Depression Dark as a Coal Mine

King Coal has given Alabama a distinctive history among the Deep South states. In the last few years, it has also meant double-digit unemployment rates. In 11 lengthy articles over five days, May 17-21, 1987, Rick Bragg and Dean Barber of the Birmingham News analyzed the crisis of the Alabama coal miner: Why so many miners have lost their jobs, why so many mines have closed, and what impact the industry's depression has on mining communities. 

Sipsey — The steel boom of an idled coal dragline rises like a gallows over the little town of Sipsey. A sign on a football field scoreboard says it was donated by Hallmark & Son Coal Co. The company shut down last winter and laid off its miners. 

Miles away in Dora, tall grass grows between rails of track that trembled under coal cars in the 1970s. An office building in Carbon Hill is labeled "Cobb Coal Co." The company closed three years ago. 

In a brick house in Pleasant Grove, laid-off miner Larry Flowers sits with the foreclosure letter in his hand. The FOR SALE sign may go up any day. He sees his children every other weekend; a 10-month layoff was more than his marriage could stand. He dropped from $15 an hour to a place among the new poor — a crowded place in the Alabama coal fields, where one in two miners is out of work. 

Flowers has joined thousands of Alabama miners in a treadmill hopelessness of odd jobs and anticipation, waiting for a recall that may never come for some of them. The miner with the lowest seniority at the Oak Grove mine has 15 years in. The young men — some third-generation miners — fear they're the last of the line, casualties of a dangerous dependency on coal. 

The same scenes, same situations are waiting in other cities, towns, and wide places in the road in Walker, Jefferson, and Tuscaloosa counties — the state's primary coal-producing counties. 

"The old miners told me that if I ever went down in the mines I'd never come out, that it would get in my blood," said the 34-year-old Rowers. "Well, it is in my blood. But the jobs are gone. "Where have all the jobs gone?" 

 

Miners Paying the Price 

The numbers are staggering. In 1980 there were 13,000 coal-mining jobs in Alabama. Now there are 6,500 — a drop of 50 percent in seven years. 

Since October 1985, 2,160 miners have been laid off indefinitely, according to the Alabama Department of Industrial Relations. Some 250 were laid off last month, continuing the downward spiral. 

"I go in to work every day like it's going to be my last, expecting it," said Walker County miner Johnny Smothers. 

In one sense the coal depression is no different from the rest of the South's heavy industry — foreign competition and slackening demand are driving it to its knees. 

But at the root of the 1980s coal depression is a 10-year-old U.S. government foul-up — when the Department of Energy analysts wrongly forecast a long-lasting energy crisis in which coal would become the energy savior of a fuel-hungry nation. 

The forecast prompted an overwhelming response from the coal industry — which helped dig its own grave over the next decade by burying the market under such a glut of coal that prices plummeted. 

Now 10 years later, the Alabama miners pay die price: 

♦ Since 1982, the number of businesses licensed to mine coal in Alabama has fallen from 274 to 104, state records show. The number of active coal mines has dropped from 148 in 1982 to 86 by March 1987. 

♦ The state's largest producer, the Drummond Co., has weathered the depression with an aggressive strategy. Drummond bought coal mines and acquired rich contracts with Alabama Power Co., then laid off some 900 miners. 

♦ Drummond, the largest employer with 3,000 employees, now is pursuing mining interests in Colombia, where coal can be mined and transported cheaper than it can be mined in Alabama. 

♦ McWane Coal Co. in Walker County already is buying Colombian coal, blending it with Alabama coal, and selling it to a Florida utility company. 

♦ Jim Walter Resources, the state's second-largest coal producer, inked long-term coal contracts with Japanese steel mills in the boom of the 1970s. Jim Walter laid off 260 miners in April after the Japanese steel companies failed to pick up 1.5 million tons of coal on time, allowing a mountain of coal to grow at the Port of Mobile. 

♦ Alabama Power in the coal heyday of the 1970s locked itself into long-term, high-cost contracts with a handful of big coal companies, ensuring a reliable supply for a growth rate that would turn out to be exaggerated. Now smaller coal operators clamor for any business from the utility that could help keep their doors open, and claim they can sell coal cheaper than the coal giants. 

Miner Bill Rutherford puts it like this: "You don't have to be no damn Birmingham psychologist to know that the Alabama coal miner is dying." 

 

Coal: A Fickle Godsend 

The towns are unremarkable, just small places with no more than a half-dozen streetlights and clusters of wood-frame houses, with names like Sipsey, Dora, Parrish, Cordova, Brookwood, North Johns, Adger, and Carbon Hill. 

Bom at the mouths of mines, their histories stretch back 100 years or more — to a time when the county courts might sentence a man to work underground in a convict mine; when mine owners paid in script instead of cash, and miners owed more than their souls to overpriced company stores. Mine safety was as far and fast as you could run when the roof started to crack; job security was keeping your mouth shut. 

The company gave miners inexpensive housing —the rows of small houses still stand in some towns — and provided cheap medical care and schools. "Company towns," they came to be called. 

