BorgWarner’s History with Asbestos
BorgWarner Inc. is an automotive parts manufacturer that began manufacturing asbestos-containing automotive clutches in 1928. In 1971, it started manufacturing asbestos-containing brake pads.
BorgWarner continued to supply asbestos brake pads until 1975, and made asbestos clutches through the 1980s.
These products exposed many automotive workers to asbestos, putting them at risk of developing asbestos-related diseases such as malignant mesothelioma. Many workers who developed these diseases filed lawsuits against BorgWarner claiming that their illnesses were caused by its asbestos products.
These lawsuits have cost the company millions of dollars. In 2016, BorgWarner set aside $703.6 million ($440.6 million after taxes), which was estimated to cover pending and future asbestos claims for the next 50 years. In 2019, BorgWarner divested the subsidiary that held its asbestos liabilities to an insurance group.
Headquartered in Auburn Hills, Michigan, BorgWarner no longer makes asbestos-containing products. Today it manufactures products for combustion, hybrid and electric vehicles.
Divesture of BorgWarner Morse TEC
Unlike other companies that have faced thousands of asbestos claims, BorgWarner avoided bankruptcy through divestiture, which is a relatively uncommon way of handling asbestos liabilities. It is the largest legacy liabilities sale executed in U.S. history.
On Oct. 30, 2019, BorgWarner divested BorgWarner Morse TEC, the subsidiary that held all its asbestos liabilities, to Enstar Holdings LLC. Enstar is an insurance group, and this is the second time it has acquired a company’s asbestos liabilities. The first was Dana Corporation in 2016.
BorgWarner paid Enstar $172 million to take over Morse TEC.
“Enstar is a leading player in managing legacy liabilities and has specific expertise in asbestos,” said BorgWarner President and CEO Frédéric Lissalde in a company press release.
Enstar will manage all of BorgWarner Morse TEC’s asbestos claims and collection of existing insurance policies.
Asbestos Litigation Involving BorgWarner
Tens of thousands of asbestos lawsuits have been filed against BorgWarner. The company reported it resolved 38,000 asbestos cases in 2005 and 27,000 in 2006.
According to previous earnings reports, BorgWarner paid $54.7 million in 2015 and $45.3 million in 2016 in asbestos-related defense and litigation fees.
BorgWarner Named in GM Worker’s Suit
One case against the company involved Mark Buttitta, a former General Motors employee who died of mesothelioma at age 50 after exposure to BorgWarner asbestos brakes and clutches at a General Motors warehouse. Buttitta also had prior secondary exposure to asbestos through his father, who also handled asbestos clutches and brakes at a General Motors warehouse.
After Buttitta died in 2002, his wife sued BorgWarner, General Motors and several other companies. In 2010, the court ordered the named companies to pay $30.3 million in total damages. A New Jersey appeals court later upheld the decision.
BorgWarner Wins Appeal in $32.5 Million Lawsuit
In July 2015, a California state appellate court overturned a $32.5 million punitive damages decision against BorgWarner. The case involved former General Motors security guard Secundino Medina, who sued BorgWarner in March 2010 after he was diagnosed with mesothelioma. After he died in July 2010, his family took over the suit.
A jury awarded $130,500 to each of his three daughters in economic damages, along with $2 million each in noneconomic damages. Finally, $32.5 million in punitive damages was awarded to the Medina estate. The appeals court later decided there wasn’t enough evidence against BorgWarner to preserve the large sum, which may have bankrupted the company. BorgWarner was still forced to pay its share of $6 million in noneconomic damages.
BorgWarner’s Asbestos Products
BorgWarner manufactured the following asbestos-containing automotive products:
- Brake pads
- Brake shoes
- Clutch discs
- Clutch pads
The company’s asbestos products were used in automotive repair shops across the country, which exposed many auto mechanics to toxic asbestos fibers.
Other automotive employees were also exposed while handling these products, including auto factory workers and warehouse workers. Additionally, do-it-yourselfers who replaced their own brake pads may have been exposed to BorgWarner’s asbestos products.
Today, the Occupational Safety and Health Administration recommends methods to reduce asbestos exposure for auto technicians. Safety measures include using pressurized enclosures and wetting asbestos-containing materials to minimize the amount of airborne asbestos fibers.
BorgWarner Occupations at Risk
The following occupations faced the risk of exposure to BorgWarner’s asbestos products:
- Automotive mechanics
- Automotive repair shop employees
- Automotive factory workers
- Automotive warehouse workers
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