Don Blankenship Announces Retirement
share this story
RICHMOND, Va. — Massey Energy Chairman and CEO Don Blankenship announced Friday that he will retire at the end of the month, finishing a nearly 30-year career that included big profits for the company but also labor conflicts, battles with federal regulators and a 2010 mine explosion that killed 29 people.
A millionaire who rose from obscure beginnings in coal country, Blankenship oversaw an ongoing plan to expand the production of Appalachian coal for growing Asian markets, but will leave behind a company that was badly shaken by a history-making mine disaster.
The company's board of directors named current president Baxter F. Phillips Jr. as the company's new CEO, effective Friday. Retired Adm. Bobby Inman, a board director, will serve as chairman. Blankenship's retirement date is Dec. 31.
"After almost three decades at Massey it is time for me to move on," Blankenship said in a prepared statement accompanying the surprise announcement. "Baxter and I have worked together for 28 years and he will provide the company great executive leadership."
Blankenship, who has served as chairman and CEO since 2000, leaves as Massey's safety practices are under scrutiny by federal and state mining regulators.
Massey's board is also reviewing its strategic options. In recent weeks there have been reports that Massey is a possible takeover target for rivals such as Alpha Natural Resources and steel industry giant ArcelorMittal SA.
Based in Richmond, Massey is the nation's fourth-largest coal producer by revenue. It operates 19 mining complexes in Virginia, West Virginia and Kentucky.
Massey is under investigation for the April 5 explosion at its Upper Big Branch mine in West Virginia that killed 29 and injured two. The blast was the worst U.S. coal mining disaster since 1970 and the subject of civil and criminal investigations.
Last month, Blankenship blamed the explosion on a rush of natural gas into the underground coal mine. He added that the infusion could have been mitigated if the federal Mine Safety and Health Administration hadn't forced Massey to change the mine's ventilation plan.
MSHA has said a buildup of coalbed methane and coal dust might have contributed.
Massey said it lost money in the third quarter of this year because of tougher federal regulations after the blast.
Blankenship grew up beside the railroad tracks in a tiny town in the Tug Fork River valley along the Kentucky-West Virginia state line. He was raised by his single mother, who owned a gas station and grocery store. He was an accountant who worked for two baking companies before joining Massey 1982.
Bill Raney, president of the West Virginia Coal Association, called Blankenship "one of the most aggressive, intelligent and certainly one of the most outspoken leaders in the coal industry.
"I don't think it's any of my business whether it's good or bad, I've just observed that Don's been quite a leader over the years," Raney said.
Blankenship's rise was helped by his handling of a labor dispute involving the United Mine Workers of America. Massey has been strongly anti-union under Blankenship. He keeps a television set in his Kentucky office that was hit by a stray bullet during a labor dispute.
As he rose through the company, his personal fortune also increased. According to Associated Press calculations, Blankenship earned $17.3 million in total compensation last year, including salary, perks and performance-related bonuses. That was down from $19.7 million in 2008. The bulk of Blankenship's 2009 compensation came in a performance award of $11.5 million. He kept tight control of the business, staying intimately involved in minute details of company activity.
Blankenship regularly professed to make safety a high priority, yet his company was frequently cited for safety violations.
UMW President Cecil Roberts said Blankenship's departure ends a difficult chapter in the industry's history, "one that all too often been associated with human tragedy."
The UMW, which has fought with Blankenship for decades, called for his removal at the company's annual meeting this spring, after the April explosion. A number of shareholders also asked that Blankenship's role be re-examined.
The board voiced its support for Blankenship in April, saying it would not be a good time to change leadership during the blast probe.
"We are gratified that this action has finally occurred," Roberts said in an e-mailed statement.
Since the explosion, public attention has been focused on Massey's underground safety record. The company also has a history of environmental violations at surface mines.
Pittsburgh attorney Bruce Stanley, who has sued Massey at least five times over allegations ranging from pollution to wrongful death, said Blankenship has left a legacy in the coalfields, where his mountaintop mansion sits high above his neighbors.
"He poisoned his own back yard," said Stanley.
His presence wasn't just felt in the coalfields. Blankenship also used his wealth to try to influence West Virginia politics and public policy. In 2006, he spent more than $1.8 million to promote 41 hand-picked Republican candidates.
He also spent $3.4 million to help elect the first Republican to the state Supreme Court in 2004. The U.S. Supreme Court would later cite that campaign in a ruling involving Massey Energy and the West Virginia Supreme Court.
"All he's done in the past few years is bring negative attention to Massey," said environmental activist Larry Gibson, who has long battled Massey Energy and the practice of mountaintop removal coal mining in Appalachia.
Lorelei Scarbro, a coal miner's widow from Rock Creek, W.Va., has fought for years to stop Massey's planned mountaintop removal operation nearby, with many saying their health, property values and quality of life have been hurt by dust, vibrations, and water pollution.
"The citizens of the mountain communities can only hope that Baxter Phillips will be a man of honor – a man who puts the health and safety of miners and communities above profits," she said. "I know coal companies are in business to make money, but we must no longer be asked to pay such a high price for cheap energy.
Blankenship did not immediately respond to a call seeking comment Friday night.
___
Smith reported from Morgantown, W.Va.
(This version CORRECTS Fixes spelling of Phillips in second to last paragraph. Corrects that statement from UMW came from its president, not a spokesman. This story is part of AP's general news and financial services.)
Loading comments… 
VICKI SMITH and MICHAEL FELBERBAUM 12/ 3/10 10:38 PM ET Associated Press