In the Coal Fields, Peabody Creates a Novel Way to Get Rid of Pensions

http://truth-out.org/news/item/13691-in-the-coal-fields-a-novel-way-to-get-rid-of-pensions-is-born

Friday, 04 January 2013 10:03
By Mike Elk, In These Times

Morgantown, West Virginia - If you are an individual struggling with debt, your options are limited. But if you are a coal company, you may be able to take advantage of a creative new strategy to shed your obligations.

Over the past decade, Peabody Energy and Arch Coal, the nation's largest coal companies, offloaded large amounts of retiree healthcare obligations to new companies that now face bankruptcy. The United Mine Workers of America (UMWA) says that the spin-offs were designed to fail in order to clean the companies' books of their retiree debts.

In 2007, Peabody Energy spun off a new company, Patriot Coal, which inherited 10 unionized mines in Kentucky and West Virginia. Along with the mines, Patriot took on $557 million in healthcare obligations to UMWA retirees. In 2008, Patriot bought Magnum, which had been similarly spun off from Arch Coal three years earlier. From Magnum, Patriot inherited another $500 million in obligations to retired miners, according to the UMWA.

Oddly, for a 5-year-old company, Patriot wound up with nearly three times as many retirees as active employees, more than 90 percent of whom never worked for the company. Overburdened by its debts, in July of 2012 Patriot declared bankruptcy.

In bankruptcy court, Patriot is seeking to be released from its pension and retirement obligations to some 10,000 UMWA retirees, covering more than 20,000 beneficiaries which total more than $1.3 billion.

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“Without healthcare a lot of us wouldn't survive; we wouldn't even afford medication," says retired Patriot miner Clifton Tennant. “There is no doubt in my mind they did this to get out of their obligations. I fulfilled my obligations to Patriot and I feel like I was a good employee.”

A local doctor who treats many Patriot retirees say he is deeply worried that bankruptcy could take away their healthcare. “I have some Patriot retirees and I have some of Patriot active miners--one of whom has put off retiring 'cause he doesn't know what he is going to do,” says Dr. Michael Schreoring of Fairmont, W. Va. "They work in one of the more dangerous occupations in the country. Many of them have medical problems related to that; it’s not just not fair. It’s going to be a tragedy for them. I find it disgusting that corporations can actually pull these kind of shenanigans.”

Many of the miners note that they have already made sacrifices to keep their retirement benefits. “I started in the mines in 1971,” says retired Patriot miner Bill Lemley. "In 1971 we had two weeks of vacation and the coal company told us when to take it. Thirty-five years later I still had two weeks of vacation and the company told us when to take it. We didn't strive for more vacation and the right to take it when we wanted it. We gave that up to keep our healthcare and keep our retirements.”

http://www.aflcio.org/Blog/Corporate-Greed/Working-Families-Protest-Patriot-Coal-s-New-Bonus-Plan

02/13/2013
Kenneth Quinnell

Patriot Coal filed a motion in the Bankruptcy Court of the Eastern District of Missouri to be allowed to pay $6 million to 120 senior executives, company managers and office personnel. The company's top six executives would receive no bonuses in the plan, but the bonuses are being condemned by working families and retirees the company is attempting to deny health care coverage.

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http://www.youtube.com/watch?v=AKCwwA_nsnA