Awwww ... Massey Energy May Be
"On Thin Ice," Forbes Magazine Says

by Martyn Chase
Charleston Gazette Business Editor

Wall Street is souring on Massey Energy Co.s prospects and the energy giant may be "skating on thin ice" with its big bet on low-sulfur coal in central Appalachia, according to an article in the May 26 issue of Forbes magazine.

The magazine also asserts that Massey was forced to hire "inexperienced" workers after it refused to match wage increases by competitors in the aftermath of the 2000-2001 surge in electricity demand. The result: miners "quit in droves" and undercut the companys plans for substantial boosts in coal production.

The article, titled "Not King Coal" and written by Bernard Condon, traced the companys lengthy history of labor and environmental strife in West Virginia and Kentucky, including the 1985 battle with the United Mine Workers and recent environmental disasters along the Big Sandy River and at its mine near Madison. Forbes noted that Massey missed its earnings targets in eight of the last nine quarters and that the companys stock price has fallen from $28 two years ago to about $10 today.

"[Massey Energy CEO] Don Blankenship made money while making enemies of union members and environmentalists," the article says. "Now hes not even making money. Does he have any friends left?"

The magazine is generally regarded as conservative. Steve Forbes, who ran unsuccessfully for the Republican presidential nomination in 1996 and 2000, is president and editor-in-chief. The magazine has a circulation of more than 900,000, a spokeswoman for Forbes said.

Blankenship benefited greatly in the past by facing down the UMW, Condon wrote. "But its not his only enemy. Environmental regulators, who he says are in cahoots with the union, arent particularly fond of him either. They say he runs some of the nations dirtiest mines."

Now Wall Street has joined the critics, Condon wrote. "The cocky, independent streak that served him so well has led to bad decisions, such as hiring cheaper but inexperienced workers."

Massey lost $33 million on $1.6 billion in revenues last year.

"Its an ugly turn of events for Blankenship, a brilliant, gutsy operator with an unfortunate tendency to shoot off his mouth," the article said. The article can be read in full at www.forbes.com.