‘Coal is not our future’

BLUEFIELD – When two brothers started a metal fabrication company in a Bluefield garage in 1973, it served one industry: coal mining.

Lawrence Brothers made battery trays, the heavy-duty steel boxes that encase batteries for mining equipment. Over the years, the company grew, adding customers and employees and moving to successively larger facilities.

Coal remained a constant – until it didn’t. From its 2008 peak until 2018, U.S. coal production dropped by more than a third, and half of the mines in the Appalachian region closed, according to federal figures.

But Lawrence Brothers is growing, thanks to a timely move by its third-generation owners toward expanding industries. Today, less than 5% of the company’s business is tied to mining, compared to 98% in 2008. Its employees now build battery boxes for the warehouse industry, a sector that has seen explosive growth in recent years thanks to the rise of e-commerce.

And Lawrence Brothers is preparing for an even more seismic shift away from coal: It is one of four manufacturers in and around Tazewell County that are part of a push to bring clean-energy manufacturing to the region.

“It’s not as if we’re slighting our history, which is coal,” said Melanie Protti-Lawrence, a granddaughter of one of the founders who today owns the company with her husband, Fernando Protti. “But we recognize that coal is not our future. And if electric energy is our future, then we have to figure out how to continue to serve the energy industry in that way.”

The Energy Storage and Electrification Manufacturing Jobs project is providing technical help to four companies, all of which had their roots in building equipment for coal mining but are now exploring the market for products such as battery components for the growing electric vehicle industry.

The pilot project’s goal: to develop a renewable energy cluster in the state’s seven coalfield counties by helping existing companies diversify and, eventually, by attracting clean-energy manufacturers to the region. 

In addition to Lawrence Brothers, the other participants are AMR PEMCO, which manufactures electrical components for mining and has operations in Rocky Gap and Bluefield; West River Conveyors & Machinery Co. in Oakwood, which manufactures mining conveyor equipment; and Simmons Equipment Co. of Tazewell, which makes mining equipment including scoops and haulers.

All four are family-owned, multi-generational businesses. And all four already had started to explore the energy storage and electrification market. 

“These four particular businesses have really forward-focused leadership,” said Sam Wolford, a regional growth manager with GENEDGE Alliance, a statewide initiative that works with manufacturers and will be advising the four companies. “Their leadership was really thinking about the future, about what’s coming, about how to become a part of that manufacturing future that’s on its way.”

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When Protti-Lawrence, now 41, joined her family’s company in 2008, mining was its mainstay. 

She and Protti had moved back to the region from Washington, D.C., with a plan to work with her father over the next 10 years and then take over the company. 

They believed that Lawrence Brothers needed to diversify, she said. Her father wasn’t so sure.

“He had just known such success and very large profit margins in mining, so of course it was difficult for him to see otherwise,” she said. “But the downturn we saw in 2009, 2010 solidified that for us – that coal was not going to be around forever. And it never has come back to those numbers. And it never will.”

By May 2018, when Protti and Protti-Lawrence took over leadership of the company, mining-related manufacturing still accounted for up to 85% of its work. The rest was in custom metal goods like benches, trash cans, signs – it was interesting work, she said, but it didn’t bring in a lot of money.

Shifting to the warehousing industry made sense, she said. Lawrence Brothers would still be producing battery boxes, just for different equipment – the forklifts and fork trucks that move merchandise in the kinds of massive warehouses that now dot the landscape along Interstate 81.

And warehousing is a growing sector, thanks to online retailing, which expanded rapidly during the pandemic. Over the last decade, the number of employees in the warehousing and storage sector more than doubled, from 6.4 million to 15.0 million, according to Bureau of Labor Statistics data. And the Journal of Commerce in March reported that the U.S. was coming off the strongest quarter ever for leasing of warehouse space. 

During the summer of 2018, they worked for six weeks with GENEDGE, which helped them map out the risks and the rewards. It was one of the most valuable things they did to help them grow, she said.

In May 2018, Lawrence Brothers was producing about 49 battery tray assemblies a month for the warehousing industry. Today, she said, it averages 1,100 a week.

