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International Coal Group Inc. The Sago Mine Crisis. By: Brittany Mitrick, Janette Bolan, Laura Capobianco , Marissa Diem and Andrea Reilly. International Coal Group, Inc. Formerly known as Horizon Natural Resources, ICG was bought at an auction in 2003 by Wilbur L. Ross for $786 million.
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International Coal Group Inc.The Sago Mine Crisis By: Brittany Mitrick, Janette Bolan, Laura Capobianco, Marissa Diem and Andrea Reilly
International Coal Group, Inc. • Formerly known as Horizon Natural Resources, ICG was bought at an auction in 2003 by Wilbur L. Ross for $786 million. • CEO- Ben Hatfield • Services span from Northern to Central Appalachia. • Operates 13 different mining complexes. • Non-Union Company • Publicly traded within the NYSE.
The Crisis • January 2, 2006 • Lightening caused an explosion in the Sago Mine and trapped 13 miners. • Miscommunication from mine to control center. • January 3rd- rumors that all 13 miners were found alive. • CEO Ben Hatfield didn’t address the media until the early hours of January 4th to put an end to the rumor.
Prodromes • Ignored safety violations – cited with 208 safety violations in the previous year, 16 of which were considered serious violations. • No effective crisis communication plan.
Target Audiences • Enabling Publics: Governor Joe Manchin, other government officials and the Mine Safety and Health Administration (MSHA). • Functional Publics: fellow mine workers at ICG. • Normative Publics: Family and friends of the miners involved in the tragic incident. • Diffused Publics: Media and general public.
Corporate Culture • Two types of people within the organization: • Corporate Executives/Businessmen • Miners • Change of Control • Billionaire Wilbur Ross take over in 2005
Preparation (or Unpreparedness…) • Ignored Prodromes • No Crisis Plan • No Public Relations Strategy • “Crisis within in a Crisis”
Objectives • To rescue the miners. • To inform about the rescue process.
Crisis Communication Theories • Cultivation Theory- The Sago Mine disaster was compared to the miracle at Quecreek in Pennsylvania. • All 9 of the trapped miners were rescued. • Created a false hope for the families of the Sago miners.
Crisis Communications Theories • Image Restoration Theory- created the Sago Mine Fund as a way to fix their mistake of misinforming the public. • Apologia Theory- ICG should have offered a full apology for the mistake and taken full responsibility for their mistakes.
Three C’s • Credibility- Lost all credibility when the false information was released. People questioned the ethics of ICG after the long amount of time before correcting their mistake. • Control- Had no control of the flow of information. • Compassion- Lack of compassion for the families of the miners.
Communication Strategies • Took Corrective Action by creating the Sago Mine Fund • Made an initial donation of $2 million. • Should have offered a full apology for the miscommunication. • Hired Dix and Eaton.
Key Messages • Wanted to rescue miners safely. • Stressed that their goal everyday is to get their employees home safely. • Offered sympathy to the families of the trapped miners. • Safety is their number one priority.
Key Messages • Ben Hatfield, the President and CEO of ICG released a statement saying, “This has been the most tragic period of my life. Our goal is always to see that our people get home safely each day and we will redouble our efforts to make sure that a tragedy like this never occurs again. Our management is working diligently with the government investigators to learn the cause of the explosion and we will report all findings in the hope that lessons learned here may help prevent similar problems at other mines. No amount of explanation can replace a loved one, nor can the Sago Mine Fund, but our fervent hope is that this will help. I reiterate the deep sympathy I have already expressed to the families. We regard our miners as part of our extended family and hope that many people will express their sorrow by contributing to the Fund."
Recovery/Learning • Always speak with one voice. • Spokesperson should remain empathetic but not too emotional. • Take corrective action. • Constantly evaluating the companies’ communication and have a crisis communication plan ahead of time.
Where ICG is Now • Closed Sago Mine due to “ineffective mining” but now… • ICG is the leading producer of coal in Northern and Central Appalachia. It has grown from 11 to 13 mining complexes since the Sago Mine disaster in 2006. • According to ICG’s yearly report, the companies earnings last year were $211.1 million and is projected to sell over 16 million tons of coal by the end of 2011.
Where ICG is Now • “ICG operations worked the entire year without a lost time accident. ICG’s Non-Fatal-Days-Lost (NFDL) injury incident rate was 21 percent lower than the equivalent national industry average. Our goal is a continuous year-over-year improvement in our safety performance.” • February 7, 2011 ICG announced that 4 of its mining operations received the prestigious Mountaineer Guardian Award for outstanding safety performance in 2010 from the West Virginia of Miners’ Heath, Safety and Training and the West Virginia Coal Association.
