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X-ray of lungs with black lung.
Black lung
Peabody Energy, the largest coal company in the world, decided a few years back that it was inconvenient to pay its retiree health care obligations. So it spun off a new company, Patriot Coal, giving Patriot Coal 13 percent of Peabody's coal and 40 percent of its health care costs, in the form of thousands of retired coal miners with the black lung and other costly conditions they got working for Peabody. Then, as if that wasn't enough, Patriot went ahead and acquired another spin-off company with serious health care liabilities. Then it decided to declare bankruptcy, because after all, it had a lot of debt and not much in the way of assets.

And now a judge has said Patriot Coal can just dump its retiree health benefit obligations, because screw it, those miners didn't deserve such good benefits anyway and what else is Patriot going to do? It's not like there's a guarantee anyone can make Peabody pay up for its obvious ploy to save itself those retiree health care costs, whereas union contracts are, to bankruptcy Judge Kathy Surratt-States, so much toilet paper. The health benefits being jettisoned were going to people like Alana Green:

"You take a car and go underground, like a trolley," said Green. "The mines are very damp and cold and wet, with a low ceiling. The only lamp you have is on your head, and if you turn that out, you can't even see the hand in front of your face. In the wintertime, you go down in the dark and come back in dark."

Green, a grandmother of six, will be 59 years old next month. She suffers from Lyme disease, and her time in the coal mines has left her with black lung and chronic back problems, she told HuffPost.

The Patriot case is about retiree health benefits, but maneuvers like this are also a way pensions have become so rare—companies have devised a staggering array of ways to get out of their pension obligations, with spinning off a company designed to fail being one of those ways. This is why pensions have become so rare. Companies have methodically shed them, and in many cases, workers didn't have unions to fight for them and draw attention to what was happening. Then by the time the companies came for the strongest contracts, people who'd lost their pensions years before were willing to sit by, going, "I don't have a pension, so why should they?"

Yes, I'm a little pissed today. Continue reading below the fold for more of the war on workers.

  • Walmart striker fired six months after solo walkout. Not because of her activism, mind you. No, just another of those coincidences that so often befall workplace activists, in this case after nearly eight years on the job.
  • Nice priorities Pennsylvania Gov. Tom Corbett and Philadelphia Mayor Michael Nutter have got going.
  • Bikeshares are good things for the environment and people's fitness levels. Unfortunately, Alta Bicycle Share, the company responsible for bikeshare programs in Washington, DC, and New York City, isn't living up to its responsibilities to its workers, Sarah Jaffe writes:
    According to Swenson, he was hired with the expectation that he would become a full-time bicycle mechanic and that he would receive health benefits, but the benefits didn't materialize. The warehouse where he and the handful of other mechanics worked was housed next to a concrete mill in a Superfund site. The hard work and the silica dust from the concrete made him concerned about when his healthcare would kick in. When he never got a satisfactory answer from the company, he began researching Alta's contract with the city.

    “I found out that I was entitled to health benefits, based on federal law, that my employer had agreed to, that I had been paid less than they had agreed [in their contract] to pay me, again according to this federal law,” he says.

  • Fast food workers speak out.
  • Most disgusting reality show ever?
    A reality show set at various small companies, it’s part docuseries, part gauche game show. At each office, the bosses cede authority to the workers, who decide whether to punish their colleagues with pay cuts, demotions or firings.

    It bears repeating: This is a show in which people might lose their jobs.

    For companies, this is a victory, reinforcing the idea that what’s wrong with the American workplace is the workers. The problems discussed aren’t about the structure of the company, or the state of its chosen industry and market, or the economy as a whole. Employees are the enemy here, bolstering the fanciful and generally wrong idea that one bad apple spoils the lot.

  • Workers at Brooklyn's Guitar Center faced dropping commissions after Bain took it over. Now, they've unionized.
  • Meanwhile, in Queens, New York, carwasheros have their first contract after unionizing and will get pay raises, safety equipment, and better procedures for fair treatment on the job.

Originally posted to Daily Kos Labor on Sat Jun 01, 2013 at 10:55 AM PDT.

Also republished by Daily Kos.

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Comment Preferences

  •  When companies default on pension obligations (16+ / 0-)

    shouldn't workers be able to seize ownership of the company's assets?

    Process defines product.

    by Troubadour on Sat Jun 01, 2013 at 11:02:12 AM PDT

    •  Yeah, but the assets they would have... (12+ / 0-)

      ...access to would be the spin-off's, which would be decimated by design.

      Float like a manhole cover, sting like a sash weight! Clean Coal Is A Clinker!

      by JeffW on Sat Jun 01, 2013 at 11:03:38 AM PDT

      [ Parent ]

    •  In bankruptcy... (3+ / 0-)
      Recommended by:
      marsanges, Odysseus, Troubadour

      ...there are of course generally various creditors in line to take a piece of the corporate assets.

      I do wonder why private sector unions didn't long ago demand that the union manage the pension/retiree healthcare funds. The employer would give the union pension fund $X for each hour worked or whatever (based on contract negotiations). Then the funds would be insulated from the failure of the employer and the union members, through voting for union leadership, could decide how to invest and, within the law, the level of reserves needed.

