Hatch Expected to Introduce Industry's Asbestos Compensation Bill; Stocks DropThe NY Times reports that Senator Orin Hatch, in an attempt to force labor and the business community to an agreement, planned to introduce the business version of an asbestos compensation bill today. Hatch's action brought a threat from the AFL-CIO to pull out of negotiations with industry representatives. The potential breakdown in negotiations has also apparently had a negative impact on the stock prices of companies with large asbestos liabilities, and possibly on Hatch's plan to introduce the bill:
Shares of USG Corp., Owens-Illinois Inc. and other companies with large asbestos liabilities fell as trust fund negotiations stumbled. USG shares fell $1.36, or more than 11 percent, to $10.55 on the New York Stock Exchange. USG rebuffed the exchange's request for a statement explaining the decline, saying it doesn't comment on unusual trading activity. Owens-Illinois Inc. shares fell 55 cents, or almost 5 percent, to $11.55.According to the Times,
Under a proposal to be introduced today by Senator Orrin G. Hatch, Republican of Utah and the chairman of the Senate Judiciary Committee, the groups would create a $108 billion asbestos trust....Business groups and insurance compa nies have praised Senator Hatch's proposal, which would include $45 billion in contributions from companies that made asbestos or used it in their products and $45 billion from insurers, as well as about $8 billion from other asbestos trusts and $10 billion from other companies with limited asbestos liabilities.Companies with large asbestos liabilities are not happy with the prospect of no resolution to this issue if negotiations fall apart and Congress is unable to pass any legislation. According to Bloomberg.com,
But Jon Hiatt, general counsel for the A.F.L.-C.I.O., which has played an important role in the negotiations, said in a statement that he was "deeply disappointed" in the bill, as well as the decision by Senator Hatch to introduce the legislation at a time when talks were continuing. The support of the AFL-CIO is vital if a trust is to win the votes of Democratic senators, who can block the bill in the Senate by a filibuster.
"The Hatch bill is a step backward," Mr. Hiatt said.
The legislation would require the primary defendants and insurance companies to contribute $90 billion, the same amount that those groups offered to pay months ago and an amount that labor groups and many businesses said was only a starting point for negotiations.
In addition, the payouts specified in the bill are less than what had been discussed in the negotiations and are much less than what some victims now receive. People with mesothelioma, a fatal cancer caused by asbestos, would receive $750,000 each under the bill. Negotiators had discussed $1 million or more, and the current system often yields multimillion-dollar jury verdicts and settlements.
The proposal by Senator Hatch does not contain a federal guarantee that victims of asbestos disease will be compensated if the trust fund is exhausted, a provision that labor views as vital. The legislation "is merely a vehicle to relieve businesses and insurers of hundreds of billions of dollars of liability while significantly shortchanging the asbestos victims of the fair compensation they are due," Mr. Hiatt said.
Hiatt said labor would be able to line up among Democrats the 41 votes needed to block Senate action on the bill.As of this afternoon, Hatch, perhaps noticing the negative reaction of the stock market, still had not introduced the bill. Both sides agree, however, that a trust fund is the answer to the problem that, like the mineral itself, never dies.
The labor federation said Hatch's plan includes restrictive requirements for determining whether a worker is eligible to file a claim for cancer and other diseases caused by exposure to asbestos.
"People will not even get in the front door'' to claim benefits, said Peg Seminario, the AFL-CIO's occupational safety director.
The AFL-CIO also said the plan wouldn't provide adequate compensation for asbestos-related cancers that have resulted in larger court judgments.