Bailey Mine - Part 1

"... Sparks Flew From My Mechanical Pencil ..."

It was 1989, I was 31 years old, it had been 9 years since I graduated from Penn State University with my Mining Engineering Degree, I had my Master's Degree from the University of Pittsburgh and my Professional Engineering license. Married for four years, we built a homestead on 10 acres and we just had our first child. I had just been promoted to the Chief Mining Engineer at the Bailey Mine Complex. This was the 4th promotion in nine years at Consol. With degrees and licenses all having fallen into place, I believed I was pursuing the American Dream and well on my way up the corporate ladder.

I had spent the previous four years as a Regional Engineer working on various capital projects and mine planning activities within the Eastern Region of Consol Coal Company (Consol). The Eastern Region was made up of six underground mines and one surface mine, all but one were union mines. Eastern Region encompassed an area from Eastern Ohio, through the West Virginia Panhandle and up into Western Pennsylvania. Consol was the 2nd largest coal company in America, as measured in both tons produced and revenues. Consol's mines were primarily in the Appalachian coal fields, spread throughout West Virginia, Virginia, and Pennsylvania, with several surface mines in Illinois and Ohio, and two mines west of the Mississippi.

Bailey Mine was the jewel of all jewels in the coal mining industry. It was opened in the mid-80s with much fanfare. There was some industry backlash due to its opening during a period of oversupply of Appalachian coal, a time during which the steel mills around Pittsburgh were shutting down, and when massive nuclear power plants were pushing out the traditional coal-fired power plants. But the primary reason for the special attention from the industry, and to some degree the nation, was because it was a non-union underground coal mine. Bailey Mine was initially projected to be a massive 3 million ton per year mine almost 50% larger than any underground mine in Appalachia at the time. It would be the first non-union coal mine to open in the heart of the United Mine Workers of America ( UMWA).

The Bailey Mine was located in Washington County, Pennsylvania, about 50 miles south of Pittsburgh and just a few hollers from the West Virginia border. Unlike most coal mines throughout the Appalachians, it was not located near the Monongahela, Alleghany, or Ohio Rivers, landlocked it was forced to ship its coal by a new rail line spur.

The mine was a direct threat to the UMWA's current members and essentially its future. There could be no doubt by anyone working on this project that for Bailey Mine to succeed it had to thwart the UMWA. It was firmly believed within the halls of Consol's Corporate Headquarters, during these Reagan years, that unions no matter what the industry, were dragging down economic growth and thus the middle class. With their ever-increasing dues, featherbedding and generally unproductive work ethic, many industries across the Northeast and Mid-Atlantic had been migrating south towards non-union working environments and lately, they were not stopping at the US border as they moved their factories to Mexico, Brazil, or SE Asia.

Interestingly, the UMWA never publicly came out and challenged Consol's investment in Bailey Mine as it was being developed and going through the permitting process. Rather the union took the position that under the Fair Labor Act, they would let the mine get built, let Consol make the $100,000,000+ investment, and once it was fully staffed they would petition the workers and call for a union vote. Their confidence lay in the fact that Western Pennsylvania was swamped with unemployed UMWA workers. Thus, the hiring pool that Consol would draw from would have a built-in bias towards the union. In their minds, it was the proverbial slam dunk.

But, as many best-laid plans have gone in the past, the cards did not play out as planned. The Union's labor pool logic, in fact, worked against the Union. Consol's management invoked a policy of only hiring coal miners who had been laid off for at least 12 months. This policy assured them of a "hungry" workforce, a workforce that would literally work their butts off to protect their higher-than union rates-paying jobs. Essentially they were hiring an employee base that had been fed up with the work outages, strikes, and union dues that the UMWA was known for.

After several years of environmental permitting and two years of construction, the Bailey Mine Complex was up and running. From the onset the mine was setting production records; most tons per day, most tons per week, or most tons per month. There seemed to be a steady banner of congratulatory press releases during the initial months of operation. No doubt these press releases were rubbing it in on the union.

