These Corporations Have Raped the Land and Robbed the People

Another day, and another coal company is trying to rob its workers of their pensions and health plans.

On Monday, Alpha Natural Resources became the most recent coal company to file a petition with U.S. Bankruptcy Court.

They're asking the court to slash retiree benefits and tear up existing union contracts, worth nearly a billion dollars in payments to workers and retirees.

Alpha was crushed and forced to file for Chapter 11 bankruptcy last August when the price of coal futures fell to a 12-year low due to a global supply glut and falling global demand.

With May 16 set as the date that Alpha's assets will go to auction, Monday's filing is nothing less than a threat to the union workers: let Alpha walk away from the contract, or else.

Seriously, in Monday's filing the company's lawyers explained that "If such cost savings cannot be achieved globally, then the debtors (Alpha) may be forced to liquidate their assets, to the detriment of all stakeholders, including all union employees.".

This filing doesn't come as a surprise to anyone who's been paying attention to the coal industry recently, because this has become the standard endgame in Big Coal's playbook.

It's a big part of how the companies guarantee that they can deliver no-risk profits to shareholders and pay-off Wall Street lenders, and still manage to pay out millions to their executives in the middle of declaring bankruptcy.

Last year, Patriot Coal and Walter Energy both tried the exact same trick.

It's a playbook that the UMWA is familiar with, President Cecil E. Roberts wrote back in August that the Chapter 11 filing "appears to follow the same scripts as others we've seen this year: pay off the big banks and other Wall Street investors at the expense of workers, retirees and their communities.".

He's right.

Company lawyers are complaining that they spent nearly $53 million on health care benefits for union employees last year, and they listed around $872 million in accrued retiree health care obligations to union employees.

That's nearly a billion dollars that Alpha is trying to steal from its workers and retirees.

You see, Wall Street lenders have offered to forgive $500 million of debt in exchange for ownership of certain Alpha mines: but, Wall Street just isn't interested if they have to fulfill Alpha's legal obligations to workers.

This isn't a new fight, back in the 1980s Big Coal and its investors fought hard to get out of their obligations to retirees.

That fight lead to Senator Jay Rockefeller introducing (and George H.W. Bush signing) the Coal Act of 1992, requiring coal companies to pay for the lifetime costs of their retirees.

The Coal Act is based on the recommendation of the so-called "Coal Commission," which said that: "Retired miners have legitimate expectations of health care benefits for life; that was the promise they received during their working lives, and that is how they planned their retirement years. That commitment should be honored."

That's the law that coal companies like Alpha, Patriot, and Walter have all attempted to completely bypass, with the help of Wall Street lenders to set pro-corporate terms for bailing the companies out.

The Coal Act has been critical over the years to make sure that over 100,000 retired miners, along with their widows and dependents, get the benefits that they were promised in exchange for a lifetime of backbreaking and dangerous labor in the coalfields.

And it actually anticipated the fact that retirees might outlive the companies that employed them: it sets out a provision for "orphan retirees" to receive their pensions partly from interest generated from the Abandoned Mine Land Reclamation Fund.

And that makes some sense, because the Abandoned Mine Land Reclamation Fund is funded by a miniscule 35 cent-per-ton tax on coal production.

The problem is, the Abandoned Mine Land Reclamation Fund was set up as part of the Surface Mine Control and Reclamation Act of 1977, and it was unsurprisingly set up to ensure that companies are paying the cost of… reclaiming abandoned mine lands.

The whole point is to make sure that the companies pay for at least a little bit of the very expensive environmental costs of coal mining, presently and into the future.

So it really doesn't make any sense to take federal money that's dedicated to restoring the land that Big Coal pillaged, to pay off the workers who have been screwed by Big Coal's broken promises.

But thanks to Big Coal's friends in Congress, there's at least one bill in the House right now that aims to take even more money from the Abandoned Mine Land Reclamation Fund to pay off even more of Big Coal's broken promises to workers.

The bill has been understandably embraced by the UMWA, because it would at least guarantee that their members actually get the benefits and health care that they deserve.

