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Massey Energy: A rose by any other name…

3 June 2011 1 comment

The recent acquisition of violation-ridden Massey Energy by Alpha Natural Resources highlights an simple and effective technique of repenting for a companies sins: change your name.

Background:

Massey Energy, one of the world’s most heavily fined coal companies was acquired by Alpha Natural Resources through a friendly takeover valued at $7.1 billion. This merger of the 6th and 4th largest US coal producers will bring an end to the long-standing, long-tarnished Massey name. Massey made headlines in 2006 and 2010 with fatal explosions in two of its West Virgina mines.

In the 15 years leading up to the deadly explosion in its Upper Big Branch mine in 2010, Massey had received over 3000 safety violations for that mine alone.  Even with a tome of violations stacked against it, Massey continued to operate the mine until its fatal conclusion. This shear hubris and lack of respect for human life and working conditions (not to mention the environment) lead to the deadliest US coal mining accident in over 30 years.

Will this merger reform Massey’s stance on safety? Alpha initially planned to retain 4 Massey executives including former Massey VP of Operations Chris Adkins, who helped shape Massey’s safety policy. Adkins was quickly and abruptly dismissed before the June 1 stockholder vote which approved the merger. Alpha’s PR statements regarding the merger have promised a commitment to “running right” but are largely devoid of any substantive plan to reshape Massey’s safety-last culture.  So, will this merger bring about change?  Hopefully. But most likely, what was Massey will continue to operate as Massey, though without that pesky history of deadly mining accidents. And a violation-ridden-energy-company by any other name, will actually smell much sweeter to its stock holders.

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