Coal producer Massey plans 6% average pay cut

Massey plans 6% average pay cut

CHARLESTON, W.Va. — Coal producer Massey Energy’s shares are up more than 22 percent after it announced plans to slash wages and benefits for all employees about 6 percent in the face of declining demand and prices.

Chief Executive Don Blankenship told analysts Wednesday the cuts will occur May 1 and should reduce wages and benefits between $50 million and $60 million. Blankenship says Massey should save about $1.30 per ton of coal sold as a result.

Blankenship says the wage and benefits cuts comes atop other measures, including the idling of underground mines and eliminating Saturday shifts. Combined, Blankenship estimates those measures have reduced production about 4.2 million tons.

Massey operates coal mines in West Virginia, Virginia and Kentucky. Its stock jumped $2.80 to $15.33 in midday trading.