Walmart Inc. said Wednesday it will drop products made by Water Gremlin Co., the White Bear Township manufacturer targeted by state regulators for exposing its employees and their families to toxic lead residue.

The move comes as Minnesota health officials identified what appear to be additional health effects from the company's lax lead controls. They now suspect that the toxic lead dust tracked home by workers may have poisoned as many as 24 children over the past two years — up from the 12 previously identified — although they still need to rule out other possible sources of lead, such as paint, in the additional cases.

Lead can cause brain damage and neurological problems in children.

State health officials are "deeply concerned" about the situation, Assistant Health Commissioner Dan Huff said in a statement Wednesday.

"Tragically, these children and their families will be dealing with the health impacts of lead poisoning for the rest of their lives," Huff said. "That's why we are working so hard with our partners and the courts to ensure that Water Gremlin recognizes and acts on its legal and moral obligation to protect workers and their families."

A spokeswoman for Walmart confirmed its decision Wednesday morning, adding that the company will "discontinue the sale of Water Gremlin items after selling through current inventory." She wouldn't elaborate, saying she can't discuss the nature of Walmart's supplier relationships.

Water Gremlin is a major supplier of lead terminals for batteries, such as vehicle batteries, and also makes fishing gear such as lead sinkers. It employs more than 300 people at its White Bear Township plant.

Water Gremlin executive Carl Dubois said the company intends to win back Walmart's business.

State regulators shuttered the factory briefly in October after identifying lax lead control practices and pinpointing "take-home lead" as the source of contamination for a dozen area children who tested for elevated lead levels in blood. Two of those children tested above the state safety level of 15 micrograms per deciliter, a particularly serious health risk for a child. None of the additional 12 children has tested at that level, but all were above 5 micrograms per deciliter, considered elevated.

A Ramsey County judge soon allowed the factory to reopen, and Water Gremlin is now about one month into a court-ordered, phased cleanup that will eventually result in a redesign of the facility and its locker rooms.

On Wednesday, the company was back in Ramsey County District Court with state regulators to update Judge Leonardo Castro on the remediation efforts. Water Gremlin was ordered to overhaul its employee safety training and decontaminate the plant — adding additional floor scrubbers and sticky mats, for example. It was also required to acquire more safety gear for workers; clean their vehicles, which were a major source of the take-home lead; and to start spot-checking employees' heads and bodies for lead dust with wipes as they exit at the end of their shifts.

Over the objections of the state, Castro on Wednesday agreed to limit the scope of the exit spot checks after a lawyer for the company complained that it was taking too long and employees wanted to get home.

The state's lawyer, Special Assistant Attorney General Peter Surdo, told the judge he objected to the limits because the spot checks are a critical safeguard, particularly because the trailers that will be the basis for a temporary worker decontamination system are not yet in place. "Watering down" the spot checks will leave employees at risk, he said.

"Even one or two people are one or two too many," Surdo said.

Decontaminating employee vehicles has also proved challenging. Water Gremlin and its third-party monitor, Wenck Associates Inc., may have to clean some of the vehicles as many as three times, court documents show, to get lead levels down to an acceptable range.

Another key challenge will be notifying former employees that they and their families may have been exposed to take-home lead and that they can opt to have their homes tested and decontaminated. The state now has a list of nearly 1,000 former employees, including part-time and temporary workers, who worked for Water Gremlin over the past two years. It intends to notify them, but details of the notification are still being decided. Both parties are due back in court with those details by Dec. 18.

Surdo also told the judge he's "starting to see some slippage" in the company's remediation efforts. The company is taking too long to get employees' vehicles cleaned, he said, and the lead levels in several non-production areas of the plant, such as the cafeteria and stairs to locker rooms, are still "not acceptable" after cleaning. Surdo urged immediate retesting of those areas, but Castro decided that the testing schedule was adequate.

State regulatory records show that Water Gremlin has a history of pollution problems, including emitting tons of the hazardous solvent trichloroethylene into the air in violation of its state air quality permit.

In March, the company agreed to pay more than $7 million in fines and environmental remediation over the trichloroethylene emissions, the second largest such settlement for the Minnesota Pollution Control Agency.

Jennifer Bjorhus • 612-673-5683