Coal Tattoo

Big hearing starts in Patriot Coal bankruptcy case

Photo via UMWA’s Fairness at Patriot campaign

There was action in the streets and in the courtroom today in St. Louis. A key hearing began on Patriot’s effort to use its bankruptcy reorganization to throw out its contract with the United Mine Workers of America. And plenty of UMWA members, retirees, officials and supporters were on hand outside. Local station KMOV reported:

Sixteen people were arrested including a Reverend as more than 1,500 people protested in downtown St. Louis as Patriot Coal began to argue to a federal bankruptcy judge that it needs to significantly cut health care and pension benefits for its union workers, who protest the move. Rev. David Gerth, 11 retired miners and four others were arrested Monday afternoon after refusing to comply with demands from a police officer. 

The Associated Press reported:

Peabody accused the union of grandstanding “when it knows that this matter will be decided in the courts” and is between the union and Patriot, not Peabody. Peabody added it “has lived up to its obligations and continues to do so.”

The hearing could last through Friday, although U.S. Bankruptcy Judge Kathy Surratt-States may not issue a ruling immediately.

… Monday’s proceedings drew an overflow crowd, including nearly two-dozen Peabody retirees from Kentucky who wore T-shirts that said “Peabody promised …” on the front and “Peabody lied!” on the back.

Among them was Donald Morris, a Greenville, Ky., resident who retired from Peabody after working for 18 years in one of its mines near Beaver Dam, Ky. The 66-year-old’s speech is strained because of partial facial paralysis related to a brain tumor that was removed a decade ago, and he’s had to undergo several other costly procedures, including hernia and prostate surgeries. Morris said he worries that if he loses his health coverage, he doesn’t think he’d be able to find affordable coverage.

“My wife and I are at an age where we can’t buy insurance,” Morris said. “If we lose it, we’re done.”

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Patriot Coal: Potential progress and more protests

Retired coal miner Ricky Clark, left, of Man, W.Va., protests with around 2,000 other retired and active coal miners and their

The United Mine Workers of America is promising more protests in its continuing campaign regarding the Patriot Coal bankruptcy and the future contract and benefits for thousand of miners and retirees , as everyone is gearing up for a major court hearing that starts on April 29, and in the wake of last week’s announcement by Patriot Coal of a new offer to the mine workers, described in this story by the Gazette’s Paul Nyden:

Janine Orf, Patriot’s vice president for investor relations, said Thursday that the UMW would be given “a direct 35 percent equity stake in the reorganized enterprise.”

The bankrupt company said the union could then sell all or part of the stake and put the money in the new voluntary employees beneficiary association, or VEBA, that the company has proposed setting up.

Under the company’s new proposal, retiree health-care benefits would be moved to the VEBA Trust on Jan. 1, 2014, an extension of six months, if the UMW agrees to a short-term funding proposal.

If union leaders agree, UMW retirees and their beneficiaries will continue getting their current level of benefits until the end of the year.

The extension is being offered, Orf said, to give the UMW “ample time” to figure out the “optimum level of health-care coverage the VEBA Trust can provide.”

On Friday, UMWA President Cecil Roberts had this response:

While we are working with our financial advisors to fully analyze the amended Section 1114 proposals made by Patriot Coal yesterday with respect to health care for retired miners, their dependents and widows, this appears to be a step forward by the company.

There are still considerable problems with the company’s intentions to change the existing contract for active workers under the Section 1113 process. We are nowhere near a fair and just agreement regarding that part of this equation.

We continue to believe that an agreement can be reached that provides Patriot with the short-term relief it needs to emerge from bankruptcy, keep people working and become a profitable company again without putting retirees’ lives at risk or demanding the deep sacrifices the company says it needs from hourly workers. We will continue our discussions with the company on these issues.

Meanwhile, if you haven’t read these two stories by the State Journal’s Tyler Kuykendall (here and here), they are worth checking out for more detail and background on this whole mess, and for sure check out yesterday’s story recounting the State Journal’s interview with Patriot CEO Ben Hatfield, which includes quotes like these from Hatfield:

Patriot CEO Ben Hatfield was not at Patriot Coal when the company filed Chapter 11 bankruptcy just five years after it was birthed from the assets and liabilities of Peabody Energy. Hatfield was the CEO of International Coal Group. He said at that time, coal executives were scratching their heads about the formation of Patriot Coal.

“Frankly, as a competitor, we looked at that and said ‘how could that work?’ It looks like a bad balance here – too many liabilities and not enough assets,” Hatfield said. “Now, they were some good assets. These are coal mines that have a lot of potential and good people and good management, but an inordinate amount of legacy liabilities disproportionate to the assets. As a competitor we were very suspect from the day the spin was announced as to whether this venture could survive.”


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Patriot announces changes in UMWA proposal

Here’s the latest, just in from Patriot Coal regarding its bankruptcy and the contract/benefits dispute with the United Mine Workers of America. The company has filed proposals (see here and here) to again modify its proposed changes to its agreements with the UMWA. Patriot summarized the proposals this way in an e-mail message to the media:

— The UMWA would be granted a direct 35% equity stake in the reorganized enterprise. This equity stake could be monetized, in whole or in part, generating a substantial cash contribution to the VEBA Trust, which is expected to be worth hundreds of millions of dollars.

— The date on which retiree healthcare will be transitioned to the VEBA Trust will be extended by six months to January 1, 2014, provided the UMWA consents to a short-term bridge-funding arrangement. If the UMWA consents, UMWA retirees and their beneficiaries will continue to receive their current level of benefits until January 1, 2014. The purpose of this extension is to afford the UMWA ample time to monetize the equity stake and determine the optimum level of healthcare coverage the VEBA Trust can provide. The extension will also allow UMWA retirees and beneficiaries to continue to receive their current level of benefits until the healthcare options associated with the Patient Protection and Affordable Care Act (“PPACA”) become available on January 1, 2014.

— In addition to the Profit-Sharing Contribution that was a component of prior 1114 proposals, Patriot would also pay a royalty contribution for every ton produced at all existing mining complexes. This royalty will raise additional tens of millions for the Trust based on current production estimates.

