Sunday, December 5, 2010

CEO Of Mining Giant Massey Steps Down

The controversial CEO of coal mining giant Massey Energy says he's retiring at the end of the month.

Don Blankenship (left) and his company managed the Upper Big Branch coal mine in West Virginia where 29 miners died in an explosion in April.

His departure as CEO is effective immediately; he retires fully from the company at the end of the month. The announcement came in a statement issued by the company's Board of Directors. Blankenship is quoted in that statement as saying it is time to move on. No other explanation for the move was given. Effective Friday December 3rd, Massey will be replaced by Massey President Baxter F. Phillips Jr.

"But there could be other reasons," NPR's Howard Berkes told All Things Considered co-host Robert Siegel. "One hint may be in the fact that the statement was not issued by Blankenship himself but by the company's board of directors.

"He chaired that board but there have been unconfirmed reports that he and the board clashed over the board's possible sale of the company."

Badge Humphries (right), a South Carolina lawyer who represents several
shareholder groups in a lawsuit against Blankenship and the rest of the Massey board, hailed the decision. "This is a huge victory for what we've been trying to accomplish," he said.

The lawsuit alleges that Blankenship and the Massey board devalued the
company's shares by allegedly failing to operate its mines safely and in violation of a settlement of an earlier lawsuit.

Humphries believes Blankenship's reported resistance to a possible sale of Massey Energy prompted his sudden departure. "It doesn't take much imagination to believe he was forced out," Humphries adds.

Blankenship did release a statement later Friday saying he was ready to leave Massey.
“After almost three decades at Massey it is time for me to move on. Baxter and I have worked together for 28 years and he will provide the company great executive leadership. Most of all, I want to thank the Members of Massey Energy whose hard work supports not only their own families, but also contributes greatly to the entire community of Central Appalachia," Blankenship said.
The press release says Blankenship has helped Massey grow from 3,662 employees in 2000 to more than 7,300 today. Also under Blankenship, the company's market capitalization rose from about $758 million in 2000 to about $5 billion today, according to the release.

Blankenship is scheduled to testify in two weeks in the joint state and
federal investigation of the Upper Big Branch mine disaster. His company is also under scrutiny in a federal criminal investigation.

Randolph McGraw, an attorney in Beckley, W.Va., who represents the families of six of the victims of the Upper Big Branch tragedy, said the move was "a long time coming."

Blankenship's sudden retirement "in no way ends his responsibility for
the Upper Big Branch mine disaster," he said. "I certainly hope that his retirement is not an acceptable end for the government entities looking into the disaster."

Meanwhile, the Massey board confirmed that it is considering a sale of the company.

The board recently affirmed a departure package for Blankenship worth about $10 million. In nearly three decades at Massey Energy, Blankenship became known for obsessive focus on coal production and bitter criticism of federal regulation.

The United Mine Workers of America in a statement welcomed
Blankenship's resignation, adding his departure "brings to a close a long and difficult chapter in the history of the coal industry."

NPR, "CEO Of Mining Giant Massey Steps Down", accessed December 5, 2010
Metro News, "Massey Leader to Step Down", accessed December 5, 2010

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