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Another day, and another coal company is trying to rob its workers of their pensions and health plans.
On Monday, Alpha Natural Resources became the most recent coal company to file a petition with a US bankruptcy court.
They’re asking that court to slash retiree benefits and tear up existing union contracts, worth nearly a billion dollars in payments to workers and retirees.
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Alpha was crushed and forced to file for Chapter 11 Bankruptcy last August when the price of coal futures fell to a 12-year low due to a global supply glut and falling global demand.
With May 16 set as the date that Alpha’s assets will go to auction, Monday’s filing is nothing less than a threat to the union workers: Let Alpha walk away from the contract, or else.
Seriously, in Monday’s filing the company’s lawyers explained that “If such cost savings cannot be achieved globally, then the debtors [Alpha] may be forced to liquidate their assets, to the detriment of all stakeholders, including all union employees.”
This filing doesn’t come as a surprise to anyone who’s been paying attention to the coal industry recently, because this has become the standard endgame in Big Coal’s playbook.
It’s a big part of how the companies guarantee that they can deliver no-risk profits to shareholders and pay off Wall Street lenders, and still manage to pay out millions to their executives in the middle of declaring bankruptcy.
Last year, Patriot Coal and Walter Energy both tried the exact same trick.
It’s a playbook that the United Mine Workers of America (UMWA) is familiar with. President Cecil E. Roberts wrote back in August that the Chapter 11 filing “appears to follow the same scripts as others we’ve seen this year: pay off the big banks and other Wall Street investors at the expense of workers, retirees and their communities.”
Company lawyers are complaining that they spent nearly $53 million on health care benefits for union employees last year, and they listed around $872 million in accrued retiree health care obligations to union employees.
That’s nearly a billion dollars that Alpha is trying to steal from its workers and retirees.
You see, Wall Street lenders have offered to forgive $500 million of debt in exchange for ownership of certain Alpha mines: But Wall Street just isn’t interested if they have to fulfill Alpha’s legal obligations to workers.
This isn’t a new fight, back in the 1980s, Big Coal and its investors fought hard to get out of their obligations to retirees.
That fight lead to Sen. Jay Rockefeller introducing (and George HW Bush signing) the Coal Act of 1992, requiring coal companies to pay for the lifetime costs of their retirees.
The Coal Act is based on the recommendation of the so-called “Coal Commission,” which said that: “Retired miners have legitimate expectations of health care benefits for life; that was the promise they received during their working lives, and that is how they planned their retirement years. That commitment should be honored.”
That’s the law that coal companies like Alpha, Patriot and Walter have all attempted to completely bypass, with the help of Wall Street lenders to set pro-corporate terms for bailing the companies out.
The Coal Act has been critical over the years to make sure that more than 100,000 retired miners, along with their widows and dependents, get the benefits that they were promised in exchange for a lifetime of backbreaking and dangerous labor in the coalfields.
And it actually anticipated the fact that retirees might outlive the companies that employed them: It sets out a provision for “orphan retirees” to receive their pensions partly from interest generated from the Abandoned Mine Land Reclamation Fund.
And that makes some sense, because the Abandoned Mine Land Reclamation Fund is funded by a miniscule 35 cent-per-ton tax on coal production.
The problem is, the Abandoned Mine Land Reclamation Fund was set up as part of the Surface Mine Control and Reclamation Act of 1977, and it was unsurprisingly set up to ensure that companies are paying the cost of… reclaiming abandoned mine lands.
The whole point is to make sure that the companies pay for at least a little bit of the very expensive environmental costs of coal mining, presently and into the future.
So it really doesn’t make any sense to take federal money that’s dedicated to restoring the land that Big Coal pillaged, to pay off the workers who have been screwed by Big Coal’s broken promises.
But thanks to Big Coal’s friends in Congress, there’s at least one bill in the House right now that aims to take even more money from the Abandoned Mine Land Reclamation Fund to pay off even more of Big Coal’s broken promises to workers.
The bill has been understandably embraced by the UMWA, because it would at least guarantee that their members actually get the benefits and health care that they deserve.
But it forces a false choice: We can either pay for Big Coal’s broken promises to workers, or we can pay to deal with the roughly half a million dangerous and toxic abandoned mines throughout the country (like the Gold King gold mine that spilled three millions gallons of toxic mine waste water into Colorado’s Animas river last August).
Either way though, federal and state governments are left to foot the bill for Big Coal’s reckless exploitation of the land and the people.
It’s time to put a stop to Big Coal’s playbook of pillaging the land for short term profits and then robbing workers and retirees of their pensions to pay off Wall Street lenders.
And if lawmakers want to be pro-worker, we need legislation that ACTUALLY protects workers’ health care and pensions, without holding the environment for ransom.
The federal government, and, thus, you and me, shouldn’t be left to foot the bill for Big Coal’s reckless pursuit of profits and callous disregard for people, communities and the environment.
If lawmakers really want to protect workers AND their communities, they need to introduce legislation that actually holds these COMPANIES accountable for their contractual and legal obligations to workers.
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