— Patriot has accepted the UMWA’s litigation trust proposal verbatim, except that the funding obligation has been reduced to a level Patriot can afford, and the appointment of members will be evenly apportioned between the UMWA and the Committee.

— As set forth in Patriot’s revised Section 1113 Proposal, Patriot has pledged to pursue good faith negotiations with the UMWA 1974 Pension Plan toward a mutually agreeable payment arrangement that avoids creation of a large unsecured claim that would be detrimental to other Patriot creditors (including the UMWA).

Patriot said:

Unfortunately, Patriot simply does not have the financial resources to support its current benefit levels and will not survive without substantial changes across its cost structure. While we very much regret that these changes are necessary, we hope and trust that the UMWA will work with us on a collaborative basis to achieve a successful reorganization. Failure to reorganize will almost surely lead to a devastating loss of jobs and healthcare coverage for more than 21,000 active workers, retirees and their dependents.

UMWA officials are still reviewing the Patriot filings and declined comment this afternoon.

More on the UMWA’s latest Patriot rally

There’s more in today’s Gazette about the big United Mine Workers of America rally against Patriot Coal here in Charleston, including the above video by Doug Imbrogno, a story by Rusty Marks about the arrests of 16 UMWA members and supporters, and this piece by Dr. Paul Nyden, headlined, “Mine families at rally ask ‘who will be next?‘:

Linda Robinette doesn’t rely on Patriot Coal for her health benefits. But she’s worried what might happen if the company is allowed to cut union-negotiated benefits for retirees.

“We are here for a good cause. If Patriot and Peabody get by with this, who will be next?” asked Robinette, whose husband Clarence retired after working at U.S. Steel’s No. 50 Mine in Wyoming County for 36 years. Their health benefits were negotiated under the United Mine Workers of America’s contract with the company.

On Monday, thousands of miners, retirees and supporters arrived at the Charleston Civic Center to protest Patriot Coal’s efforts to use bankruptcy filings to strip miners and retirees of health and pension benefits guaranteed under union contracts.

The miners traveled from coalfields in West Virginia, Illinois, Ohio, Pennsylvania, Virginia, Indiana and Kentucky. After the rally, the crowd marched to nearby Laidley Tower, where Patriot maintains its West Virginia headquarters. Sixteen marchers, including UMW President Cecil Roberts, were arrested after they sat down on the building’s front steps.

Patriot Coal was founded Oct. 31, 2007, when Peabody Coal sold all its union operations east of the Mississippi to the newly created company. In 2008, Patriot bought Magnum Coal, a company that took over union mines once operated by Arch Coal.

Union leaders have said that Patriot was a “company created to fail,” a way to let Peabody and Arch shed their obligations to union employees and retirees, while reaping the benefits of their largely non-union mines in the western United States.

“I worked 36 years as a miner with Arch. I have COPD (chronic obstructive pulmonary disease) and breathing problems,” said Charles Huth of Ava, Ill. “I think Arch should honor their commitment and give us our health care.

“The coal companies are only paying 20 percent of our health care because Medicare is paying the rest of it,” Huth said. “I get $1,300 a month in my pension. I still have that. I am afraid that if we lose our benefits, everyone else down the road will also lose them.”

Huth said he boarded a bus in Illinois at 10 p.m. Sunday to come to Charleston, and would get back on the bus to go home Monday evening.

I’m just back from listening to a few of the speeches and watching a little bit of the action at the huge United Mine Workers of America rally today in downtown Charleston. Thousands of miners, family members and various supporters attended the event, held as part of the UMWA’s ongoing campaign to protect its union contract and retiree benefits at bankrupt Patriot Coal.

The event began over at the Charleston Civic Center, where they started with prayers, music and speeches for the thousands who drove or rode union-chartered buses into town early this morning. Then, the crowd marched a few blocks over to Laidley Tower, where Patriot maintains a local office.  There, 16 individuals — including UMWA President Cecil Roberts and West Virginia AFL-CIO President Kenny Purdue — were arrested after they sat down on the office tower’s steps and refused to move, in another of the union’s series of peaceful civil disobedience protests.

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Patriot Coal: Will industry have to pay its debts?

Whenever there’s any sort of action by the government or by environmental or citizen groups that might somehow — no matter how remotely — curb any practice of the coal industry, I can almost always count on watching my inbox fill up with statements from coalfield politicians criticizing that action and promising to stand up for the coal industry.

Well, yesterday evening, Patriot Coal finally made official what the United Mine Workers union has been warning for months was going to happen. As we reported in today’s Gazette:

Patriot Coal Corp. on Thursday asked a U.S. bankruptcy judge to throw out the terms of the company’s contract with the United Mine Workers union and modify the health-care plan covering thousands of retired miners.

Now, the public can’t really find out exactly what Patriot is proposing. Company lawyers filed this motion asking a federal bankruptcy judge to throw out its union contract, but that document contains few details — and Patriot’s attorneys also filed this motion asking Judge Kathy A. Surratt-States to allow them to file the more detailed proposal under seal. In a press release, Patriot explained its proposal this way:

Patriot’s UMWA labor costs are not competitive with other coal producers that operate under more flexible work rules and a significantly lower labor cost structure. The Company’s proposal seeks to adjust wages, benefits and work rules for its unionized employees to a level consistent with the regional labor market. The Company can no longer afford to pay above-market wages and benefits to its 1,600 union employees as compared to its 1,300 nonunion miners doing exactly the same jobs. As part of the proposal, Patriot intends to offer its union employees the same healthcare benefits it provides to nonunion employees.

Here’s what UMWA President Cecil Roberts had to say about it:

They’re demanding massive changes to the collective bargaining agreement, and they want to scrap the health care benefits our retirees earned through decades of blood and toil. These demands by the company are totally unacceptable to the UMWA, and unnecessary for the company’s survival.

The truth is that the depth of relief Patriot seeks isn’t needed. There is a path forward for the company that does not include drastic cuts at the level the company has proposed and we will demonstrate that in court.

