Asbestos Products

SIC 3292

Industry report:

This category includes companies that primarily make asbestos textiles, asbestos building materials (except asbestos paper), insulating materials for covering boilers and pipes, and other products composed wholly or chiefly of asbestos. Companies that primarily make asbestos paper are in SIC 2621: Paper Mills. Those making gaskets and packing materials are in SIC 3053: Gaskets, Packing, and Sealing Devices.

Industry Snapshot

Serious health concerns have all but dismantled the asbestos industry in the United States. Use of asbestos plummeted after medical studies in the early 1970s linked airborne asbestos fibers with two serious illnesses: asbestosis and mesothelioma. Asbestosis scars the lungs and interferes with respiratory function, while mesothelioma is a rare and deadly form of cancer. Acting on these health concerns, the Environmental Protection Agency (EPA) banned the use of spray-on asbestos insulation in 1973, and the U.S. tile and floor-covering industry, once a major consumer, voluntarily stopped asbestos use by 1986. All mining for asbestos in the United States ceased in 2002, according to the U.S. Geological Survey, and the U.S. Census Bureau reported that the value of asbestos products made in the United States in 1990 was about $352 million. By 1995 sales were so low that no figures were available, although the asbestos products industry was valued at $83.8 million in 2010.

In 1989 the EPA issued a ruling that would have eliminated asbestos use in the United States by 1996. However, the ban was declared unreasonable by the federal courts, which permitted asbestos use in products imported or made in the United States as of July 1989. The courts upheld an EPA ban on any new products with asbestos. By 2003 approximately 400,000 victims of asbestos exposure were suing for compensation in the U.S. courts. Manufacturers of asbestos materials and their insurance companies contributed to a multibillion-dollar trust fund to distribute to victims, with claims ranging from general medical monitoring to cancer, and payments guaranteed through 2030.

Background and Development

Asbestos is a group of soft minerals composed of tiny fibers that is nearly impervious to acid, fire, and biological decay and is a poor conductor of heat and electricity. During the late 1800s, when it was first widely used to insulate boilers, steam pipes, and other high-temperature industrial equipment, asbestos became known as "white gold," particularly in Canada, which was the world's leading supplier.

Beginning in 1900, asbestos was used in more than 3,000 products made in the United States, from safety clothing and automobile brake linings to textured paints and electrical insulation. The most extensive use of asbestos was for construction insulation. The United States used thousands of tons of asbestos insulation in ships built during World War II. Another surge in asbestos insulation use was in the 1960s when it was routinely sprayed on structural beams and roof decks. In the mid-1970s, the United States used an estimated 700,000 tons of asbestos per year, most of it in insulation products.

By the late 1990s, only a handful of U.S. companies manufactured products containing asbestos. Most of those continued to include asbestos in the production of friction products for automobile brakes. The rest made roofing materials, heat-resistant gaskets, and safety clothing. Once enormously popular in construction applications because it is nonflammable and a poor conductor of heat, asbestos use in construction is virtually nonexistent with the exception of limited use in roofing materials.

Most of the asbestos used by U.S. manufacturers was chrysotile asbestos imported from Canada. Canada, then the world's largest producer of the chrysotile form of asbestos, received a major blow in the late 1990s when France banned the production and importation of all asbestos products. Angered by the sweeping French ban, Canadian government trade officials petitioned the World Trade Organization to mediate the dispute. The European Commission, which is the executive body of the multinational European Union, pre-empted any decision in July 1999 when it banned almost all remaining asbestos applications throughout the trade bloc. The only product exempted from the ban was electrolysis diaphragms used in chlorine plants. The ban was implemented in all member countries of the European Union on January 1, 2005.

In the early years of the first decade of the 2000s, the number of U.S. lawsuits related to asbestos damage was estimated to be between 300,000 and 400,000 cases. Lawsuits against car companies alone were expected to cost more than $1 billion. In the middle of the first decade of the 2000s details of a victims' fund were being worked out to provide monetary compensation of up to $1 million to 10 identified levels of victims, from mesothelioma to minor asbestos-related illnesses. The U.S. Senate proposed a trust fund of $140 billion, but some analysts estimated that $300 billion to $695 billion would be needed, and a national fund of any size had not been put into place in 2007. Critics, including President George W. Bush in 2005, called for legislation to limit asbestos claims, citing the economic impact of resulting bankruptcies and the volume of claims overwhelming the court system. The resulting Fairness in Asbestos Injury Resolution (FAIR) Act of 2006 stalled in Congress. Legislation to ban asbestos in the United States has been introduced repeatedly in Congressional committees, including in July 2007, but the measures did not make it to the floor for a vote.

