Owens Corning declares bankruptcy

The world's largest manufacturer of fiberglass insulation, Owens Corning Corporation of Toledo, Ohio, filed for Chapter 11 bankruptcy on Oct. 5, 2000, in response to a growing mountain of asbestos liability claims.  The company has assets of $7 billion and liabilities of $5.7 billion; however, the number of asbestos claims against the company continues to grow and the trust fund it set aside to pay those claims now appears inadequate.

Owens Corning (O-C) has informed its employees and customers that business will continue as normal for the immediate future.  Bank of America loaned the corporation $500 million so that it may continue operations while the court system helps sort out which creditors will be paid, in what order, and how much.  O-C has revenues exceeding $5 billion per year, making it one of the wealthiest corporations to ever be afforded bankruptcy protection by the U.S. courts.  

Chapter 11 bankruptcy, the lesser of the two common bankruptcy filings, allows a company to continue business while sorting out its financial affairs.  In Chapter 7 bankruptcy, the court supervises the sale of the debtors assets to pay creditors.  O-C's bankruptcy is America's largest this year, and second largest in five years, according to the Toledo Blade newspaper.

From 1952 to 1972 Owens Corning produced an asbestos-containing high-temperature pipe coating called Kaylo.  "To date, the company has received more than 460,000 asbestos personal injury claims and has paid or agreed to pay more than $5 billion for asbestos-related awards and settlements, legal expenses and claims processing fees," according to an Owens Corning press release announcing the bankruptcy filing.

Newspaper articles and press releases fail to mention O-C's potentially monstrous liability for the toxic fiberglass insulation which is in 90 percent of America's homes, and is manufactured by OC all over the world

"It looks like the well may be dry when fiberglass victims finally step up for a drink," said Robert Horowitz, chairman of the Victims of Fiberglass non-profit organization.  "Owens Corning has poisoned so many people that it will never be able to pay them all, nor will it be able to clean up the millions of homes and business contaminated by its irresponsible behavior and unrestrained greed."

Although OC officials have promised employees that paychecks will continue uninterrupted, long-time workers who depend on the company for retirement face an uncertain future.  Although the company's pension plan is a separate asset, Owens Corning stock is now virtually worthless, and OC President Glen Hiner said he expects the New York Stock Exchange to delist the former Fortune 500 company any day. (See the five-year stock price graph, below.)  This leaves employees who spent a lifetime accumulating shares financially ruined; many of them are ruined physically, as well.

Asbestos claimants are also left holding the bag.  O-C has indicated it will not make any payments to asbestos claimants during the Chapter 11 proceedings.  The average Chapter 11 proceeding for an asbestos company is six years, according to Owens Corning's own materials.  By that time, many claimants will be dead.  Stalling until victims die is a popular tactic for asbestos companies and other corporate killers, noted VOF's Horowitz.

"This continues O-C's 50-year tradition of not giving a damn about people," he remarked. "They didn't care about workers when they made Kaylo, they don't care about the workers and homeowners choking on their products right now, and when you get sick from the toxic pink fiberglass in your house, don't expect them to care."

Owens Corning is not without friends in high places, however. For years, it has spent lavishly on donations to the Republican Party and to numerous lawmakers, particularly those from Ohio. O-C appears to be the prime beneficiary of a measure now pending in Congress which would, according to the American Public Health Association (APHA), allow asbestos producing firms to recoup taxes paid at the time the asbestos-containing products were made and sold, as far back as 1920. The bill would also give tax refunds to asbestos companies to make up for money that the companies have lost as a result of their asbestos operations, says the APHA.

"Contrary to its supporters' claims, the bill is not an efficient legislative vehicle to ensure compensation for the victims of the asbestos companies' decades of malicious negligence," writes Mohammad N. Akhter, MD, MPH, Executive Director of the APHA, "In fact, the bill has no requirement that the money refunded to the asbestos companies must be used to compensate asbestos-injury victims. Instead, all of the refunded money could be used to pay the cost of fighting asbestos-liability claims and to compensate property owners with financial asbestos-related losses. Not only could the companies use the money to pay "related" expenses that would not benefit people with asbestos injuries, the bill's lack of a time limit for the companies to pay asbestos-related expenses would mean that the companies could simply put it aside indefinitely as an interest-free loan."

The bill's sponsor is Senator Mike DeWine of Ohio, a longtime beneficiary of O-C's political profligacy.  Many Ohio legislators, including Democrat Marcy Katpur, a long-time feeder at the O-C political trough, have co-sponsored the measure.

Contact your Congressperson and Senator to let them know about your opposition to S. 2955.

Read the latest on the situation at the Toledo Blade, but keep in mind, this is the hometown paper and is heavily biased in favor of Owens Corning.