The mine was blessed with a great coal reserve, a 6 to 7-foot thick coal seam with a solid-consistent roof, a level-dry floor, and nominal methane gas trapped within the eon's old coal seam. With two modern, highly efficient longwall units and the advantages of an all-conveyor belt haulage system, the production cost was a fraction of the union-controlled mines within Consol's fleet.

The bean counters and executives were quick to recognize that the differentiating issue between the Bailey Mine and the other mines in the Appalachian Coal Basin, was primarily driven by the labor force. At first, the high productivity results were discounted as being a result of the new equipment, the two longwall layouts, or even plain old rookie luck. But after a full year under its belt, the productivity figures continued to improve. More coal with less manpower and the same capital investment translated into lower production costs, which quickly fell out to the bottom line as higher profits.

Within Consol, upper management began to recognize that this was not an aberration, a short-term phenomenon, the high risk of opening a non-union mine was paying off like no other investment in the company.

Not that a great return on investment wasn't a worthy goal, but there was a bigger prize being sought, and it was a game changer for the coal industry. The lower production cost allowed Consol to lower the price of the coal it sold while maintaining an exceptional profit. Of course, many with an MBA could play with this concept and try to determine the optimal profit level, but Consol's management had one other objective. Namely, it wanted to shut down its high-cost/low-productive union mines in the Appalachian Coal Basin and move those coal sales contracts to Bailey Mine. A strategy to drive the industry as a whole away from union labor.

With the higher productivity rates the mine's annual production was on a constant path upward, after 2 years of production it had increased from 3 million tons per year (mtpy) to 4.5 mtpy. A phenomenal 50% increase in production from the same capital investment. Management was extremely proud that these increased production levels were from a workforce of about 3/4th of the initial estimated workforce. Put another way, the original economics were based on a 3 mtpy production rate, a $100 million investment with 400 workers. In actuality, it was producing 4.5 mtpy, (50% more), with 300 workers, (25% less) and no additional capital investments. Around the water coolers within Consol, it was being whispered that every day Bailey Mine brought in a million dollars (over $3M in today's dollars)!

Over the next 2 years, the Bailey mine's productivity rates continued to ramp up. By 1988 it had achieved a production rate of 6 mtpy, again with essentially the same equipment and a slight increase in labor, inching up to 325 workers. These gains were not without a little wear and tear on the mine's management. The salaried staff was being stretched thin.
As a Regional Engineer, I had several construction projects at Bailey Mine. Whether it was with conversations with workers underground, or in the bathhouse it was not uncommon to hear the salary Foreman or Supervisors claiming they hadn't had a day off in 2 or 3 months or were working 12-14 hour days for three or more weeks at a stretch. However those mumblings were just a whisper compared to the bravado, or some would say arrogance, that the management and miners at Bailey extolled.

They were justifiably proud of their accomplishments; they were by all standards the best coal miners in the US, if not the world. It created a culture, some outsiders would say an ego, at the mine that "they were the best of the best". For the most part, this was positive, but occasionally it would grate on the newcomer or the person who tried to present a new idea to the mine.

After achieving the 6 mtpy mark and staying flat for almost a year there was a building consensus that the mine had peaked. The 1-year, 3-year, and 5-year mine forecasts were showing that to maintain the 6 mtpy rate additional capital and substantially more workers would be required. This was due to the fact that the active mining face was getting further and further from the main shaft where the workers portal-ed in and out of the mine. The jewel of Consol and the Industry was big and bright, sitting strong on top of the mountain, but it was beginning to lose a little of its luster. By all standards, after 4 years of operation, the mine and the investment; were all a success, one that far exceeded even the most optimistic estimates.

Bailey Mine clearly had set the bar within Consol, and as the execs had hoped, throughout the industry. Its economic impact was far-reaching, more so than just within Washington County. The production above the initial design rate allowed Consol to shut down a least a half dozen of its "less productive union mines" in the Pittsburgh Coal Basin. This was not lost on the UMWA and when the UMWA contract came up for negotiations the union was upset, hot, yet on their heels.

