Asbestos-Related Bankruptcies Cost 52,000 Jobs -- Study

OF DOW JONES NEWSWIRES

WASHINGTON -- At least 52,000 jobs have been lost at companies that filed for bankruptcy protection due to asbestos injury claims, according to a study released Tuesday.

The study by Sebago Associates was commissioned by the American Insurance Association, which is part of a coalition pushing Congress to pass legislation restricting asbestos-related lawsuits.

Asbestos litigation controls are a top priority for the insurers and trade groups such as the U.S. Chamber of Commerce and the National Association of Manufacturers. Companies have paid out $54 billion to resolve asbestos claims, and consulting firm Tillinghast-Towers Perrin projects the total cost of asbestos claims will be $200 billion.

The Sebago study was conducted in part by Joseph Stiglitz, former chairman of the White House Council of Economic Advisers under U.S. President Bill Clinton. It found that asbestos claims pushed about 61 firms into bankruptcy; one-quarter of these filings have happened in the past 10 months.

The study found employment data for 40 of those firms. Adjusting for changes in industry employment, the study found the firms lost 51,970 jobs in the five years prior to bankruptcy. The study estimated that with all of the bankrupt firms, job losses totaled about 60,000.

Stiglitz told reporters that asbestos-related bankruptcies are on the rise, and the size of the potential claims is a concern for the economy.

"This kind of litigation uncertainty does have an adverse effect on economic performance," Stiglitz said.

Updated December 3, 2002 12:48 p.m. EST