Update, December 7, 2011: Alpha Natural Resources, which purchased Massey Energy earlier this year, settled with the federal government December 6, 2011, agreeing to pay $209 million in penalties (civil, criminal, and restitution) to avoid Alpha’s facing criminal charges for the explosion 20 months ago in Massey’s Upper Big Branch Mine that killed 29 miners. However, Massey executives, including former CEO Don Blankenship are not covered by the settlement and may face criminal charges.
Update May 30, 2011: Blankenship retired in December 2010 and in May 2011, the first investigative report was issued. This one is by the former West VA Governor’s Independent Investigative Panel, see May 2011 column.
The Massey Energy disaster last week bottom lines the question of how much risk a company will take on at the expense of their workers in pursuit of aggressive production goals. It is also a story about the obsolescence of paternalism and failures of leadership.
Funerals are happening, searchers are still looking for the last nine miners’ bodies, and federal investigators are on site to investigate what caused the explosion at Upper Big Branch that killed 28 miners and one construction worker in the worst mining disaster in decades.
Meanwhile Massey chairman and CEO Don Blankenship is chronicling his ministrations to the bereaved families on twitter. Yesterday he wrote, “We will be doing all we can to figure out what happened and to greatly lessen the chance of it ever reoccurring.”
“Greatly lessen” is that the best Blankenship’s got?
You couldn’t ask for a more striking contrast in leadership than Blankenship to former Alcoa chairman and CEO Paul O’Neill (who went on to be U.S. Treasury Secretary). From his first day, O’Neill committed that Alcoa would be a place where no one would be hurt at work. Safety was at the top of his agenda. He created accountability and when accidents did occur in a plant anywhere in the world, within 24 hours there would be an analysis of what went wrong and how a process could be changed or people trained differently to eliminate the possibility of it happening again. O’Neill also took Alcoa’s profitability to record levels while still focusing on the safety of Alcoa employees.
Strategically positioned on the board of the U.S. Chamber of Commerce, Blankenship has been a vocal critic of politicians and regulators knowing more about how to keep miners safe than he or Massey does. Arrogance isn’t a proven method for saving miners’ lives.
There is something feudal here: the portrayal of a benevolent company building loyalty over years by “being there” on its own terms for employees and their families in life’s ups and downs. In this explosion, which may prove to have been preventable, rather than feeling employees’ pain, workers would be far better off if Blankenship used his authority to demand hazards in the environment be removed or mitigated. Instead, in its 35 underground mines and 12 surface mines, the company decides what regulations it will take seriously.
Massey’s Upper Big Branch mine had more than 600 safety violations in the 16 months prior to the explosion, a period when production had been ramped up significantly to meet aggressive goals. To complicate the ability of violations to be corrected, Massey has contested about one-third of the violations, further undermining the enforcement capability of the Mine Safety and Health Administration (MSHA); a tactic not unique to Massey. MSHA has its own work to do to determine how to better analyze and act on perceived risk.
Don Blankenship’s focus on production over everything else is grist for those who would challenge his leadership at the Annual Shareholders’ meeting in May. The immediate question is that if Massey planned to increase production 66 percent this year to reach 2 million tons of coal, with Upper Big Branch closed since the explosion, will the 34 other underground mines and 12 surface mines be pushed further to make the target while safety violations are ignored, danced around, or contested?
The best tribute to the 29 Massey workers is that safety really becomes Massey’s top priority and that going forward, no one should ever be injured or die in a Massey mine from issues the company can prevent. There is no acceptable tolerance level for deaths in the workplace; to operate as if there is constitutes a failure of leadership.
Gael O’Brien, April 13, 2010