The results from the Bailey Mine gave the coal industry negotiators, headed up by Consol's CEO Bobby Brown, much more negotiating leverage. Resulting in dramatic changes in the work rules. The union leaders, being led by a young, outspoken lawyer from Western Pennsylvania named Richard Trumka, (yes Richard Trumka, the ex-president of the AFL-CIO) did some face-saving by obtaining a very favorable pay rate increases. But the union was now wise enough to see the future and the future was spelled with a capital C, to survive in the upcoming 90's the union card-carrying members in the coal industry had to be competitive.

Bailey Mine was such a success that plans to replicate it with a twin or sister coal mine were being executed. The 2nd mine would have its portal and production slope located just a few hundred yards to the south of Bailey's. The existing prep plant would be expanded and it would use the same rail loadout facility. Development of this new mine started in 1988 with the submittal of the necessary permits. No doubt sending another serious message to the UMWA.

****

The coal reserves that were dedicated to the Bailey Mine were part of a detailed plan that called for four 3 mtpy mines, together pushing out a phenomenal 12 mtpy. With Bailey Mine doubling the initial forecasted annual production the plans were quickly revised to reflect just two 6mtpy mines.

By early 1989 all the permits were in hand and construction on the 2nd mine commenced. The new mine was called Enlow Fork to reflect the name of the nearby creek.
Due to some favorable compensation loopholes that were created between the two mines, a portion of the Bailey Mine management jumped over to Enlow Fork. This shift in personnel resulted in the Chief Mining Engineer at Bailey, the person who had a hand in the mine's outstanding results, leaving Bailey Mine and joining the Enlow Fork team. This opened up the position at Bailey Mine to which I was promoted.

I was not a stranger to the Bailey Mine, its workers, and its key managers. As a Regional Engineer, I had put in numerous degas holes, plugged several abandoned oil wells, put in two air shafts, conducted numerous underground ventilation surveys, and most importantly was doing the long-term planning for the mine, creating 1, 3, and 5-year production and quality forecasting mine plans.

Typically all the forecasting of the coal quantity and quality, both short and long-term, was done by the Chief Mine Engineer at each coal mine. But in the Eastern Region, due to my computer background (I had essentially earned a minor in computer science at PSU), I created a computer program that greatly reduced this manually intensive planning effort.
Creating mining and quality forecasts for a coal mine is like playing three-dimensional chess, but with one additional element, time. Essentially it involves all four aspects of the space continuum: height, depth, width, and time.

To create a coal mine forecast, a Mining Engineer would lay out the area he believes will be mined in the upcoming 12, 36, or 60 months based on worker-machine productivities and the geology of the coal seam. The objective is to develop a detailed plan that will forecast the annual amount of coal and its associated quality. Then layering in manpower costs, the cost of consumables, supporting services costs, and any new or refurbishing equipment costs, the engineer would build up the forecasted cost to produce the quantity & quality of coal for that time period.

Forecasting the coal production and its cost were the easy parts, predicting the quality of the coal produced was always the biggest challenge. Although the Pittsburgh Coal Seam was known for its relatively consistent thickness, the quality in the Pittsburgh Coal Seam varied from high btu, low sulfur, metallurgical grade coal located in the central part of the basin (near Pittsburgh) to a lower btu, very high sulfur, high ash coal located on the eastern and western fridges of the basin. Because creating a mine plan is an iterative process as one tries to find the optimum solution, it takes a lot of time. This resulted in many-many trial and error runs.

Balancing these cost and production variables is typical in any industry, but what made coal mining forecasting unique was that coal mining is not like a factory with fixed inputs and outputs. In a coal mine, the working environment is always moving. The mining machines excavated the coal seam as they progressed forward. As these mining machines moved forward they had to carry with them electrical and water lines, ventilation, supplies for roof supports, partitioning walls, rail lines to move the men and supplies and conveyor belts. All of these variables have to be considered.

If that wasn't complex enough the plan had to properly address the coal quality, which varied in all directions. If a mining unit moved 200 feet in any direction the % ash, % sulfur, % moisture, and Btu values all changed. The Mine Engineer had to find ways to strategically mine the coal reserve in a manner that not only optimized production and cost but also produced the coal quality that matched the coal contracts. It can be quite a brain teaser; the only analogy I can think of is to try visualizing the coal mine with its entries and cross cuts looking like the back of a computer chip board and thinking that it has to be redesigned every 3 months.

