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6200 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / NoticesDepartment’s PositionWe agree with Petitioner. The scrapinput respondents used to producecertain TRBs was not purchased asscrap. Respondents paid the fullpurchase price for these inputs. Sales ofbearings produced from scrap areindistinguishable from those producedfrom new steel in respondents’ reportedsales listing. Valuation of the input asscrap instead of as new steel wouldresult, therefore, in an undervaluation ofrespondents’’ FOP. Furthermore, for thefinal results in all previous reviews wevalued scrap steel inputs as new steel.See TRBs IV–VI at 65533. Accordingly,we have valued the scrap-steel input asnew steel for the final results.Comment 10Petitioner argues that the direct-laborsurrogate value should be based on theaverage for all industrial workers or,alternatively, on the average of skilledand unskilled labor rates in India.Petitioner notes that, although theDepartment had available wage rates forall industrial workers and for skilled,semi-skilled and unskilled labor inIndia, it only used the average ofunskilled and semi-skilled labor.Petitioner claims this selection isarbitrary and is in direct conflict withthe information provided byrespondents on the record. Petitionerstates that most respondents reportedthat the PRC manufacturers used skilledand unskilled labor as productionworkers, referring to the PublicQuestionnaire Responses of February 7,1995. Petitioner argues that a reasonableuse of the Department’s source would beto select the average ‘‘industrial worker’’wage or the average of the wage rangesfor unskilled and skilled workers.Guizhou Machinery et al. argue that,although some respondents may havereported that they employ some skilledworkers, the record clearly demonstratesthat the manufacture of TRBs largelyinvolves unsophisticated processes andunskilled labor and, thus, theDepartment’s preliminary results arereasonable and should not be revised.Guizhou Machinery et al. claim thatPetitioner’s suggested calculationrevisions are not supported by recordevidence and would artificially inflatethe surrogate-value labor rate.Additionally, Guizhou Machinery et al.argue that use of Petitioner’s suggestionwould value skilled labor to the samedegree as unskilled labor, not takinginto account the low-tech nature of themanufacturing process. GuizhouMachinery et al. state that Petitioner hasnot provided any evidence which showsthat respondents have equal numbers ofskilled and unskilled workers in themanufacturing process.Department’s PositionWe agree with Petitioner in part. Wereject Petitioner’s recommendation,however, that we use an average‘‘industrial worker’’ wage rate, becauseit does not take into account unskilledlabor. During the course of this review,we visited several TRB factories whileverifying various companies andconfirmed that the primary source oflabor consists of unskilled personnel inthe production process. See, e.g.,Memorandum for the File From CaseAnalyst: Verification Report for YantaiCMC Bearing, Ltd. (September 21, 1995)and Memorandum for the File FromCase Analyst: Verification Report forShanghai General Bearing Co., Ltd.(September 21, 1995). The average‘‘industrial worker’’ wage rate does notindicate if, or to what extent, unskilledlabor is included. The lowest wage ratein the average ‘‘industrial worker’’category is at the level of the highestwage rate among the average wage ratesfor unskilled labor. Therefore, use of the‘‘industrial worker’’ wage rate coulddistort significantly the wage-rate factor.We agree with Petitioner’s alternativerecommendation, however, that wecalculate a wage rate between ‘‘skilled’’and ‘‘unskilled’’ labor rates.Respondents reported that during theproduction process they employedcertain amounts of both skilled andunskilled direct labor. Because we haveaverage wage rates for both skilled andunskilled labor, we can more accuratelyvalue direct labor according to eachrespondent’s own experience.Accordingly, we have calculated, forthese final results, an average wage ratefor skilled labor and an average wagerate for unskilled labor. We appliedthese rates to each respondent, weightedaccording to the reported amounts ofskilled labor and unskilled labor.Comment 11Petitioner argues that the Departmentshould make allowance for vacation,sick leave and casual leave whencalculating the number of weeks permonth actually worked. Petitioner statesthat the Department calculated thehourly wage rate on the basis of 4.333working weeks per month, based on afull 52-week year, which assumes thatworkers never get sick, take vacations orhave other days off. Petitioner observesthat IL&T India shows that mandatorybenefits include one day of paidvacation for every 20 days worked, sickleave of seven days a year with full pay,and seven to ten days of casual leave.Petitioner claims that respondents havenot allocated any portion of vacation orsick leave to the labor hours theyreported as their factors of production.Petitioner states that the goal is todetermine the cost to an employer ofeach hour that an employee is on the joband the denominator must include onlytime on the job. Petitioner suggests thatthe number of weeks per month shouldbe recalculated to take into account atleast the minimum benefits and derivesa figure of 3.94 working weeks permonth using this approach. Petitionerfurther suggests that it would be morereasonable to use the usual vacationtime of 30 days as stated in the IL&TIndia data which the Department used,thus deriving a figure of 3.72 workingweeks per month.Guizhou Machinery et al. state thatthe Department should reject thePetitioner’s argument to adjust thecalculated labor rate for vacation, sickleave and casual leave which theDepartment used in the preliminaryresults. Guizhou Machinery et al. claimthat Petitioner provides no support forthe statement that hourly labor costsshould reflect only the expensesaccrued to an employer for the time theemployee is on the job. GuizhouMachinery et al. state that the realhourly cost to the employer reflectsmany factors, including fringe benefitssuch as paid vacation, sick leave, etc.Guizhou Machinery et al. suggest thatthe Department’s calculations shouldinclude the cost of fringe benefits suchas vacation and sick leave in thenumerator and, because the numeratorincludes costs for fringe benefits, thedenominator should likewise reflectthese fringe benefits.Department’s PositionWe disagree with Petitioner. In ourpreliminary results we valued directlabor using rates reported in IL&T India,which states that fringe benefitsnormally add between 40 percent and50 percent to base pay. SeeMemorandum to the file from CaseAnalyst: Factors of Production ValuesUsed for the Seventh Antidumping DutyAdministrative Review (Memorandum),September 1, 1995, attachment 5.Accordingly, we multiplied base pay by1.45 in order to incorporate fringebenefits. Memorandum at 3–4.Whereas petitioner suggests wecalculate a wage rate based only on timespent on the job, we find that paidholidays, vacation, sick leave, etc.,belong in the calculation because theemployer incurs the same expenses as ifthe employee were on the job. Byadjusting the base pay to include suchfringe benefits as vacation, sick leave,casual leave, etc., we calculated a direct-