Coke Maker Sues Again
By PAUL GIANNAMOREWELLSBURG - Mountain State Carbon, the company that operates the Follansbee coke plant, has filed a second lawsuit against Central West Virginia Energy Co., alleging the Massey Energy subsidiary is again short-supplying coal to the coke ovens.
David Fawcett, who represented Wheeling-Pittsburgh Steel Corp. in a July 2007 Brooke County Circuit Court suit that saw the steelmaker win a $219 million award from Massey, said the case is similar to the earlier one.
"Inventory is at dangerously low levels," he said.
Fawcett said Mountain State is seeking an expedited hearing in the suit, which was filed during the last week of August.
So far, the suit only includes Mountain State suing Central West Virginia. The suit decided in 2007 included Massey as a defendant and Wheeling-Pitt, which was in a joint venture as a parent of Mountain State with Severstal North America, as plaintiff.
Wheeling-Pitt since has been sold to Severstal, and Severstal Wheeling has full ownership of the coke plant.
Coke plants bake coal at high temperatures to refine the mineral for further use as a fuel in blast furnaces for the reactions that convert and purify iron ore into iron.
To deal with short supplies, coal baking times in the ovens can be extended, but the heat-resistant brick linings of the ovens can be damaged, according to steel industry experts who testified during the first trial.
The case has been assigned to Circuit Court Judge Ronald Wilson.
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acmecoke1
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09-17-08 12:26 AM
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I agree with you oldsteelmaker 100%. Beyond the very stupid move by the unions to vote Severstal in, WPSC should have invested in a new cold mill at Steubenville long ago when Monessen was closed. Monessen was geographically in a worse position than Steubenville and they spent millions to build a blooming mill there as well as keep Allenport, that should also have been closed. Severstal is doing exactly what I told everyone they would do. They have already closed the blast furnace and all that coke will be sent to Warren and Sparrows Point. The BOF will remain closed while the EAF will operate only as the economy allows (on scrap only). Soon the slabs will be coming in from Baltimore, which will keep all the employees in Baltimore very happy. Essar would have invested in the entire WPSC plant and it would have been operating fully today. Massey Energy is a crooked organization, but they get away with it most of the time. WPSC was a good organization with stupid union employees.
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oldsteelmaker
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09-16-08 4:19 PM
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Ellis, Part 2. Allenport was the other killer. Poorly built, terrible location for the rest of the company, lousy productivity. Rotten union attitude. In 1981 I saw a temper mill run by a crew of five. At US Steel Gary it takes two. Add to that the Gary mill runs at twice the speed, and you start to see the problem. If you want to criticize the management, it should be for not having the nerve to close that shop as part of the second bankruptcy. It was a money loser every day of the last three decades. I notice I haven't seen any mention of the new cold mill recently. I wonder why?
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oldsteelmaker
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09-16-08 4:11 PM
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Ellis, I have to take issue with the "management was incompetent" remark. If they were so incompetent, why is it WP was still around in 2007, while Bethlehem, LTV, National, Weirton and Acme all disappeared? All Chapter 7 bankruptcies. Two Fortune 100 companies, including a Dow 30 Industrial stock. Everything goes back to the late 70's. Dennis Carney made a bad decision for very good reasons. The Monessen caster and the rail mill made a lot of business sense at the time, since no one foresaw the total collapse of the steel market. By the time they were both running there was no market because the foreign mills has bought the business. If the Monessen caster could have make slabs as well as blooms it might still be running. As it was, the cash that went to that part of the company was not available for other improvements, and the debt siphoned off profits at the worst possible time. Once this was in place there never was enough cash to fix the mess.
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oldsteelmaker
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09-16-08 3:59 PM
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My friend at Essar said they are firing up their old blast furnace to meet demand. Since overall the market is off a little, why would Severstal bring up Mingo now? They will have a nice new furnace to work with when (if?0 demand calls for it. Get used to unemployment, guys. Will your union pay your mortgage for you?