Exported asbestos fell to roughly 451 tons in 2008 from 815 tons in 2007. These figures likely include non-asbestos materials, because asbestos production ceased in 2002. Imported asbestos or chrysolite from Canada climbed to 1,880 tons in 2008, up from 1,730 tons in 2007. An estimated 76 percent of asbestos consumption in the United States was for roofing products.

Health Concerns.
The ancient Greeks first noticed a link between asbestos and respiratory illness. However, the first medical studies were not done until the early 1900s when asbestos use became widespread. When the hook-shaped fibers of asbestos are inhaled, they attach to the insides of the lungs. The body reacts by covering the fibers with proteins, creating scar tissue. As this scar tissue increases, the lungs clog and lose elasticity. The scarring and resulting respiratory problems are called asbestosis. Evidence also suggests that prolonged exposure to asbestos can increase the risk of cancer, including mesothelioma, which affects the visceral membranes. Asbestos exposure also greatly increased the risk of lung cancer for cigarette smokers.

In 1931 Great Britain became the first country to pass laws regulating exposure to asbestos. The United States did not pass similar laws until the early 1970s. In the 1960s, Dr. Irving Selikoff, an epidemiologist at Mount Sinai Hospital in New York, studied the incidence of respiratory diseases in men who had worked in the asbestos industry or in the shipyards during World War II. Selikoff also found more respiratory problems in wives who shook asbestos dust out of their husbands' work clothes. Selikoff's controversial conclusion was that no level of exposure to asbestos was safe. However, later studies disputed Selikoff's conclusions. In the late 1980s, the United Kingdom Health and Safety Commission concluded the long-term risk to office workers in a building with asbestos insulation was so low it was comparable to inhaling one puff of cigarette smoke every day for a lifetime.

Johns-Manville Corporation.
The Johns-Manville Corporation was created in 1901 from the merger of two asbestos products companies. In 1969 Clarence Borel, a laborer who had spent more than 30 years installing asbestos insulation, sued Johns-Manville and other asbestos products makers alleging they knowingly manufactured a hazardous product (Borel v. Fibreboard Paper Products Company, et al). Borel, who suffered from asbestosis, testified that in all his years as an installer, no one had ever told him asbestos could make him ill.

In addition to Johns-Manville, the suit named the Pittsburgh Corning Corp., Owens-Corning Fiberglass Corp., Union Asbestos & Rubber Co., Combustion Engineering Inc., Eagle-Picher Industries Inc., the Philip Carey Corp., Armstrong Contracting & Supply Corp., Rubberoid Co., and the Standard Asbestos Manufacturing & Insulation Co. Those companies testified that most laborers knew the dangers but refused to wear breathing masks provided by insulation contractors. As the industry leader, Johns-Manville argued that it had put warning labels on its products starting in 1964, as soon as it had sufficient evidence that installation workers were at risk.

The jury found the asbestos-products companies guilty of negligence. Significantly, Borel died in 1970 before the verdict was rendered, and the jury found the asbestos-products companies liable for his death. The jury awarded Borel's widow nearly $80,000. The U.S. Court of Appeals upheld the decision in 1973 and found that Johns-Manville and the other defendants could have foreseen the dangers to Borel "at the time the products causing Borel's injuries were sold." That ruling opened the floodgates to litigation. By 1981 more than 16,000 lawsuits were filed against Johns-Manville. Most of the suits were filed by insulation workers and people who worked in shipyards during World War II. Johns-Manville put the projected costs of the lawsuits at $2 billion, which was twice the company's assets at the time. In 1982 the company filed for protection under Chapter 11 of the U.S. Bankruptcy Code, which at the time was the largest U.S. corporation to ever file for bankruptcy.

Johns-Manville filed a plan for reorganization in 1983. As part of the plan, the company, which had changed its name to the Manville Corporation, established a trust fund to pay for asbestos-related claims. The Manville Personal Injury Settlement Fund owned 80 percent of the reorganized company, which also stopped using asbestos. Initially, the trust fund held $1 billion. However, as the number of claims increased to more than 200,000 by 1993, the fund was increased to almost $3 billion. Because asbestosis and other asbestos-related diseases develop over time, the Rand Corp. estimated potential claims against Manville and other asbestos companies at more than $50 billion.