Given my computer science background, it was not a stretch that in my regional engineering role I wrote a computer program that greatly expedited the iterative, mind-numbing process of creating these forecast reports. Essentially, turning a work effort involving a week or two into two days at the most. Back in the 80s, this computing was delegated to the mainframe computer, the latest advancement in technology. These machines the size of a McDonald's restaurant, cut the work time of these laborious tasks into a fraction of the time. As a bonus, the results were more accurate, repeatable, and easier to understand.

****

With all of the forecasting work and the airshafts that I built at Bailey Mine, the promotion to Chief Mine Engineer was a natural. The initial few months were rather easy as I settled into what could be said was a familiar role. I knew all the players, the top management at the mine, and my staff. My staff was comprised of a draftsman, a surveying crew of three, a project engineer, and an intern/co-op student. Although I had managed numerous contractors with crews of over a dozen workers, on multiple sites, this would be my first management role with in-house staff.

Despite my familiarity with the Bailey staff, I did incur a significant management issue in the initial 30 days of taking the new position. The mine's draftsman was a 40+ year-old man named Dave who had worked as a draftsman since graduating from High School. He had worked at several coal mines within Consol, but like all Bailey workers, he had an extended period where he was laid off. He had been through at least two bad marriages which had taken its toll on his wallet and psyche. To me he was an enigma, at times he was the office clown, entertaining everyone with his antics and verbal assaults on current events and politicians but at other times his sharp wit would turn bitter or acidic, berating and sometimes belittling his coworkers.

It didn't take but a few weeks of working with Dave to realize he was not the friendly "class clown" that his 1st impression made. The drafting room was his domain; it was a 20 x 30-foot room on the 2nd floor of the mine portal/bathhouse building. It had a 10 ft by 10 ft drafting table in the middle surrounded by a large print machine, filing cabinets and a large walk-in closet where the surveyors kept their equipment. The bathhouse had no lobby or reception area. For all intentional purposes, the drafting room was the reception area for the mine. The drafting room also served as the lunch area for my staff and as the de-facto watering hole for the office.

Within a few days, I began to notice some pre-existing tension between my staff and Dave, so much so that it heightened my management senses. It became apparent that Dave's outward friendliness was a front, used to try and catch visitors in awkward situations so he could embarrass them in front of their co-workers. His initial demeanor was friendly, and his wit was sharp and comical in front of the visitors, usually aimed at some public figure or recent news event. But with a more critical eye and ear, I began to notice that some of his acidic wit was being directed at the visitors or co-workers. Without fail every time a visitor left the drafting room he had a mean and derogatory comment. This man was two-faced, and there was no doubt that every time I left the drafting room he had a negative comment about me.

The next day at lunch, there was what I would call an ugly scene, Dave tore into Jim, the intern, making comical fun of his work ethic, general intelligence, and appearance, (slightly overweight). Normally I would step in and stop something like this, but Jim was a shy & quiet person, and he seemed to enjoy the banter. Essentially, what Jim thought was friendly office banter was a public denigration. Jim was not part of the fun, he was being made fun of, being laughed at, and embarrassed in front of his co-workers. But he was so green he could not recognize it.

I observed the situation for a few more days to make sure I didn't misinterpret the situation. Thus, on Friday morning after my staff had left to go underground, I asked Dave to come into my office. We had a cordial talk about his actions. Of course, he was taken aback by my position, and with a clear voice and looking straight into his eyes I told him that he needed to: tone down his comments, not to be disrespectful of others, and stop bullying the intern. Dave initially gave some pushback, claiming he was only teasing, that it was not harmful, etc., but I was firm and made it known in no uncertain terms it had to change. Of course, there was a bit of me "marking my territory" in this meeting. I thought I had genuinely convinced Dave that he was stepping out of bounds.

Over the next few weeks, Dave pouted a little but did conform. It took the remainder of the staff a few days, maybe a week, to recognize the new Dave, soon they were letting down their guard and the conversations no longer had an air of tension. I was pleasantly pleased with myself, but in the back of my mind I knew Dave was very sharp and maybe this was just another front he was putting on.

