CHARLESTON, W.Va. -- On July 28, I stood in the hot sun in the Kanawha State Forest with about a dozen of my friends, all of us part of the RAMPS campaign to end mountaintop removal. We were facing about 100 miners and their supporters who were standing across the road from us, carrying "Friends of Coal" signs, and yelling at us. In between us there were a lot of West Virginia State Troopers. It was a tense moment.
But when people perceive that their livelihoods are slipping away, it is bound to be tense, and as much as we were able to have a dialogue that day, one of the last men to leave the Friends of Coal rally stopped and said: "We're peaceful for now, but we won't be if you trespass."
Coal companies have done a masterful job of portraying "tree huggers" as the enemy of coal miners, and they sponsor and coordinate these counter-demonstrations, turning unfortunate situations into potentially explosive ones. This has shifted some of the attention away from what executives are doing to miners and their families.
As we were standing there in the Kanawha State Park, Patriot Coal had already filed for Chapter 11 bankruptcy with the hopes of reducing its pension "liabilities," as Mark Schroeder, the company's chief financial officer, said in a sworn statement. He explained that the company was responsible for three times as many retirees as current employees, which created a "mismatch" between the company's "legacy costs" and its "ability to generate revenue." The company's viability, he continued, depended on its "ability to achieve savings with respect to these liabilities."
In the world of finance, pensions are "liabilities." I say that pensions are not gifts from companies nor are they future compensation that companies must dig through their pockets to somehow raise the money to meet. Pensions are deferred compensation that employees earn every day that they are on the job, and once companies agree to pension plans in a contract with their employees, they have a responsibility to appropriately finance those pension funds starting that day. Also, it is not like Social Security, where the size of the current workforce compared to the number of current pensioners is relevant. So when Schroeder pointed out that there are three times as many retirees as current employees, that is a specious argument.
In its bankruptcy filing, Patriot Coal's lawyers claim that the company is struggling to compete with cheap natural gas and facing "more burdensome environmental and other government regulations." So I guess that all the tree huggers including me are to blame and not coal industry executives, right?
UMW President Cecil Roberts says otherwise. He says that Patriot is a "house of cards" that Peabody Energy created to "get out of its obligation to pay for the pensions and health care of thousands of people who spent their lives working for Peabody." Unfortunately for coal miners and retirees, bankruptcy has offered companies a convenient way to shed those "liabilities" and "costs."
CHARLESTON, W.Va. -- On July 28, I stood in the hot sun in the Kanawha State Forest with about a dozen of my friends, all of us part of the RAMPS campaign to end mountaintop removal. We were facing about 100 miners and their supporters who were standing across the road from us, carrying "Friends of Coal" signs, and yelling at us. In between us there were a lot of West Virginia State Troopers. It was a tense moment.
But when people perceive that their livelihoods are slipping away, it is bound to be tense, and as much as we were able to have a dialogue that day, one of the last men to leave the Friends of Coal rally stopped and said: "We're peaceful for now, but we won't be if you trespass."
Coal companies have done a masterful job of portraying "tree huggers" as the enemy of coal miners, and they sponsor and coordinate these counter-demonstrations, turning unfortunate situations into potentially explosive ones. This has shifted some of the attention away from what executives are doing to miners and their families.
As we were standing there in the Kanawha State Park, Patriot Coal had already filed for Chapter 11 bankruptcy with the hopes of reducing its pension "liabilities," as Mark Schroeder, the company's chief financial officer, said in a sworn statement. He explained that the company was responsible for three times as many retirees as current employees, which created a "mismatch" between the company's "legacy costs" and its "ability to generate revenue." The company's viability, he continued, depended on its "ability to achieve savings with respect to these liabilities."
In the world of finance, pensions are "liabilities." I say that pensions are not gifts from companies nor are they future compensation that companies must dig through their pockets to somehow raise the money to meet. Pensions are deferred compensation that employees earn every day that they are on the job, and once companies agree to pension plans in a contract with their employees, they have a responsibility to appropriately finance those pension funds starting that day. Also, it is not like Social Security, where the size of the current workforce compared to the number of current pensioners is relevant. So when Schroeder pointed out that there are three times as many retirees as current employees, that is a specious argument.
In its bankruptcy filing, Patriot Coal's lawyers claim that the company is struggling to compete with cheap natural gas and facing "more burdensome environmental and other government regulations." So I guess that all the tree huggers including me are to blame and not coal industry executives, right?
UMW President Cecil Roberts says otherwise. He says that Patriot is a "house of cards" that Peabody Energy created to "get out of its obligation to pay for the pensions and health care of thousands of people who spent their lives working for Peabody." Unfortunately for coal miners and retirees, bankruptcy has offered companies a convenient way to shed those "liabilities" and "costs."
In 2005 for example, United Air was able to unload $3 billion in pension "liabilities" through Chapter 11 restructuring, and some retirees saw their payments fall by 50 percent. That corporation then joined a long list of airlines and steel mills whose pension plans have been taken over by the Pension Benefit Guaranty Corporation, a U.S. government agency, which means that taxpayers like you and me are partly footing the bill.
But I guess it's tough all over. Then again, according to the St. Louis Business Journal, Peabody Energy posted profits of $957 million in 2011, and the St. Louis Post-Dispatch reports that Peabody CEO Gregory Boyce received more than $10 million in total compensation last year. He made more money in one year than I could make in two or three lifetimes of teaching history. And if Boyce loses his job with the company after a change in leadership, he will get a payout of more than $13 million.
I do not begrudge people for getting rich. But when they earn more than 200 times what a worker makes, then the system is broken. And when they earn that money by eliminating such "liabilities" as miners' pensions that the miners worked decades to earn, it is criminal.
I wonder what would have happened if RAMPS had rented one pavilion in the Kanawha State Park and the top executives of Peabody Energy had rented another. I would like to think that if the miners had to choose which one to protest, that they would have given the bosses who are getting rich a piece of their mind.
As I have protested mountaintop removal, demanding that West Virginia enforce its regulations, I have faced many miners whose jobs will be affected. I have heard what they and their families think of me. I have seen the pain, fear and sometimes hatred on their faces. But I doubt that the CEOs and the CFOs of Patriot Coal and Peabody Energy will ever have to stand under the hot sun face to face with the workers and retirees after having cut the "liabilities" that were their pensions.
The real struggle is not between the tree huggers and the miners. It is between the people and the outside corporations that will exploit the land and the people and leave nothing behind, not even pensions. That is one of the reasons I believe in working for a sustainable economy for West Virginia now.
Martin is an assistant professor of history at Chatham University.
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