Corporations divided over plan for asbestos compensation fund
Tuesday, January 11th 2005, 8:50 am
By: News On 6
WASHINGTON (AP) _ While several companies oppose a plan to ban asbestos lawsuits in exchange for a multibillion-dollar compensation fund, groups that fought bitterly last year over how a proposal should work are urging lawmakers to keep looking for a compromise.
``The best solution to the asbestos problem lies in establishment of a national, no-fault trust fund, privately financed by asbestos defendant companies and insurers,'' said Mike Baroody, executive vice president of the National Association of Manufacturers.
Added Peg Seminario, the AFL-CIO's director of occupational safety and health department: ``We have supported the establishment of a federal trust fund in principle, provided that it provides victims fair compensation and is adequately funded.''
Disagreements between labor and businesses over how much money should be put in a trust fund for asbestos victims helped kill legislation ending asbestos liability lawsuits last year. But Senate Judiciary Chairman Arlen Specter, R-Pa., plans to kickstart the legislation again on Tuesday with a hearing.
The Pennsylvania Republican says asbestos liability is driving companies out of business and leaving victims with little or no money for medical bills. Specter has said he favors ending asbestos liability and paying victims through a trust fund instead of having thousands of lawsuits with no end in sight.
But several corporations oppose the idea, including Federal-Mogul Corp. The Southfield, Mich.-based auto supplier filed for bankruptcy in 2001 because it was facing more than 365,000 lawsuits claiming hundreds of millions in damages because of asbestos. The company was drawn into the issue in 1998 when it bought several companies facing asbestos claims.
The company said in a Jan. 3 statement that the legislation won't help the economy, sick people or the companies that are being sued into bankruptcy.
``Not only will the proposed trust result in devastating economic harm to U.S. business, leaving most companies far worse off than under the existing tort system, but it will almost certainly fail to compensate most claimants before becoming insolvent,'' the company said in a fact sheet it sent to Congress.
Federal-Mogul said it would be forced to pay more money into the trust fund than any other _ $82 million a year under a previously introduced version of the legislation. But it isn't the only business concerned about Specter's bill.
In a separate Jan. 3 letter, Exxon Mobil Corp., E.I. du Pont de Nemours and Co., and other corporations joined Federal-Mogul in opposing Specter's proposed legislation.
``We remain concerned that the current discussion would result in a program that would set up back rather than move us forward,'' the companies said.