Few industries remain untouched by the Federal-Mogul Corporation, a true corporate conglomerate. Headquartered in Southfield, Michigan, the company manufactures products for the automotive, industrial, railroad, aerospace and energy sectors. Federal-Mogul was founded in 1899 when J. Howard Muzzy and Edward Lyon incorporated the Muzzy-Lyon Company. After establishing a subsidiary, Mogul Metal Company, the founders developed a process to fabricate die-cast bearings for engines. Buick placed the company’s first major order in 1910 when it requested 10,000 connecting-rod bearings.
Mogul Metal became the Federal-Mogul Corporation in 1924 after merging with Federal Bearing and Bushing. Between 1941 and 1945, company sales doubled as a result of production for World War II. Throughout the ensuing decades, Federal-Mogul significantly expanded its business operations through a series of acquisitions.
Many of Federal-Mogul’s asbestos litigation claims arose after it acquired companies who manufactured asbestos products. Two major acquisitions occurred in 1998 when Federal-Mogul purchased Fel-Pro and Turner & Newall. Fel-Pro manufactured gaskets and seals that contained asbestos ingredients. And Turner & Newell, Europe’s largest manufacturer of asbestos-containing construction materials, also produced brake pads, bearings and other automotive parts.
The financial aftermath of the asbestos claims accompanying Federal-Mogul’s acquisitions led the company to file Chapter 11 bankruptcy in 2001. Although the company nearly tripled in size during the 1990s, Federal-Mogul didn’t emerge from bankruptcy until 2007.
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Federal-Mogul attempted to avoid bankruptcy by shedding its workforce and closing manufacturing facilities, but no strategy could save the company from the sheer number of asbestos-related lawsuits stemming from the Turner & Newall acquisition. By the time Federal-Mogul filed for bankruptcy, it had more than 156 subsidiaries and affiliates. Of these, a number were involved in asbestos litigation suits, totaling nearly 350,000 individual claims.
When Federal-Mogul acquired Turner & Newall, it set aside approximately $2.1 billion as a reserve to pay for asbestos-related claims, but the amount proved insufficient. Although Federal-Mogul cites Turner & Newall as the driving force that sent the company into bankruptcy, Flexitallic Gasket Company, another subsidiary, is the defendant most often named in recent asbestos claims.
In a 2001 case involving 22 former Texaco workers, a jury awarded the plaintiffs $35.2 million as compensation for their workplace exposures to asbestos. While employed at the Texaco refinery from the 1940s to the 1970s, these workers handled asbestos-containing Flexitallic gaskets and went on to develop asbestosis. The former owners of Federal-Mogul subsidiary Flexitallic (U.S. Gypsum Co. and Gasket Holdings), were responsible for paying the $35.2 million. Each former employee received $1.6 million.
Federal-Mogul Corporation’s core manufacturing businesses did not generally involve asbestos. However, the company exposed itself to asbestos liability after acquiring companies that manufactured asbestos-contaminated building materials, gaskets and automotive friction products such as brake pads. As a result, anyone who worked with products made by Federal-Mogul, Turner & Newall, Flexitallic Gasket Company and others may be at risk for developing mesothelioma or another asbestos-related disease.
Occupations at risk include construction workers, mechanics, shipyard workers, refinery workers and refractory plant workers. Employees who manufactured products for asbestos companies that Federal-Mogul acquired may have also faced asbestos exposure hazards. Workers often handled asbestos materials and used machines that contained asbestos parts.
Courts have held Federal-Mogul liable for injuries related to various products manufactured by its subsidiaries throughout the years. Many lawsuits have stemmed from exposures to asbestos-containing automotive parts such as brake pads, gaskets, seals and bearings. In addition, Federal-Mogul owns companies that produced insulation, cement pipe and various other asbestos building materials.
While Federal-Mogul knew about the asbestos claims filed against companies it acquired, they still felt adding them as a subsidiary was a good move. Unfortunately for Federal-Mogul the risk did not pay off.
Matt Mauney is an award-winning journalist with nearly a decade of professional writing experience. He joined Asbestos.com in 2016, and he spends much of his time reading, analyzing and reporting on mesothelioma research articles to ensure people in the mesothelioma community know the latest medical advancements. Prior to joining Asbestos.com, Matt was a reporter at the Orlando Sentinel. Matt also edits some of the pages on the website.
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