But it forces a false choice: we can either pay for Big Coal's broken promises to workers, or we can pay to deal with the roughly half a million dangerous and toxic abandoned mines throughout the country (like the Gold King gold Mine that spilled three millions gallons of toxic mine waste water into Colorado's Animas river last August).

Either way though, federal and state governments are left to foot the bill for Big Coal's reckless exploitation of the land and the people.

It's time to put a stop to Big Coal's playbook of raping the land for short term profits and then robbing workers and retirees of their pensions to pay off Wall Street lenders.

And if lawmakers want to be pro-worker, we need legislation that ACTUALLY protects workers' health care and pensions, without holding the environment for ransom.

The federal government, and, thus, you and me, shouldn't be left to foot the bill for Big Coal's reckless pursuit of profits and callous disregard for people, communities, and the environment.

If lawmakers really want to protect workers AND their communities, they need to introduce legislation that actually holds the COMPANIES accountable for their contractual and legal obligations to workers.

Comments

Lloyd Lutterman's picture
Lloyd Lutterman 4 years 8 weeks ago
#1

America or United States of fascist...choose wisely

Legend 4 years 8 weeks ago
#2

Need to publish the CEO's earnings.

2950-10K's picture
2950-10K 4 years 8 weeks ago
#3

Geeez, tonight's blog sounds like another vulture capitalism story featuring Mitt Romney. The only difference being..... the vultures already own the company.

I assume the workers know who the company executives are, and where their mansions and yachts are located! In other words they know where much of the stolen retirement money is going.... My advice; "Occupy" .....block the roads near their homes, and access to the country clubs these criminals frequent. Call national attention to the injustice with Gandhi like passion.

Hephaestus's picture
Hephaestus 4 years 8 weeks ago
#4

This is just another accountancy "smoke and mirrors" fraud

The money in the pension and health funds do not belong to those from which it was deducted since it was created by the company

cccccttttt 4 years 8 weeks ago
#5

As long as workers are not on the board of directors of a company, the workers will be taken advantage of.

So says in effect a leading economist, Professor Wolf, at Democracyatwork.info

Recommend his weekly talks.

Note that Germany, one of the worlds leading economies, has a law that half the board of directors must be factory workers.

ct

wolfman's picture
wolfman 4 years 8 weeks ago
#6

Think Michigan couldn't get any worse? Read on. http://www.truth-out.org/news/item/35328-alec-backed-lawmakers-stymie-anti-fracking-and-pro-pot-ballot-initiatives

richinfolsom 4 years 8 weeks ago
#7

This was the story line in the 1980's Wall Street movie. Bankrupt a company and walk away with the pension account! Remember the Pilot who safely ditched in the Hudson? He and other pilots were screwed by the United Airlines fat cats when United filed BK, took the pension, and told everyone they need to take a huge reduction or the airline will go out of business.

A twist on too big to jail?

Willie W's picture
Willie W 4 years 8 weeks ago
#8

Just another example of how privatizing government would work out.

Aliceinwonderland's picture
Aliceinwonderland 4 years 8 weeks ago
#9

Rape and robbery are as American as apple pie. That is our legacy. Ask any indigenous person or black person, if you must.

MountainCatBob's picture
MountainCatBob 4 years 8 weeks ago
#10

It is always troubling when the courts transfer wealth from the poor to the rich by eliminating retirement benefits, especially after the kind of egregious mismanage that label the coal barons little more than thugs. But shouldn’t those who spent their lives building a company like Peabody or Alpha be more entitled to the benefits of a bankruptcy proceeding than those who cause the collapse? Certainly they have earned equity, as evidenced by the retirement benefits. Certainly their efforts were laudable, as evidenced by their long hours and years of dedicated labor. Certainly they have more to lose than the old, white, rich, men who stashed away tens and hundreds of millions of dollars over the years of operations. Certainly, they can ill afford to lose out, while the rich are merely inconvenienced. Even US courts still recognize this vestige of common law.

I say: let those who have a vested interest be bailed out, not just those who happen to own stock at this moment in time. Investors assumed the risk in order to make a profit. Workers didn’t agree to the same risk when they accepted retirement plans instead of cash up front.

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