Paul J. NydenThe Charleston Gazette
May 21, 2013
(MCT) CHARLESTON — A new report criticizing Arch Coal and Peabody Energy for creating Patriot Coal was released Tuesday by two groups of religious leaders — Interfaith Worker Justice and Religious Leaders for Coalfield Justice.
More than 23,000 working and retired miners, and their spouses, could lose health-care benefits, the report warns, especially in the wake of Patriot’s recent bankruptcy filing.
“Schemes from the Boardroom: The War by Arch and Peabody On the Aging, Ill and Disabled” argues the two major coal companies moved their union workers to Patriot Coal to avoid paying health-care and other retirement benefits.
Since most of those workers had already retired from Arch or Peabody, very few ever worked a day for Patriot, the report states. The spin-off of union mines by Arch and Peabody shifted $1.6 billion in liabilities onto Patriot Coal, the report states.
“We are deeply concerned about the future of coal miners,” said Ted Erickson, lead author of the report and a retiree from the Homeland Ministries staff of the United Church of Christ.
“Peabody and Arch have engaged a nonstop battle against collective bargaining,” Erickson said during a telephone press conference. “I have seen them undermine the right to negotiate wages and benefits.”
Father John Rausch, executive director of the Catholic Committee of Appalachia based in Stanton, Ky., said, “When we think of being American, we think about fairness. But through manipulation of the law, some people exercise power over the workers.
“Peabody and Arch promised to give health benefits to their workers. Then, through manipulation and bankruptcy laws, they may be able to dump their responsibilities from themselves onto another company, which goes under. Peabody and Arch should continue to have a responsibility to those workers.
Patriot Coal was founded on Oct. 31, 2007, when Peabody Coal sold all its union operations east of the Mississippi to the newly created company. In 2008, Patriot bought Magnum Coal, a company that has taken over the union mines once operated by Arch Coal.
U.S. Bankruptcy Judge Kathy Surratt-States has until May 29 to decide if Patriot’s bankruptcy plan, including cutting benefits for workers and retirees, is acceptable.
“Patriot filed for bankruptcy last July as a result of one the sharpest coal market declines in decades, increasing regulatory and environmental cost burdens, and unsustainable payments for legacy obligations,” said Janine Orf, vice president of investor relations for Patriot. “Patriot is working to make the changes necessary to emerge as a viable entity for the benefit of all stakeholders, while saving more than 4,000 jobs.
Kim Link, an Arch Coal spokeswoman, noted that Arch did not directly spin off subsidiaries to Patriot. Instead, Arch sold the subsidiaries to Magnum Coal, which was then sold to Patriot by its owners.
“This is a very challenging time for the U.S. coal industry, and we empathize with the many people who have been affected by the market downturn,” Link said. But, she said, “Arch Coal had no ownership interest in Magnum and was not involved in the formation of Patriot or its decision to purchase Magnum.”
Peabody spokesman Vic Svec said the UMWA is making a “desperate attempt to rewrite history. Patriot was highly successful following its launch more than five years ago with significant assets, low debt levels and a market value that more than quadrupled in less than a year.”
The company’s acquisition of Magnum Coal, Svec said, added to “a series of other unforeseen events,” led to Patriot’s downfall.
“Peabody has lived up to its obligations and continues to do so, Svec said. “The proper process for deciding such issues is through the bankruptcy court — not the court of public opinion.”
The Rev. Jim Lewis, an activist and former rector at St. John’s Episcopal Church in Charleston, said, “Coal miners who jeopardize their own health by going into the mines are now being thrown under the bus. The actions of Patriot Coal could deny them health care.”
The two religious groups, Lewis said, are looking “for people from the religious community who are willing to stand up…. We hope this document will trigger more involvement from the religious community.”
The groups are planning to host a prayer vigil at 1 p.m. Thursday in front of the coal miner’s statue located between the Capitol and the Culture Center on state Capitol grounds. The vigil will be sponsored by the two groups that published the report, as well as the United Mine Workers of America.
Reach Paul J. Nyden at firstname.lastname@example.org or 304-348-5164.
(c) 2013 The Charleston Gazette (Charleston, W.Va.)
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