Asbestos Trusts: Babcock & Wilcox
Babcock & Wilcox made products that needed asbestos insulation. But asbestos causes health problems.
As one of the earliest manufacturers connected to asbestos products, they played a part in exposing many people to harmful asbestos fibers, and the company has paid over a billion in compensation.
How can a company that never manufactured an asbestos product in its history be so closely associated with the substance? A famed boiler manufacturer, Babcock & Wilcox (B&W) is a company whose origin dates back 150 years. The company was built upon the work of men named Stephen Wilcox, O.M. Stillman, and George Babcock. Stillman and Wilcox were awarded a patent for their water tube steam boiler in 1859.
The steam revolution required boilers, and Babcock & Wilcox met the need.
By 1867, Babcock, Wilcox, & Company was established in Providence, Rhode Island and Messrs. Babcock & Wilcox were awarded another patent for improvements on the boiler design. These boilers are primarily used for high temperature steam/power generation, like what’s used to power some large ships and vessels. The company made more than just boilers, though. It also manufactured other types of high-temperature or steam generating equipment, like generators and furnaces.
Babcock & Wilcox achieves early success
B&W would continue to flourish as time went on. By the 1880s, it had established itself as a leading, trusted name in boiler manufacture. Its equipment was used to power some of the first electricity generating stations in the world, including Brush Electric Light Company in Philadelphia, PA, and Thomas Edison’s Pearl Street station in New York City.
From New York subways to the WWII front line
In the early 1900s, the company’s boilers were installed for a variety of electrical and utility uses around the country; they were even used in the first subways in NYC. After the attack on Pearl Harbor propelled the U.S. into WWII in 1941, B&W changed all of its production to fit the needs of the U.S. military.
But the company’s relationship with the Navy dates back further than WWII. In fact, it was around 1894 when B&W created its marine department and shortly after, the U.S. and British navies were purchasing coal-fired water-tube marine boilers for their vessels.
Asbestos, Babcock & Wilcox, and the Great White Fleet
President Theodore Roosevelt, who was in office from 1901-1909, oversaw the voyage of the “Great White Fleet” around the globe from December 1907 to February 1909. The fleet was made up of 16 brand new battleships, and each one was powered by a Babcock & Wilcox boiler. Arguably, the sole purpose of sending the ships on such a voyage was to showcase the new American Navy ships to the world.
By the mid-1940s, B&W boilers were used on nearly all Navy ships as the company began manufacturing them specifically to military specifications (also called mil-specs). Industrial marine boilers are very large, often over 10 ft. in both height and width, and some early marine boilers were as big as 20 ft. in length. The water tubes carry water from a large drum into smaller tubes inside a furnace, which is externally heated to cause the water in the tubes to boil, generating steam that would typically flow into a turbine or other steam equipment to power the vessel. The furnace, tubes, and surrounding pipes needed to be able to withstand extremely high temperatures.
Boilers require heat insulation: asbestos offered a cheap solution, but it was hazardous.
Asbestos comes into play because it was one of the most – if not the most – popular types of insulation available at the time. The “miracle mineral” was a common and favored fireproofing material. When the military wrote mil-specs for certain equipment, asbestos was often a requirement because of its reliability as an insulating product. B&W was not involved in the manufacture of asbestos insulation or any other asbestos product, but it did use products made by other companies in its equipment.
Many B&W products utilized potentially harmful asbestos products to function. But none of the products had warning labels.
Babcock & Wilcox boilers would have required asbestos insulation on all of the heated components like the various water tubes and furnaces; it was even common for boilers to be installed with asbestos containing cement holding parts in place. Other asbestos products that were commonly found on industrial boilers include gaskets, which would protect manholes used to open and inspect the boilers, adhesives or sealants to join pipes together, and even rope that would line the boiler door. For a company that didn’t even make asbestos, their equipment sure needed a whole bunch of it to function properly.
The Asbestos Industry Cover-Up:
What the asbestos industry knew about their products
The truth is that the asbestos industry knew that asbestos was making workers sick since the 1930s, but manufacturers did not use warning labels or caution customers – or their own employees – about the dangers of asbestos exposure. Insurance companies and doctors warned the companies that workers exposed to asbestos were developing serious respiratory problems.
Health research showed the dangers of asbestos decades before manufacturers issued warnings.
Health researchers found that asbestos could even cause lung cancer and mesothelioma (cancer of the tissue surrounding the lungs). Despite this knowledge, asbestos was extremely prevalent in construction, refineries, mechanic shops, power plants, shipyards, and other industrial sites for decades. By its own admission, B&W used asbestos component parts in its equipment until the 1970s. Phasing out the products was likely not a coincidence.
Asbestos and the establishment of the Occupational Safety and Health Administration (OSHA)
The first toxic material regulated by OSHA was asbestos.
On April 28, 1971, the Department of Labor established the Occupational Safety and Health Administration (OSHA). The purpose of OSHA was to protect workers by establishing safe and healthy work practices and environments for every employer and employee in the country. And the first toxic substance that was regulated by OSHA was asbestos. Standards were put in place to determine how much dust could be in a work area while maintaining safety of the workers. It makes sense that Babcock & Wilcox, like numerous other companies at the time, would begin to scale back their asbestos use with OSHA watching.
Violations and poor safety practices continued even after the establishment of OSHA.
In 1978, well after the establishment of OSHA, B&W received word that it was in violation of OSHA standards, but did not rush to implement any changes to make the environment safe again. In a memo dated August 7, 1978, T.L. Wharton of Babcock & Wilcox expresses concern over a possible walkout or OSHA citation if employees were to learn that there is excessive asbestos dust in a particular area of the plant.
Wharton even states that “no one…wants the warning signs posted at this time,” referring to members of B&W who met to discuss the issue. So more than 40 years after the dangers of asbestos first became known, and 7 years after the formation of a government agency dedicated to maintaining safe work environments, here is a company that did not even want to put up warning signs for its employees when they were in direct violation of safety standards.
The truth catches up with the asbestos industry
Lawsuits by injured employees and consumers revealed what the asbestos industry had known for decades: that asbestos caused health problems, including cancer.
By the 1980s, Babcock & Wilcox like many companies was facing increasing asbestos injury claims.
Over the next 20 years, the number of claims would hit 300,000, which reportedly cost the company $1.6 billion to settle, leaving them in a precarious financial position. This is where court mandated asbestos trust funds come in.
The Babcock & Wilcox asbestos bankruptcy trust
Babcock & Wilcox (and its affiliated companies) joined dozens of other companies and filed for Chapter 11 Bankruptcy protection on February 22, 2000.
Babcock & Wilcox is only one of many asbestos bankruptcy trusts that still contain over $30 billion in compensation. This money is still unclaimed but available to those harmed by asbestos exposure.
Through this process, the company was ordered by the U.S. Bankruptcy Court for the District of Eastern Louisiana to establish a trust fund to provide compensation for present and future claimants who were injured by asbestos products used on B&W equipment.
The trust was established in 2006 with approximately $1 billion in funds from McDermott International (Babcock & Wilcox’s parent company) and its insurers. Today, Babcock & Wilcox is still in the business of power generation, just without all the asbestos.
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