Interestingly, a few weeks later at the end of a mine management meeting, the General Manager pulled me aside to tell me they thought my initial months on the new job was going well and that I was earning the respect of the whole Bailey team. Then in a lower, almost whisper voice, he said "We liked how you handled Dave and put him in his place, he's been needing that for years, that took b_lls." At that point, we broke off our talk and I cut into my office.

I sat down in my chair and rethought what he said, but wondered how did he know about my conversation with Dave. As I sat there, I surmised that Dave had burned bridges with many others at the mine. Apparently, the adjustment to Dave's demeanor was recognized by a wider audience than I expected. Well, some questions are best left unanswered, so I just absorbed the compliment, stood up, turned out the office lights, headed to my car, and let the day end on a good note.

****

About 2 months later, I was in the middle of creating another version of the annual forecast for the mine. I had worked on this task several times from the regional engineering position, but I had not done the initial raw mine plan in a way so one could pull off the needed information to feed the computer program I created. Creating the raw mine plan is one of those tasks that once you have done your first one, then the following ones are a lot easier. It's like laying the 1st course of brick for a foundation.

In this case, even though I had worked on these forecasts for years, I wanted to do it from scratch and not copy or reproduce what the previous Mine Engineer had done. Typical engineer attitude, why do it the easy way?

So around 8 am, I closed the door to my office isolating myself from the drafting room. It was rare for me to close my office door, so I was sure Dave noted it and he probably had his suspicions. At 11:00 I came out for the daily lunch ritual in the drafting room. Someone in the room commented that I looked worn out, I stated, "Yeah doing the mine forecast is like refinancing your house, deciding on your corporate health plan, and buying life insurance all in the same day".

Dave jumped in and agreed with me that it probably was the toughest part of my job, but he was thankful that some smart-ass engineer in the company HQ had figured out a way that made this weekly chore into a single-day event. He went on to explain especially since the old method required the draftsman, himself, to spend 3 or 4 days on each forecast and now he only needed to spend about a half day. Everyone in the room knew that the corporate engineer was me and they all knew, despite the smart-ass moniker, that it was about as big a compliment anyone would get from Dave. My talk had gotten to him, he was now seeking my approval, albeit there was a flavor of sarcasm.

After lunch, I huddled back in my office to finish the 5-year forecast plan. After one more iteration, I thought I had come to a closure on the optimum plan. I was a little proud of myself, thinking that my initial forecast only took me about a half day to complete. But something was bugging me about this plan. Namely, that it essentially followed the previous ones, nothing new, no real added value.

What bothered me wasn't that this new plan required additional capital, nor the fact that it required a 15% increase in manpower, resulting in an increase in the operating cost. But it was the cold reality that mine's stellar 5-year run was coming to an end. The plan I just created did minimize the capital and manpower that was presented in the previous version, but just marginally, maybe a percent or two. As an engineer, I knew this was nothing but a rounding error. Yes, I had completed the update of the 5-year forecast in under a half day, but I felt like I had just pushed another car off the assembly line. Maybe I went through the motions, but really, how could I be expected to improve on the best of the best?

I stepped back into my office and while I stared at the mine map, with its computer chip-looking layout of entryways, crosscuts, intakes, returns and overcasts, I had a once-in-a-lifetime "eureka" moment.

It all came into focus in a flash, I envisioned a totally different mine layout; one that eliminated manpower and equipment, substantial amounts of them. Like a surgeon using his scalpel, a carpenter with his saw, or a sculptor with his carving tools, I was creating something better by subtracting and removing something.

I carefully, and surprisingly quickly, kept eliminating lines from the map with my erasure, taking out one and two lines representing entries or cross cuts. With my mechanical pencil, I added one entry there, and another over there, but then I would take out two or three. It felt like there were sparks flying from my mechanical pencil. It was only a 10-minute process with quite a few "what the F__ks", thrown in, and then it was done. I pushed back my chair from the drafting table in the office and surveyed my work. I had a rush of pride and accomplishment, I let it sink in for a few seconds but I knew before I presented this new mine layout to management, I had to double if not triple-check it. It was just after noon at this point; I had completed this whole new mine plan in less than 30 minutes.

