Owens-Illinois (O-I): Asbestos History & Kaylo Liability

Company History & Kaylo Origins

Owens-Illinois Glass Company was incorporated in 1929 following the merger of the Owens Bottle Company and the Illinois Glass Company, two of the most significant glass manufacturers in the United States. From its Toledo, Ohio headquarters, O-I quickly became one of the largest glass-container producers in the world, supplying bottles and jars to food, beverage, and pharmaceutical industries. The company grew aggressively during the 1930s and 1940s, diversifying into industrial materials as the post-war construction and manufacturing boom created demand for specialty building products.

In the mid-1940s, Owens-Illinois research engineers began developing a calcium-silicate-based pipe insulation product designed for high-temperature industrial applications such as steam pipes, boilers, and process equipment. The product — eventually trademarked as Kaylo — used amosite (brown) asbestos as a critical binding and heat-resistance agent. Amosite asbestos was valued in industrial insulation because its long, strong fibers provided mechanical stability at extreme temperatures. By 1948, Owens-Illinois had begun commercial production of Kaylo at plants in Sayreville, New Jersey and Berlin, New Jersey.

Kaylo was aggressively marketed to contractors, industrial facilities, shipyards, power plants, refineries, and chemical plants throughout the United States. O-I positioned Kaylo as a premium, high-performance pipe insulation capable of withstanding temperatures far exceeding those tolerated by conventional insulating materials. The product achieved wide commercial success throughout the late 1940s and early 1950s and was installed in countless facilities across the country by pipe insulators, boilermakers, and construction tradespeople who had no idea it posed a serious health hazard.

In 1958, following growing awareness of asbestos health risks in industrial and scientific circles — and the damaging conclusions from O-I's own internal research — Owens-Illinois sold the Kaylo product line to Owens Corning Fiberglas Corporation. The sale transferred ongoing Kaylo manufacturing and marketing to Owens Corning, which continued producing Kaylo until 1972. Critically, the sale of the product line did not transfer O-I's legal liability for the decade during which it manufactured and sold the product. Owens-Illinois remained a named defendant in thousands of asbestos personal injury lawsuits for its role as the original developer and manufacturer of Kaylo.

In subsequent decades, Owens-Illinois continued to operate as a glass-container business — today known as O-I Glass, Inc. — while its legacy asbestos liabilities grew substantially. By the late 2010s, the company faced an enormous and ongoing stream of asbestos personal injury claims. In January 2020, O-I created a subsidiary called Paddock Enterprises LLC and transferred all of its asbestos liabilities to that entity, which then filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Western District of Texas. The purpose of the bankruptcy was to establish a permanent asbestos settlement trust — a common strategy used by companies with asbestos liability to resolve claims in a structured, equitable manner.

Asbestos Products & Exposure Routes

Owens-Illinois's primary asbestos product was Kaylo pipe and block insulation. The following table summarizes the known asbestos-containing products associated with O-I and the exposure risks they created.

Kaylo insulation was designed for use in high-temperature industrial environments, which meant it was installed and maintained by workers in some of the most heavily industrialized settings in the country. Power plant workers, refinery operators, pipefitters, boilermakers, and insulators who worked with or near Kaylo products inhaled asbestos fibers over extended periods. Because Kaylo was installed across broad areas of industrial infrastructure during the post-war economic expansion — a period when occupational safety standards for asbestos were essentially nonexistent — exposure was widespread and cumulative. Even workers who did not directly handle Kaylo were often exposed as bystanders when nearby tradespeople cut or disturbed the material.

Manufacturing Facilities

Owens-Illinois manufactured Kaylo at two plants in New Jersey during the decade it produced the product. Both facilities were central to O-I's industrial materials division and employed workers who faced direct occupational asbestos exposure from the production process.

The Sayreville and Berlin plants drew their workforces from the surrounding communities in central and southern New Jersey. Workers employed at these facilities mixed raw asbestos into the Kaylo formulation, operated autoclaves and curing equipment, and handled finished Kaylo products — all in conditions of significant dust exposure. Many of these former plant workers, and their family members who were exposed to asbestos carried home on work clothes, have since been diagnosed with mesothelioma, asbestosis, and asbestos-related lung cancer.

The Saranac Lake Documents: Corporate Knowledge of Harm

Among the most significant and damaging episodes in asbestos litigation history is what attorneys and researchers have come to call the Kaylo papers — internal Owens-Illinois documents revealing that the company conducted animal studies in collaboration with the Saranac Lake Laboratory in the early 1950s that conclusively demonstrated Kaylo caused pulmonary fibrosis in laboratory animals. Despite these findings, Owens-Illinois continued to manufacture and market Kaylo without any health warnings for several more years.

The Saranac Laboratory (formally the Trudeau Foundation Saranac Laboratory) in Saranac Lake, New York was one of the leading industrial hygiene and pulmonary disease research institutions in the United States during the mid-twentieth century. Owens-Illinois engaged the laboratory to study whether Kaylo dust posed a health hazard to workers and end users. The laboratory's animal inhalation studies — conducted in the early 1950s — exposed test animals to Kaylo dust under controlled conditions and monitored the progression of lung disease over time.

