UMWA president, Patriot bankruptcy 'might be legally correct, but it's morally corrupt'

The ten sat in the road in front of Peabody Headquarters in protest. The rally marked the first hearing in St. Louis of Patriot Coal’s Chapter 11 bankruptcy case. According to a press release, the rally began with more than 750 United Mine Workers of America members and supporters chanting in front of the federal courthouse in St. Louis.

The group marched to the headquarters of Peabody Energy; a company that the union says created a ‘long-term scheme’ to shed health care and retirement liabilities.

UMWA president, Cecil Roberts hosted reporters in a press conference before the rally.

“Peabody did two things of this in 2007,” Cecil said, “they divested themselves of the obligation to deal with the United Mine Workers and they are attempting to divest themselves of an obligation and a commitment that they made to these people that work for them.”

In 2007, Peabody spun off most of its union based mines along with a subsidiary of Arch Coal, to form Patriot Coal Company. Patriot filed for bankruptcy last summer.

The bankruptcy jeopardizes benefits for more than 20,000 retirees and dependents, mostly in West Virginia, Indiana, Illinois, Kentucky and Ohio.

“People who never worked for Patriot are asking me how can Patriot going into bankruptcy have anything to do with my health care,” he explained. “Because Peabody in writing promised to provide health care to these pensioners upon retirement and they ceased doing it when they spun these companies off.”

The union believes that Patriot was a company created by Peabody and Arch Coal to fail.

Vick Svec Senior Vice President of Investor Relations and Corporate

Communications at Peabody Energy points to the success in the initial launch.

“What happened after their highly successful launch were some factors that affected a number of coal companies,” he said. “Certainly you had the global financial prices."

"You had low cost shale gas which brought about a a dramatic decline in shale gas and therefore an unprecedented drop in coal demand in the US last year, you had burdensome regulation by the US EPA that drove up Patriot’s environmental compliance cost."

"You had increases in safety regulations that raised compliance cost and you also had metallurgical coal prices for steel making that declined.”

Only two Peabody mines, one in Arizona and one in Illinois, are considered union mines. Svec admits that the majority of Peabody’s union mines were spun off to help create Patriot.

“Patriot was launched as an independent company more than five years ago," Svec said, "to allow that company to focus on the Eastern assets and a specialized markets as well as the mining methods and the crouches that go with that whereas Peabody since the early part of last decade has been focusing increasingly on growing our international platform.”

Lilly - Would you say that your company prefers to deal with employees without union members?

“As I say we’ve operated successfully under our subsidiaries have under both arrangements, Svec said. "We clearly prefer the direct communication and the broader flexibility that can often occur in a union free setting but we also recognize the rights of employees to select a union should they desire.”

In the bankruptcy filing, Patriot refers to pension and non-pension benefits for active and retired miners whose employers are no longer in business as
‘costly’.

“Financially I’ll be ruined I’ll literally will be ruined,” former miner Robert Blankenship said.

Blankenship, originally of Bluefield is one of those miners. He was promised benefits for life but like thousands of other miners, he could lose his worker’s compensation, pension and medical benefits.

Last fall, Blankenship shared the story of how he lost his legs in a mining accident and his concern.

“I’ll lose my home I can’t afford to pay my vehicle insurance and stuff. They’ll be a lot of things change in my life.”

“Who is going to hire me,” Blankenship said. "Who is going to hire a 60-year-old one legged man with no legs I mean. I’m a double amputee. I can’t go to work in the coal mines no more I sure ain’t going to go work in a taxi cab for no minimum wage.”

Union president Cecil Roberts says the way it stands now as of June 1 retirees would not have health care.

“Corporations pay lawyers a lot of money to figure out how to do things like this," Roberts said. "This might some how end up being legally correct but it’s morally corrupt.”

Roberts joined union members in September during a rally in Charleston. The union wanted the bankruptcy court case to be heard in the coalfields not New York. The case was moved to St. Louis.

Roberts says the union will continue to host rallies and demonstrations in support of its members.

In a statement Arch Coal says it sold two union mines and two nonunion mines to Magnum which eventually was sold to Patriot.