A-5 2. Location of known U.S. producers of limousines ••••.••••••••.•.••••••.• A-13 3. A.H.A.'s U.S. distributor/dealer network •••••••••••••••••.••.••••••••• A-16 Tables 1. Limousines: Changes in the U.S. limousine industry during the period of investigation ..........· .......................................... A-14 2. Limousines: U.S. capacity, production, and capacity utilization, 1986-88, January-June 1988, and January-June 1989 ••.••..••..••••..•• A-20 3. Limousines: U.S. producers' domestic shipments, export shipments, and total shipments, 1986-88, January-June 1988, and January-June 1989 .. A-21 4. Limousines: U.S. producers' end-of-period inventories, inventories as a percentage of U.S. shipments, and inventories as a percentage of total shipments, as of Dec. 31, 1985-88 and June 30, 1988 and 1989 •• A-22 5. Limousines: Average number of production and related workers, hours worked, productivity, wages paid, hourly wages, total compensation paid, hourly total compensation, and unit labor costs, 1986-88, January-June 1988, and January-June 1989 .•••••.••••••.•••..••.•••... A-24 6. Income-and-loss experience of U.S. producers on the overall operations of their establishments within which limousines are produced, accounting years 1986-88, January-March 1988, and January-March 1989 .................................................. A-26 iii CONTENTS Tables--Continued 7. Income-and-loss experience of U.S. producers on their operations producing limousines, accounting years 1986-88, January-March 1988, and January-March 1989 ........ ·..................................... A-27 8. Income-and-loss experience of U.S. producers on their operations producing limousines, by firms, accounting years 1986-88, · January-March 1988, and January-March 1989 ••••••••.•••••••••.••••••• A-28 9. Limousines: Value of property, plant, and equipment of * * * U.S. producers, as of the end of accounting years 1986-88, Mar. 31, 1988, and Mar. 31, 1989 •.••••••.••••••••.•••.•.•••.••••••• A-29 10. Limousines: Capital expenditures by * * * U.S. producers, accounting years 1986-88, January-March 1988, and January-March 1989 •••••••.•• A-30 11. Limousines: A.H.A.'s capacity, production, capacity utilization, end-of-period inventories, inventories as a share of total shipments, home-market shipments, exports to the United States, exports to all other countries, and total shipments, 1986-88, January-June 1988, and January-June 1989 •••••••••••••••••••••••.••• A-34 12. Limousines: Canadian exports to the United States, by companies, 1986-88, January-June 1988, and January-June 1989 •••••••••••••••••• A-35 13. Limousines: U.S. imports from Canada, 1986-88, January-June 1988, and J anuary-.Jurie. 1989 . .............................. ·. A-35 14. Limousines: Shares of the quantity of U.S. consumption supplied by Canadian and U.S. producers, 1986-88, January-June 1988, and January-June 1989 . ............................. ." .·. A-36 15. Limousines: Lowest~price sale of U.$.-produced and of imported Canadian-produced Model 1, Lincoln Town Car chassis, single cut, 60-66-inch extended wheelbase limousines to dealers o.r distributors, by companies and by quarters, January 1987-June i989. A-40 16. Limousines: Lowest-price sale of U.S.-produced and of imported Canadian-produced Model 1, Lincoln Town Car chassis, single cut, 60-66-inch extended wheelbase limousines to limousine rental firms, by companies and by quarters, January 1987-June 1989 ••••••.• A-41 '17. Limousines: Lowest-price sale of U.S.-produced and of imported Canadian-produced, Model 3, Lincoln Town Car chassis, single cut, 60-66-inch extended wheelbase limousines to dealers or distributors, by companies and by quarters, January 1987-June 1989. A-41 18. Limousines: Lowest-price sale of U.S.-produced Model 3, Lincoln Town Car chassis, single cut, 60-66-inch extended wheelbase limousines to limousine rental firms, bycompanies and by quarters, January 1987-June 1989 ............................................. A-41 19. Limousines: Margins of under/overselling, based on comparisons of net f .o.b. selling prices of Model 1 domestic limousines and limousines imported from Canada sold to dealers and distributors, by companies and by quarters, January 1987-June 1989 ••••••..••••••• A-44 20. Limousines: Margins of under/overselling, based on comparisons of net f.o.b. selling prices for Model 1 domestic limousines and limousines imported from Canada sold to limousine rental firms, by companies and by quarters, January 1987-June 1989 •••.•••••.•••••••• A-45 iv CONTENTS Tables--Continued 21. Limousines: Margins of underselling, based on comparisons of net f .o.b. selling prices of Model 3 domestic limousines and limousines imported from Canada sold to dealers and distributors, by companies and by quarters, January 1987-June 1989 .••••••••••••••••••••••••••• A-45 22. U.S.-Canadian exchange rates: Nominal exchange rates
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