Most Americans realize that coal companies have
been contesting the decisions of federal regulatory
agencies. But many do not see the infighting that
has occurred between mining executives and their
labor unions, which have a long and painful history
that centers on working conditions and job security.
The two separate dynamics have converged in what is
known as Patriot Coal versus the United Mine Workers
of America. In this case, the company is trying to
emerge from bankruptcy and is asking workers for a
$150 million in concessions, which include cuts in
fringe benefits, especially health care-related ones
to retirees; at least 1,700 current employees and
23,000 former workers and their dependents would be
affected. Those promises, they say, were rewarded to
them after working in underground mines and after
taking numerous risks.
In Late May, a federal judge ruled in favor of
Patriot Coal, saying that while the decision was a
difficult one, the company had to get concessions.
Without that, it would die and take all of its
workers with it. As such, the coal company has the
authority to begin making the necessary cuts on July
1. However, it has said that it will continue
discussions with the labor unions to try and reach
an amicable resolution. Labor has agreed to those
talks but it has also threatened a strike before
month’s end as a way to gain leverage.
“A strike would put the company on a path to
liquidation, which is the worst possible outcome for
UMWA employees and retirees,” says Ben Hatfield,
chief executive of
Patriot, in a formal statement. “Patriot’s
unionized work force would be left with limited job
opportunities in a difficult coal market, and our
UMWA retirees would likely be left with zero
healthcare coverage.”
Hatfield goes on to say that through negotiations,
he would hope that the resulting wage and benefit
package would reflect the regional market
conditions. But he is saying that the current labor
union’s proposal would increase Patriot’s losses by
more than $40 million per year for the next two
years, underscoring the point that Patriot won the
federal court case that is now on appeal.
In an effort to keep an ailing sector alive, Senator
Joe Manchin, D-WV, says that the coal industry is
committed to commercializing
next-generation coal technologies. Jobs and fuel
diversity are at stake, especially in his state that
is plush with coal revenues.
‘Robber Barons’
But that acquiescent tone may not suffice: Alpha
Natural Resources, Arch Coal and Peabody have all
taken a thumping. Patriot Coal, spun off by Peabody
in 2007, is in struggling to emerge from bankruptcy.
All are active in Appalachia. And while those
companies blame federal regulations for part of
their woes, they acknowledge that a
declining reserve base there in combination with
abundant and inexpensive shale gas are also
contributing to the new energy paradigm.
What to do? Patriot is calling the shots now that it
has a court victory under its belt. But it realizes
that forcing massive cuts in benefits programs must
be a mutual decision, to the extent possible.
Discussions are must. So is avoiding a strike.
But the mine workers' president,
Cecil Roberts, is accusing Patriot of awarding
bonuses to hundreds of its executives and managers
while miners are trying to figure out how to pay the
bills. It’s all led to the use of rhetoric that has
been bandied about for decades, with one local
politician falling in line and calling the coal
executives “robber barons.”
Coal companies, for instance, have a reputation
of coming into rural communities and providing jobs
and wealth -- as long as the natural resources are
there for the mining. But when they dry up, the
businesses pull up stakes and go home, taking their
wealth with them. The towns are subsequently left
destitute while the ill-will permeates. Meantime,
many of the locals will remain jobless, and
drug-addicted.
“This has become a country by, for and of the
corporations,” adds
Kentucky AFL-CIO President Bill Londigran.
It’s a classic labor dispute, except this time the
company that is trying to exact a deal is actually
in bankruptcy. Some tense negotiations will take
place in the coming weeks between Patriot and the
UMWA, which will no doubt get the short end of the
stick here. But it may be the only way that its
members will continue to have jobs in a coal market
that is filled with hardships.
The broader question, of course, is what will happen
to the industry during this period of competitively
priced natural gas and tougher emissions
regulations? The coal sector’s hardline posture may
no longer work in these instances, if the past two
presidential elections are an indication. If so,
coal groups need to focus on the funding and the
building of next-generation technologies to keep
their product relevant, and their labor force
gainfully employed.
EnergyBiz Insider has been awarded the Gold for
Original Web Commentary presented by the American
Society of Business Press Editors. The column is
also the Winner of the 2011 Online Column category
awarded by Media Industry News, MIN. Ken Silverstein
has been honored as one of MIN’s Most Intriguing
People in Media.
Twitter: @Ken_Silverstein
energybizinsider@energycentral.com
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http://www.energybiz.com/article/13/06/labor-dispute-highlights-coal-s-darkest-days