Document zzB2JMVopo6Q50Q9b6JjJDZZa

FILE NAME Dana DAN DATE 1986 July 22 DOC DAN012 DOCUMENT DESCRIPTION Testimony to the EPA BEFORE THE ENVIRONMENTAL PROTECTION AGENCY ASBESTOS PROPOSED MINING AND IMPORT RESTRICTIONS AND PROPOSED MANUFACTURING IMPORTATION AND PROCESSING PROHIBITIONS 40 CFR Part 763 Docket Control No. 62036 TESTIMONY OF FEL INCORPORATED GASKET CORPORATION SUBSIDIARY OF MC CCE ORL D L CORPORATION and VICTOR PRODUCTS DIVISION DANA CORPORATION July 22 1986 PLAINTIFF'S EXHIBIT Mr. Chairman and Panel Members My name is Ken Lehman and I am President and Chief Sales and Marketing Officer of Pro Incorporated located in Skokie Illinois Accompanying me today are Eugene R. Field President of McCord Gasket Corporation subsidiary of Cell Corporation located in Detroit Richard B. Forde Vice President and General Manager of Victor Products Divi- sion Dana Corporation located in Lisle Illinois Don McDowell Pro's Technical Director Richard Russell Vice Engineering of McCord and Marc Fleischaker our attorney These gentlemen will help answer any questions which the panel has following my prepared remarks Pro Incorporated McCord Gasket Corporation sub- sidiary of sion Dana Cell Corporation and Victor Products Divi- Corporation are major manufacturers of gaskets used in exhaust systems and turbochargers cylinder heads intake manifolds and engine and gear cases We have brought along some examples of these products for the Panel's review Historically the qualities requisite toa satisfactory gas- ket produc-t heat resistance chemical inertness and ser- vice life longevity-s- have been best achieved by the use of materials containing asbestos Gaskets while clearly addressed by the proposed rule have received little attention either in public comments submitted on the proposal or in these hearings Mr. Chairman and Panel Members My name is Ken Lehman and I am President and Chief Sales and Marketing Officer of Pro Incorporated located in Skokie Illinois Accompanying me today are Eugene R. Field President of McCord Gasket Corporation subsidiary of Cell Corporation located in Detroit Richard B. Victor Vice President and General Manager of Products Forde Divi- sion Dana Corporation located in Lisle Illinois Don McDowell Pro's Technical Director Richard Russell Vice , Engineering of McCord and Marc Fleischaker our attorney These gentlemen will help answer any questions which the panel has following my prepared remarks Pro Incorporated McCord Gasket Corporation sub- sidiary of sion Dana Cell Corporation and Victor Products Divi- Corporation are major manufacturers of gaskets used in exhaust systems and turbochargers cylinder heads intake manifolds and engine and gear cases We have brought along some examples of these products for the Panel's review Historically the qualities requisite to a satisfactory gas- -- inertness - ket product heat resistance chemical and ser- been best achieved by the use of vice life longevitya have materials containing asbestos Gaskets while clearly addressed by the proposed rule have received little attention either in public comments submitted on the proposal or in these hearings Nevertheless the proposal would have a significant impact on each of our companies and we believe that it will be useful for the EPA to have our perspective on the proposed regula- tion We support the EPA's desire to eliminate asbestos from the marketplace In our testimony today we will discuss why we have reached this conclusion and provide alternate suggestions as to how this goal can be met for gaskets It might be useful initially for us to provide some background information about why we are testifying as a group Some two years ago it became evident during informal conversations at various industry meetings that each of our companies was concerned about the use of asbestos in our products While we have no evidence whatsoever that the use of asbestos in automotive gaskets has ever caused health problems either in our own workplaces or among persons who work with motor vehicles our companies independently had reached the conclusion that the use of asbestos should be eliminated There were two reasons for this conclusion First asbestos had obviously become a societal concern and we therefore felt a social responsibility to deal with its use Second we recognized that the failure to deal with this issue could in the longer run lead to worker . dissatisfaction and increasing litigation for which liability insurance will be prohibitively expensive or unavailable Because of these mutual beliefs our three companies have met several times during the past two years -- with legal counsel present ~- to discuss issues connected with the phasing out of asbestos In addition to monitoring govern- mental activity we have exchanged information about the activity : to reactions of some of our major customers the elimination woe niin of asbestos the incentives which may be available from insurance companies to eliminate asbestos and the availability of substitutes for particular applications We believe that our discussions have been fruitful and they are continuing During the intervening two years our companies desire to deal progressively with the asbestos situation has not waivered Our companies have independently committed themselves to removing asbestos in gaskets and have made substantial progress in doing so Pro McCord and Dana are all converting from asbestos to substitute products as early as such a conversion is feasible This conversion is very expensive in retooling and other costs While the conversion is not and will not be at the same time for all three companies for each product it will be based upon the ready availability of substitutes which are fully functional in the applications in which they are used and the ability to offer the substitutes at competitive prices Needless to say it does no good to switch to asbestos substitutes if our customers won't buy them either because of cost or their inability to function properly The phasing out of asbestos should not be a wee ee eT competitive issue Presumably it should be done as a matter of public health We are concerned however that the proposed regulation would make the decision whether or not to continue to use asbestos a competitive one and would even have the effect in some cases of encouraging its use This situation of course should not be tolerated Specifically we are concerned that under a permit system proposed companies such as ours would suffer a severe competitive disadvantage in the market because of the higher cost of substitutes while manufacturers and importers not yet committed to conversion would enjoy a distinct marketing advantage these firms could sell their asbestos product at far lower prices than we could sell our substitute products Moreover they would have access to significant amounts of asbestos