      The companies obviously shouldn't be able to shed their responsibilities, but the reality is that many companies that a worker works for will fail during the employee's lifetime and if there are insufficient reserves in the pension fund, the employees end up screwed.

      By always moving the responsibility to the union, it removes the ability of the employer to 'raid' the fund (by, for example, shell games like described here or via unrealistic investment return expectations - which is a bubble waiting to burst) to prop up their profit. This natural conflicts that employers have in these matters dooms the employer managed scheme.

      As well, sometimes this sort of thing happens when there is no intent to allocate pension liability to "bad spinoffs" (sort of like the "bad banks" shell game). In these cases, a company decides they are too diversified and split off into multiple companies and, inevitably, a few of these now more specialized companies miss a technology shift or screw up otherwise and end up going out of business. The 'union always owns and manages pension fund' would also address these cases.

      It also seems to me this would also increase the value of belonging to a union and help boost their attraction to workers.

      •  shell game exemption? (1+ / 0-)
        Recommended by:

        Before the fact of creation of the spin-off corporation. What entities are empowered to approve the creation of a new spin-off business that has such an outrageous imbalance of assets to liabilities?   Do any guidelines or regulations exist?

        After the fact.  Could bankruptcy judges (or other trier of fact) have discretion to declare that the separate corporate entities are still really a single entity for purposes of allocating assets in bankruptcy, when the parent corporation has used this ploy to avoid its long-term liabilities?  

        I thought corporations were fictitious creations of the state (notwithstanding Citizens United).  Couldn't the incorporating entity or the bankruptcy judge include in their decision-making a weighing of the public interest in state-created entities not dumping their liabilities on the public?  

        Naive, here.  It just seems SOME balance and discretion should be allowed somewhere in the process.

        •  Shell game exemptions... (0+ / 0-)

          ...make sense - just like, in general, if you do something whose sole purpose is to avoid taxes and makes no sense business wise, the IRS looks very closely.

          However, "after the fact" enforcement would be difficult and make it harder for companies to merge/split/acquire each other (small and large) as there would be an unknown liability in the future.  This additional hurdle would discourage what is often good job creating, economy improving activity. Some sort of limited "look back" period would be necessary to make it work at all -- and that period would have to be pretty short which would make it less effective.

          It would seem review and enforcement needs to happen at the time of the transaction to split/spin/merge/acquire. Such review would also put a bit of a damper on doing business, but a more predictable and quantifiable hurdle.

          Such review would require, unfortunately, a lot of speculation. Consider if GE decided that its wind turbine group along with 2000 employees would be more competitive and nimble if it were spun off as its own company. The determination of if this was a "shell game" would be dependent on speculation  if the wind turbine market was expanding or contracting (a matter of much debate) and hence if the spinoff was a strong company able to cover the debt assigned to it or if was a "sure to fail" company that might be being created just to shed debt. Of course, the long term viability of wind turbines is highly debated, so the review would require a lot of speculation.

          One could require that the "original" company keep all the retiree obligations incurred based on employee hours worked for that company. However, then the temptation would be to create "good" spinoffs and leave the parent a desiccated corpse with underfunded retiree obligations.

        •  Confused as well. (0+ / 0-)

          I can not believe that it is legal for a company to sell off liability to other companies. With the full knowledge that that the new company would not be able to meet those liabilities. Are there any laws that would prevent this obvious fraud to get out from under the healthcare obligation of it's retired workers. Legal contracts were signed. This is blatant fraud on the retired workers. The executives of the parent company have to be liable for their actions in this fraud.

      •  that was outlawed during the Red Scare (1+ / 0-)
        Recommended by:

        It became illegal for a union to control pensions and insurance unilaterally. Legislators feared that if unions controlled that money, it would give them too much power.

        I wonder if there is a way that unions could get around that going forward.

        By the way, bankruptcy judges have a reputation for being anti-worker and anti-union. Often, as a result of leveraged buyouts, factories that are profitable go into bankruptcy because there is just too much debt put on the books from the private equity company that did the buyout. In these cases, the workers will sometimes try to acquire the assets in bankruptcy court, but, unfortunately, the judges are not supportive.

        •  Interesting... (0+ / 0-)

          ...I didn't know that unions were not allowed to control pensions and insurance. It seems so logical to me to allow/encourage it.

          Unfortunately, we routinely allow pension funds to underfund themselves by making excessively optimistic assumptions. Both the companies and unions seem to be in favor of this as it lets the company save money and it lets the union get larger benefits in contract negotiations since it costs the company less - well, at least today. In the end though, it's likely to screw the workers. Making the unions responsible for the funds would remove some of the twisted motivations that result in this behavior.

  •  Oh, great for Patriot Coal! (11+ / 0-)

    Let them get black lung and then die of it as soon as they leave the company and lose their coverage.  What a compassionate company, what a compassionate judge.  