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oldsteelmaker
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09-16-08 3:53 PM
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The Bouchards did one sensible thing while they ran things, they closed Allenport. If the new cold mill had been built the company would have been in much better shape by improving productivity and cutting shipping costs. The problem was the takeover was overleveraged, and there was too much debt to be serviced. As for Massey, well, lousy coal makes poor coke. Poor coke means the blast furnace underperforms. That means the caster makes fewere tons per day, and that cuts shipments. Final result, fewer dollars per day. Is that the only reason WP was losing money? Not by a long shot, but you can bleed to death from a hundred paper cuts just as badly as one big gash. Just takes longer. Massey should be taken for every dime they can get. Breach of contract is grounds for legal action every time. Lost profit, lost opportunities, punitive damages. This one should be easier to win, because it shows a pattern of behavior.
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acmecoke1
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09-15-08 10:07 PM
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I am sorry. Saying that the coal is not Mountain State's until it is delivered is totally stupid for the clear reasons I already stated. I have worked with contracts for over forty years and have never heard of that one. In court that holds ups up like a plastic bag of water full of holes. Massey is seeking revenge for losing their last lawsuit with Mountain State, so all this is a new attempt to do it. Any jury or court in the United States that is on a level playing field will find Massey guilty in ten minutes. As far as Severstal Wheeling the union has put the company in it's worst situation in the company's modern history. Essar was the far better choice for the company, and now with the blast furnace closed, it is the beginning of the end for many employees at that plant. The union was told this over and over again, but like Esmark, they voted in line as their masters instructed them. However, their masters again have lead them down the path of certain destruction.
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EllisWyatt
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09-15-08 6:09 PM
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My father, who was a pro-union Democrat and a union grievance man, told me the truth. There were too many people working in the mill. Management was incompetent and the union was greedy. Guys were sleeping on the job, jerking around, etc. Wheeling-Pittsburgh lost money, year in and year out. They could not make it. Some companies just can't. BUT-if you cannot turn a profit during a record boom market for your sector, you do not deserve to be in business. Severstal will have to fire a great many USWA workers to get their labor costs down to the point where they can actually turn a profit. W-P was always blaming others or suing other companies for their failures. W-P lost money no matter what. Blaming Massey for their losses is misleading at best.
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EllisWyatt
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09-15-08 6:05 PM
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acmecoke1 I am not saying that Massey did not sell at spot prices to take advantage the market. I have already stated that I believe Massey is capable of such behavior. Certainly, a company with such a poor safety record is capable of shortchaning in other areas, as well. HOWEVER, Massey's coal DOES NOT belong to its' customers until it is on the way to the customer. Does Massey have people go down into the seam and write "property of Mountain State" on the face? I wasn't there. I don't know what production problems Massey ran into. I don't know if certain mines' production was reserved for contract customers or not. Yes, contracts must be kept and must be enforced. Yes, it looks bad for Massey. But do you really think Massey got a fair deal in Brooke County? Would W-P have gotten a fair deal in southern WV? My father worked for Wheeling-Pitt in the 70's and 80's. Wheeling-Pitt was a constant loser and to blame your failures on suppliers is a cop-out.
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acmecoke1
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09-14-08 11:17 PM
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In addition, no steel company is going to make a profit when their own suppliers cheat them! Do you think U.S. Steel's or ArcelorMittal's lawyers would put up with that crap? No! Its just Don Blankenship who thinks he is the king of West Virginia. The coal belongs to Mountain State Carbon when Massey puts the ink on the contact. They must provide the right type of coal at the arranged time and in this case probably from certain arranged mines. Who ever heard of "the coal isn't theirs until it physically arrives." That is one of the most stupid arguments I have ever heard of. I just hope other companies put pressure on Massey to honor their contracts or sue the*****out of them. This has gone on too long. It isn't a matter of politics, or the West Virginia Supreme Court, it is the matter of contract law and a well known thief.
