A tale of three cities: Winners of the GM cleanup lotto are more like survivors

By Brian Laskowski, Shawntina Phillips and Jeff Gillies
Jan. 21, 2010

Editors note: This is part three of a three-day series on the environmental implications of GM’s bankruptcy.

Massena, Flint and Bedford are three towns that rose in the industrial might of the General Motors manufacturing era. Now Motors Liquidation Co., the company that owns GM’s worst assets, is preparing to close the door on the automaker’s legacy in these cities.

But before it leaves, Motors Liquidation or GM must account for decades of pollution at former factories and waste sites.

A solution is unclear. The company expects cleanup costs to be around $450 million. It has $1.5 billion in assets but $35 billion in legal liabilities.

With nearly 100 years of pollution at several sites, some will fall between the cracks when it comes to cleanup. Others will win money in bankruptcy court. But even “winning” might just mean surviving.

Cost of Massena cleanup disputed

A site in Massena, N.Y. may be a winner if only because it has not yet been lost in the scuffle.

The 50-year-old General Motors hazardous waste site is on the Canadian border. Peter Ouderkirk, the New York State Department of Environmental Conservation’s project manager for General Motors in the area, is rooting for Massena.

“Massena is by far the furthest ahead when it comes to investigation and it’s also the largest [GM] cleanup they (the U.S. Environmental Protection Agency) have,” Ouderkirk said.

The site has had a legal promise for long-term clean up since the early ‘90s, Ouderkirk said. Now New York’s environmental agency is negotiating with Motors Liquidation to complete it. Over the past 20 years, General Motors has dredged rivers surrounding the site, completed partial cleanup of the lagoons and excavated around the facility.

Completion of the clean up will cost around $111 million, Ouderkirk said.

“Numbers have been thrown all over the place,” he said. “That number may go up or down based on our final negotiations with the Department of Environmental Conservation and the Environmental Protection Agency.”

Jason Clark, the director of economic development in Massena, disagrees with both Ouderkirk’s price quote and his optimistic opinion of the site.

“I would say if we’re talking at this moment in time today, Massena is in no way a winner,” Clark said.

Clark says that according to GM and the EPA, Massena needs the most work of all the automaker’s remediation headaches. “The project has been ongoing for the last 25 years,” Clark said. “In theory it could go on for another 25 years.”

Even though a majority of the work has been done, Clark says the EPA has not even started cleanup in some parts of the site. The agency has not even been able to measure the depth of contamination at one disposal site.

“If you can’t measure it, you can’t clean it,” Clark said.

Who will pay for additional clean up?

“Nobody really knows,” Clark said.

Because Massena is a hazardous waste site, the government has to find money to clean it up, Clark said. That task is complicated because parts of the site are not currently part of EPA’s responsibility.

“There’s still the unknown relative to the building which is 880,000 square feet, plus what’s underneath the building,” Clark said. “We don’t know exactly what that is and what that isn’t.”

Clark estimates Massena’s cleanup will cost at least $250 million. There’s no guarantee, though, that all that money will come from GM.

“That’s part of the problem. GM won’t talk about it and the EPA won’t talk about it,” Clark said.

The New York State Department of Environmental Conservation filed claims totaling more than $200 million, according to the Motors Liquidation Web site. It’s not yet clear how many or what sites that claim covers.

Hope on the horizon in Flint

Meanwhile, in Flint, Mich., the EPA will soon file a cleanup plan for Buick City, a 200-acre Motors Liquidation Co. property. Flint has risen and fallen with the fortunes of GM. Buick City once had 20,000 workers turning out autos, but it has been a decade since the site began shutting down.

A developer wanted to purchase the property last year and invest $25 million into building a regional transportation hub to make the area a prime distribution center. The deal broke down over the question of who would handle long term environmental responsibility. The Flint Journal, the city’s newspaper, reported that the developer backed out after being left out of talks with the EPA about the responsibilities.

Now a new developer, Global Link Network, has taken up the idea of building the $25 million hub. The deal almost broke down again over the same issues, but this time things are happening differently, the GM bankruptcy has likely aided cleanup, experts say.

“Motors Liquidation Co.’s entire job as a company is to wind down old GM operations, which means in part cleaning up these facilities and getting them sold,” said Matt Didier, the EPA brownfield coordinator for Flint and Genesee County. “In this particular case of Buick City, the fact that it’s owned by this company, old GM (Motors Liquidation), is probably moving the cleanup along quicker than it would have otherwise,” said Didier.

It will cost $1.1 million to $3.7 million to clean up the Buick City site’s lead-contaminated soil and possible groundwater contamination, said Keith Edwards, a senior development director for the Genesee Regional Chamber of Commerce at a meeting of the chamber’s small business council in September. The Michigan Department of Environmental Quality filed a $1.4 million claim in bankruptcy court for the site’s cleanup.

GM will fund Bedford cleanups

Bedford, Ind. wins in a way unlike Massena or Flint, both of which became the responsibility of Motors Liquidation. The ‘new’ GM retains ownership of its Bedford factory, which produces aluminum parts like engine blocks and pistons. The new GM — shed of most of its other liabilities – will be responsible for funding ongoing cleanups.

Motors Liquidation Co. still has a role in Bedford. While GM retains ownership of the manufacturing plant, 54 other Bedford properties have been turned over to the company’s successor. Most of those sites are clean, and the company agreed to clean the two that aren’t, said Jose Cisneros, chief of the Reuse and Remediation Branch at EPA Region 5.

Though it still isn’t clear that Motors Liquidation Co. has enough money to do that, Bedford at least has the promise that it will.

“There are other places throughout the country that don’t have that same assurance,” said Cisneros. “But this is one of the places that we do know that that’s the case.”

Most of Motors Liquidation’s Bedford properties are residences near the plant that GM bought to ease cleanup crews’ access to contamination or to appease residents who thought their property values were going to go down, said Bruce Palin, assistant commissioner of the Indiana Department of Environmental Management’s office of land quality.

Though the EPA is still assessing those sites, only two seem to have any pollution that needs cleaning up, Cisneros said. One of those sites has a big pile of contaminated debris that was dug out of a nearby creek bed as part of the cleanup.

This story originally said that Massena was two hours south of the Canadian border. A commenter pointed out that it is ON the Canadian border.