Pain in the coalfields: WV lawmakers want ‘promises kept’ - WBOY - Clarksburg, Morgantown: News, Sports, Weather

Pain in the coalfields: WV lawmakers want ‘promises kept’

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  • Many WV coal counties losing revenue

    Many WV coal counties losing revenue

    Monday, August 8 2016 10:15 AM EDT2016-08-08 14:15:05 GMT

    As Appalachian coal production continues its drastic decline, West Virginia’s coal-producing counties are  not only losing people as lifelong residents are forced to flee their homes in order to find work, but in many cases, they’re also relinquishing millions of dollars from their budgets.

    As Appalachian coal production continues its drastic decline, West Virginia’s coal-producing counties are  not only losing people as lifelong residents are forced to flee their homes in order to find work, but in many cases, they’re also relinquishing millions of dollars from their budgets.

At a roundtable discussion in a Beckley public library, two senior West Virginia lawmakers and an organized labor leader listened as Patriot Coal miners shared stories of pain and injury in the coal business.

That's not all – the same miners who have faced a host of injuries risk loss of their pensions, retirements and health care as all three sit on the chopping block in Patriot Coal bankruptcy reorganization proceedings. Sen. Jay Rockefeller and Rep. Nick Rahall were in town to introduce a bill that would protect those benefits just before the release of a study that concluded Patriot was not likely to succeed from the beginning.

The bill is called the Coalfield Accountability and Retired Employee Act, or CARE.

"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," Rockefeller said. "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."

The bill would amend the Surface Mining Control and Reclamation Act to transfer excess funds from the Abandoned Mine Land fund to the UMWA 1984 Pension Plan – which now faces potential insolvency. CARE would also make a retiree who loses benefits following a bankruptcy eligible for a benefit plan established under the Coal Act and make employer contributions exempt from taxes, just as other pension plans are currently treated.

"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," Rahall said. "This effort is about justice, about integrity, and about keeping faith with the federal obligation to the health and welfare of our coal miners."

Also at the meeting was Cecil Roberts, president of the United Mine Workers of America. He said the way Patriot workers have been treated is a "terrible wrong."

"If nothing is done, we are looking at a situation where people are going to have to make cruel choices," Roberts said. "Will they eat or get their medicines? Will they pay the mortgage or get the surgery they need? This is literally a matter of life and death for thousands of people in West Virginia and throughout the nation's coalfields."

According to Rockefeller's communications department, the 1974 pension plan covers 100,000 mine workers, including more than 35,000 in West Virginia. That plan is currently underfunded due to "the recent financial crisis and fewer contributions to the plan."

Scared and hurting

Roberts vowed to fight and bring national attention to Patriot Coal's bankruptcy. The UMWA has been fiercely protesting Peabody Energy, the company that spun-off Patriot Coal into what the union believes was a company "built to fail."

"Corporate executives seem to think that if they act behind closed doors, they can't be held accountable," said UMWA Secretary-Treasurer Dan Kane, who was arrested in front of Peabody headquarters on Feb. 13.  "They're wrong. This dishonest scheme to cheat retired miners and their families out of the health benefits they earned is getting more and more attention – and the more we see, the worse it looks."

Patriot Coal declined comment on the UMWA's statements, said Janine Orf, vice president of investor relations.

"The objective of our reorganization is to make Patriot a viable company and save 4,000 jobs," Orf said. "All of our employees and retirees are being asked to make sacrifices to help Patriot successfully emerge from bankruptcy."

Peabody Energy did not immediately  respond for comment.

Who are these miners? Several of them met in Beckley on Feb. 22 to share their stories.

Terry Newsome also worked for more than 30 years as a miner and described his state of health as "real tore up." He retired from a Patriot operation.

"They're showing their appreciation by betraying me," Newsome said. "The worst thing that's happened since the Judas kiss is the betrayal of Peabody to us as coal miners. I've had no less than 20 work-related injuries."

He said those injuries include broken bones, contusions and hernias. He takes regular treatment for back pain.

Newsome said he worked for more than 60,000 hours in the coal mines under the impression he was promised his benefits.

