The United Mine Workers of America union said Feb. 13 that more than 1,000 active and retired coal miners and their families from Illinois, Indiana, Kentucky, Ohio and West Virginia, marched that day on Peabody Energy (NYSE: BTU) headquarters in St. Louis.
This protest is part of a continuing pressure campaign against Peabody over Patriot Coal, which Peabody spun off a few years ago in an IPO, with Patriot taking with it much of Peabody’s UMWA-related obligations. Patriot in July 2012 sought Chapter 11 bankruptcy protection and is currently trying to reorganize its finances and emerge from bankruptcy as a going concern.
Ten people were arrested Feb. 13 for non-violent civil disobedience in front of Peabody’s office tower in downtown St. Louis, including UMWA Secretary-Treasurer Dan Kane, the union noted. The rally, organized by the UMWA to protest “financial maneuvers” which threaten to cut off health care benefits to former Peabody Energy employees, was also joined by union and community supporters, including members of the UAW, the Coalition of Black Trade Unionists, and Jobs with Justice.
The event came a day after Patriot Coal executives filed a motion in the U.S. Bankruptcy Court in St. Louis, seeking $6m in “retention bonuses” for 120 “key executives” at Patriot Coal, while the company is demanding a cut-off of health care benefits to more than 22,000 retirees in desperate need of ongoing medical care, the union noted.
“Peabody executives may know how to wheel and deal and hire $900-an-hour corporate lawyers,” said Kane. “But they don’t know the United Mine Workers. We’re not going to abandon our retirees, who spent their lives working underground and now must have the benefits they were promised.”
“If I can’t get my medication for my heart disease, I won’t be around much longer,” said Shirley Inman, a retired member of UMWA Local 2286 from Madison, W.Va., who was among those arrested. “I’m a breast cancer survivor and I have coronary artery disease. Health care isn’t an option for me; it’s what I need to survive. I’ll do whatever it takes to make these corporate executives keep the promises they made – and if that means going to jail, so be it.”
Inman spent 18 years driving a coal truck for Arch Coal in West Virginia. Arch Coal also shed a lot of UMWA liabilities by contributing several of the initial mining operations in Central Appalachia of a Patriot Coal predecessor company, Magnum Coal.
Peabody assigned Patriot some 40% of its health care and pension liabilities but gave the new company only about 10% of its revenue-producing assets, and Arch Coal made a similar assignment of assets and liabilities, the union claimed. At the request of the UMWA, the case late last year was transferred from a New York federal bankruptcy court to St. Louis, closer to the homes of more than 22,000 retired mine workers who are former Peabody and Arch employees.
Both Peabody and Arch have indicated that they put these employee obligations into financially viable companies at the time, and that they bear no responsbility for the decisions and circumstances that led to Patriot’s Chapter 11 filing.
Patriot seeking court approval for executive retention plan
The union was referring to the fact that Patriot asked its bankruptcy court on Feb. 12 for approval of an executive retention plan, saying it has recently lost about 25 key people who left due to uncertainty about the future of the company and their jobs. Patriot is asking for approval of a Chapter 11 incentive plan (called the “2013 AIP”) and a critical employee retention plan (the “CERP” and, together with the 2013 AIP, the “Proposed Compensation Plans”).
Since its July 2012 Chapter 11 petition date, the Patriot companies have lost over 25 key employees through voluntary departures, including the Vice President of Kentucky Operations, the Vice President Controller, the Vice President of Human Resources, the Vice President of Sales, and the Vice President of Financial Planning & Analysis, the company said.
“Patriot is currently experiencing historically unprecedented levels of attrition among corporate employees,” it added. “Many departing employees, including mine foremen, managers, engineers, accountants, and attorneys, have expressly cited the lack of stability at Patriot as a reason for their resignations, often accepting lower paying positions at companies in less convenient locations in exchange for greater job security. A number of these critical employees explained that the lack of retention or incentive compensation at Patriot was an important factor in their decision to leave the company.”
Maximizing value of the bankruptcy estates of the Patriot companies will largely depend on Patriot’s ability to minimize the loss of additional critical people, the company added.
Further information about the UMWA’s efforts to protect retired miners is at FairnessatPatriot.org.