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acmecoke1
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09-14-08 3:26 PM
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If Massey has a contract with Mountain State to deliver coal at a certain time and of a certain quality then they must legally abide it. They have no way out. They thought they could cheat Mountain State last time by shipping poor quality coal and lost the law suit big time. Now their new trick is to delay the shipments in order to hurt Mountain State in revenge or again sell it overseas. There is no way out of it, Massey Energy is just a crooked organization, and they have proved this over and over again. This time they have come up against a larger animal with larger teeth and much deeper pockets-Severstal International. This is at a time when steel companies insist that their contracts be honored, and I can't believe Mountain State would write a contract with that much room in it. Especially with the experience they had with Massey Energy before. It is just Don Blankenship's way of trying to throw his big butt around again. He is not very clever.
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EllisWyatt
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09-14-08 2:27 PM
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Rebo The award came down from a home jury in Brooke County. Because of a well-publicized smear campaign from the WV Democratic party, Don Blankenship's ties to the WV Supreme Court were well known. There was absolutely no way the court could rule in favor of Massey without subjecting themselves to an investigation. So they let the award stand. Do I think Blankenship and Massey would renege on contracts to sell coal on the spot market? Yes. But the coal they promised doesn't belong to Mountain State until it is physically delivered. Maybe they had contracts to sell to China at spot prices-contracts that were signed before the W-P deal went into effect. All in all, you may be right. I wasn't with Blankenship when the decision was made. Perhaps they agreed to sell coal to W-P from one mine, with spot market sales to be made from another. There is just no way of knowing. Regardless, W-P was unable to make a profit during a record boom time for steel.
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Rebos88
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09-13-08 11:28 PM
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Ellis, I usually find myself in agreement with most of your posts. I've been reading the post on here for some time and never felt the need to respond. This one needs a response.Yes, I am an employee of WP. I am a Union member but not a big union supporter. I don't get involved in the unions politics because mine are conservative. On Massey you are way off the mark! They were found guilty of not honoring their contract. I believe we conservative believe in and demand accountability. As for the Brooke County home cooking, they appealed to an extremely Massey friendly WV Supreme Court and lost. Blanlenship is good friends with more than one justice as well as the chief justice. NO Home Cooking for Brooke County or WP there. Keep up the conservative posts. I'll hold your feet to the fire when need be.
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acmecoke1
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09-13-08 4:22 PM
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It isn't Massey that is getting screwed. its Mountain State. Massey makes contracts for No. 1 metallurgical coal to Mountain State. But, when China or India offers more cash, they start selling more coal overseas and shorts American companies like Mountain State and Serverstal Wheeling. Massie is nothing but a profit driven political machine. They would stab any American company in the back if they could make money doing it. I am glad Massie lost the the last lawsuit and I hope they loose this one. They should be take to court constantly until they figure out that this practice is not only illegal, but un-American as well. Non wonder the people at Severstal Wheeling have difficulty making a profit when their fellow Americans do their best to cheat them. But again, that is the Massey way.
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wvufan
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09-13-08 10:04 AM
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This must be the new business model for W-P If you can't make a profit on your product just sue your supplier that way you can make payroll.
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EllisWyatt
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09-13-08 8:40 AM
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Massey was screwed. Of course a Brooke County jury would award W-P $219 million. This is W-P's home turf. The people on the jury may have had family, friends or neighbors working at W-P. Do you think they are ubiased against a non-union coal producer who they believe is harming their beloved W-P? I wonder if Massey would have been able to request a change of venue. I don't deny for a minute that W-P tried to pass off their failings on Massey. If you can't turn a profit, sue! I believe this because W-P couldn't earn a dime in record times for the steel industry. This says that W-P and their management team were incompetent. Truth be told, W-P should have been out of business 20 years ago. Years of taxpayer subsidies postponed the inevitable.
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