from a variety of sources They can apply for their allocated amounts or they can import cheaper asbestos products they can negotiate for additional amounts under the proposed permit transfer provision and finally they can stockpile still more under the proposed banking provision Under the permit system a company could even increase its use of asbestos for short competitive reasons This would serve neither the interests of the regulation nor the interests of the more responsible companies which are reducing asbestos use The permit system as presently proposed will not reduce asbestos use in gaskets as anticipated We are concerned that the availability of permits which are marketable and freely transferable will actually slow down the ultimate elimination of asbestos and undercut the underlying purpose of regulation There may even be more asbestos available for various products such as gaskets because of the elimination of asbestos from other products and the ability of those permit holders to sell their rights to use asbestos Instead of searching for substitute products users will be encouraged and permitted to continue using asbestos If anything the approach adopted by EPA should reward firms which phase out asbestos more quickly than required and penalize those which delay Perhaps this concern can be illustrated by the following chart Control Level Asbestos Piber Importer Industrial Asbestos Material Importer Asbestos Product Importer Industrial Material Producer Product Producer Product Producer End User End User End User - 5 - Under the proposed regulation the EPA control would always be on the importer While this may be efficacious from the EPA standpoint it threatens to cause havoc in the gasket industry and presumably in other product categories as well The competitive dislocationast the product producers level could be severe Under the proposal the controlled party could be an importer of asbestos an importer of asbestos sheet for subsequent use in gaskets or an importer of gaskets Under the proposal if during the phase period the asbestos importer reduced the level of his imports he could sell the right to import additional asbestos to an actual gasket manufacturer Or the reverse could gasket manufacturer could reduce the happen the importing use of asbestos and sell his allocated or banked share to either an asbestos importer or the importer of sheeting material We do not believe this is a logical way to reduce the use of asbestos and we believe that it would injure domestic gasket manufacturers -- such as ourselves -- who are switching to substitutes and inevitably charging higher prices as a result Why should a gasket importer be allowed to increase his use of asbestos as a direct result of the aggressive elimination of asbestos by a domestic manufacturer and thereby gain a price advantage over domestic producers We do not believe this is a logical way to regulate Our concern is heightened by the cost advantages currently enjoyed by foreign producers of gaskets These cost advantages have been exacerbated by the new OSBa regulations which are applicable only to domestic producers and which will require expensive plant modifications The EPA proposal threatentso provide even more advantages to the foreign producers The U.S. government should do all that it can to avoid this result For all of the above reasons we support a regulation based upon product group categories This regulation should contain specific dates after which asbestos may not be used in products manufia n c ort imu po rre ted d the United States This restriction need not apply at the customer or installer level since that use will automatically be eliminated a relatively short time after importation or manufacturing is halted / What should that timetable be Our companies are , moving to asbestos products as rapidly as technology and competition will permit To use substitutes prematurely -- before they are proven safe and effective -- would amount to exposing the public to safety risks and potentially higher warranty and product repair costs . Insofar as gasketing material is concerned costly substitutes are now available -- or soon will be -- for many gasket applications Gaskets are produced in a variety of shapes sizes and compositions accommodating thousands of specific ture and end uses operating with each being conditions To put to different tempera- accommodate reasonably all manufacturers including the lead time required for engine and vehicle manufacturers to plan for and field test changes we have recommended that three years be given to eliminate asbestos from gaskets used in an engine environment in which the highest operating temperature is under 400 Where the operating temperature is between 400 and 750 we recommend five years Where temperatures exceed 750 elimination of asbestos will take longer and we recommend eight years Our research to date has yielded no adequate substitute for all applications at these high temperatures These time periods for a ban should apply universally to both original equipment and in the aftermarket / Our proposal would result in gaskets being in excess of 90 percent asbestos free within five years Details on this calculation are provided in the appendix to this testimony In short our companies do not quarrel with the EPA objective of eliminating the use of asbestos in gaskets We do take exception however to the method chosen to effectuate a phase and believe that a complete ban on importation and manufacturing on a date certain would be a preferable approach We appreciate this opportunity to present our views on the EPA proposal My colleagues and I will be pleased to try to answer any questions which you may have . GASKET ENVIRONMENT PROFILE APPENDIX A Gasket Environment // / Application Description 2 Under 400 Intake Manifold Relative Material 3 Req Relative Product Mix 4 Weighted Usage 47 % Total Of Usage Appl Cum ^ 67 67 178 178 ; 400-750 Cylinder x3 Bead 100 300 75 928 Above 750 Exhaust 1 33 88 100 * And other miscellaneous gaskets PPENDIX B RECOMMENDED ASBESTOS BAN SCHEDULE Under 400 Completion Weighted % of Total 3 YRS 178 Effective Ban Schedule End of Year 1 2 3 5.68 5.78 5.78 17.08 GASKET ENVIRONMENT 400 to 750 5 YRS 75 Above _ 750 8 YRS 88 Program Total AS CALCULATED SUGGESTED USE 15.0 15.08 15.0 15.08 15.0 er 75.08 1.08 - 1.08 1.08 1.0 1.08 1.08 1.08 1.08 f 8.0 21.68 21.78 21.78 16.08 16.08 - 1.0 1.08 1.08 100 208 20 20 15 15 4 38 38 100 APPENDIX C EFFECTIVE ASBESTOS BAN Index Year EPA PROPOSAL & CUM AVG -'83 ADJ to '85 Sales 100 120 Index % 708 73 768 90/120 93 96 75 788 80 798 828 85 99 102 105 83 85 888 10 11 88 918 94 978 100 108 111 114 117 120 908 938 958 988 " 100 GASKET INDUSTRY PROPOSAL AVG -183 ADJ to '85 Sales 100 120 Index % 20 40 608 75 908 94 978 100 / 40/120 60 80 95 110 114 117 120/120 | 30 50 67 798 928 95 988 1008