Transcript: ICG's Wilbur Ross on the Sago Mine Tragedy

This is a partial transcript from "Your World with Neil Cavuto," January 5, 2006, that was edited for clarity.

NEIL CAVUTO, HOST: The sole survivor of a mining disaster in West Virginia remains in a coma. Doctors say they are somewhat encouraged by his progress. Randal McCloy Jr. was able to squeeze the hand of his wife, Anna. But doctors say it may only be a reflex, nothing more, that his condition is still critical.

McCloy now is being moved to a Pittsburgh hospital for oxygen treatment. That's all we are being told. McCloy survived, while 12 other miners perished.

Now, initially, family members were told most of the miners had survived, only to have their hopes dashed a few hours later.

On Wednesday, the CEO of International Coal Group (ICO) apologized, saying that he understood their grief, anger and incredible pain.

(BEGIN VIDEO CLIP)

BEN HATFIELD, PRESIDENT & CEO, INTERNATIONAL COAL GROUP: Just as we did, they're clinging to hope. And, so, they needed good information. And we were trying to get them good information. And, in the process of being cautious, we allowed the jubilation to go on longer than it should have. And that is just all I can say about it.

(END VIDEO CLIP)

CAVUTO: All right. Now, that is the man who runs the company.

Now his boss, the guy who owns the company, in rare chat, Wilbur Ross. He is the chairman of W.L. Ross & Company. His International Coal Group is the parent company of the Sago Mine in question.

Wilbur, good to have you.

WILBUR ROSS, CHAIRMAN, W.L. ROSS & COMPANY: Thank you, Neil.

CAVUTO: Been a hellacious week, I would imagine.

ROSS: Been the worst week of my life.

CAVUTO: Yes.

Let's try to understand when you acquired this particular company, the Sago Mine in question. It was actually about seven weeks ago.

ROSS: Yes.

International Coal Group consummated the acquisition on the 18th of November, 2005.

CAVUTO: And you're known as sort of a distressed investigator. You buy properties others avoid. You spruce them up. They improve. Your critics are claiming that they improve because you cut on things like safety.

ROSS: That's totally fallacious.

You know that vice president for safety of the United Steelworkers of America has publicly stated, in an Associated Press interview, that we greatly improved the safety conditions at every single one of the steel company that we bought.

CAVUTO: Including LTV Steel, which was a bankrupt company.

ROSS: Including LTV.

And, in fact, we incorporated it into the incentive pay system that we had for both the blue-collar and white-collar workers.

CAVUTO: So, when it comes to safety, whether you're taking over steel companies or coal companies, have you ever pinched?

ROSS: No.

We have never declined one penny's worth of requests from management for either P&L expenditure for safety expense or for capital expenditure for safety purposes. And, in fact, International Coal Group, on the 19th of September, 2005, was awarded the Sentinels of Safety Award by the Mine Safety Health Administration of the Department of Labor. That's the most important award for safety in the entire mining industry.

CAVUTO: Now, Wilbur, as you know, your company has been criticized for the way it released information, first having people believe that 12 of the miners were alive, and then having to state, some hours later, no, they're not; they're dead.

ROSS: Well, we did not make the initial release. That was leaked out without authorization by somebody who had been in the control center.

The news had come from them in the mines from the rescue team, who you can appreciate -- these fellows were two miles under earth, under heavy oxygen masks, and communicating over a radio to the command center. The instructions in the command center had been that nobody was to release anything. Our process heretofore had always been and was meant to be that Ben Hatfield, our CEO, would go break whatever the news was to the families in the church, and then we would brief the media.

Someone was so excited about the news that he thought he had heard that he ran out, apparently communicated with the media and with the people in the church.

CAVUTO: Do you have any qualms with the way Ben Hatfield handled this whole thing?

ROSS: Well, I think that, in retrospect, it would have been better if they could have gotten the hard news a lot sooner. And, as you know, Ben has apologized.

And, on behalf of the company, I apologize for the delay.

CAVUTO: So, you wouldn't fire him or do anything?

ROSS: Fire him? No, I wouldn't. I mean, you have to put it in context. This man had been up for 36 hours straight, under enormous pressure, using his level-best efforts to get these workers out safely, and, then, every two hours, being cross-examined by the media. That's the most grueling kind of environment I can imagine.

CAVUTO: Well, you saw the media coverage. What did you think?

ROSS: Well, the media were doing their job.