Patriot Coal CEO Ben Hatfield had this to say for his company:

The actions we have taken today are necessary for the survival of Patriot and the preservation of more than 4,000 jobs. Without the cost relief we are seeking, all of these jobs will be lost and it will no longer be possible to provide healthcare for more than 23,000 employees, retirees and their dependents. Our labor and retiree benefit costs have risen to levels that simply cannot be sustained given the challenges facing the Company and our industry. All of our employees and retirees are being asked to make sacrifices to help Patriot emerge from bankruptcy. These sacrifices include reductions in compensation and benefits for salaried, union and nonunion employees.

What Ben didn’t mention was that this proposal comes just a few days before a hearing that’s scheduled on Monday, described by Cecil Roberts and the mine workers this way:

Patriot’s filings come just days before it goes into the bankruptcy court and argues it should be allowed to pay nearly $7 million in bonuses to executives and managers. “That $7 million would pay for a lot of oxygen bottles for the black lung sufferers. If Patriot is successful, these retirees will soon face a cruel decision between getting the oxygen they need to survive or eating,” Roberts said.

Keep in mind the stakes in this particular dispute, as outlined on the website of the UMWA’s Fairness at Patriot campaign:

About 2,000 UMWA members currently work at Patriot operations in West Virginia and western Kentucky. Additionally, more than 10,000 retirees, their dependents and surviving spouses receive health care benefits from Patriot. All told, the UMWA estimates the health care benefits for more than 22,000 people are potentially at risk.

But so far, I’ve only seen one coalfield politician have anything to say about Patriot’s move yesterday. Sen. Jay Rockefeller, D-W.Va., issued this statement:

Patriot’s decision is deeply disappointing, and incredibly unjust. These retirees worked day and night, risking their lives and their health, under a pledge that is now broken. Passing my bill to protect these union miners’ health benefits and pensions is now more than just the right thing to do – it’s imperative.

It’s not entirely clear yet if Sen. Rockefeller’s bill will fix all of the problem for UMWA members and pensioners, or if it will make Patriot be the one to pay these debts. And that’s really what this is all about — a major player in an industry that’s historically tried to externalize its costs of doing business onto its workers, the environment, the communities where it operates, and the global climate. As Temple University business professor Bruce Rader has explained, Patriot’s move here will:

… Ultimately will shift the burden to the general public or in a word socialize the health care benefits since the miner’s ability to pay will not cover this obligation and then the health care burden will be shifted to the government. In essence we will all pay the costs. This is a perfect example of the use of the legal system to socialize the costs and therefore lead to a transfer of costs to the general public from the shareholders of a company.

The question becomes, as a society, do we want to condone this? Should the profitability of these companies be enhanced at the general public’s expense, and what effect will this have on our system of allocating capital? Free-market capitalism is ultimately a system for the allocation of capital in a society and the efficient allocation of capital is the driving force behind the economic growth that this country has experienced. For this system to work, the participants must suffer the consequences and reap the benefits of their actions.

If you look more broadly at Patriot, you can see this … Take the selenium pollution from Patriot’s mountaintop removal mines (many of which — like its retiree health-care liabilities — Patriot inherited from other mine operators). With a series of carefully planned lawsuits, citizen group lawyers from Appalachian Mountain Advocates managed to force Patriot to internalize the costs of that pollution. The company went kicking and screaming at first, but eventually agreed not only to proper pollution treatment plans, but also to a longer-term plan that will get Patriot out of the mountaintop removal business altogether. Back when that announcement was made, Ben Hatfield had this to say:

Patriot Coal recognizes that our mining operations impact the communities in which we operate in significant ways, and we are committed to maximizing the benefits of this agreement for our stakeholders, including our employees and neighbors. We believe the proposed settlement will result in a reduction of our environmental footprint.

But remember that while Ben Hatfield became a household name because of the Sago Mine Disaster, he’s also  a veteran coal operator who worked for many years for Massey Energy’s predecessor, A.T. Massey Coal, a company whose efforts to break union contracts to reduce production costs and increase profits was in many ways the beginning of the sorts of maneuvers that Patriot is making now as part of its bankruptcy reorganization.

In West Virginia, the response to the Patriot selenium deal has been for state lawmakers to pass legislation aimed at ensuring that no other coal companies will have to take responsibility for their selenium pollution. Our House of Delegates couldn’t muster even one vote against that selenium bill — and not for nothing, but the United Mine Workers sent its lobbyist, Ted Hapney to a public hearing to support the industry’s bill.  And, as Taylor Kuykendall at The State Journal made clear in this story, the West Virginia Coal Association was certainly proud of its success with this legislation. Among those patting themselves on the back was Delegate Troy Andes, who used to handle public relations for Massey and Don Blankenship:

Andes said the Coal Caucus has allowed pro-coal legislators to educate the rest of the body on coal issues. As an example, Andes cited the selenium bill that the House passed unanimously March 8. He said the Coal Caucus was able to meet with about half of the legislative body on the bill before opponents were able to “flood the halls of the Capitol with misinformation.”

Andes also touted the major gains of the Republican Party and said that would bode well for the West Virginia coal industry.

“Today we have 46 Friends of Coal in the Republican Caucus,” Andes said. “Thanks to the 2012 election we grew from 35 members to 46 members. That translates to more seats on important committees.”

Rupert Phillips, D-Logan, works at White Armature Works, an electric motor repair company in Southern West Virginia that serves the coalfields. Hamilton said Phillips championed the passage of the selenium bill that recently passed the House.

“(The West Virginia Coal Association) gave me the car to drive,” Phillips said regarding the selenium bill. “I put it in four wheel drive and we took it to the top.”

So far, I haven’t heard any of these “Friends of Coal” talking about what they’re going to do to make sure Patriot lives up to the promises made to UMWA members and retirees. They seem perfectly content to allow the industry they champion to keep “externalizing” its costs onto workers and pensioners and, ultimately, the rest of us. Which brings me back to something that UMWA President Cecil Roberts said about how the union is continuing to fight Patriot in court and to call attention to the situation with protests in the streets:

Lawyers will do what lawyers do, courts will do what courts do,” Roberts said. “What working families do when they fight for justice is get out, get loud, and demand to be heard. We will continue to do that.

