Ford, UAW Settle With MIOSHA for $7 Million

Sept. 3, 1999
Ford Motor Co., instead of waiting for Michigan OSHA to drop its citation hammer regarding the fatal Rouge Complex power plant explosion, has teamed up with United Auto Workers to forge a $7 million settlement with the state.

Ford Motor Co., instead of waiting for Michigan Occupational Safety and Health Administration (MIOSHA) to drop its citation hammer regarding the fatal Rouge Complex power plant explosion, has teamed up with United Auto Workers (UAW) to forge a $7 million settlement with the state.

The scope of the Sept. 2 agreement goes beyond issues surrounding the Feb. 1, 1999, incident at the Dearborn, Mich., industrial complex that left six workers dead and 14 injured. The resolution, which resulted from Ford and the union independently approaching the state, includes a $1.5 million fine and funding for safety and health research and for monitoring and training programs.

The fine, based on 15 citations, is the largest monetary sanction every levied by the Michigan Department of Consumer Industry Services (CIS). The violations mainly are associated with physical controls on the power plant boilers, written operating and maintenance procedures, housekeeping and employee training.

Boiler No. 6 in Rouge's power plant, owned jointly by Ford and Rouge Steel Co., exploded because of a natural-gas buildup in the furnace chamber. The blast occurred about four hours after shut down of the unit began for a planned inspection and overhaul.

CIS' Bureau of Construction Codes ruled the explosion happened because of inadequate procedural controls for the safe shut down of the boiler, improper valve lineups and inadequate work group communication. Natural gas, a tertiary fuel source for the boiler's burner, leaked into the furnace because valves were not closed properly.

Included in the $7 million agreement:

  • $1.5 million to establish programs companywide that will aim to achieve lasting safety improvements;
  • $1.5 million for medical research, facilities or equipment in the treatment of burns and other critical care;
  • $1 million for research to increase the understanding of industrial safety and health;
  • $1 million for a scholarship fund to benefit UAW members and their families; and
  • $500,000 potential third-party reimbursement.

"We have learned a great deal," said James J. Padilla, Ford's group vice president of manufacturing. "We are working hard with our UAW colleagues and all of our employees to make sure that a tragedy like this never takes place again and that all Ford facilities become safer.

"This settlement agreement allows the company and the union to focus our efforts on prevention. We cannot change the terrible events of the past, but we can work hard to make our workplaces safer in the future."

The "unique and innovative" resolution, CIS Director Kathy Wilbur said, brings to a close a seven-month investigation. In that time, investigators reviewed 29,000 photographs, 689 blueprints, 324 binders of documents containing more than 200,000 pages, and 375 boxes of evidence, including 10 file cabinets and 20 blueprint file cabinets. MIOSHA safety officers conducted more than 300 interviews with about 150 Ford employees.

"This historic agreement can never reclaim lost lives or restore injured bodies, but it can ease the suffering of the victims and their families by ensuring a safer and healthier work environment for all Ford employees in the future," Wilbur said.

Simultaneous to the agreement with the state was the release of Ford and UAW's internal report, which also cited a buildup of natural gas as the cause for the explosion. The full report only was released to employees and their families.

The joint report was based on more than 160 employee interviews, 30,000 photos, 75 hours of videotape and 500,000 pages of documents. Many of its findings were the same as the state investigation's results.

"It is with great sorrow and sympathy for the families that we issue these findings," Padilla said. "Today's Ford-UAW report addresses a commitment we made to the families and to all of our employees to do a complete and thorough investigation of this tragedy."

Donald Harper, 58, a pipefitter and a 35-year veteran of the Rouge complex, died in the blast. He was near retirement. The other five workers died in the next three weeks following the accident: Cody Boatwright, 51, a skilled worker; Warren Blow, 51, a power service operator leader; Ken Anderson, 44, a pipefitter; John Arsenaw, 45, a pipefitter leader; and Ron Moritz, 46, a skilled welder.

During the investigation, Ford embarked on a global initiative to inspect every one of the company's boilers, boiler houses and all other types of combustion-fired equipment. The initiative includes routine inspections on an ongoing basis and an enhanced training program for employees who operate or maintain boilers and other combustion-fired equipment. Independent consultants were brought in to audit boiler houses.

In another effort to emphasize safety, production lines recently were stopped at Ford plants so that a special safety message could be given to employees.

Other recommendations, included in the joint report, range from evaluation of control systems of boilers and other combustion-fired equipment to updating and maintaining all safety procedures. These steps are being implemented at all Ford facilities, Padilla said.

"A worldwide safety initiative, in cooperation with our local unions, is focusing the company and employees on the need for a higher awareness of safety procedures," he said. "We are determined to learn from the harsh lessons that are contained in this report and move forward, to assist the families who have had to bear a terrible burden and to commit ourselves to safer workplaces."

MIOSHA officials said they are pleased with the settlement. Not only did the agreement prevent costly legal fees had the citations been contested, but the $7 million sum was much more than the state could have hoped for, agency spokeswoman Maura Campbell said. The maximum penalty, if issued without an agreement, would have been $1.8 million.

"We wanted something more than we would have received if we had gone through the normal citation process," Campbell said, adding the agreement includes a provision that MIOSHA will not turn over its findings to the state attorney general.

The settlement, which does not include $30 million in private settlement offers Ford has made to the victims and their families, gives the company 45 days to pay the fine and 90 days to abate the citations. Failure to meet these deadlines could result in additional penalties. Any time extensions must be agreed upon by the state, Ford and UAW.

Because the dead or injured workers were Ford employees, Rouge Steel was not part of the investigation. About 140 workers were employed at the power plant, which was scheduled to be replaced with a new facility in 2000.

The 80-year-old Rouge complex, which includes an assembly plant for Mustangs, has about 10,000 workers. Boiler No. 6, built in 1965, is a Babcock & Wilcox water-tube unit. It was within 20 days of receiving its annual state inspection when the explosion occurred.

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