After a decade of court battles, in 1993 two insurance companies, Chubb Corp. and CNA Financial Corp., agreed to pay up to $3 billion for asbestos-related claims against the Fibreboard Corp., which was spun off from Louisiana-Pacific in 1988. More than 145,000 people claimed to have been harmed by Fibreboard products. The decision was expected to keep Fibreboard from declaring bankruptcy. However, at least a dozen other asbestos-products companies declared bankruptcy due to asbestos litigation along with Johns-Manville, including National Gypsum Co., Celotex Corp., and Eagle-Picher.

Federal Regulations.
The United States began regulating industrial exposure to asbestos dust in the early 1970s. In 1986 the EPA declared that "no level of exposure to asbestos is without risk," and the agency tried to ban asbestos use in consumer products. The EPA order would have phased out almost all use of asbestos by 1996. However, the Asbestos Institute, supported by the Canadian asbestos-mining industry, filed a petition for review of the ban with the U.S. Court of Appeals. In 1991 the court ruled that the ban was unreasonable.

The court said in its ruling that the EPA had overstepped its authority by trying to ban all asbestos use and had failed to consider the financial costs and health risks posed by asbestos substitutes. The court said many proposed substitutes "actually may increase the risk of injury Americans face." Based on the EPA's studies, the court also found that "a complete ban would save less than one statistical life over 13 years."

Under the court ruling, which was affirmed in 1993, U.S. companies could keep making asbestos products that were either imported or manufactured in the United States at the time the EPA announced the ban in 1989. The court let stand an EPA ban on new uses of asbestos or asbestos products.

In 1993 the EPA issued a report listing products that were permitted under the court ruling. These included asbestos clothing; roofing materials; gaskets; and friction products for automotive use, including brakes, brake linings, and clutch facings. Friction products accounted for about 70 percent of asbestos used by U.S. manufacturers. These products concerned the appeals court because automobile makers testified that non-asbestos-lined brakes were less reliable, especially for trucks and heavier cars. The appeals court found there was "credible evidence that non-asbestos brakes could increase significantly the number of highway fatalities." After the court ruling, the EPA asked car makers to switch to non-asbestos brakes voluntarily by 1994, but no major manufacturers agreed to do so in 1993.

Asbestos in products allowed by the court order was considered "locked-in" or "encapsulated," and not considered a health risk. Asbestos fibers in friction products were mixed with various binders, and only a small amount was released into the air during normal use. Auto repair shops used special equipment to remove asbestos fibers from the air. The asbestos fibers in roofing materials and gaskets were surrounded by asphalt, latex, rubber, or other resilient material.

Current Conditions

According to the U.S. Geological Survey, in 2010 U.S. consumption of asbestos equaled 820 tons. Because the United States no longer mines the mineral, 100 percent of asbestos used was imported, with 90 percent coming from Canada and the remaining 10 percent coming from other countries. Seventy-two percent of the asbestos used in the United States went to roofing products, with 28 percent used in other products.

Dun & Bradstreet reported that 99 U.S. establishments manufactured products from asbestos, and revenues from the sale of asbestos products totaled $83.8 million in 2010. The only two states that had more than nine establishments engaged in the industry were Texas and California, with 11 and 18, respectively, with most states home to one or two. Asbestos continued to be used in building products like roofing felt roll and shingles, floor tile, pipe coverings and other insulating materials, and brake linings.

Organizations like the Asbestos Disease Awareness Association (ADAO) continued to work toward a U.S. ban on asbestos. Small victories for the organization included the introduction of a bill in the U.S. Senate in early 2011 that would declare the first week of April National Asbestos Awareness Week. In addition, federal funding was available for certain cases, such as the $6 million from the U.S. Department of Health and Human Services that was offered to the victims of the asbestos contamination in Libby, Montana.

Research and Technology

Researchers continued to seek a satisfactory substitute for asbestos at the beginning of the twenty-first century. According to the U.S. Geological Survey, in 2010 some substitutes for asbestos in manufactured products included calcium silicate, carbon fiber, cellulose fiber, ceramic fiber, glass fiber, steel fiber, and wollastonite. Additional substitutes included organic fibers such as aramid, polyethylene, polypropylene, and polytetrafluoroethylene. When the reinforcement properties of fibers were not required, nonfibrous minerals or rocks such as perlite, serpentine, silica, and talc were possible substitutes for asbestos as well.

Meanwhile, asbestos cleanup continued throughout the United States, such as one former mining and processing plant of vermiculite contaminated with asbestos in Libby, Montana, as well as several others. Related lawsuits also continued unabated. According to the Mesothelioma Information Resource Group, an estimated 322,000 claims were pending in February 2008, with about 2,500 people falling victim to asbestos-related illnesses each year. The total number of new cases was projected to continue rising to a peak in 2025.

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