The towns would survive their early, dreary histories; the miners would organize and unionize and steadily win a better and better living from coal. 

Thirty years ago they trooped out of the mines by the hundreds; their carbon-arc head lamps lighting up the streets. Ten years ago they came out by the thousands. 

Today the main streets in those towns are dotted with empty stores. A Jasper car salesman says he hasn't sold a car in weeks, but has had chance after chance to buy cars cheap from miners desperate for cash. The owner of a country store in Dora doesn't stock as much Brown Mule chewing tobacco and bib overalls as he used to. Miners were his best customers. 

Bill Kelce, president of the Alabama Coal Association, said a loss of 500 mining jobs means an annual loss of $15 million in payroll. The ripple effect of that on the local economy is $137 million — merchants and others who benefit from the miners' money. For laid-off Walker County miner Ken Harris, it means unemployment pay and odd jobs for grocery money. It means he can't buy his family what he'd like to for birthdays and Christmas. 

In middle age, Harris says he is too late in life to start a new career, too young to retire. He has hinged his life on coal. He remembers when that was a good bet. "When you live around a coal community you get a job in coal, the first chance you get. It's good money and . . . well, it's just sort of the way you're raised." 

Coal miners in 1987 make $16 an hour. But even in the 1930s and 1940s, the coal mines were an economic godsend for men accustomed to the tug of a cotton sack and the heat of the laborer's sun. 

Men — and later women — with little or no education could make a living in a coal mine. It would be that way for generations. 

Bill Rutherford, four days from retirement at the U.S. Steel Oak Grove mine, has been underground every working day of his life for 33 years. He looks out from his mask of black coal dust and says point-blank he does not love the mines; he does not believe anyone really loves the mines. 

Miners trudge past stoop-shouldered in the black of 1,100 feet, the lights on their helmets dancing off the roof. Deadly methane gas hisses from a crack in the rock. 

"The money . . . that's what brings 'em down," Rutherford says. "Anybody who tells you different is a damn liar. I ain't gonna walk out of this damn hole broke." 

Coal has always been a fickle industry of booms and busts, with mines running full-tilt or half-speed, never a steady, consistent balance of supply and demand. 

A miner's layoff could last a week or a few months, but eventually coal would begin to sell — to the steel mills, to the utility companies. Overseas demand would pick up, and soon coal would be heading out in barges to places miners couldn't even pronounce. Hard times meant a few late payments on a Buick Riviera. 

People knew, people believed, people trusted coal would be back, the mines would hire, the union boss would get on the phone to the laid-off miners and good times would come back. Coal would rise like Lazarus. 

But this coal depression is different. This time — industry analysts, mining experts, and the miners themselves agree — many of the jobs lost in the coal depression of the 1980s may be lost for good. 

 

Coal Was Gold in 1970s 

Ten years ago, government analysts with the U.S. Department of Energy forecast coal prices and all other forms of energy would go only one way — up. "When the coal boom of the 1970s took off, prices were appreciating, everyone was looking at the coal market to be a very lucrative one," said Bill Carr, a native of Britain who was hired in the 1970s to run a brand-new multimillion-dollar operation for Jim Walter Resources, Inc. — owned by a homebuilding company with no mining experience. "A lot of people began to develop new mines, such as ourselves." 

Others didn't have the resources to open deep mines. But they didn't need it. Strip mining was a simple process — find coal, scrape the dirt and rock off the top, and pile it up. 

"When the oil embargo hit [1973], anybody who knew how to drive a bulldozer became a coal operator," said Don Thornburgh, fuels manager for Alabama Power, the state's largest consumer of coal. 

But the government energy gurus had messed up, spectacularly. The lofty increases in energy demand projected by the government never happened. As oil prices rose, people did what some analysts said they wouldn't — they conserved. The energy crisis "locked the country into a conservation ethic, or a mania, depending on how you look at it," said Jerome J. Karaganis, chief economist for the National Coal Association. 

Demand and prices for coal, especially metallurgical coal used by the steel industry, fell and continue to fall. Birmingham, the Pittsburgh of the South, turned from steel to a service-based economy. Medicine and education, not metal, are the city's largest employers. 

To compound problems, Alabama's coal production costs are the highest in the nation — its coal seams are thinner, deeper, and gassier, according to Rusty Ward, geologist with Alabama Geological Survey. 

Faced with fierce competition for a shrinking market and declining prices, the owners of coal mines responded by cutting costs but increasing productivity — the number of tons of coal per miner. The smaller, less efficient companies simply went under; the more efficient cut costs in their costliest area — labor. The base pay for a union miner is $32,000 a year. But with benefits — health care, pensions, and insurance — the hourly cost to the employer is $30 per miner, or $60,000 a year, according to U.S. Steel mining officials. 

Coal industry executives say that by increasing production, fixed costs like labor are spread out more and the cost per ton to mine the coal, the critical yardstick, is lessened. That strategy, which the surviving companies swear by, has a Catch-22 clause. The more the mine produces, the more it adds to the glut that forces price declines — and adds to the pressure to produce more for less. 

