Dana Corporation’s History with Asbestos
Dana Corporation was established in 1904 by engineering student Clarence Spicer. After inventing a breakthrough car part, the Spicer Universal Joint, Spicer left Cornell University to found an automotive parts business in Plainfield, New Jersey.
Spicer provided a range of automotive parts to companies including Buick, Wayne, Mack, Olds, Stevens-Duryea and American Motor Car Company. Some of these parts contained asbestos, which made the company vulnerable to a slew of asbestos lawsuits in decades to follow.
By 1914, the Spicer Company was struggling with financial difficulties. Attorney and financier Charles Dana invested in the company shortly after, assuming the role of president in 1916.
The Spicer Company relocated to Toledo, Ohio, in 1928 and became the Dana Corporation in 1946. Two years later, Charles Dana was named chairman of the board, and a series of acquisitions brought his company decades of success following World War II. Dana Corporation continued to expand its product line and purchased two automotive part suppliers in the 1960s.
By 2006, Dana Corporation was facing financial problems, and the company filed for bankruptcy protection that year. Dana asserted that its asbestos liabilities, which represented 3% of its debt, were not responsible for the bankruptcy. The previous year the company defended a total of 88,000 asbestos claims.
Unlike other asbestos manufacturers that filed for bankruptcy, it resolved many asbestos exposure claims while going through bankruptcy and did not establish an asbestos trust fund. In 2016, Dana divested the subsidiary that held its asbestos liabilities.
Now known as Dana Incorporated, the company has been on the Fortune 500 list for 65 years, generating sales of more than $8 billion in 2018 alone.
Dana Corporation Bankruptcy and Divestiture
On March 3, 2006, Dana Corporation filed for Chapter 11 bankruptcy. The reorganization plan was approved on Dec. 26, 2007.
In October 2007, amid bankruptcy proceedings, Dana resolved about 7,500 of the 150,000 asbestos claims against it with a $2 million settlement.
Dana’s bankruptcy plan called for asbestos claims to pass through the bankruptcy process unimpaired and for the company to resolve them after it emerged from reorganization. Dana said it was insured and cited prior success handling asbestos claims.
During bankruptcy proceedings, the company established Dana Companies LLC, a consolidated, wholly owned company created to hold and manage its asbestos claims.
In 2008, a group called the Ad Hoc Committee of Asbestos Claimants appealed Dana’s recently accepted reorganization plan. The committee believed the company hadn’t set aside enough money to settle current and future asbestos claims.
Dana responded to the committee’s concerns, noting that it set aside $240 million in cash and other assets to cover future asbestos liabilities. The company based this figure on the number of active cases pending and the number of dismissed cases.
The company continued to handle asbestos lawsuits filed against it. By June 2010, Dana had about 31,000 active asbestos claims and had settled about 11,000 inactive claims. That year, the company estimated that its asbestos liabilities would extend through the next 15 years.
By the end of 2015, it was facing approximately 25,000 active asbestos lawsuits.
On Dec. 30, 2016, Dana Companies LLC was sold to Enstar Holdings, an insurance group that also later acquired BorgWarner Inc.’s asbestos liabilities. After completion of that sale, Dana Incorporated was absolved of its asbestos liabilities. Enstar now handles all asbestos claims involving Dana’s asbestos products.
Voluntary Employee Beneficiary Association
While Dana did not establish a trust fund to compensate all individuals harmed by its asbestos products, the company reached an agreement in July 2007 with two workers unions to create a Voluntary Employee Beneficiary Association (VEBA) trust fund for former employees of the company.
Replacing welfare and long-term disability benefits, the VEBA trust includes coverage of asbestos-related medical expenses for participants and their families. To fund the trust, Dana contributed approximately $700 million in cash and $80 million in company stock after it emerged from bankruptcy.
Former employees of Dana Corporation who develop an asbestos-related disease may file a claim with the VEBA trust. Those who didn’t work for Dana but believe their asbestos-related disease was caused by Dana products may file a lawsuit that will be handled by Enstar.
Asbestos Litigation Involving Dana Corporation
Asbestos lawsuits against Dana Corporation have been filed by workers who handled the company’s asbestos products.
Robaey v. Dana
The biggest verdict against Dana to date came in 2017 in the case of Marlena Robaey, who was diagnosed with mesothelioma in November 2012.
Dana and four other manufacturers of asbestos automotive components were found liable for Robaey’s injuries. Robaey helped her husband repair asbestos-containing car parts for more than 20 years. A New York jury ruled that Dana was 40% liable for her injuries.
The overall award of $75 million to Robaey and her husband stands as the largest single mesothelioma verdict in the state’s history.
Hicks v. Dana
In one notable asbestos lawsuit, a former pipefitter sought recovery for his asbestos-related injuries in 2002. Louis Hicks filed a lawsuit against Dana Corporation and 10 other asbestos companies after developing mesothelioma, claiming his cancer was caused by exposure to asbestos products he worked with for more than 40 years.
Although Hicks died from his disease in 2003, his daughter continued the suit. The court found all 11 manufacturers responsible for Hicks’ illness, ordering them to pay his estate $5 million.
Dana Settles with Insurers
In 2012, Dana privately settled a $21 million dispute with two of its insurance providers over asbestos litigation costs.
Dana Corporation’s Asbestos Products
Dana Corporation made the following asbestos-containing products:
- Brake linings
- Sheet gaskets
- Spraycraft fireproofing
- Valve covers
Dana Corporation’s Occupations at Risk
- Dana manufacturing plant workers
- Auto mechanics
- Auto assembly line workers
- Boiler workers
- Engine mechanics
- Steam fitters
For decades, the Dana Corporation provided an array of asbestos-containing products to standard and heavy-duty vehicle manufacturers.
Installing and replacing asbestos brakes can stir up dangerous levels of airborne fibers. Such conditions put any unprotected shop worker in the vicinity at risk for lung cancer, mesothelioma and other asbestos-related diseases.
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