Everyone is ending up a loser in the Dow Corning Corp. litigation and Chapter 11 filing.
The silicone supplier is losing big. It sought protection from creditors after being besieged by product liability lawsuits over silicone-gel breast implants it made. Dow Corning already pledged $2 billion toward a $4.25 billion settlement fund, but faces the possibility of thousands of more lawsuits.
Many plaintiffs in the lawsuits are hamstrung by the Chapter 11 filing. Women who decided not to participate in the settlement now won't have their cases heard for several years.
And, most importantly for at least 12 medical goods makers, Dow Corning said it is contemplating leaving the medical-grade silicone business.
That action would set adrift members of the Dow Corning Medical Fabricator Network. These 12 companies joined the alliance to receive lead referral, technical assistance, marketing support and educational seminars from Dow Corning, their main supplier of medical-grade silicone rubber. In turn the manufacturers agreed to follow certain industry quality standards, which would help Dow Corning have better control on who used its materials.
The network has been a good partnership for the fabricators. In particular, it proves the quality of their products in a field where product liability claims can be devastating.
The breast implant cases demonstrate that possibility, to the extreme. Now Dow Corning's ongoing inability to obtain insurance for silicone medical products leaves the company at great risk.
And it's a real risk. Some of the fabricators don't even bother carrying product liability insurance. They know a plaintiff's attorney will go after Dow Corning and its ``deep pockets,'' instead of the smaller fabricators.
Dow Corning officials say the company hasn't decided yet if it will drop out of medical-grade silicone. Considering the circumstances, there seems to be little doubt the company eventually will opt to bow out of the field.
That will remove the advantage a dozen small fabricators currently have, forcing them to find a new supplier, to re-certify their products and generally suffer because of a problem that wasn't of their own making.
It's just not fair.