And as we do, more and more of our members are wondering which side national, state and local politicians, community leaders and religious leaders are on. For those who haven’t already answered that question, the time is now. Get off the fence and choose.

Here’s the announcement just from from Sen. Jay Rockefeller’s office:

On the heels of hearing gripping accounts last week in Beckley from retired coal miners who were promised lifetime pension and health care benefits for themselves and their families, Senator Jay Rockefeller today introduced legislation that would protect those benefits for thousands of retired miners whose livelihoods are in jeopardy. Senator Joe Manchin cosponsored the bill.

The Coalfield Accountability and Retired Employee Act seeks to provide certainty and peace of mind to retirees and their families while holding employers accountable for the commitments they make to their workers. The bill builds on and strengthens similar legislation Rockefeller and U.S. Rep Nick Rahall introduced last Congress. The new measure comes soon after a roundtable discussion Rockefeller held in Beckley with retired coal miners in which he re-affirmed his commitment to preserving their promised benefits. Rahall and United Mine Workers of America (UMWA) President Cecil Roberts also joined the discussion. Rahall today introduced companion legislation in the House, just as he did last Congress.

Sen. Rockefeller said:

Last month, I heard stories that absolutely broke my heart. One woman—Shirley Inman, who lives in Boone County—left a good-paying job in Chicago to come home to West Virginia to work in the mines. She did it because of the pension and health care benefits she was promised. And now, after years of on-the-job injuries and a bout with cancer, that promise was broken. That’s more than unfair. It’s shameful. And I won’t stand for it.

Sen. Manchin said:

A strong mining industry begins with a strong commitment to our miners. Our coal miners are some of the hardest working people in America, and they are proud to do the heavy lifting that keeps this country strong. They are the backbone behinds decades of lighting our cities and heating our homes, and deserve nothing less than the best possible benefits and care. This bill makes sure our brave coal miners receive the benefits they’ve been promised.

At the same time, here’s the announcement from Rep. Rahall’s office:

As part of his longtime effort to strengthen and improve the quality of life for coal miners in retirement, U.S. Rep. Nick J. Rahall (D-W.Va.) today introduced the Coalfield Accountability and Retired Employee Act (CARE Act), legislation that strengthens the legal protections and funding for the health care and pension benefits promised to retired coal workers and their families.

“Every effort must be made to preserve health care benefits for our retired coal miners who worked so hard to produce the coal that powered this Nation,” said Rahall. “This legislation that Senator Rockefeller and I are introducing today keeps faith with the federal commitment that has been made to our coal miners. It ensures that those who participated in the noble but dangerous job of working underground to provide our energy security are secure in the retirement.”

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Where are all those friends of coal?

Members of the United Mine Workers of America take part in a protest outside the of headquarters of Peabody Energy, one of the companies the union accuses of orchestrating business deals that bankrupted Patriot Coal, Wednesday, Feb. 13, 2013, in St. Louis. Ten people were arrested during the protest of bankruptcy proceedings that the union says jeopardizes pension and health care benefits for some 20,000 retirees and dependents. (AP Photo/Jeff Roberson)

The United Mine Workers plans to continue its protests of the Patriot Coal bankruptcy situation, with another protest on Tuesday outside the headquarters of Peabody Coal in St. Louis.

And the problems faced by Patriot miners and retirees is getting more attention, first with this story in the Wall Street Journal:

Patriot Coal Corp., which is in bankruptcy-court proceedings, plans to seek to terminate the health benefits of up to 1,000 salaried retirees, according to court filings.

During the Patriot bankruptcy most attention has focused on about 22,000 active union miners, union retirees and their beneficiaries who are fighting to keep health benefits. While smaller in number, the salaried retirees could stand to lose more than unionized counterparts.

Salaried retirees, for example, would be ineligible to participate in a trust Patriot has proposed to cover some health benefits for retired United Mine Workers of America members …

… Many salaried retirees—including foremen, superintendents and other supervisors—worked alongside unionized miners in underground coal mines for decades but don’t have protections guaranteed by collective bargaining agreements.

In December, Patriot sent a letter to salaried retirees saying it intended to terminate all of their retiree health and life-insurance benefits. A hearing is scheduled for Tuesday in U.S. Bankruptcy Court for the Eastern District of Missouri to create a committee to represent salaried retirees’ claims.

“In this case the company is saying we want to terminate 100% of your benefits, and we don’t want you to have any unsecured claim,” said Jon Cohen, a Chicago attorney representing the retirees.

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Rockefeller, Rahall to introduce UMWA pension bill

This just in this afternoon from Beckley:

Senator Jay Rockefeller today said he plans to introduce legislation, the Coalfield Accountability and Retired Employee Act, that would protect the pension and lifetime health benefits thousands of retired coal miners and their families were promised – and are now in jeopardy. Rockefeller met today with a group of coal retirees, along with United Mine Workers of America  President Cecil Roberts and U.S. Rep. Nick Rahall, to discuss the importance of preserving these promised benefits.

Sen. Rockefeller said:

In West Virginia, a promise made is a promise kept. And when it comes to our coal miners – who put their lives, limbs and lungs on the line under the promise of a secure future for them and their families – there should never be any backing away from that pledge. I’ve heard from retirees and their loved ones who are deeply fearful and rightfully angry. This legislation is about human decency, it’s about doing what’s right, and it’s about having the backs of those who have ours deep underground.

Rep. Rahall said:

Clearly, every effort must be made to preserve health care benefits for these retirees who worked so hard to produce the coal that powered this Nation. This effort is about justice, about integrity, and about keeping faith with the federal obligation to the health and welfare of our coal miners.

According to a statement from Rockefeller’s office:

These retirees are facing such uncertainty because the UMWA’s 1974 pension plan, which covers more than 100,000 mineworkers, including more than 35,000 West Virginians, is severely underfunded and on the road to insolvency – a result of the recent financial crisis and fewer contributions to the plan.

