General Motors (GM)
General Motors is one of the largest car companies in the world, and although it went through a rough period and a bankruptcy, it is back on top and profitable once again. As one of the “Big Three” American car companies headquartered in Detroit, GM has played an important role in the car industry and the overall economy, employing hundreds of thousands of people over the years.
GM has also had issues with asbestos, like companies in many industries. A number of car parts have been made with asbestos because of its ability to withstand friction while resisting heat and fire. Some components in cars still include asbestos, as federal bans have not completely eliminated this mineral. The use of asbestos in GM car parts has caused exposure in thousands of workers, and some of those workers became sick as a result. GM has faced lawsuits over these cases and has been forced to create an asbestos trust fund to compensate victims.
About General Motors
For many years, General Motors was the largest care company in the world. It was surpassed by Toyota in 2008 but today is still one of the world’s largest automakers, coming in third behind Toyota and Volkswagen. GM sells cars on six continents and employs nearly a quarter of a million people around the world. GM has nearly 20,000 dealerships in 125 countries selling ten different brands of cars. Many of its current brands have been around for 100 years or more and are recognizable throughout the world.
The history of General Motors stretches back more than 100 years. It was formed as General Motors Corporation in 1908 in Flint, Michigan. The creator of this holding company was William C. Durant, the owner of Buick, which is still a brand of cars made and sold by GM. Durant manufactured horse-drawn carriages before he got into the burgeoning automobile industry, which at the time was small but growing.
Over the years the company acquired other automotive companies and brands, including Oldsmobile in 1909 and the Reliance Motor Truck Company, which would become the GMC brand of well-known trucks. Durant lost control of GM in 1910 and founded Chevrolet in the meantime. He also used that new company to buy a stake in GM and was able to take back control of the company by 1916, adding the long-lasting Chevrolet brand to the company’s lineup.
General Motors also acquired automobile parts companies over the years as well as other types of companies, including Frigidaire, a maker of appliances. During World War II, GM played an important role in the war effort, halting automobile manufacturing to use the assembly lines to make tanks, weapons, airplanes, and even ships and ship components. GM thrived in the post-war economy and continued to be profitable for decades, rising to the largest car maker in the world.
By the 1970s and 1980s, competition from other car makers, particularly Japanese companies, started to hurt GM and other U.S. companies. Sales declined and rising pension funds and healthcare costs for employees and retirees further hurt the bottom line, as did lawsuits over asbestos exposure and illness. In June of 2009 GM was finally forced to file for bankruptcy. After a quick reorganization and a controversial bailout from the federal government, GM was back just a month later, but had been forced to ditch several brands and establish and asbestos trust fund.
Asbestos has been used extensively in the automotive industry, mainly because of its ability to resist heat and fire, but also because it was readily available from asbestos mines and was inexpensive. In cars, having materials that will resist heat is important. Hood liners, for instance, contained asbestos to keep the hood from getting too hot from the engine. Brakes and clutches contained a lot of asbestos because these components experience a lot of friction, which generates huge amounts of heat. Overheating in these parts is dangerous and asbestos protects against it.
Many of the parts that GM used in cars that contained asbestos came from third-party car part makers. BorgWarner, for instance, supplied the company with asbestos-containing clutches and brakes beginning in the 1960s. Not all of GM’s asbestos liability comes from cars. Some of the other, non-automotive companies that GM acquired used asbestos. For example, Delco Appliance Corporation made boilers, which in the 1930s and 1940ss included asbestos in their construction.
The asbestos that went into car parts and the products made by other types of companies GM acquired over the years caused a lot of damage in people working in all kinds of industries. One of the groups of workers most affected was mechanics. When these skilled workers took out, repaired, or replaced clutches and brakes containing asbestos, they were exposed to the dust created by the friction in the parts. Inhaling this dust meant that they also inhaled asbestos fibers and were put at risk of developing mesothelioma and other very serious illnesses.
People who worked on repairing the appliances and boilers made by companies GM owned, were put at similar risk. Other workers affected included all the people who worked with or around the asbestos-laden parts, including factory workers, engineers, machinists, salespeople, managers, installers, and workers in warehouses. Even the family members of these workers were put at risk because workers may have brought asbestos fibers home on their clothing.
By 2009 when GM was forced into bankruptcy protection, the company was facing several hundred million dollars-worth of asbestos lawsuits. Most of these were related to the use of clutches and brake linings. One example was a case brought by auto mechanic Roland Grenier who worked for nearly 40 years on GM cars and parts, including brakes and clutches. He was diagnosed with mesothelioma in 2005 and was awarded $2 million by the jury in the case. Another case was brought by a man whose father worked in a warehouse with GM brakes and clutches. The man alleged that his father brought home asbestos fibers on his clothes, resulting in his mesothelioma diagnosis through secondary exposure. He was awarded $30 million.
GM’s Asbestos Trust Fund and Bankruptcy
There were many causes of the troubles that led to GM’s 2009 bankruptcy, and the number and size of asbestos lawsuits was just one part of it. Because the company had many pending lawsuits against it related to asbestos, it was required to form an asbestos trust fund. This trust fund was opened in 2012 and was supplied with a certain amount of money, decided upon in bankruptcy, that would be used to settle any future asbestos claims and to compensate victims of mesothelioma and other illnesses.
General Motors is an example of a company that was large enough to be able to survive asbestos litigation. After bankruptcy and a government bailout, the company made a comeback and became profitable again. For so many workers in the auto industry, this comeback did not include them. Countless mechanics and other workers were exposed to asbestos over years of service and got sick as a result. These workers have filed lawsuits, but now they have the chance to make claims with the Motors Liquidation Company Asbestos Personal Injury Trust.
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