The results were unambiguous. The Saranac studies found that Kaylo dust caused pulmonary fibrosis — scarring of lung tissue — in the laboratory animals studied. Researchers documented progressive lung damage consistent with asbestosis. The scientific findings were reported back to Owens-Illinois in internal correspondence and reports that detailed the pathological changes observed in the lungs of exposed animals. There was no scientific ambiguity: the product O-I was manufacturing and selling to industrial customers caused the same type of lung disease that had already been documented in human asbestos workers for decades.

What happened next became the centerpiece of corporate-knowledge claims in asbestos litigation for decades. Rather than issuing warnings, reformulating the product, or halting sales, Owens-Illinois's management made a business decision to continue manufacturing and marketing Kaylo. No warnings were added to product packaging. No health information was shared with customers, contractors, or the workers who installed the product. The internal research was not disclosed to the public, to health authorities, or to the workers whose lives would be shortened by exposure to the product.

These internal Owens-Illinois documents were eventually produced in discovery in asbestos litigation cases during the 1970s and 1980s. Plaintiffs' attorneys quickly recognized their profound evidentiary value: here was a manufacturer that had its own scientific proof that its product was lethal, had made a deliberate decision to conceal that information, and had continued selling the product to unsuspecting workers. The Kaylo papers became a cornerstone of asbestos litigation strategy, used in dozens of trials to support claims for punitive damages and to establish a pattern of corporate concealment that mirrored what was being uncovered at other manufacturers across the industry.

Courts and juries were deeply affected by the Kaylo documents. In multiple trials where the Saranac Lake research was presented, juries returned substantial verdicts — including punitive damage awards — against Owens-Illinois. The documents also influenced the trajectory of asbestos litigation more broadly, reinforcing what had become clear across multiple industries: that asbestos manufacturers had long known about the dangers of their products and had systematically chosen profit over worker safety. The Owens-Illinois and Kaylo story remains one of the clearest documented examples of corporate suppression of industrial health hazard information in American manufacturing history.

Paddock Enterprises Trust Fund: Filing & Compensation

In January 2020, Owens-Illinois created a wholly-owned subsidiary called Paddock Enterprises LLC and transferred all of O-I's asbestos-related liabilities to that entity. Paddock Enterprises then filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the Western District of Texas. The bankruptcy was specifically structured to use the federal asbestos trust mechanism — established under Section 524(g) of the Bankruptcy Code — to create a permanent trust that could compensate all current and future claimants injured by Owens-Illinois asbestos products.

The Paddock Enterprises Asbestos Settlement Trust is now the exclusive vehicle for compensating people injured by Kaylo and other O-I asbestos products. One of the most notable features of the Paddock Trust is its payment percentage of approximately 50%. In the world of asbestos trusts — where many trusts pay only 1%–5% of an approved claim's value due to the sheer volume of claims and limited trust assets — the Paddock Trust's payment rate is exceptionally high. This means that for a claim valued at $200,000 under the trust's payment schedule, a claimant could receive approximately $100,000 directly from the Paddock Trust alone.

It is critically important to understand the relationship between the Paddock Trust and other asbestos trusts. Because Kaylo was sold to Owens Corning in 1958, and Owens Corning continued manufacturing the product until 1972, workers exposed to Kaylo during the period 1958–1972 may have claims against both the Paddock Trust (for O-I's period of manufacture) and the separate Owens Corning trust. Workers who installed or worked near both original O-I Kaylo and later Owens Corning Kaylo — which was common, since old and new insulation often existed side by side in facilities — may be able to make claims against both trusts, significantly increasing total recovery. An experienced mesothelioma attorney can identify all potentially applicable trusts, typically filing claims against 20, 30, or even more trusts simultaneously on behalf of a single claimant.

To file a successful claim against the Paddock Trust, claimants must generally provide:

• Medical documentation of a qualifying diagnosis — mesothelioma, primary lung cancer, asbestosis, or other asbestos-related disease recognized by the trust
• Evidence establishing occupational or bystander exposure to Kaylo or other Owens-Illinois asbestos products (employment records, union records, co-worker affidavits, military service records, facility records)
• Documentation of the exposure timeline establishing that exposure occurred during the period O-I manufactured Kaylo (1948–1958)
• Completion of standard trust claim forms with supporting documentation attachments

Importantly, the statute of limitations for asbestos trust claims is determined by the date of diagnosis, not the date of exposure. Because mesothelioma and asbestos-related lung cancers often do not manifest until 20 to 50 years after initial exposure, people who worked with or near Kaylo in the 1950s and 1960s may only now be developing symptoms. Most mesothelioma attorneys work on a contingency fee basis — meaning there is no upfront cost to the claimant, and attorney fees are paid only if a recovery is obtained. Given the complexity of filing across multiple trusts and the potential for very significant total recovery, obtaining qualified legal representation is strongly recommended for anyone diagnosed with an asbestos-related disease with possible exposure to Owens-Illinois or Owens Corning products.

Frequently Asked Questions