Investigators looking into the London Grenfell Tower disaster think the building’s cladding was a factor in the deadly June 14 blaze, and the company that makes the cladding panels is taking a beating.
Arconic said Monday it will stop selling the panels for use in high-rise buildings, which the company’s own brochures had recommended against even before the Grenfell fire, according to Reuters. The company has also pointed out to reporters that it’s not responsible for complying with local construction regulations on specific projects.
But the risk of costly litigation remains. “There is potential for this to be drawn out, and is just the beginning,” Morgan Stanley analysts wrote in a note to clients, referring to possible Grenfell-related litigation against Arconic.
The U.K. government has called for tests at dozens of other area high-rises that used cladding and insulation similar to those installed at Grenfell Tower.
Shares in the industrial company Arconic, formerly part of the aluminum giant known as Alcoa, have dipped sharply in the last two trading days, declining more than 14 percent. On both days, it’s been the single worst-performing stock in the entire S&P 500.
Arconic provided aluminum and polyethylene cladding (metal exterior panels) that investigators believe contributed to the fire at the West London residential high-rise. The death toll as of Wednesday was 79, and it’s expected to rise as more bodies are recovered.