In addition, Patriot Coal, a spin-off from Peabody Energy and Arch Coal, is facing bankruptcy and could shed its obligations to retirees. This means more than 12,000 retired miners, including nearly 7,000 West Virginians – the vast majority of whom actually worked for Peabody and Arch – and their dependents would lose health benefits, and the 1974 pension plan would be further crippled.

We’ve written about the problems with the UMWA pension plan before here, and of course the Patriot Coal situation has been in the news a lot lately (see here, here and here).

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UMWA continues Patriot-Peabody protests

Members of the United Mine Workers of America take part in a protest outside the of headquarters of Peabody Energy, one of the companies the union accuses of orchestrating business deals that bankrupted Patriot Coal, Wednesday, Feb. 13, 2013, in St. Louis. Ten people were arrested during the protest of bankruptcy proceedings that the union says jeopardizes pension and health care benefits for some 20,000 retirees and dependents. (AP Photo/Jeff Roberson)

Here’s the report today from The Associated Press, via the St. Louis Post-Dispatch on the latest United Mine Workers of America civil disobedience action in the Patriot Coal bankruptcy (see here and here for background):

Protesters from the United Mine Workers of America picketed this morning outside the headquarters of Peabody Energy. That’s one of the companies the union accuses of orchestrating business deals that bankrupted Patriot Coal.

The protest ended before noon and 10 people were arrested.

Meanwhile, as Taylor Kuykendall reports in the State Journal:

The protest follows a filing by Patriot Coal requesting approximately $6 million in bonuses to be paid to about 120 executives and managers while it goes through bankruptcy reorganization. The UMWA said the move was a “callous disregard for the lives and well-being of thousands of active and retired workers and their families.”

“While Patriot is handing out cash to managers and executives, thousands of retirees and widows the company is responsible for are worried about having to choose between buying groceries or getting the prescription drugs they need to live,” said UMWA President Cecil Roberts. “That $6 million would pay for a month’s worth of health care for retirees, dependents and widows. It’s also $6 million Patriot could use to fight Peabody Energy and Arch Coal in court to get them to pay for these obligations.”

According to a statement from Patriot Coal, the company’s CEO and executive team will not participate in the retention and annual incentive plans filed yesterday. 

“The purpose of these plans is to motivate key employees to remain with Patriot and to achieve financial and operating performance goals that are essential to the Company becoming viable through reorganization.,” Patriot stated. “A successful reorganization is critical to Patriot’s survival and to saving 4,000 jobs.”

You can read the court filing here.

UMWA explains Patriot plan for health-care cuts

Judging from the online video stream (from which I pulled the above photograph) from the United Mine Workers of America protest at Peabody Energy headquarters in St. Louis today, it looks like some folks might soon get arrested. UPDATED: Read the latest on the arrests here.

Mike Elk from In These Times has been live-tweeting the event, and you can follow the UMW’s Fairness at Patriot Campaign here or here.

But buried in the news about the protest, UMWA President Cecil Roberts for the first time revealed some details — though only a few of them — about exactly what Patriot has proposed to do regarding its union contracts and health-care benefit plan (see previous posts here, here and here). Until now, these details have been discussed only privately during union negotiations with Patriot, and the actual proposals haven’t been filed publicly yet in bankruptcy court.

During a telephone press conference just before the protest, Roberts said that Patriot has proposed to change its UMWA contract terms “quite dramatically,” but didn’t provide more details than that. Roberts also said that Patriot has proposed to create a “voluntary employees beneficiaries’ association,” or VEBA, to replace its existing health-care plans. But, Roberts said, the company hasn’t proposed adequate plans for funding the program. The company proposed putting $10 million into the program over a 12-month period, but Roberts said the real need is more like $80 million a year to cover the costs. Under such a plan, Roberts said:

People would still lose their health care.

Initially, Roberts said, the company hoped to implement its plan by April 1. For now, that has been pushed back to June 1 … But Roberts says the UMWA will keep up its campaign against Patriot:

What we have here is a company reneging on its promises. We’re not going to take it. We will fight for our members and their families in the courts, in the coalfields and in the streets of St. Louis. Patriot and Peabody have a moral obligation to those who mined their coal.


Patriot Coal bankruptcy moved to St. Louis

The bankruptcy case of Patriot Coal has been moved from New York City to St. Louis. You can read the ruling here. And here’s a statement from United Mine Workers of America President Cecil Roberts:

The U.S. Bankruptcy Court made the right call today when it moved the Patriot Coal case from New York to St. Louis. Nobody has ever mined one ounce of coal in Manhattan. Patriot Coal executives set up two dummy corporations in New York because they wanted their case heard in a forum far from the coal fields.

U.S. Bankruptcy Judge Shelley Chapman agreed with our argument about that, saying in her opinion that, ‘this Court cannot allow the Debtor’s venue choice to stand, as to do so would elevate form over substance in a way that would be an affront to the purpose of the bankruptcy venue statute and the integrity of the bankruptcy system.’

St. Louis is where Patriot Coal is headquartered. More important, it’s the headquarters for Peabody Energy and Arch Coal. These two companies spun off their operations to Patriot in an attempt to run away from pension and health care obligations to thousands of miners and their survivors.

Referencing the actual voices of those whose health care is at risk in this case, Judge Chapman wrote in her conclusion, ‘… hundreds of hand-written letters have been received by the Court from the people whose hands mine the Debtors’ coal and their widows and children. Many of them enclosed family pictures, or lists of ailments and medications. Some of them asked for a personal response. All of them were respectful, and compelling. This decision reflects the Court’s attempt to craft a just and balanced solution to the question of which bankruptcy court will become the next custodian not only of these cases but also of these letters.’

Making reference to the UMWA’s suit against Peabody and Arch to require them to live up to their promises of health care to retirees and widows, Judge Chapman also noted that Peabody is headquartered in St. Louis, which she called, “significant in light of the issues that have been raised by the UMWA with respect to its spin-off of Patriot and its responsibility to provide promised cradle-to-grave health care benefits to Patriot employees and retirees who worked for Peabody prior to the spin-off.’

