Asarco has moved its headquarters from Phoenix to Tucson and changed its corporate structure to take advantage of the company's joint ventures and partnerships, the company's top executive said.

Asarco, a wholly owned copper mining subsidiary of Grupo Mexico S.A., moved out of its Phoenix office and changed its status to a limited liability corporation "three or four months ago," said Daniel Tellechea, Asarco president and CEO.

The company, formerly called Asarco Inc., is now known as Asarco LLC. The company's 1,714 employees placed it 26th in the 2005 Star 200, an annual listing of the largest employers in Southern Arizona.

Tellechea also announced that five defunct subsidiaries of Asarco filed for bankruptcy protection under Chapter 11 Monday in Corpus Christi, Texas.

All five companies were involved in the production of asbestos or asbestos-containing products, but all ceased production "many years back," Tellechea said.

For more than 40 years, Asarco has had a Tucson office at 1150 N. Seventh Ave. The company has another nearby office at 55 E. Helen St., he said.

Bought by Grupo Mexico in 1999, Asarco moved its headquarters from New York City to Phoenix in 2001. Now Asarco has vacated the former Phoenix office and moved its legal and commercial divisions into a new office in Chandler, Tellechea said.

"It's very close to the entrance of (Interstate 10) and a lot closer to our Ray mine," Tellechea said. "And the move to Tucson will save us substantial money because we've owned this building for a number of years and because we have two offices here that are very close together."

The proximity of the company's Mission and Silver Bell mines to Tucson was also a factor in the move, he said.

"More flexibility as a company"

The change in corporate structure is due primarily to the fact that most of the company's operations are now joint ventures or partnerships, Tellechea said.

"It simply gives us more flexibility as a company as we move forward," he said.

Companies with similar business relationships often adopt LLC status, said consultant George Leaming, owner of the Marana-based Western Economic Analysis Center.

Grupo Mexico has benefited from the rising price of copper, which now sits at about $1.50 a pound due to China's insatiable appetite for raw materials, Leaming said. That may well explain the timing of the bankruptcy filings, he said.

"They may be just trying to get everything cleaned up while they've got the money," Leaming said. "A number of other companies have been trying to pay down their debts, trying to get their affairs in order, and I think that's related to the price of copper, that they have money to take care of things now."

The company reported a net profit of $33.2 million for 2004, compared with a $120.7 million loss in 2003. Company reports attributed the upswing to increases in metal prices and financial restructuring.

Reaction to asbestos lawsuits

Tellechea said the bankruptcy filings are a move to strengthen Asarco's financial health in the face of huge increases in the number of asbestos-related lawsuits.

"We don't see any more sense in continuing to pay all these claims for dormant, nonoperating companies," he said.

Some of the five companies have real estate assets, but none is functioning, Tellechea said.

Three companies associated with Lake Asbestos of Quebec produced asbestos from the Black Lake region of central Quebec. The other two companies manufactured various cement underground pipe products that used asbestos as a binding agent. All five companies had ceased operations by the mid-1990s, Tellechea said.

Asbestos is made up of microscopic bundles of fibers that may become airborne when distributed. Once inhaled into the lungs, the fibers can cause significant health problems, according to the Environmental Protection Agency's Web site.

"Totally out of control"

Asbestos-related litigation has reached a fever pitch, said business consultant Don E. Smith of Ithaca, N.Y.-based American Consulting Group Inc.

"This whole asbestos thing has gotten totally out of control with the huge numbers of lawyers and lawsuits that have been filed," Smith said. "I can understand why a company that's no longer operating would want to make such a decision."

Tellechea said the filings have nothing to do with a settlement Asarco reached with the EPA that set up a $100 million environmental trust fund to pay for the cleanup of scores of former mining and smelting sites.

Asarco reached an agreement with the U.S. Justice Department in 2003 that allowed it to split off its Southern Peru Copper subsidiary, making it a more direct subsidiary of Grupo Mexico. The federal government had blocked the sale, fearing that without Southern Peru, Asarco would be financially unable to cover its environmental liabilities in the United States.