This week, you may have seen news coverage of Murray's press conference in which he fired 158 workers because Obama won the election. If you had not been paying attention to the exploits of Robert Murray, then you really need to read these. If you are thinking that the name sounds familiar, then, yeah... he's the guy who has those mines in Appalachia and Utah that occasionally collapse. As a former miner whose father was injured in an accident, I don't want to believe that he really wants these things to happen in his mines, but his actions do not indicate that he is doing everything in his power to prevent deaths and hazardous working conditions.
This year, the highlights of Murray Energy's policies have been:
- Closing a mine in Ohio for a day so miners could attend a mandatory Romney campaign event, but not paying the workers for this mandatory event (I see a DoL Wage and Hour Division complaint here...)
- Tied bonuses and promotions of executives to their campaign donations to Republican candidates.
- Required executives and engineers to attend Republican fundraisers on their own dime.
- Created the Murray Energy PAC to funnel money to Republican candidates... while PACs are supposed to create an air that campaigns and PACs cannot coordinate, let's face it, when you see an ad funded by Murray Energy PAC attacking your opponent, you know who's behind it.
On Wednesday, he led his workforce in prayer, asking God to forgive the horrible thing he was about to do, then went ahead and told 158 people that they were to lose their jobs because Obama won. Matthew 6:5 aside, there are fundamental problems with this statement. Mainly, that it is a giant crock of bullshit.
Let's get this clear: electing Obama had nothing to do with the firings. Instead, there's a simple business reason: Murray Energy competes on cost in an industry where prices are set by the commodity market. There's a lot of coal in Wyoming that's easy to get to. There's less in Galatia, Illinois, and Utah, it's harder to get to, more dangerous to mine, and higher in sulfur than other sources. If your plan is to buy the cheapest coal mines, the ones with the high sulfur coal, then try to sell them for prices near that of higher quality coal, you are going to fail. If the government tries to internalize the externalities associated with the burning of fossil fuels, especially by regulating the pollution caused by the sulfur content of your product, then your business fails. Most businesses do fail. Add to this a substitute good, natural gas, which is now so cheap you could basically give this away, and even without the EPA, the invisible hand of the market is going to smack you upside the head, and you are going to fail. Not letting Murray Energy fail? Well... where's the moral hazard in all of this?
Instead of blaming Obama, Murray needed to face facts: Coal is a mature industry. The only way to stay competitive in this industry is consolidation and maybe some favorable treatment by the government. He has a pretty good idea where Obama sits on this - he's not going to destroy the coal industry, but he's not going to help it become more profitable than it already is... and he's going to regulate the shit out of it. However, Murray was banking on Romney being more generous. He backed the wrong horse, so now he's having to face the problems associated for his own poor business strategy without a bailout by the Romney Administration. If anything, he should have just kept all his money, and prepared for the slow decline of his company. That would have been in his economic self-interest no matter who would have won.