The bankrupt coal firm that operates Wyoming’s Kemmerer mine told union officials that potential buyers will likely want to break the existing contract with miners, eliminating protection for current and retired workers, according to a letter provided to the Star-Tribune.
In an October proposal to the United Mine Workers of America, which represents the 286 Kemmerer miners as well as those at a number of other operations with Westmoreland Coal Co., the firm wrote that it wanted to remove a clause from the current contract that obligates any buyer to keep the wages, health benefits for retirees and other working conditions agreed to by the company and the union.
“As you know, [Westmoreland] had commenced a marketing process and plans to sell the Kemmerer mine,” the company’s legal counsel wrote on Oct. 23. “[Westmoreland] has obtained initial bids from potentially interested third-party buyers, none of which indicates a willingness to leave the current Kemmerer [contract] in place.”
A member of the Kemmerer miners’ union provided the letter to the Star-Tribune.
The United Mine Workers of America is fighting Westmoreland on this point and rebuffing other asks from the company in negotiations with the union, like cutting medical benefits for retirees and their dependents from the contract. The company suggested replacing benefits with “creative alternatives … provided these are economically achievable in light of the company’s situation.”
A call to Westmoreland’s headquarters in Colorado Springs was not returned by press time Friday. The company noted in letters to the union, included in court documents, that the difficult coal market has forced the company to this end.
Westmoreland’s chief financial officer, Gary Kohn, announced his resignation for personal reasons last week. In addition to his salary, Kohn was paid $1.2 million in incentive bonuses in the year leading up to bankruptcy, according to court documents. The company also recently asked the bankruptcy judge to allow retention bonuses to management employees.
Mike Dalpiaz, vice president of the UMWA District 22 that represents Kemmerer, said the company’s failure was due to bad business decisions rather than the market.
“They don’t know how to mine coal,” he said.
Westmoreland filed for bankruptcy in October, citing the troubled coal market in the U.S. Demand for coal has dropped dramatically in the country as natural gas fired-power has become the dominant source for electricity, due to sustained low prices.
In 2016, the narrowing market combined with company debt to push Wyoming’s largest coal producers into bankruptcy. Peabody Energy, Arch Coal and Alpha Natural Resources all filed for Chapter 11 bankruptcy protection. Nearly 500 miners were laid off in Campbell County in a single day from both Peabody and Arch. Miners in the Powder River Basin are not represented by unions.
Westmoreland stands somewhat apart from the trend observed in the coal market. Its strategy has been different. The Kemmerer mine, for example, is the sole provider of coal to Rocky Mountain Power’s nearby Naughton coal plant. Other Westmoreland mines are also mine-to-plant operations, providing some insulation from the troubled market that Powder River Basin mines are competing in.
The Kemmerer mine has been represented by the United Mine Workers of America for 107 years, through multiple changes in ownership. Westmoreland bought the mine in 2011 from Chevron Mining Inc.
In each sale, the language obligating buyers to honor the union contract was included, Dalpiaz said.
Miners, particularly retirees, have pushed back on Westmoreland’s attempt to cut benefits and pensions. More than a dozen former miners sent letters to the bankruptcy court in Houston, spelling out the importance of that income and support in their old age. Many said they had worked at the mine for decades before retiring.
Dalpiaz said most retirees continue to participate in the union after retirement. The company’s contracts — unusual in most bargaining agreements — always include protections for both current and retired workers, he said.
“We’re going to protect them,” Dalpiaz said of the retired miners. “A retiree is as valuable to us as an active guy. If it wasn’t for the retirees those active guys wouldn’t have a job.”
The union is organizing picket lines at Westmoreland’s headquarters in Colorado Springs. They are also sending miners down to Houston next week to attend court hearings.
“We are not a bashful bunch of people,” Dalpiaz said. We’ve dealt with more of these coal bankruptcies in the last 15 years than we want to think about. We will fight this every single step of the way.”