Public News Service-WV
November 22, 2010
Massey's Violations Hurting its Bottom Line?
CHARLESTON, W.Va. - The coal-mining company Massey Energy is apparently up for sale, and shareholders may not be thankful for the company's record of violations of law and regulations. The company confirms it is now seriously considering takeover offers, and a number of stock watchers say privately that Massey's environmental and mine safety problems have cost it.
Rob McGarrah, who follows stocks for the huge
AFL-CIO pension funds, says accidents and environmental violations cause down-time and run up huge legal fees.
"Contesting every single violation, questioning the legality of the enforcement efforts on the part of federal and state officials: None of this is good for productivity. It's not good for the overall health of the company."
No one at Massey returned a call requesting comment. The company has fought with the unions before, but McGarrah says Massey could be a better neighbor and more profitable if it were less combative.
Speaking to investors last week, company CEO Don Blankenship claimed that their finances have been hurt by regulations that he says target Massey.
"Practices that we've employed at Massey successfully for years, that improve health and safety, are now being discarded; that's as well as the fact that environmental regulations have reached the point that they're fully unreasonable."
According to McGarrah, other large coal operators seem to have fewer of these problems.
"Other companies, and we are invested in them, do not have anywhere near the same troubles with federal investigations or federal mine safety enforcement."
Over the last ten years shares in such mining companies as Consol, Peabody and Arch Coal have shown a tremendous rise. But even before the accident at its Upper Big Branch mine last April which focused national attention on the firm and its record, Massey Energy's share price was about where it had been a decade before.
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