How a retired Peabody miner found himself at the mercy of Patriot Coal’s bankruptcy plan

By TIM ROWDEN

Associate Editor

St. Louis – Carlyn Rehbein worked for 27 years in the coal mines of Peabody Energy. Now the 76-year-old retired miner from Mascoutah, Ill., has lung cancer and is facing the potential loss of his health coverage in the bankruptcy proceedings of Peabody spinoff Patriot Coal.

Rehbein, a member of the United Mine Workers of America (UMWA), never worked for Patriot, but found himself dependent on the company for his health care and pension benefits after Peabody spun-off the coal company in 2007.

The UMWA says Patriot was “designed to fail” in a bid to rid Peabody of its pension and health care obligations to union retirees.

Peabody, the world’s largest private-sector coal company, assigned Patriot approximately 43 percent of its pension and health care liabilities but just 11 percent of its productive assets.

Arch Coal did much the same thing when it created Magnum Coal in 2005. Patriot bought Magnum in 2008.

Now Patriot is in bankruptcy court asking a federal judge for authority to shed most of its health care obligations for some 22,000 retired miners and their dependents. Most of them, like Rehbein, never worked for Patriot. A full 90 percent worked for Peabody or Arch Coal.

“Peabody can’t do this to us,” Rehbein’s wife, LaVerne said. “My husband never worked for Patriot. His entire career was with Peabody. If Peabody gets away with this, there’s not one single union that can believe whatever their company is promising them. It’s just opening a whole door of bad things for anybody that belongs to a union.”

Rehbein, a member of UMWA Local 2412, worked as an electrician in the mines, putting in 21 years at Peabody’s River King Mine in Freeburg, IL, and six years at Peabody’s Marissa Mine in Marissa, IL. Both mines have since closed.

A THOUSAND CROSSES

Rehbein was too weak from the chemo therapy he is receiving to treat his lung cancer to travel to St. Louis last week for UMWA’s fifth rally here to protest Patriot’s bankruptcy plan. His wife came in his place and marched beside UMWA International President Cecil Roberts in the rain as the miners, active and retired, and their families marched from the Crowne Plaza Hotel at Fourth and Pine streets three blocks north to Keiner Plaza, across from Peabody Headquarters at Seventh and Market and streets, where they planted 1,000 white crosses in the grass.

The crosses were in memory of the 666 fatalities that have occurred at mines operated by Peabody Energy, Arch Coal and Patriot Coal or their subsidiaries since 1903. They also symbolized the active and retired miners, dependents and surviving spouses who will be at risk if Patriot Coal, Peabody Energy and Arch Coal succeed in their efforts to effectively eliminate contractually-guaranteed health care benefits.

“The corporate executives trying to get away with this outrageous scam tell us we should make decisions based on ‘fact,’ not ‘emotion,’” Roberts said. “Here’s a fact: If you take away the benefits retired miners and their spouses need for medicine, doctor visits and hospital care, they will become sicker and poorer. And they will die younger.”

FOURTEEN ARRESTED

Fourteen people were arrested at the rally April 16 for peacefully blocking the street in front of Peabody’s headquarters. They were released later in the day.

Roughly 2,000 miners, union supporters, faith and community leaders turned out for the rally. They included active and retired miners and their families from Illinois, Indiana, Kentucky, Ohio, West Virginia, Pennsylvania, Virginia and Missouri, as well as members of Unite-Here, the steelworkers, communications workers, Jobs with Justice, boilermakers, AFSCME, the Coalition of Black Trade Unionists (CBTU), postal workers and painters.

In addition to Roberts, UMWA International Secretary Treasurer Dan Kane, CBTU President Emeritus Bill Lucy, Illinois State AFL-CIO Secretary-Treasurer Tim Drea and Boilermakers International Industrial Sector Vice President Jim Pressley also spoke with the miners.

“The companies want to argue this case in bankruptcy court  – where they can hide behind their $1,000-an-hour lawyers  –  instead of in the court of public opinion,” Kane said. “No wonder they don’t want anybody to watch – because what they’re doing to sick, retired miners and their widows and widowers is just plain wrong.”

SHEDDING ITS OBLIGATIONS

Patriot filed for Chapter 11 bankruptcy protection on July 9, citing anemic coal demand and prices, increasing environmental liabilities and $1.6 billion in retiree health care and pension obligations.

The case is being heard in U.S. Bankruptcy Court in St. Louis because this is where Peabody, Arch and Patriot are headquartered.

In March, Patriot filed a motion with the court seeking authority to alter the union’s collective bargaining agreement to make changes to wages, benefits and pensions and to transition them into a voluntary employee beneficiary association, or VEBA.

A hearing on the motion was set for April 29 in St. Louis.

A NEW PROPOSAL

Patriot sent the UMWA a new proposal on April 11 offering the union a 35 percent equity stake in the reorganized company.

The company said its proposal would give the union stock in the reorganized company estimated to be worth hundreds of millions of dollars (if the company can survive) and allow the union to sell shares to generate “a substantial cash contribution” for a new trust fund to help pay its members’ health care and pension costs.

The proposal would allow Patriot to pull out of the current union health and welfare and pension plans and start new plans under the VEBA.

Roberts said the offer appeared to be “a step forward” by the company, but said there were still considerable problems with the company’s intentions to change the existing contract for active workers under the company’s bankruptcy proceedings.

“We are nowhere near a fair and just agreement regarding that part,” he said.