Document ba2V2MjGo0kqxMGR5xV6mb2jy

PLAINTIFF'S EXHIBIT G F -I8 5 2 TO: ,7146-1 a: J. Faivo FROM: <;i47-5 C. M. Howard, SUBJECT: U.S.C.'S MON-ASBESTOS PROGRAM V ---- : H July 17, 1981 The attached Chronology of Events leading co our current business position is offered co supplement and elucidate the following summary of che'mosc cime-consuming, cost-affecting, ambitious undertaking in the.history of our business. BACKGROUND: U.S.G.'s joinery business was, deeply involved in the 3 co 4 year craterfree ready mixed program when the asbe^fos issue begin co peak ... a program which brought a unique, saleable,""quality improvement in Che product while increasing our ready mixed capacity by SOS at a relatively low investment cost . . . and while increasing our market share by 4 points to 35T. A major program of implementing terra alba filler at significant cost savings at 3 operating plants was additionally demanding of Product Management, Research, and Technical Service efforts. PROBLEMS: EXTERNAL A.) Increasing government regulation and public concern over asbestos fiber as an alleged cancer producer. B.) The subsequent threat of costly product liabilicv claims. C.) The potential for a costly competitive, non-asbestos breakthrough co our leadership position. D.) The dryvail mechanics who were generally unconcerned about the threat, but highly concerned that the product was not changed. INTERNAL Research evidence that asbescos..fiber was ' the most critical and irreplaceable ingredient in our produces. OBJECTIVE: FIRST 5TAGE: Reformulate pcoduccs, with at least equivalent qualiev, with' fiber content to meet increasingly lowered government regulations, at acceptable costs. - -i SECOND STATE: Reformulate without any asbescos fiber while maintainmg performance properties regardless of cost. * THIRD STAGE: Refine the reformulated products, while holding quality, by reducing costs to acceptable levels. UNITED STATES GYPSUM COMPANY '"j '= TAB 4 2 ChronoLogy of Incemal anc External Events Effecting U.S.G.'s Son-As'oescos Fregrart 1. 1967 - Federal Register of Dept, of -Labor published new Threshold Limit Value (TLV) alloving a maximum of 22 fibers of asbestos no greater than 5 microns length per milliliter of air. 1968 - New Yorker Magazine - Quoted findings of Dr. Selikoff's research study at Mt. Sinai Hospital of City University -of N.Y. contending that asbestos causes mesothelioma or cancer of lung cavities. ' i 3. 1968 - Wall Sc. Journal article featured asbescos as cancer inducing substance. 4. 1968 - First U.S.G. position letter released to operating plants by G. R. Krug on Asbestos and Cancer. 5. 1969 - Federal Register published a reduced TLV of 12 fibers. .a*. 6. 1969 - Meecing(s) with Price, Cushman, JCehn-and Mahin, our attorneys, re: their letter urging U.S.G. to label its proaucts so as to conform with the Federal Hazardous Substances Act and Federal Packaging and Labeling Act. 7. 1969 - Meeting at Research where a Hazardous Materials Committee of seven members was formed. 8. 1970 - Company decision that labeling vould be "hazardous co our sales'1 if U.S.G. moved firsc. 9. 1970 - State of Illinois and Nev York City banned spraying of asbescos containing materials - the possibility of product liability claims began co build as a'serious Company threat. A parade of state and municipal governments began legislating against asbestos. 10. 1970 - Attorney General of the State of Minnesota sent U.S.G. an Interrogatory regarding the shipping of asbestos containing products into its State. 11. 1970 - The Occupational Safety and Health Act, under che Department of Labor, was passed. The firs: regulatory body on TLV's. 12. 1971 (May) - Research manned the program co meet existing government codes/'regula while searching for asbescos replacement. Product Management was to be che key elemenc coward closely guiding , encouraging, directing/ redirecting, and scheduling Research ,efforts into acceptable timely results throughout the next 7 years. 13. 1972 - National Institute for Occupational Safety and Health: Rated asbestos as the number one hazardous material; proposed warning labels on all containers, job sites, etc. 14. 