As if it did not have enough on its hands dealing with the slowdown in the civil aerospace industry, on 11 December 2001 Rolls-Royce was knocked by fears that it could be the next company to be affect…
As if it did not have enough on its hands dealing with the slowdown in the civil aerospace industry, on 11 December 2001 Rolls-Royce was knocked by fears that it could be the next company to be affected by the wave of asbestos-related injury claims currently sweeping the United States. Rolls-Royce shares fell 9 pence to 164 pence as hedge funds targeted the stock on concerns that Allison, the American engine manufacturer it acquired from General Motors in 1995 for GBP 353 million, could have an asbestos exposure. A succession of American companies were hit by costly asbestos lawsuits in 2001, including Owens Corning, WR Grace and Federal-Mogul, which had to file for protection from its creditors after being forced to pay out more than US$ 1 billion. On 7 December, Halliburton, an oil field services company once headed by the US vice-president, Dick Cheney, lost nearly half its market value after a jury ordered the company to pay US$ 30 million in damages in an asbestos lawsuit. It was the third ruling against the company. Rolls-Royce declined to comment on the “market speculation”, but analysts said there was little substance to the rumours and the company was fully provisioned against any claim.