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Editorial: A chemical giant reborn

Daily Record Staff//January 2, 2014

Editorial: A chemical giant reborn

By Daily Record Staff

//January 2, 2014

The announcement right before the holidays that Worthington Industries is closing its steel-processing plant in Essex is a reminder of the long, grinding attrition of Maryland’s traditional strengths in manufacturing and heavy industry. So it’s nice to start the year with the prospect that if a bankruptcy court agrees, W.R. Grace & Co., the Columbia-based specialty chemical manufacturer, will emerge this month healthy and sound from one of the nation’s longest stints in Chapter 11.

Grace’s links with Maryland trace back to 1832, to the chemical company founded in Baltimore by William T. Davison. Grace bought Davison in 1954, and its operating segment was called Grace Davison until 2012.

Grace has a colorful history. William Russell Grace went to Peru for guano in 1854; by 1860, he had established a merchant steamship line to serve the Americas, and 20 years after that, he was the first Roman Catholic mayor of New York City. The founding family retained its grip on the company for more than 150 years; more than a century later, his grandson, Joseph Peter Grace Jr., was still the company’s chairman in his 80s, struggling with a palace coup in which his anointed successor was eventually ousted amid allegations of questionable financial dealings and sexual harassment.

If Grace’s history sounds like a screenplay, it actually became one. The company’s dark years began in earnest in the latter years of the 20th century as a wave of asbestos-related lawsuits overwhelmed it. It fought charges that it had covered up the dangers posed by its vermiculite mining operations in Libby, Mont.; Grace defended itself successfully, but the damage was done. In 1998, the movie “A Civil Action” starred John Travolta as a lawyer fighting corporate wrongdoing in a groundwater contamination case in Woburn, Mass. Grace was one of the companies involved in the incident on which the movie was based and was part of a record $69.45 million Superfund settlement reached with the Environmental Protection Agency.

Grace faced accusations in Maryland, too. In 1992, it settled out of court with plaintiffs in the nation’s largest asbestos trial, held in Baltimore City Circuit Court. The trial brought together 8,555 Maryland plaintiffs and 14 manufacturers and distributors of insulation containing asbestos. The claim: that the insulation used in shipyards, steel plants and construction sites made those who worked there seriously ill. Attorney Peter G. Angelos represented 90 percent of the plaintiffs.

In an area where so many lives were blighted by exposure to asbestos, it’s not possible to forget the past or to make excuses. At the same time, Grace was caught up in an industrywide nightmare that took down many of its competitors as well. Owens Corning and USG Corp. were among those filing for bankruptcy as the asbestos cases mounted. Grace itself filed for bankruptcy in 2001.

W.R. Grace moved its headquarters from Florida to Maryland in 1999, settling its corporate employees at its Howard County campus in Columbia. It begins the new year with 1,085 employees in Maryland, split fairly evenly between Columbia and a manufacturing plant and technical and analytical services center in Curtis Bay. It puts its total Maryland payroll at $131 million and its state payroll taxes at $10 million. Worldwide, Grace employs approximately 6,500 people in more than 40 countries and had net sales in 2012 of $3.2 billion. Columbia is also the home of the Grace Foundation, which in 2012 donated nearly $1 million to charity.

Grace’s specialty chemical products are in strong demand in today’s world; as America moves toward energy independence, its fluid catalytic cracking catalysts and additives are helping petroleum refineries convert distilled crude oil into transportation fuels. Its silica-based products have industrial applications ranging from toothpaste manufacturing to beer purification to glass making.

It’s time for W.R. Grace & Co. to take its place in Maryland once more without the shackles of Chapter 11.


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