1972 - 0..S.H.A. announced a reduction in asbescos fiber TLV to 5 fibers per cubic centimeter of air on an 8 hour-cime-weighced- average. c GOAL: to be che first producer co introduce a full line of asbestos-free products nationally in order co preserve our market position, leadership image. and role of concerned corporate citizen. ~ TIMETABLE: All products converted co non-asbescos by July 1, 1976. RESULTS: TIMETA3LE 1.) U.S.G. introduced ch.e 1st non-asbescos product co market a powder topping into CCPD - in 1971. x* 2.) U.S.G. completed convers_iSm.jationally June, 1976. RESEARCH COSTS 51,500,000 MARKET SHARE Fell from 351 co 242 during che 1st two years of implementation. From 1976 co 1979 our I. ?. moved to 321 - an 8 pt. increase, which represents a net sales penetration of S24,000,000. Further coved co 421 by April, 1981. COMMENT: If U.S.G. were producing the 1975 asbestos formulation today, che cost penalty would amount to $12,000,000 based on 1930 volume cc: r'147-1 0147-5 R. P. Faust M. V. Cook ( [ i)f. 15. 1972 - U.S.G. Research programed co test all of i'cs join: ccmoound formulations (approx 40); contracted vith NATLSCO (Kemper Insurance Co. technical arm) co prove i:s results as an independent agency - aiso, co determine if package labelling was necessary. Yet government specified no testing ' apparatus or procedure for determining the TLV. Our test results.supporte that all of our formulations met know standards, except one. NATLSCO results supported that all our formulations met existing regulations. 16. 1972 - Company decision that labelling was necessary and a program was completed for labelling joint compound and texture containers. ; 17. 1972 - Consumer Products Safety Act identified and released regulations on hazardous substances, including asbestos. IS. 1972 - U.S.G. conducted first field tests on a non-asbestos formulation in CCPD with a powder copping compound. Subsequent trials proved acceptable,' and was released co market as NV coping, and not non-asbestos, in order to aa security (lead time) on our overall program. * 19. 1973 - N. Y. times Newspaper - Sunday Magazine Supplement - Expose on asbestps as a cancer producing agent. 20. 1973 - Mr. Watt appointed Ken Freeman at Research, in conjunction vith Legal, co be the official responder on outside inquiries regarding che asbestos fiber issue. 21. 1973 - First of many policy and position letters released by product management to Che field on proper non-asbestos deportment with customers, etc. 22. 1973 - U.S.G. filed a patent on non-asbestos technology. Patent 112,891,453 was issued co Terry Williams on June 24, 1975. Reissued as 29,754 on August 16, 1977. U.S.G. VS. NATIONAL ____________ PATENT ACTIVITY FILES ISSUES National February 26 , 197-3 Seocember 23 , 1975 United States Cvpsua July 26, 1573 ' June 24, 1975 U.S.G. produced notebook evidence that 'our'laboratorv work, preceded the patent file cate'by 1 years - also, preceded National's notebook entry. ^ o ~ ~ 23. 1973 - E.P.A. issued regulations regarding the discharging of pollutants such as asbestos fiber and mercury (chea a basic preservative) into air or water. Primarily affected our operating plants. 24. 1974 - Product Management compiled an O.S.H.A. Guideline's Eooklet and a question and answer white paper for release to the field in order to help our people handle the flood of inquiries from government agencies, trade tactc mass media, and interested 3rd parties. Product Management was the pivotal resource position in all this. 23. 1977 - Consumer Produces Safety Commission opened hearings on non-asbestos produces. John 3ush read a prepared seaeeaene. 26 . 1977 - Consuaer Produces Saiecy Concussion proclaimed rhac asbeseos coneaimng or could not be produced after January'15, 197S; none could be sold after June 15, 1978. This became the catalyst to help us redeem our costs/ losses in converting to non-asbestos and to launch major gains in market share. 27. 1978 - C.S.G. contracted with Hilliard-Lyons Patent Management, Inc.', ; Louisville, Ky to make thea exclusive agent under our non-asbestos patent For selling thea the patent, they would grant us a non-exclusive license for producing product to U.S.G. and others ... a capital gains device. The license with National Gypsum Co. currently appears fairly imminent. .x cV.-