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George Hohmann: Storms highlight harsh truth

CHARLESTON, W.Va. -- West Virginians affected by the June 29 derecho and superstorm Sandy know they're dealing with a harsh reality:

* If they are wealthy, they can invest $8,000 to $10,000 and have a permanent backup power system installed for their home.

* If they aren't wealthy but can afford to invest a couple of thousand dollars, they can buy a small generator, a heater, a grill and some battery-powered equipment and live reasonably comfortably in one room during an extended winter power outage.

* Without backup equipment, they know it isn't farfetched that at some point they may have to depend on the generosity of others.

Maybe it has always been this way. But it sure feels different.

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Here's hoping for a more detailed explanation of how West Virginia University can execute $14.6 million in land deals with developers and agree to a $70 million redevelopment project in the Sunnyside section of Morgantown without putting any parts of it out for bid.

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The decision announced Thursday by Monty Boyd, the owner of Walker Machinery of Belle and Whayne Supply of Louisville, Ky., to sell and service Caterpillar-brand underground mining equipment seems brilliant.

After all, the Walker and Whayne Caterpillar dealerships have been selling and servicing Cat's surface mining equipment for years.

The opportunity to expand their offerings comes in the wake of Caterpillar's July 2011 acquisition of Bucyrus International for $9 billion. Bucyrus had been buying up underground equipment manufacturers for years and had assembled an extensive product line when Caterpillar came calling.

Boyd said earlier this year that one of his goals is to stabilize the business of Walker and Whayne so it can hold onto experienced, skilled employees despite the coal industry's ups and downs.

Although Walker and Whayne will still depend on the coal industry for a majority of their revenue, they'll be selling both surface and underground mining equipment. Right now mining in the Eastern U.S. is split about 50-50.

It is worth noting that Cat's acquisition of Bucyrus also provides Walker with a broader portfolio of surface mining equipment to sell and service.

"We have a tremendous opportunity for product expansion on surface operations with rotary and hydraulic drills, trucks, and hydraulic shovels," Boyd said. "Central Appalachia has the greatest population of highwall miners in the world."

Boyd sits on Caterpillar's Global Mining Council, which consists of dealer-owners from around the world. The council helps Caterpillar develop its mining business strategy. Although coal is currently taking a beating, Boyd said the long-term outlook is for a stable business. That's because coal will continue to be needed to meet U.S. energy demands and developing nations are staking their futures on energy from coal, he said.

Bill Raney, president of the West Virginia Coal Association, said at the Walker Machinery-Whayne Supply announcement, "West Virginia sends coal to about 32 countries. Every other ton of coal that leaves the shores of this country comes from West Virginia."

Reach George Hohmann at business@dailymail.com or 304-348-4836.

 

 


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