Federal Mogul Corporation
Headquartered in Southfield, Michigan, the Federal Mogul Corporation is a company with origins dating back to the 1890s. Today the company is successful despite having survived thousands of asbestos lawsuits from people who developed mesothelioma, millions of dollars in settlement payments, and a bankruptcy with the creation of an asbestos trust fund to pay claimants.
Federal Mogul began as a small bearing-manufacturing company targeting the automotive industry in Detroit, but quickly expanded to include the making of many different types of auto parts. It also acquired multiple companies over the years, and this is where it got into trouble with asbestos. Several of those companies made products with asbestos and by buying them Federal Mogul assumed liability.
The origins of Federal Mogul begin with the Muzzy-Lyon Company, founded by J. Howard Muzzy and Edward F. Lyon. These two owners sold supplies to rubber companies and mills as Muzzy-Lyon, but moved into metals when they began a subsidiary called Mogul Metal Company. Mogul manufactured bearings and developed different types of metals for different needs, making their bearings with die-casts. This was an innovative step in bearing making and made the process quicker and more efficient.
In 1924 Mogul Metal Company merged with a company called Federal Bearing and Bushing, creating the new company called Federal Mogul. Success really came to the company during World War II when demand was high for metal bearings. After the war the company continued to find success and grew quickly by acquiring many other companies.
These acquisitions helped the company grow, offer more products, and expand into new markets and even overseas, but they also got Federal Mogul into trouble. A few of the companies that Federal Mogul acquired used asbestos to make their products. These included Fel-Pro, which made gaskets and Turner & Newell, which made asbestos construction materials and automotive parts.
After facing thousands of asbestos-related lawsuits from workers who developed mesothelioma, asbestosis, or lung cancer, Federal Mogul was finally forced to reorganize under the protection of Chapter 11 bankruptcy. This process began in 2001 and ended in 2007 with a new Federal Mogul and a large asbestos trust fund to compensate victims.
Federal Mogul might have avoided ever having asbestos in its products or having lawsuits filed over asbestos exposure and illness, except for the fact that when it bought certain other companies, it took on their asbestos liabilities. Fel-Pro, Turner & Newell, and other subsidiaries of Federal Mogul made a wide variety of asbestos-containing products. The heavy use of asbestos in multiple industries is explained by the fact that it has unique properties that make it so useful.
For instance, several of Federal Mogul’s subsidiaries made automotive parts with asbestos, including gaskets, clutch components, and brakes. Asbestos has a high resistance to heat, so it was incorporated into high-friction parts to reduce the risk of overheating and subsequent failures of parts. In construction materials asbestos was useful, again for heat resistance, because it insulates well, but also because it adds strength to materials, like concrete. Federal Mogul’s subsidiaries made concrete, insulation, flooring, roofing, drywall, and other construction products embedded with asbestos fibers.
Asbestos Exposure Caused by Federal Mogul
Exposure to asbestos can cause serious harm because of the very tiny fibers that make up this mineral’s structure. They can break off and become part of the dust in the air and on surfaces. Anyone in the vicinity of asbestos use is vulnerable. Anyone could inhale or ingest these microscopic fibers, but those who handle the mineral directly are at the greatest risk. Once in the body the fibers are difficult to pass and they mostly lodge in tissue and cause damage that in some people leads to later illness.
Anyone who worked for one of Federal Mogul’s subsidiaries making asbestos products was likely to have been exposed to asbestos and to have inhaled the fibers. Not everyone who did inhale them will get sick, but some will develop life-threatening diseases like mesothelioma, lung cancer, and asbestosis. Workers for other companies that used the asbestos products were also likely to have been put at risk of these diseases. Because of the diversity of products Federal Mogul sold, this could include auto factory workers, automotive mechanics, shipyard workers, construction workers, refinery and power plant workers, and many other industrial or factory workers.
Most of the lawsuits that Federal Mogul faced over asbestos exposure and illnesses were the result of its subsidiary Turner & Newell. There were hundreds of thousands of lawsuits over the company’s products and the exposure they caused in a variety of workers. Federal Mogul knew what it was getting into, though, and when it acquired Turner & Newell it also set aside funds for asbestos claims. The amount, over $2 billion, was not enough.
The vast number of lawsuits over Turner & Newell and other subsidiaries and the amounts of the claims and settlements eventually forced Federal Mogul to reorganize. Filing for Chapter 11 bankruptcy protection in 2001, the company emerged in 2007, reorganized and having funded a large asbestos trust fund with several sub-funds for various subsidiaries.
Federal Mogul did manage to get out of liability for one major case involving 22 Texaco workers. They filed a lawsuit in 2001 after having worked at a Texaco refinery from the 1940s through the 1970s and having been exposed to asbestos. Part of that exposure came from gaskets made by a Federal Mogul subsidiary called Flexitallic Gasket Company. The jury awarded the plaintiffs $35.2 million total, but assigned liability to the previous owners of Flexitallic, not Federal Mogul.
Asbestos Trust Funds
As part of Federal Mogul’s bankruptcy protection agreement the company had to establish a trust fund to help settle claims for asbestos exposure and illness. The company created the Federal Mogul U.S. Asbestos Personal Injury Trust in 2007, with separate sub-funds for some of its subsidiaries with the most liability, like Turner & Newell. The latter fund was created with $635 million.
The trust fund is still active and is accepting claims. Federal Mogul expects to field more claims in the future because of the fact that asbestos illnesses often take decades to manifest. If you are diagnosed with an asbestos-related disease and you can trace your exposure to one of Federal Mogul’s subsidiaries, you may be eligible for compensation. To find out, you can file a claim with the active trust fund.
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