So I took a break and went down one flight of stairs to the vending machines in the main bathhouse. I got a can of Coke and headed back up the stairs with a big smile but a sense of worry, thinking I had forgotten something. I certainly knew that changes of this magnitude would be heavily scrutinized by the Mine Superintendent and the General Mine Manager.

As I crossed the drafting room to enter my office, I paused and asked Dave if he could free up his afternoon, noting I had a special drafting project for him. He quizzically inquired, but I said give me about 30 minutes. After sitting back at my drafting table, I decided to just grab a clean sheet of paper and re-draft up the new mine plan from scratch. My working version just had too many stray lines and erasure marks. It would be a laborious process, but it was the only way to make sure there were no flaws in the layout. I ground it out and by 2 pm it was done. Knowing the current status of all the working faces, I knew that to implement this new plan it would have to be; approved, fine-tuned and finalized sometime in the next 2 to 3 weeks, otherwise, it would have to wait about 6 months until after the next longwall move.

With a little confidence and expecting a high degree of resistance, I put the new mine layout down in front of Dave and said I needed this design transposed onto the mine's mylar map (a more durable plastic map drawn in ink) so I could take it to management to perform reviews and obtain approvals.

His initial reaction was a comical, "Wow! It only took the corporate genius 6 months to redesign the whole mine". Since the talk a few weeks earlier, his sarcastic comments were very minimal, this was the first satirical comment he had directed at me since the talk. But, with his next breath, he was criticizing the layout. Yes, Dave may have had personality issues but he was a well-seasoned, sharp draftsman, as good as they come.

As he was about to start laying it on thick with his sarcastic tone, his comments turned to "well this part might work... but it won't because.." then a deep pause as he took a harder look at the intricate layout, then he looked to the left and said sharply "this won't work", but before he could finish his sentence he paused again and he reevaluated the plan. By the third time, he realized this was something unique, and he looked over his shoulder and in a conceding voice said, "Why don't you just explain this to me". It took a few minutes to explain it to him, after which he pushed back his chair from the drafting table and said, "This is too F--king unreal! I need a break." Whether it was him trying to absorb the impact of the changes or that fact that I, the corporate engineer, had made them, it will never be known, but he too went down the stairway to visit the vending machines. Like a champion prize fighter reeling from a knockout punch, I figured he was realizing he was no longer the top dog, the one in control of the engineering office.

He returned with an energetic approach and tore into the design with a whole new series of questions: was it laid out properly for ventilation? Did the conveyor belts cross or have an impossible slope? How would the power supply cables be laid out? Then we discussed the manpower estimates and how the capital estimate was determined. With each probing question, I was able to reply quickly and accurately, I had all the bases covered and every answer was a homerun. After another 10 minutes of exchanges, he conceded that this was a very good concept, a game changer.

****

I asked if he could ink this plan on to mylar by 3:30 so I could do a quick run by the mine management when he came out of the mine. The next hour went by quickly. It was about 3 pm and I told Dave I would get us both a Coke and be right back to see the final product. Then, we could discuss how to present it to the Mine's Superintendent and Assistant Superintendent. Since I knew the General Mine Manager was on vacation until the following week, I thought that would give me a few days to polish it up and add in their comments.

When I got down to the vending area I ran into the Assistant Mine Superintendent, Jim. I was about to ask him if Don, his supervisor, the Mine Superintendent , and himself were available for a few minutes before the 4 pm shift came on board. He floored me when he responded with "I hear you redesigned the whole friggin mine". I was taken aback by this because I knew he had been underground since 7 am. I could only think of how amazing rumors can fly through a workplace even if the workforce is 4 miles away and 700 feet underground. Then he said that he and Don were ready now to review whatever I had. This response was expected. In the mining industry, it didn't matter what the issue was, decisions always had to be made on the spot. I responded with let's meet at 4:00 pm, giving me 60 minutes to pull it all together. He reluctantly agreed, so I dashed upstairs and told Dave about the meeting time and the need to crunch out the new drawing. He gave his typical "no way" response, but he knew the routine all too well and agreed he'd have something by then.

****

END - PART 1