Federal-Mogul Corp. CEO Frank Macher feels reprieved from business death row these days.

“If I'd been asked to address this group in 2001, you'd have called me ‘dead man walking,’” Macher tells about 600 attendees of the 2003 Global Automotive Aftermarket Symposium in Dearborn, MI. “What a difference two years makes.”

He wincingly recalls Oct. 1, 2001 — nine months after he became CEO — when the automotive and aftermarket parts supplier filed Chapter 11 bankruptcy.

It did so primarily to protect itself from the blow of legal claims from people who say they suffered exposure to asbestos produced by acquired subsidiaries, mainly T&N plc, Fel-Pro Inc. and Cooper Automotive.

Federal-Mogul had taken on a heavy debt load to acquire the companies. Then the asbestos claims started pouring in — 475,000 at last count.

Going into debt to buy companies with crippling legal liabilities is an irony, a double whammy and one of the acute dangers of business acquisitions. Federal-Mogul has paid out millions and could ultimately give claimants and their attorneys $1.2 billion over the next decade.

Yet Macher says things are looking better, if not great.

Federal-Mogul announced losses of $34 million, or $0.39 a share, during the first quarter. Still, that's a significant improvement from a loss of $1.44 billion, or $17.53 a share, during like-2002. Total revenues were $5.42 billion last year, $5.47 billion in 2001 and $6.01 billion in 2000.