Federal-Mogul Corporation and Official Committee of Unsecured Creditors of Federal-Mogul Oppose National Asbestos Trust Fund Proposal as Fatally Flawed

SOUTHFIELD, Mich.--Jan. 6, 2005--Federal-Mogul Corporation (OTCBB:FDMLQ) and the Official Committee of Unsecured Creditors of Federal-Mogul this week submitted a joint letter to the U.S. Senate strongly opposing the creation of a national asbestos trust fund, citing the extremely inequitable and adverse impact such a proposal would have on Federal-Mogul and its future viability.

While Federal-Mogul and the Creditors Committee support efforts to reform the asbestos litigation crisis through passage of a medical criteria bill and also support enactment of meaningful tort reform measures, the Company and Creditors cannot support a national trust that imposes a grossly disproportionate payment obligation on Federal-Mogul while providing a bailout to a small number of companies that are responsible for the lion's share of the most serious asbestos claims in the tort system.

In a process strikingly reminiscent of the "taxation without representation" that the American Revolution was fought over, the trust fund would compel mandatory annual payments for a period of nearly 30 years from companies, a number of whom have joined a new coalition of defendant companies opposing the legislation. These payments threaten the viability of countless companies, bear no relevance to their asbestos exposure or costs, and have been developed in the absence of consultation with or input from the companies. Compounding the devastating effect of the payments, the trust fund would strip companies of their insurance coverage for asbestos claims -- coverage on which premiums have been paid and that would be forfeited, perhaps unconstitutionally.

Through this manifestly unfair and undemocratic process, the legislation would make Federal-Mogul the largest proposed contributor to the national asbestos trust, requiring the Company to pay a far greater amount to the trust fund than it would under its reorganization plan, while simultaneously eliminating the company's ability to access its insurance assets to compensate foreign asbestos claimants.

In their letter, the Company and Creditors Committee again outlined the dire business consequences that passage of legislation creating a national asbestos trust would have on the Company, and urged Senators to consider alternative legislation establishing medical criteria as a more equitable solution to the asbestos litigation crisis.

This joint Company and Creditors Committee letter follows a Jan. 3, 2005, business coalition letter to Senate Judiciary Committee Chairman Arlen Specter (R-PA) signed by Exxon Mobil, DuPont, Federal-Mogul and the Creditors Committee, and other U.S. businesses opposing the national trust. As in the case of the other companies signing the coalition letter, Federal-Mogul can demonstrate that it fares far worse under the legislation than under the existing tort system or if allowed to confirm its reorganization plan.

Copies of the joint letter to the U.S. Senate and the business coalition letter are available upon request.

About Federal-Mogul

Federal-Mogul is a leading global supplier of automotive components and sub-systems serving the world's original equipment manufacturers and the aftermarket. Headquartered in Southfield, Michigan, Federal-Mogul was founded in 1899, and today employs nearly 20,000 people in the United States -- with substantial operations in Alabama, Illinois, Indiana, Iowa, Michigan, Ohio, South Carolina, Tennessee and Wisconsin -- and more than 44,000 worldwide. Federal-Mogul products are sold under a variety of brands, including AE(R) engine products, Anco(R) wipers, BCA(R) bearings, Champion(R) spark plugs and wipers, Fel-Pro(R) gaskets, Ferodo(R) brake pads, Glyco(R) bearings, Goetze(R) piston rings, Moog(R) chassis products, National(R) oil seals, Nural(R) pistons, Payen(R) gaskets, Sealed Power(R) engine products and Wagner(R) lighting and brake products. For more information on Federal-Mogul, visit the company's Web site at http://www.federal-mogul.com.