Fairchild Industries Inc. was found guilty yesterday of five counts of unauthorized hazardous-waste disposal and water pollution and fined $100,000, the largest criminal penalty ever assessed under Maryland's antipollution statutes, said Maryland Attorney General Stephen Sachs.
Washington County Circuit Judge Frederick C. Wright issued the decision after a 13-day trial. The diversified airplane and industrial products company was found guilty of one count of illegally discharging hazardous waste water containing hexavalent chromium and three additional counts of illegally releasing chrome-tainted waste water onto the ground from Fairchild Republic Co.'s airplane manufacturing plant in Hagerstown. Hexavalent chromium is corrosive, causing burns if ingested in sufficient quantities.
Fairchild also was found guilty of permitting chrome-bearing waste water to leak into the surrounding ground water through a hole in a concrete pit in the plant.
Earlier in the day and before the court's decision, Fairchild Chairman Edward G. Uhl said he was "prepared to drink the water" that is discharged by the Hagerstown plant. His comment was in response to a shareholder's question about the pollution charges during the company's annual meeting.
Last September, Fairchild was indicted on 86 counts of hazardous waste disposal and water pollution violations at its Hagerstown plant after a three-year investigation by the state's Office of Environmental Programs. If Fairchild had been convicted of the original charges, it could have been fined a total of $2.15 million.
The company "vigorously fought" the charges, according to a Fairchild spokesman, and never sought to settle the case out of court. The company succeeded in having most of the charges dismissed and was found guilty of five of the remaining 24 counts.
"Fairchild is disappointed that the Washington County Circuit Court found the company guilty of five misdemeanor charges concerning the violation of hazardous waste laws," the company said in a prepared statement.
"Of course, the fact that three-quarters of the charges were dismissed earlier for lack of proof and the company has been found innocent of 19 of the remaining charges indicates the case was never of the magnitude the state originally contended."
The company said it intends to appeal.
The state said last fall that Fairchild had stopped such discharges.
The largest previous pollution fine in Maryland was $50,000 in 1981 against American Cooperage & Steel Drum Co. in Baltimore, which was found to have disposed of chemicals in unauthorized dump sites.
At its stockholders meeting earlier at the Germantown headquarters, Fairchild said it expects to conclude a deal this week that would enable it to relocate its corporate headquarters to Virginia.
Fairchild would lease six acres of land by Dulles Airport and move the company's corporate staff as well as create a marketing site for one of its commercial aviation lines. Uhl said that a major reason for the move, to be accomplished in the next two years, was proximity to a major airport.
Shareholders quietly received Fairchild's disappointing financial news. Although Fairchild had hoped its earnings would be $48.5 million in 1982, said James R. Wilson, senior vice president for finance, last year's earnings were actually $35.3 million on revenue of $1.093 billion. Earnings per share were $1.90 versus a projected $2.61.
First-quarter 1983 results, released for the meeting, were equally disappointing, Wilson said. Net earnings dropped from $9.3 million (50 cents) a year ago to $2.4 million (13 cents), while sales were $199 million, down from $263 million in first quarter 1982.
Wilson attributed the earnings decline to the recession and the softness of demand for both the company's industrial and commercial aviation lines.