Though we would have preferred this case to be moved to Charleston, W. Va., moving it to St. Louis puts it on the front porch of Peabody Energy and Arch Coal. We filed this case so that it would be moved away from a place where no coal has ever been mined to a place where people are familiar with the coal industry. The decision brings the case to the heart of the Illinois coal basin, home to many of our active and retired members and their families.

This is a victory for the UMWA in what promises to be a long battle for the workers, retirees, their dependents and widows at Patriot who seek only fairness. Company executives who try to evade their obligations through a slick transfer of corporate assets need to know that the UMWA will fight in every way possible to make sure a promise made is a promise kept.

Through one of its lawyers, Patriot Coal said:

Patriot Coal respects the Court’s decision to transfer the Company’s Chapter 11 proceedings to St. Louis, where Patriot is headquartered. We remain focused on using the reorganization process to ensure the Company’s future viability as a competitor and employer in a challenging market environment. We anticipate that the new court will become familiar with our case very quickly, and we remain committed to completing the reorganization as soon as possible and preserving the nearly 4,000 jobs at risk.

President Barack Obama is introduced by AFL-CIO President Richard Trumka before he spoke about jobs and the economy during an address before the AFL-CIO Executive Council in Washington, Wednesday, Aug. 4, 2010. (AP Photo/Charles Dharapak)

AFL-CIO President Richard Trumka is getting a fair amount of press for comments he made about Republican presidential candidate Mitt Romney during a media conference call earlier this week:

The Hill — The head of the nation’s largest labor federation blasted GOP presidential candidate Mitt Romney for pandering to coal country, saying President Obama would better support miners’ rights and jobs.

The State Journal — In a bid to turn the “war on coal” rhetoric on its head, AFL-CIO President Richard Trumka said Oct. 29 that, if there is a war on coal, Mitt Romney started it.

Bloomberg — “Those EPA regulations were ordered by the Supreme Court as a result of a lawsuit by Mitt Romney while he was governor,” Trumka said. “If there is a war on coal, it starts and ends with Mitt Romney.”

The Huffington Post — AFL-CIO President Richard Trumka assailed Mitt Romney on Monday for his campaign’s recent criticism of President Barack Obama on coal and auto issues, saying Romney has been distorting the record out of “desperation” in key Midwestern states like Ohio.

Rich Trumka raises some important points, especially when he steers the conversation to what a Romney-Ryan White House might do on issues like coal miner safety and health, though as my Sunday story this week showed, the Obama administration’s record on that issue is more mixed than Trumka makes it out to be. But what’s disappointing about the way Trumka played this is that he didn’t focus on the long-term big picture for coal communities and the people who work and live three — as he did so eloquently in his speech back in January when he called for a serious conversation about the future of coal:

In particular we need dialogue between environmentalists and workers and communities about the future of coal. About what the global labor movement calls a Just Transition to a low carbon emissions economy. And the AFL-CIO is ready to host that dialogue.

Addressing climate risk is the path to a competitive, profitable future for investors, but the path is only open if it is a path to an economy that works for the 99% who seek good jobs, economic security and healthy communities—not just in New York, but in Nemacolin, and in countries around the world, from Australia to Poland to South Africa to China, countries that face the same issues and share the same climate with you and me.

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UMWA miners, retirees sue Peabody and Arch Coal

This news just in, on the heels of Patriot Coal’s management shakeup this morning:

Eight retired and active members of the United Mine Workers of America (UMWA) and the union itself filed a federal class action suit late yesterday in the Southern District of West Virginia, asking the court to “enter judgment against Defendants declaring that Defendants are obligated to maintain funding of the Plaintiffs’ benefit plans.”

The suit is filed on behalf of more than 10,000 retirees and active workers whose health care and pension benefits Peabody and Arch transferred to the Patriot Coal Company, which is in Chapter 11 Bankruptcy reorganization.

The suit maintains that Peabody and Arch “planned to transfer (their) employees and benefit plan obligations to Patriot for the purpose of depriving (their) employees and retired employees of their welfare and retiree benefits.” This is illegal under the Employee Retirement and Income Securities Act (ERISA).

ERISA Section 510, 29 U.S.C. § 1140 makes it unlawful to “discharge, fine, suspend, expel, discipline or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan, . . ., or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan . . . (emphasis added).”

“Peabody and Arch established separate spin-off companies, which have become today’s Patriot Coal, with the publicly stated intention of getting rid of their obligations to the retirees who gave a lifetime of service to those companies,” UMWA President Cecil E. Roberts said. “The companies bragged about getting those liabilities off their balance sheets.

“And as people with long experience in the coal industry, they knew that the cyclical nature of the industry would inevitably lead to Patriot’s inability to pay for those liabilities,” Roberts said. “It was a company set up to fail. But under the law, that does not relieve Peabody and Arch of their obligation to these retirees, their spouses and their widows.”

You can read the lawsuit here.

Election update: President Obama and the UMWA

In the national media’s coverage of coalfield politics, it’s become standard background to stick in a paragraph that says something like this: The United Mine Workers union has decided to sit out this year, declining to endorse a presidential candidate.

Two months ago, the National Journal headlined their story Coal Miners’ Union Sits Out Presidential Race, and started off the piece this way:

After giving then-Sen. Barack Obama a full-throttled endorsement in the 2008 presidential election, the United Mine Workers of America has decided not to endorse either Obama or the presumptive Republican nominee, Mitt Romney, in 2012.

Earlier this week, an otherwise very interesting piece from the Atlantic’s Molly Ball reported that for the first time in its history, the UMWA had decided not to endorse a presidential candidate. Turns out that wasn’t exactly right, and the magazine corrected the piece to say this:

For the first time in 40 years, the United Mine Workers Union, which endorsed Obama in 2008, John Kerry in 2004 and Al Gore in 2000, has declined to endorse a presidential candidate.

Phil Smith, the UMWA’s communications director, tells me that the union endorsed FDR in 1936, and then no one else for president until JFK in 1960. Apparently, John L. Lewis personally endorsed some later FDR opponents, but the union did not. There was also no endorsement in 1972. The union has endorsed a presidential candidate every election since then.

