Labor, Manufacturers Working on Asbestos Plan

The National Association of Manufacturers said it was "encouraged" by the proposal for an asbestos fund, which asbestos defendant companies and insurers would be called on to finance, but stopped short of an endorsement.

The two sides are interested in a fund for different reasons. Manufacturers want to curb asbestos lawsuits against them, while labor wants to insure fair compensation for workers who have fallen ill after exposure to asbestos.

The fibers of asbestos, which was used in building materials, auto parts and other products for decades, have been linked to cancer and other diseases. Injury claims have forced many companies into bankruptcy.

The proposed fund would be financed by companies facing asbestos lawsuits and their insurers. Victims would no longer be able to sue and would have to seek payment from the fund.

Agreement was reached this week by Pennsylvania Republican Sen. Arlen Specter and Vermont Democrat Sen. Patrick Leahy. But some of Specter's Republican colleagues want to make refinements before the plan is introduced as legislation and will meet Tuesday for discussions.

AFL-CIO President John Sweeney said the deficiencies in the plan included eliminating compensation for many lung cancer victims without letting them document asbestos exposure through CT scans, which are more sensitive than X-rays.

There was also no remedy for victims after legislation is passed, but before the fund can pay claims, he said.

Still, the draft has improvements like increases in awards for some categories of asbestos disease and a bar against liens on workers' compensation awards, he said, adding that the AFL-CIO continued to support the establishment of a fund.

One of the largest labor unions in North America, the United Auto Workers, endorsed the Specter-Leahy proposal earlier this week, saying it would provide equitable, timely and certain compensation to asbestos victims. The UAW is one of the unions in the AFL-CIO umbrella organization.

The statement by the National Association of Manufacturers (NAM) that there was "much to like" in the draft was the first formal reaction to the plan from the US business community.

"I'm encouraged by the renewed commitment on both sides of the aisle," NAM President John Engler said in a statement on the organization's Web site. "I am more hopeful about prospects for consensus than I have been in weeks."

Some manufacturers, such as auto parts supplier Federal- Mogul Corp., began criticizing the fund plan months ago, complaining their contributions would exceed the asbestos- related costs they now face.

Insurers are known to be divided on the issue, with some such as American International Group Inc. opposed. Their trade associations have stayed quiet while they consult with members companies.