In 2018, Lawrence Brothers was doing about $3.5 million in annual sales and ended the year with 22 employees. This year, it’s on track to hit $18 million with 120 employees, she said. 

Protti-Lawrence said she and Protti have always been passionate about social justice, and they’ve brought that outlook to the company. They’ve tapped into jails, prisons and recovery centers, promising an interview to anyone who’s sent their way. Right now, ex-offenders and people recovering from addiction account for about 20% of the company’s workforce. 

There have been growing pains, she said. To counteract retention problems, they’ve raised wage rates three times since the pandemic started, she said. The average wage is now $17.30 an hour; new employees start at no lower than $13, she said.

Her father has been fully retired now for almost four years. Culturally, the shift away from coal wasn’t an easy one to make, she acknowledged.

“That’s very difficult for my dad, and for a lot of people in his generation, to come to terms with. And for a lot of people in this area, particularly because that has been their livelihood, that has been their foundation,” she said. “It built our company.” 

But moving on from that history isn’t disloyal or disrespectful, she said. “What gets you to one level will almost never be what gets you to the next level,” she said.

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All four of the companies participating in the pilot project have recently shifted, or are in the process of shifting, from one generation of ownership to the next.

That wasn’t intentional, but it’s important, said Adam Wells with Appalachian Voices, an environmental nonprofit that’s heading up the project.

“I think that matters a lot, because we’ve got people that are now looking at decades-long careers that they need to think about, and wondering, how do we keep this afloat?” he said. 

“And they came up in a different generation and have a different set of ideas they’re working with, and are more open and tolerant of risk and change and have an idea of what that could look like.”

The question of what change could look like has been driving the pilot project, which grew out of the Solar Workgroup of Southwest Virginia, a coalition of nonprofits, state agencies and others that has been working for about five years toward the goal of creating a renewable energy cluster in the coalfields by drawing on the region’s existing manufacturing know-how.

Globally, the market for energy storage is growing, both for large-scale power projects and electric vehicles.

Wood Mackenzie, a UK-based energy research and consulting firm, in October predicted that the total worldwide energy storage market will double this year and increase 17-fold by 2030. Global lithium-ion battery manufacturing capacity will double in the next two years, it predicted.

An August report by the U.S. Energy Information Administration found that the installation of large-scale battery storage – like the kind used in solar projects – is expected to increase dramatically through 2023, creating 10 times the capacity that existed in 2019.

And according to BloombergNEF, global sales of electric passenger vehicles are expected to increase from 3.1 million in 2020 to 14 million in 2025, while electrification is also making inroads into heavier-duty vehicles.

This spring, the Southwest Virginia pilot project was approved for $486,366 from GO Virginia, money that was matched by $245,000 of private and philanthropic funds. Partners include the Virginia Coalfield Economic Development Authority, the Cumberland Plateau Planning District Commission and Ascent Virginia, a nonprofit focused on building a clean technology economy.

GENEDGE, which helped Lawrence Brothers navigate the shift to the warehousing industry, will work with the companies to identify which products they should be producing, how they can enter those markets and what kinds of operational changes they might need to make. 

Beyond strengthening existing local manufacturers, the project also aims to attract new companies from outside the region to Southwest Virginia, an effort that Wells said will start in earnest next year.

A state study of the economy of Southwest Virginia’s coal counties released this month lauded the project – and called for additional funding.

“The successful ESEM [Energy Storage and Electrification Manufacturing] model is poised for regional scaling and could benefit from additional investments in both state and federal dollars,” the Reenergize Southwest report said. “Increasing focus and investment in energy storage and electrification manufacturing achieves the coalfield’s economic diversification goals in a tangible way, and is a natural evolution of the manufacturing infrastructure and the region’s workforce skills and core competencies.”

GENEDGE’s Wolford said he believes the region is well-suited to the challenge of diversification, even if it means moving beyond the long-revered coal industry.

“We have a culture that is incredibly innovative in finding solutions to very challenging problems,” he said. “The manufacturing community in Southwest Virginia, in our region, the coalfields region, really has solved so many problems that have existed for the coal industry over the years. It’s just a matter of figuring out how to help that culture see and transfer that same innovative mindset into new opportunities.”