"I think it's the duty of the court to call their hand on this. … We have on our side, truth," Newsome said. "You can look at everyone in this room here and we've all had problems. We all worked hard; we did the right thing. The truth can't be beat."

Shirley Inman, 69, worked at the Patriot Coal Hobet mine before retiring. Inman said she struggles with numerous health problems number of problems with her joints she says is due to her work on the mine.

She also has heart problems that have resulted in three stints in her heart and is a breast cancer survivor.

"I thought I was so lucky to get a job where I was promised a pension and a health card," Inman said. "If I don't have my secondary insurance, I'm not going to be able to afford what (Medicare) doesn't pay."

Joe Brown mined coal for more than three decades at Peabody Energy and struggles with pain he says came from working the mines.

"I want what the company promised me for spending them years down there mining coal for them," Brown said. "They promised health care and that's what I want. I don't want nothing extra."

Brown said all of the workers, current and retired, worked for their benefits.

"I'm going to do everything in power that I can do to help keep this insurance," Brown said. "Whatever it takes, I'm willing to do."

Rockefeller responded to Brown, and said he was amazed companies could look at something like health care and retirement benefits as one of the first things to go in a bankruptcy.

"Humans are fragile," Rockefeller said. "Corporations aren't."

Brown told Rockefeller he was hopeful and that he would fight "them all the way." He added that he hates to even think about being unable to afford the health care he needs.

Ronald Ball worked numerous jobs in the mine, starting he said "when I was a kid." He said he now has a spine stimulator installed in his back from a major work-related injury.

"I was hurting so bad it was hours before I could stop crying," Ball said.

Ball said there have been days he can't walk. But if he moves around for four or five hours he has to recoup on the couch for up to a week.

"You can't spend all of your life on the couch, or you don't have no life," Ball said. "I'm mad because they haven't kept their promise, but I'm even more mad because it's going to affect the older people worse than it is me. I've been fighting bullies all my life and I usually retreat before I start fighting. Well, I'm ready to fight."

Built to fail?

A prominent theme in the meetings was that everyone participating – miners, labor leaders and the lawmakers present – felt Patriot had been designed to fail and dump assets from Peabody. Now, a Temple University professor has added himself to that list.

A UMWA news release quotes a forthcoming study from Temple's Bruce Rader, professor of finance called "Designed to Fail: The Case of Patriot Coal." According to that work, Peabody transferred 10.11 percent of its assets to Patriot, but also left it with 40 percent of its health care and pension liabilities.

The UMWA said they asked Rader to look at Patriot Coal, but did not in any way compensate him for the report. 

By spinning off Patriot, Peabody escaped legacy liabilities including retiree health care and related experiences by "roughly $1 billion" while reducing expense and cash spending "in the neighborhood of $100 million," according to then-CEO Gregory Boyce. 

"The transaction enhances our focus on large, long-lived surface operations and significantly lowers liabilities," Peabody stated in its 2007 annual report. "BTU continues to enhance its focus on business opportunities in strong economies as we sculpt our portfolio to target the very best growth markets.

Patriot Coal also includes several former Arch Coal operations.

In his study, Rader warns of business principles that transfer "consequences of actions or agreement to the general public."

"When an individual (these days some define corporations as such) who assumes a business risk, can transfer the negative consequences of his risk to another entity but still reap the benefits, he will be inclined to excessive risk-taking, resulting in negative societal consequences," Rader wrote.

Rader added that pensions and benefits should not be considered luxuries but earned compensation.

"An individual who spends years or decades laboring for an employer has earned these benefits," Rader wrote. "Failing to honor these obligations is morally reprehensible."

Peabody has contended that Patriot was intended to thrive after the spin-off and that market conditions were what brought the company to bankruptcy. Rader strongly disputed that notion.

"The company's business model could only make money if coal was priced at or above record highs," Rader said. "The market for coal is a very cyclical market – even in the best of times. Weather, transportation costs, environmental regulations, competing energy products, etc adversely affect the coal market. It was unreasonable to assume that the price of coal would remain high and grow substantially higher."

In his study, Rader called upon federal authorities and the courts to not allow Peabody's transfer of Patriot.


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