Lawyers for Alpha Natural Resources are asking a federal bankruptcy judge to allow the company to break its contract with the United Mine Workers union as part of an effort to reorganize its finances and survive the ongoing decline in the nation's coal industry.
On Monday, Alpha filed a petition with U.S. Bankruptcy Court in Richmond asking to be able to modify the company's obligations for retiree health care benefits. The company asked for a hearing to be held April 12 to address the matter.
Alpha said it needs to continue to slash costs to survive what it called "the historic collapse of the domestic coal industry," citing "a confluence of macroeconomic headwinds, regulatory obstacles, and competitive pressures" that have forced numerous bankruptcies and cost thousands of miners their jobs.
Company lawyers complained that they spent nearly $53 million on health care benefits for union employees last year and spent an average of 34 percent more on each union employee than each non-union employee. They listed about $872 million in accrued retiree health care obligations to union employees.
The UMW had warned last August, when Alpha sought bankruptcy protection, that it would fight efforts to gut its contract with the company and, earlier this year, objected to Alpha's plan to pay nearly $12 million in bonuses to top corporate executives.
UMW spokesman Phil Smith hinted Tuesday that the union would not honor contractual changes that Alpha makes, even if they come with the court's approval.
"Alpha can file whatever they want and the judge can order whatever he wants, but it's up to us if we work under those conditions," Smith said.
Alpha's latest bankruptcy filing said the union represents 610 active employees, or about 11 percent of Alpha's active workforce, and 2,600 of its retirees. The company recently closed one of its two active unionized mines in Greene County, Pennsylvania.
In a news release Tuesday, the union announced plans for more than 5,000 active and retired UMW members to march and rally on Friday in Waynesburg, Pennsylvania, in "a demonstration of solidarity as the union works to overcome a series of challenges confronting its members."
"We are fighting to get legislation passed in Congress to protect our retirees' pensions and health care," UMW President Cecil Roberts said. "We are confronting the ongoing bankruptcy of Alpha Natural Resources and its demand to slash wages, benefits, working conditions and more for our members.
"And we are in the last year of a national collective bargaining agreement," Roberts said. "Our members want to let everyone know that we are fired up, we are united and we are ready to do what it takes to meet all these challenges and prevail."
When Alpha filed for Chapter 11 bankruptcy, the company cited increased competition from low-priced natural gas, an oversupply in the global coal market and increasing government regulations. Other major coal producers, including Arch Coal and Patriot Coal, have sought bankruptcy protection to reorganize. The nation's largest coal producer, Peabody Energy, has warned that it could do likewise.
Reach Ken Ward Jr. at kward@wvgazettemail.com, 304-348-1702 or follow @kenwardjr on Twitter.