But the problem is, that kind of extensive coverage intensifies the pressure on the families. You saw the families who were being interviewed. It intensified the pressure on the management of the company.

CAVUTO: But, when the governor of the state, West Virginia's governor, says, yes, I'm hearing these guys are alive, is the media to blame for that? Is the governor to blame for that? Is everybody to blame?

ROSS: I don't know. I don't know how the governor heard.

It's tragic, because, you can imagine, here, these families were huddled in this church, praying, desperate for any shred of good news. And this news came late. I think it was 12:00, 12:30 at night -- something like that.

You can imagine the elation and then the extreme dejection that it obviously caused when they learned a bit later that it was untrue.

CAVUTO: Very quickly, Wilbur, a lot of people are saying coal, dangerous. Don't get into it. Maybe we don't need this. It's an ample resource, but we don't need t.

What do you say?

ROSS: Well, coal supplies the majority of all the electricity in this whole country, an absolute majority.

Second, coal is a natural resource that we have more of than the rest of the...

CAVUTO: So, don't walk away for it?

ROSS: No. We have more BTUs of coal than the Arab world has oil.

CAVUTO: All right. Wilbur, hang around.

(COMMERCIAL BREAK)

CAVUTO: All right, back with Wilbur Ross right now. He is the non-executive chairman of International Coal Group, the company that operates the Sago coal mine in West Virginia, the scene, of course, of this week's tragedy.

Wilbur, I know you formally acquired this seven weeks ago. Did you know at the time that there had been these 200-plus violations that everyone is talking about?

ROSS: Yes, we did.

There was extensive due diligence done on anchor prior to the acquisition. ICG itself was represented by the Jones Day law firm, the largest law firm, I think, in the country, and by UBS Securities.

The outside directors of ICG's board were represented by Lehman Brothers and Kramer Levin. Everybody had accounting firms, mining consultants, and all that. But we had all come to the conclusion, as had the federal investigators, that these mines were safe and could be operated.

CAVUTO: The sheer number rattles people, when they hear that. Was that a high number? Is it?

ROSS: Well, it rattles them because they're not familiar with the process.

The regulators come in every three months to do an extremely thorough study. I think the last time they came in was for 11 days at the one mine. They rendered their report on the 22nd of December. They have the power to shut the mine down if they don't think it's safe. They didn't do that.

Second, there is an inspector stationed there every day. He has the power to shut the mine down. He didn't do it. And, most tragically of all, because this mine had been shut for the weekend, we sent a person in, a fire marshal, they call him, to check the mine before the crews went down.

He remained with the crew and, then, tragically died. He had given the all-clear that everything was OK. And it wasn't that he ran in and ran out. He stayed there, and, unfortunately, died with the other men.

CAVUTO: Let me ask you. We have already heard from some relatives of the victims. They're going to sue.

ROSS: That certainly is their prerogative.

And if they do, they do. And the courts will decide what happens. Our sympathy for the victims has nothing to do with whether they sue or they don't sue. This is a great tragedy. We feel a great sense of grief, whether anybody ever sues or not.

CAVUTO: What are you doing to help them?

ROSS: Well, we have created the Sago Relief Fund, which our company funded with $2 million of its own cash. We have been soliciting contributions ever since we started it, which was about two days ago.

(CROSSTALK)

CAVUTO: Now, there's a way you can contribute to this, this Sago Fund. I think we have an 800 number: 1-800-811-0441. Again, 1-800-811-0441 -- if you want to call.

ROSS: Yes. Or you can mail the check to:

The Sago Mine Fund
P.O. Box 1510
New York, NY 10150

CAVUTO: Now, some of your competitors have actually been contributing to this as well.

ROSS: Yes.

One of the amazing things, Massey Energy, which is well known to be a very fierce competitor, and from which we have actually hired some of our senior executives has contributed $250,000 to the fund.

CAVUTO: You know, you have always been a risky investor, buying in areas that are either bankrupt or in great distress, or just dangerous, like coal. Would you think less of doing so with coal in the future?

ROSS: No, I wouldn't.

It's tragic. It's awful. It's the worst week I have had in my whole business career. But that doesn't change the fundamentals of the industry. It's an important industry. We need it. And I believe that bigger, well-capitalized companies, like ours, are much more likely to operate safe mines than anyone else.

CAVUTO: Wilbur Ross, we appreciate your gutsiness, coming on to talk about this, the man behind International Coal Group, the chairman.

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