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Peabody, Arch to blame for benefit losses: UMWA

UNITED Mine Workers of America president Cecil Roberts has said the body will do "whatever it tak...

Donna Schmidt

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The large industry union is meeting this week with those impacted by Patriot Coal’s Chapter 11 bankruptcy filing in July.

The UMWA held the first of two informational meetings in Evansville.

The gatherings were organized to provide union workers with an update on proceedings as well as present additional information regarding how miners and their families will be affected.

“This union has never backed away from a fight to preserve what our members and retirees have earned and we’re not going back away now,” Roberts said inside The Centre in the populous mining town.

He wasted no time in placing blame squarely on the shoulders of the company that first created Patriot in 2007 as a spin-off company – Peabody Energy.

“Patriot is a company that was set up to fail so that two of the biggest coal operators, Peabody Energy and Arch Coal, could try to walk away from their contractual obligations,” Roberts said.

“We will not stand idly by and watch our members pay the price for corporate greed.”

He said Arch Coal was included because the Missouri-based company spun off its West Virginia union operations in 2005 to create Magnum Coal.

The mines’ long-term obligations went with that turn, Roberts said.

Just 18 months later, Peabody made a similar move, spinning off all of its complexes east of the Mississippi River into Patriot.

That collection of mines also included UMWA-represented crews.

“Included in that spin-off were Peabody’s pension and long-term health care obligations to its retirees,” Roberts explained.

“The two spin-offs then merged, resulting in a weaker Patriot Coal with large legacy obligations and below-market coal contracts in the face of an industry-wide recession.”

The UMWA estimates about half of Patriot’s workers, or about 2000 active individuals, are union members.

Additionally, those retirees receiving Patriot Coal health care are estimated to exceed 10,000.

“Patriot has already indicated that they intend to use the bankruptcy process to seek significant concessions,” Roberts said.

“This meeting today is the kick-off of what we anticipate will be a long-term campaign to fight for fairness at Patriot.”

Patriot officials have made no public comment on the bankruptcy beyond the initial announcement and an ILN request for comment about the UMWA meetings was not returned.

Roberts, meanwhile, told the dozens in attendance at the Indiana meeting that the union felt Peabody had an obligation to union retirees who left the industry before the Patriot spin-off.

“Ninety per cent of these people never worked a day for [Patriot],” he said.

The official noted the retired miners were considered to be unsecured creditors in the bankruptcy case, so it was not known how the union could force Peabody to provide the benefits to that group.

“I'm not sure if it's legally enforceable in the bankruptcy process," Roberts said, according to the Evansville Courier-Press.

“Some say we don't have a great deal of legal standing … but we have a great deal of moral standing.”

Another UMWA meeting will be held today in Charleston, West Virginia.

Patriot filed for bankruptcy protection on July 9 and has since received bankruptcy court approval for a $US802 million debtor-in-possession finance package.

The company blamed cancelled contracts, rising costs and plummeting coal prices for its woes.

It tried reducing production but that proved unsuccessful.

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