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Satellite Damage May Cost Lockheed Millions

March 03, 2004|From Bloomberg News

Lockheed Martin Corp. may be liable for hundreds of millions of dollars in damage to a U.S. weather satellite that was dropped during construction, Commerce Secretary Don Evans said Tuesday.

Evans said the Commerce Department was investigating the September accident at a Lockheed plant in Sunnyvale, Calif. The department's lawyers are considering options, including legal action to recover money from private contractors.

Lockheed was in charge of building the satellite for the National Oceanic and Atmospheric Administration when the 14-foot spacecraft slipped and fell three feet to the ground.

"I'm sure we'll be pursuing the total recovery of the loss," Evans said during a Capitol Hill hearing on the fiscal 2005 budget for the Commerce Department, which oversees NOAA.

The so-called N Prime satellite was to orbit the Earth gathering data to be incorporated into a long-term climate model.

A spokesman for Bethesda, Md.-based Lockheed said the accident was "caused by a deviation from established written procedures." Spokesman Buddy Nelson declined to comment on the company's potential liability.

Sen. Judd Gregg (R-N.H.), chairman of the subcommittee that oversees the Commerce Department's budget, asked Evans about $400 million worth of damage, but Commerce Department spokeswoman Ginny Ward said investigators still were assessing the damage.

Lockheed shares fell 59 cents to $45.64 on the New York Stock Exchange.

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