And now? Well, a UMWA endorsement of either President Obama or Governor Romney seems very unlikely at this point. But I thought it might be interesting to just very briefly talk about the union’s endorsement process, something that doesn’t get spelled out in these national media parachute-drop stories.

First, the UMWA endorsements flow through the union’s political action committee, the Coal Miners Political Action Committee, or COMPAC. Every local union has its own COMPAC committee, made up of miners elected by the local’s membership. Those groups get together before elections to make recommendations for local, state and federal offices.

Those recommendations go to each state’s COMPAC,, again elected union officials. They decide whether to accept or reject endorsement recommendations for state and local offices. Recommendations for federal offices — president, Senate and House — are referred on to the UMWA’s National COMPAC Committee, which is made up of the union’s elected international executive board.

National COMPAC committee members can also take up their own motions for endorsement. In fact, four years ago, the national committee voted to endorse then-candidate Obama without first receiving any recommendation from a state committee. Phil Smith told me that the national committee took up the endorsement issue in May 2008, amid the heated Democratic primary between Obama and Hillary Clinton, both of whom had called Roberts and asked for the union’s endorsement.

So far this year, no UMWA state COMPAC committee has recommended a presidential endorsement, according to Smith. The UMWA international board, sitting as the national COMPAC committee, is scheduled to take up some other endorsements during an in-person meeting on Thursday, Smith said. If any board member felt particularly strongly, they could seek a vote on the matter during that meeting … but again, that seems unlikely at this point.

What is more interesting than all of this, though, is to go back and look at the January-February 2009 issue of the United Mine Workers of America’s Journal. Right there on the cover is the swearing in ceremony for President Obama.

Inside, there’s an article headlined, “Keeping them honest,” that spells out three top political priorities for the UMWA: Fixing the Bush economic disaster, safe and healthy workplaces, and the Employee Free Choice Act.

Not exactly stuff that is the focus of campaign talk in the nation’s coalfields, huh? But, well, let’s see … Hasn’t the administration come through to a large extent on what the UMWA wanted in two of these three areas?

President Obama managed to get through Congress a gigantic and successful economic stimulus plan (Don’t believe me? Then read Michael Grunwald’s book on the subject). The president appointed the longtime UMWA safety director, Joe Main, to run the federal Mine Safety and Health Administration. Reasonable people could debate how effective MSHA has been under Joe Main, but regardless, the UMWA got their man put in charge. Finally, though, has anybody heard talk lately about the Employee Free Choice Act or any other reforms to federal labor laws? Didn’t think so.

That month’s Journal also includes an interview with UMWA President Cecil Roberts. This will give you the flavor of Cecil’s quotes:

Although the election of Barack Obama was great news for all working Americans, UMWA members have much to be particularly proud of. Hailing from a coal-mining state, President Obama plans to invest in the future of coal in America …

The article touts the appointment of Labor Secretary Hilda Solis (Joe Main had not yet been named to MSHA), and a huge amount of the interview is dedicated to explaining why the Employee Free Choice Act is considered critical by the UMWA. Cecil puts it this way:

…. Obama plans to restore the right to organize and bargain collectively again in America, a right we have been denied for far too long … Already the bad guys are circling the wagons. Big business groups such as the National Association of Manufacturers and the U.S. Chamber of Commerce are wielding a huge war chest to convince any wavering members of  Congress that the Employee Free Choice Act would mark the end of civilization. Make no mistake — this will be labor’s biggest effort on Capitol Hill this year, and we intent to help lead that effort. The future strength of our union depends on our ability to organize new members.

What happened? Well, while candidate and Sen. Obama supported this legislation, it ended up getting shut down, in large part because of top Obama aides. But again, this isn’t what you hear talked about as a reason the UMWA has yet to endorse anyone in the presidential race — and certainly as a reason that coal miners are showing up at campaign events for GOP candidate Mitt Romney. And the issues that are reasons for those things got much less attention in the Journal’s Obama inauguration coverage.

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In this June 6, 2011 photo, this historical marker along W.Va. Route 17 in Blair, W.Va., is the only visible sign of the 1921 battle here between thousands of armed, unionizing coal miners and the thousands of law enforcement officers and security guards hired to defeat them. At least 16 men died on the mountain, which could be turned into a strip mine. (AP Photo/Vicki Smith)

Word just in today that a federal judge in Washington, D.C., has ruled against the Sierra Club and other groups in their efforts to have Blair Mountain returned to the National Register of Historic Places.

I’ve posted a copy of the ruling by U.S. District Judge Reggie B. Walton here, but in short, the judge ruled that the citizen groups could not meet one of the requirements to show “standing” to bring the case, that of “redressability,” or that a favorable ruling from the court would redress their injury. The judge explained:

It is likely, therefore, that surface mining would be permitted on the Blair Mountain Battlefield as a result of permits that were acquired prior to the historic district’s inclusion on the National Register. An order from this Court restoring the Blair Mountain Battlefield to the National Register, therefore, will not prevent mining from occurring should the coal mining companies who own existing permits choose to exercise their rights afforded by the permits. The Court having only a limited ability to redress the plaintiffs’ asserted injuries, the plaintiffs have failed to meet their burden under the final prong of the standing inquiry.

In this Wednesday Aug. 3, 2011 file photo, Senate Commerce Committee Chairman Sen. Jay Rockefeller, D-W.Va., gestures during a committee hearing on Capitol Hill in Washington.  (AP Photo/J. Scott Applewhite, File)

Finally, another of our state’s elected officials has stepped forward to express concern about the potential impacts of Patriot Coal’s bankruptcy on thousands of working coal miners, retired miners and families. Sen. Jay Rockfeller’s office has released a copy of this Sept. 7 letter the senator wrote to Irl Engelhardt, Patriot’s CEO, saying:

Generations of West Virginia coal miners have dedicated their careers to making Patriot and the entire coal industry a success. These employees and retirees have spent decades working hard under the promise of fair wages, safe working conditions, secure pensions, and lifetime health-care benefits. I am therefore troubled that Patriot has indicated that it is reviewing pension and health-care benefits as potential sources of savings as it restructures — especially since all of these benefits were contractually agreed to or voluntarily assumed by Patriot; the company from which it was spun-off, Peabody Energy; and the company it acquired, Magnum Coal Company, which itself was spun-off from Arch Coal Inc.

