The Associated Press November 3, 2011, 11:29AM ET

On the Call: Alpha Natural CEO Kevin Crutchfield

Coal producer Alpha Natural Resources Inc.'s $7.1 billion takeover of rival Massey Energy Co. in June transformed the company into the world's third-largest producer of metallurgical coal, a key fuel for manufacturing steel. It also supplies thermal coal to electric utilities and manufacturing industries. Alpha has 5 billion tons of coal reserves and more than 180 mines and processing plants in Kentucky, Pennsylvania, Virginia, West Virginia and Wyoming.

While Alpha saw a benefit from the acquisition in the third quarter, it took over Massey at a time when the company's safety record was the focus of renewed scrutiny, after 29 miners died in an explosion at its Upper Big Branch mine in southern West Virginia. The April 5, 2010, tragedy was the deadliest at a U.S. mine since 1970 and remains the subject of ongoing civil and criminal investigations.

The blast wreaked havoc on Massey's business, and it reported four consecutive quarterly losses before Alpha bought it. Massey also struggled with the abrupt retirement of high-profile Chief Executive Don Blankenship, and turnover rates that topped 20 percent at times. Federal regulators cracked down on the company's problem mines. Massey also has a checkered environmental record.

Alpha focused its efforts on righting the issues at legacy Massey operations, including having employees spend countless production hours in training for its "Running Right" program. The company said the program has yielded benefits, including declines in incident rates and lower employee turnover.

In a conference call with investors regarding the company's third-quarter financial results, CEO Kevin Crutchfield discussed the Massey Energy acquisition.

QUESTION: Have you seen any upside surprises from the Massey acquisition?

RESPONSE: Probably the most rewarding thing that we've seen so far is how receptive 7,300 people have been to this "Running Right" system. The stories that come out of this have just been overwhelmingly positive. And look, Rome wasn't built in a day. We're talking about a culture shift and it's going to take some time. ... From a value creation standpoint, the more we did the more we find. ... All in all, it's been a massive undertaking. Clearly the scale and scope is way beyond what we've attempted before, but I think we're approaching it the right way.


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