Coal executives say they know that sounds crazy. "This has been, by any standards, phenomenal," said Carr. "In the early '80s, we were looking at eight or nine tons per man [per day] to be reasonably good performance. Today we are looking at 14, 15, and 16 tons per man, so this surge has worked against us because it has kept the capacity there." 

The trend by major coal companies has been to invest more in bigger, expensive equipment that pulls more coal out of the ground, and rely on fewer and fewer bodies. The companies refer to that as increased productivity. Miners call it bad luck. 

At surface mines in Alabama today, monster draglines — with booms the length of a football field and shovels bigger than a two-car garage — pull out 120 square yards of rock with a single bite. The sticker price for one of these giant machines is $40 million. 

Underground machines called "longwalls" — self-contained mining machines hundreds of yards long — hold up the roof and slice the coal out with a steel plow or rotating cutting machine. 

Coal companies in Alabama since 1980 have turned out 25 million tons of coal a year. But the number of miners needed to turn out that tonnage has dwindled. In 1980 it took 13,000 miners to produce 25 million tons. In 1986, nearly half that many produced the same amount. 

"What that says is productivity," said Thornburgh. "Well, that's great. But unfortunately, some people don't have jobs," he said. The past two years have been especially bloody for the Alabama coal miner. The biggest single layoff came in December 1985, when Drummond closed its Gorgas and Segco mines and laid off 900. 

For the Alabama miner caught in this economic crossfire, there seems nowhere to run. "I've been laid off before, but never this long," said Flowers. "I always managed to find my way back. I worked in the Oak Grove mine 10 years, and when you work at a place 10 years, you've got a right to believe you've got some security in your life. 

"I don't guess anybody's got any security now, in the coalfields." 

 

SIDEBAR

Colombian Connection Threatens Alabama's Coal Community 

The Colombian coal connection is a threat, not yet a force in the Alabama coal community. The South American country's primary exports to the United States have been coffee and cocaine — both commodities U.S. consumers use but U.S. companies don't produce. But Colombia also has coal, millions of tons of untapped reserves, and a wealth of cheap labor to mine it. 

In Alabama, that has United Mine Workers of America officials scared, trying to block the import of millions of tons of Colombian coal that could displace Alabama coal — and coal miners. State Rep. Tom Hogan of Jasper is sponsoring a bill that would ban Alabama Power Co. or any other state-owned utility from buying foreign coal. Two Alabama companies — Drummond Co. and McWane Coal — have made Colombian coal connections. Drummond is in the process of opening a strip mine in the country, and McWane has already imported Colombian coal, blended it with Alabama coal, then sold it to a Florida utility. 

Robert Webb, an international representative for the union, said the last thing he wants to see is Alabama Power — which to date has not purchased any foreign coal — buying Colombian coal and displacing Alabama mines and miners who work in them. 

Alabama Power's sister company, Gulf Power, has bought South African coal to feed its boilers. If the Colombian threat ever materializes, it likely will appear at utility plants near the Gulf Coast, said Bill Carr, president of the mining division of Jim Walter Resources. 

"You bring it into a port and have a power station nearby, then you are gaining all the advantages," Carr said. "That is where you will see the impact from Colombian coal, and we are all scared to death about it." 

Alabama Power is presently adding to its coal needs with an addition at its Miller Steam Plant, and Webb said he is afraid the power company might agree with Drummond to replace its Alabama coal with Colombian coal. "Alabama Power's No. 3 unit at Miller will be coming on line in 1989. We hope this bill will prevent them or any company from bringing in foreign coal and signing a contract," Webb said. 

Webb said one million tons of displaced coal in Alabama would mean a loss of 150 to 250 surface miners and 350 to 400 underground miners. 

Two Florida utilities are already using Colombian coal, according to the report. Florida Power Corp. signed a contract to receive 550,000 tons of Colombian coal per year from 1985 to 1989. That tonnage drops to 225,000 tons in the last year of the contract. Jacksonville Electric Authority of Jacksonville, Fla., recently signed a 10-year contract to buy 800,000 tons of Colombian coal annually. 

That Colombian coal came into the state through the Port of Mobile — and UMWA officials say that coal could just have easily floated up Alabama's waterway system to Alabama coal buyers. The average price of the Colombian coal is about $35 a ton, compared to nearly $47 a ton for Alabama coal. 

UMWA officials fear that the McDuffie Coal Terminal at the Port of Mobile — one of the most modem coal-handling facilities in the United States — will soon be sending as much coal into the nation as it sends out. "We need to put some people back to work," said Tommy Buchannan, a UMWA international executive board member. "And we can't do that if we can't keep this foreign [expletive] out." 

UMWA national vice president Cecil Roberts, in testifying to a U.S. House of Representatives subcommittee last year, said there are no stringent safety and environmental standards placed on Colombian coal as there are in the United States. "The UMWA insists that American wages and living standards should not be set by the lowest common denominator in the world markets," Roberts said. "As long as there are people living in poverty somewhere in the world, there will be multinational companies paying low wages and subjecting workers to conditions the United States outlawed decades ago."