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Orders overwhelm air pack makers

| Saturday, Feb. 10, 2007

At first glance, everything seems to be going well for CSE Corp.

Sales of the emergency air packs CSE pioneered for coal mining are up more than fourfold. And the small, family owned operation that used to produce about 1,000 air packs a month has orders for 55,000, enough to prompt a small-scale expansion.

However, company president Scott Shearer is getting pressure from the federal Mine Safety and Health Administration and even members of Congress. They want to know why CSE and other air pack manufacturers haven't delivered more products in the wake of state and federal legislation that requires thousands of new devices in underground mines.

Congress and coal-mining states such as Kentucky, Illinois and New Mexico pushed to increase the number of emergency air packs following the deaths last year of 19 miners in West Virginia and Kentucky in accidents where air supplies came into question.

"The whole thing has certainly been a huge burden on the whole organization," said Shearer during a recent tour of his Monroeville plant.

CSE isn't the only company that produces emergency air packs, but before last year's string of mine fatalities it had about 65 percent of the U.S. market and had made inroads in Australia and South Africa. The other major manufacturers are Prairie, Wis.-based Ocenco Corp. and Draeger Safety in Pittsburgh.

Pat Droppleman, president of No. 2 manufacturer Ocenco Corp., was unavailable for comment. However, the company recently told the West Virginia Office of Miners' Health, Safety and Training that it has a 10-month backlog.

Draeger Safety has 8,500 of its air packs ready to ship, but few, if any, buyers.

"We had product built and brought in and waiting for the marketplace," said Kent Armstrong, Draeger's national sales manager. Armstrong acknowledges that large mining companies chose Ocenco or CSE years ago and are loath to change, which has made cracking the market hard for Draeger. The company, one of the oldest and biggest in mine and fire safety gear, has made air packs for decades, but hasn't amassed a significant share of the coal mining business.

"The major players have selected," Armstrong says.

Air packs are designed to help miners breathe for one hour. The number of devices to be carried by miners and stored underground vary by state and federal law. The goal is to give miners enough air packs to switch to a new device every 30 minutes as they attempt to escape along designated routes.

There are no national figures that show how many of the estimated 100,000 air packs ordered over the past year have made it into the nation's underground mines. Numbers gathered by West Virginia regulators suggest few have been delivered.

West Virginia has more underground coal production than any other state and the latest accounting shows state operators have ordered more than 39,000 air packs and have 14,615 on hand. The figure includes thousands of air packs in use before 2006.

Kentucky has the most underground coal mines in the nation, but hasn't put any pressure on the air pack makers to meet a July 1 air pack deadline.

"Kentucky has communicated the requirements to the mining industry, but not to the manufacturers," Chuck Wolfe, spokesman for the Kentucky Environmental and Public Protection Cabinet, wrote in an e-mail. "The thinking is that the manufacturers will respond to the demands of their customers, the mining companies."

Shipping delays aren't Ron Wooten's concern. As head of West Virginia's mine safety office, he is charged with enforcing air pack deadlines imposed in the state's new law. Deadlines vary based on individual plans submitted by the mining companies.

Wooten's agency recently announced it won't grant any extensions beyond the deadline dates submitted by the individual mines.

"If they're not in compliance with their plan, they'll get a citation. It's that simple," Wooten says.

National Mining Association lobbyist Bruce Watzman says the delays are not the industry's fault for what he calls a manufacturing problem.

"Clearly, the demand has been great. The manufacturers understandably were not prepared for this," he says. "All operators were required to place orders. They're anxious."

MSHA, meanwhile, persuaded CSE and Ocenco to adjust the way they fill orders. Federal law now requires underground coal mines to keep two air packs near every miner and MSHA wants the companies to fill orders for mines that can't meet that requirement first.

While Shearer says that seems reasonable, there's little more that he can do, although a second manufacturing shift is possible.

Production is on the rise. Today, the company produces 150 to 170 air packs during a six-day work week and Shearer says the recent expansion should boost that figure to 250 by March.

It's had some effect. Last fall, CSE needed a year to fill an order. But Shearer says that's been cut to between nine and 10 months.

A tour of the company's assembly plant shows why the process takes so long. In an age of automation, virtually nothing in CSE's assembly process is automated.

"This is all manual labor," Shearer said. "There's really no automation to it."

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