Lockheed Cleanup to Cost More : Environment: The expenses are estimated at $263 million. The firm expects to recoup the money from taxpayers.
Lockheed Corp. has raised its cost estimate for environmental cleanup in Burbank to $263 million, and has reaffirmed its intention to recover most of the money from taxpayers through charges in its government contracts.
The new figure, included in Lockheed’s annual report for 1992, is $44 million above a $219-million estimate last year by the federal General Accounting Office, which relied on Lockheed data.
Citing “existing government regulations” and “an agreement with the U.S. government,” Lockheed told stockholders that the costs of soil and ground-water cleanup will be proportionally recovered from its customers, of which the United States government is the largest.
The Department of Defense and other federal agencies account for more than 80% of Lockheed’s sales, and so are allocated that share of cleanup costs and other expenses. Lockheed said the costs will be recovered through the pricing of hardware and services in current and future government contracts.
In the annual report, Lockheed said the $263 million includes an estimated $139 million for the Superfund cleanup of Burbank ground water supplies that have been polluted by chemical solvents. The company is required to perform the lion’s share of the ground water cleanup under a consent decree with the U.S. Environmental Protection Agency.
The chemical solvents, used as degreasers in aircraft manufacture, were leaked and spilled and eventually seeped into ground water tapped by city of Burbank wells that are south and east of Lockheed’s property.
Contamination from Lockheed and other sites has forced Burbank to shut down the wells-- which traditionally supplied up to 20% of the city’s water--and to rely on more costly imported supplies.
Lockheed said it expects to spend another $124 million to clean up tainted soil and water beneath its vast Burbank production complex, under an order issued by the Los Angeles regional office of the California Regional Water Quality Control Board. The work is under way and the $124 million “estimate will be subject to changes as work progresses and as additional experience is gained,” Lockheed said.
Many of the country’s biggest defense contractors face huge environmental liabilities, and their ability to recover cleanup costs from the government has become a sore point with some members of Congress and environmental groups. According to these critics, the situation could undermine the basic thrust of the Superfund program, which is supposed to require private polluters to spend their own money on toxic cleanups.
The Times reported in November 1992 that the Pentagon indirectly was becoming a key underwriter of Superfund cleanups through its contracts with top defense and aerospace firms, but without congressional scrutiny or public debate.
Two months later, Rep. John Conyers Jr. (D-Mich.), chairman of the House Government Operations Committee, and California Sen. Barbara Boxer then a House Democrat from Greenbrae, called for an investigation by the General Accounting Office.
The watchdog agency has since prepared two preliminary reports.
Conyers has scheduled a congressional hearing on the issue Thursday in Washington.
Lockheed’s cleanup bill in Burbank actually could far exceed $263 million. That’s because the EPA has told Lockheed it may also be held responsible for cleanup of contaminated wells in North Hollywood and Glendale.
The Lockheed case also presents an unusual twist, because the company plans to sell about 250 acres of its Burbank complex as part of a shift of aircraft production to Palmdale and Marietta, Ga.
