Rural companies that supply coal equipment feeling the crunch from loss of Appalachian coal jobs

The loss of Appalachian coal jobs is not only affecting coal-mining towns but also the rural towns that supply coal equipment, John Miller reports for The Wall Street Journal. "As big coal miners struggle, their equipment suppliers—thousands of firms sprinkled throughout Pennsylvania, West Virginia, Ohio and Kentucky—are scrambling to find new customers anywhere they can." (Journal photo by Jeff Swensen: Metalworkers at Brookville Equipment rebuild a streetcar)

"The modern coal industry is heavily mechanized, and miners depend on a broad web of equipment makers and tool shops," Miller writes. "The West Virginia Center on Budget and Policy estimates that four subsidiary jobs depend on every coal-mining job." Ted Boettner, the center’s executive director, told Miller, “Coal mining requires tons of machinery and equipment. And the problem is that coal companies tend to not be diversified. They’re not also into solar panels.”

Suppliers are feeling the crunch, Miller writes. Petra Industrial Services Inc., a Lochgelly, W.Va.-based machine shop, has had to reduce staff from 12 to 10 employees and is scrambling to find buyers, mainly because its big buyer, Arch Coal, has been downsizing. Princeton Machinery Services Inc., in Princeton, W.Va, once boasted 50 percent of its clientele as coal miners, but that number is now 10 percent. Jerry Fredericks, whose family owns Petra, told Miller, “It’s been catastrophic. And there’s nothing we can do about it; we’re just part of the supply chain.”

While companies trying to find other buyers, "nothing will replace the massive scale of the coal-mining sector, and as the generational coal crisis ripples throughout the hamlets and hollows of Appalachia, economists are debating the region’s most viable path for growth," Miller writes. "The plight of big coal is particularly bleak in Central Appalachia, where coal seams are thinner and costs have increased, and where the oil-price collapse has hurt natural-gas drilling and steelmaking. Alpha Natural Resources Inc., one of the nation’s biggest miners, declared bankruptcy on Aug. 3, and other filings are expected." (Read more)