Future of workers uncertain as third-biggest US coal company declares bankruptcy

E.A. Crunden

E.A. Crunden Reporter, ThinkProgress

The third-largest coal company in the United States has declared bankruptcy, leaving the future of its more than 1,000 workers uncertain. The announcement is also the latest indicator that the faltering coal industry is spinning further into decline despite the efforts of President Donald Trump to save it.

Wyoming-based Cloud Peak Energy filed for Chapter 11 reorganization on Friday, a move that has been expected since at least the spring. The company has pointed to a weak market as a leading reason for its struggles, in addition to sluggish success in expanding exports. Officials said the company’s mines will continue to operate throughout the bankruptcy process; Cloud Peak operates two mines in Wyoming and one in Montana.

“While we undertake this process, Cloud Peak Energy remains a reliable source of high-quality coal for customers,” Cloud Peak President and CEO Colin Marshall said in a statement.

The company’s workers lack union protections. But even coal miners backed by unions are at risk — a ruling earlier this year allowed a coal company to abandon union contracts. And broader threats to federal funding for miner benefits are jeopardizing pensions for tens of thousands of workers.

Cloud Peak’s financial troubles reflect the broader realities of coal, which is being displaced by cheaper energy sources, including natural gas and renewables. Since 2015, major coal companies Alpha Natural Resources, Peabody Energy, Arch Coal, Mission Coal, and Westmoreland Coal have all declared bankruptcy amid falling profits and increasing concerns over long-term viability.

While that trend has continued through several presidential administrations, more coal plants closed during Trump’s first two years in office than during the entire first term of the Obama administration.

In total, at least 50 U.S. coal plants have shuttered under Trump as of this month, according to a Sierra Club report released last week. The uptick reflects market realities but it also comes despite the White House’s best efforts to revive coal.

Trump has strongly supported the coal industry since becoming president, going so far as to advocate for a controversial bailout of the struggling sector. While that plan has fallen by the wayside amid pushback, the administration’s larger backing has not. Documents obtained recently under the Freedom of Information Act (FOIA) show that the Interior Department has even altered federal endangered species protections in order to help the coal industry.

Meanwhile, workers on the ground are being severely impacted. In February, a judge ruled that bankrupt coal company Westmoreland could legally abandon its union contract obligations with United Mine Workers of America (UMWA). That decision has compromised the health care benefits and pensions once promised to hundreds of current and retired miners.

At the time of the ruling, a representative for UMWA told ThinkProgress that many of those impacted are sick and unable to work after years spent in coal mines, leaving them in need of health care.

Westmoreland’s workers are unionized, but that isn’t the case for Cloud Peak. Bill Corcoran, regional campaign director for the Sierra Club’s Beyond Coal project, said Monday that the Wyoming company’s approximately 1,200 workers lack union protections and that their future is uncertain following the bankruptcy news. As Cloud Peak has edged towards bankruptcy, Corcoran told ThinkProgress, the company’s workers have already endured the brunt of the fallout.

“[Cloud Peak] has typically slashed or eliminated health care benefits for their workers,” he said, pointing to a larger trend of coal companies cutting worker benefits while bolstering the bonuses given to executives in order to incentivize them to stay.

The impact of coal company closures on their workers has long been a concern for unions and coal communities, but the issue has gained heightened prominence recently. As climate change becomes a leading issue for the U.S. public, lawmakers have faced a conundrum over how to protect those most impacted by a shift away from fossil fuels — namely, workers.

Under the Green New Deal resolution proposed in February by Rep. Alexandria Ocasio-Cortez (D-NY) and Sen. Ed Markey (D-MA), coal miners and other impacted workers would see a “just transition,” one that would theoretically protect their livelihoods.

It has been unclear exactly what such a shift would look like, but unions and labor rights organizations have said a plan like this will be crucial to secure their support. Some unions have been skeptical of the Green New Deal precisely because they have not yet seen legislation that would guarantee the protections of current fossil fuel workers.

Meanwhile, outside of union protections nearly 100,000 coal miners are at risk of losing their pensions by 2022 or sooner as coal companies continue to edge towards bankruptcy. The average benefit provided by the federal Pension Benefit Guaranty Corporation (PBGC) is only around $600 a month, but current and retired miners say that amount is critical to their well-being. The PBGC is heading towards insolvency, with bipartisan efforts in the Senate to rescue the fund currently stalled.

Corcoran emphasized that it is unclear what might happen to Cloud Peak’s current workers and that it is hard to say how the company might proceed. But he noted that the current downward trajectory of coal is at odds with worker security.

Efforts by Trump and lawmakers supportive of the coal industry are also failing to address that long-term problem, Corcoran said, noting that they have steered away from proposals to retrain workers in the renewables sector, for example.

“The real question,” he said, “is how are we helping workers transition?”

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Reposted from ThinkProgress

Posted In: Allied Approaches

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