Sen. Rockefeller continued:

I understand that Patriot is in the process of reviewing its labor costs, along with other aspects of its business, and will soon submit a plan for revisions to the United Mine Workers of America. As this process moved forward, I urge you, in the strongest possible terms, to uphold the commitments that were made relating to pension, health care and other benefits for your employees and retirees. Any efforts to strip these individuals of their earned benefits through the bankruptcy process would be severely unjust.

Previously, the only elected officials here to say much of anything publicly about this situation was Attorney General Darrell V. McGraw, who entered the bankruptcy case to support the UMWA’s efforts to have the proceeding moved to bankruptcy court in Southern West Virginia.

In a news released issued on Sunday evening, Sen. Rockefeller’s office also provided a copy of a letter Rockefeller sent to UMWA President Cecil Roberts, saying:

I know that UMWA employees and retirees face substantial uncertainty as a result of the recent bankruptcy filing by Patriot Coal Corporation, which is why I sent the attached letter to Patriot’s Chairman and Chief Executive Officer on behalf of the company’s employees and retirees. As indicated in the letter, I firmly believe that any efforts on behalf of the company to strip employees and retirees of the benefits they have earned and that were promised to them would be severely unjust.

Happy Labor Day

Phil Smith at the United Mine Workers of America was kind enough to share this photograph he took recently of a union miner at the Cliffs Natural Resources Pinnacle Mine in Wyoming County.

It’s a good day not only to spend time with family and friends, but to remember the workers who do so much for all of us … Here’s hoping everyone has a safe and enjoyable day.

Read about the history of the holiday from the U.S. Department of Labor or  Wikipedia, and read a collection of great journalism on worker safety put together by ProPublica.

Patriot: Some common ground in coal debate?

Gazette photo by Chip Ellis

We have an update in this morning’s Gazette about the United Mine Workers of America’s new “Fighting for Fairness at Patriot” campaign, reporting this:

Kelly Elswick mined coal for more than 30 years, finishing his career running a grader at the Hobet 21 mountaintop removal complex along the Boone-Lincoln county line.

After fighting cancer — going through chemotherapy and a bone marrow transplant — the 56-year-old Madison resident has been looking forward to his retirement.

But now Elswick is worried he’ll lose his pension and his health-care benefits if Patriot Coal manages to use a bankruptcy reorganization to rewrite its contract with the United Mine Workers union and discard such liabilities.

“I gave them 30 years of my sweat and tears,” says Elswick. “Had I not had the best health care in the world, I don’t know what would have happened.”

On Thursday, Elswick was among more than 3,000 miners, retirees and family members who turned out for a UMW briefing that kicked off the union’s “Fighting for Fairness at Patriot” campaign. A similar meeting on Tuesday in Evansville, Ind., drew a similar crowd, and union leaders say their campaign is just getting started.

“We are prepared to go to the mat over this,” UMW President Cecil Roberts told reporters after the closed-door meeting with union members. “This is an enormous challenge for the union.”

But one of the more interesting things to me was the mix of folks I ran into as the crowd streamed out of the closed-door UMWA meeting.

First, there was Roger Horton, a UMWA safety committee member who works for Patriot.  As many readers know, Roger formed a group called Citizens for Coal, and he works closely with the West Virginia Coal Association to promote the notion that environmental regulations are destroying the mining industry in West Virginia. He’s one of the more outspoken proponents of mountaintop removal.

Then, though, there was Chuck Nelson, a retired Massey/Alpha coal miner whose father is a Peabody Coal retiree whose pension and health-care benefits could be at risk in the Patriot bankruptcy. Chuck is active in the Ohio Valley Environmental Coalition and he’s a major opponent of mountaintop removal.

My guess is that Roger and Chuck don’t see some coal issues — mountaintop removal, government regulation — through the same lens. But they were both there to support the notion that coal operators should have to live up to their promises to workers and retirees.

Does anyone doubt that one thing the  people of the West Virginia coalfields desperately need right now is a way to find some common ground? A way to focus more on the things we share than the ways we see things differently?

As I’ve written here before, perhaps the UMWA’s campaign for justice at Patriot Coal is one place we could find some of these valuable commodities.

Where is the outrage for Patriot retirees?

This morning’s Gazette included an editorial about the growing concerns regarding pensions and retiree health-care for miners and their families, given the bankruptcy reorganization efforts of Patriot Coal. To quote the editorial:

The word “scam” once described the tactic of bleeding assets from a corporation, then filing bankruptcy to leave creditors stuck. The United Mine Workers of America alleges that something similar may have occurred in regard to Patriot Coal Corp.

Editorial writers cited my Sunday story on this issue, which was a follow-up to a previous Coal Tattoo post that quoted extensively from the latest issue of the UMW Journal article on the matter. We’ve published several stories on blog posts (see here, here and here) recently that touched on this issue. Perhaps I’ve missed it, but I haven’t seen much about the struggle ahead for Patriot workers and retirees from other West Virginia media outlets that typically spend a lot of time trumpeting the coal industry’s public relations campaigns and proclaiming their concerns for coal miner jobs.

Of course, it’s not like West Virginia political leaders are talking much about what Patriot’s bankruptcy means for 2,000 active union members in West Virginia and Kentucky, and more than 10,000 retirees and another 10,000 dependents, most of them in West Virginia, Indiana, Illinois, Kentucky and Ohio. Where is Sen. Joe Manchin on this issue? Or Gov. Earl Ray Tomblin? Republican challengers John Raese and Bill Maloney talk an awful lot about coal miners, but I haven’t heard them mention this issue. And what about the Republican ticket of Mitt Romney and Paul Ryan? Why aren’t they making this an issue, given that the West Virginia GOP convention delegation professes to care so much about coal miners that they’re wearing miners’ caps on the convention floor?

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