    •  We should create a "Medicare Hardship"... (2+ / 0-)
      Recommended by:
      Amber6541, Calamity Jean

      ...for people like those abandoned by Peabody Coal and many others in the same boat.

      Yes, I know that from a certain perspective it would create a "moral hazard" (funny how those are overwhelmingly cited by the Very Serious People when lives of ordinary people are on the line) of encouraging other "Multinationals" to divest themselves of Retired Employee benefits, but that divestment is proceeding apace in the absence of that "incentive."

      When you are right you cannot be too radical; when you are wrong, you cannot be too conservative. --Martin Luther King Jr.

      by Egalitare on Sat Jun 01, 2013 at 11:22:23 AM PDT

      [ Parent ]

      •  Bull (2+ / 0-)
        Recommended by:
        marina, Odysseus

        Why should my taxes pay for Peabody's liabilities?
        Why isn't this a case for the Pension Benefit Guarantee Corp?

        And I hope someone can go after Peabody on this!

        Even Democrats can be asses. Look at Rahm Emanuel.

        by Helpless on Sat Jun 01, 2013 at 12:51:50 PM PDT

        [ Parent ]

        •  No company should be permitted (3+ / 0-)
          Recommended by:
          417els, Hillbilly Dem, Odysseus

          to shrug off the pensions of its workers. That liability should be paid before any executive salaries, perks, stock options, or other perks are paid out. It should be a matter of law. Promised pensions are a part of a worker's reimbursement for his/her labor.

          It is theft to deny a pension, especially while CEOs are paid obscenely because, after all, it is in their contracts, which somehow legally hold more sway than the contracts with those who actually labor.

          Without labor, there is no profit--the 'owners' have nothing. It is time the so-called upper class is reminded of this simple fact.

          •  Legally both are on par. (1+ / 0-)
            Recommended by:

            There is a heirarchy of who must be paid in bankruptcy claims.

            Generally, it looks like:
            Employees and suppliers
            Bond holders
            Preferred Stock holders
            Common Stock holders

            Both executive salary and worker salary are at a pretty high priority.

   Superiority in the Event of Liquidation

            Superiority in the Event of Liquidation

                Preferred stockholders have precedence over common stockholders in the event of liquidation.
                Bondholders always have precedence over preferred stockholders from a dividend and liquidation point of view.
                Unlike bondholders, preferred stockholders cannot force a company into bankruptcy.

            The only question for pension funds should be whether they were adequately funded under ERISA:
   Fact Sheet: Your Employer's Bankruptcy - How Will It Affect Your Employee Benefits?
            Generally, your pension assets should not be at risk when a business declares bankruptcy, because ERISA requires that promised pension benefits be adequately funded and that pension monies be kept separate from an employer’s business assets and held in trust or invested in an insurance contract. Thus, if an employer declares bankruptcy, the retirement funds should be secure from the company’s creditors. In addition, plan fiduciaries must comply with the ERISA provisions that prohibit the mismanagement and abuse of plan assets. If contributions to a plan have been withheld from your pay, you may want to confirm that the amounts deducted have been forwarded to the plan’s trust or insurance contract.
            Corporate bankruptcy should be a non event for pensioners.  That's the letter of the law right now.

            -7.75 -4.67

            "Freedom's just another word for nothing left to lose."

            There are no Christians in foxholes.

            by Odysseus on Sat Jun 01, 2013 at 04:42:07 PM PDT

            [ Parent ]

            •  Bankruptcy hierarchy (2+ / 0-)
              Recommended by:
              Odysseus, marina

              It may look like payments to employees is at the top of the list, but the way it often works is,
              Company declares bankruptcy
              Workers find that their last paycheck bounces, and the employer hasn't been paying premiums on the health insurance or transferring money to the 401Ks. Doctors are now looking to collect from the workers who had thought they were covered.
              Years later, they get reimbursed for the last paycheck, after the bankruptcy has been finalized.
              There is no chance for severance pay, and if the workers didn't have a lawyer at court, the 401K money is iffy.
              I have heard various stories like this. For example read To Move a Mountain by Eve Weinbaum.

        •  Understand your point (0+ / 0-)

          But what I want to know is why can't these folks see that voting for the GOP is voting against their own best interest.  I'm not much on coal or fossil fuels as an energy source, but this really pisses me off to see workers treated like something to be used until the job takes its toll on their health.  Anythings fair game as long as it comes out in the company's favor when it comes to the bottom line.  
          These companies know that these workers don't have much choice and are mostly trying to survive and feed their families.
          One would think a real progressive could convince these voters that standing up for workers rights is a lot more important than whatever horseshit that the GOP can dish out about freedom and the right to work.  What they really mean is the freedom to get screwed by companies like Peabody Coal.

          Mr. Boehner, where are the jobs?

          by Tx LIberal on Sat Jun 01, 2013 at 07:11:37 PM PDT

          [ Parent ]

    •  While (9+ / 0-)

      the people who never had to breath coal dust or broke their backs for it run off with all the profits

      Why do I never hear these stories when people are bragging about AMERICAN EXCEPTIONALISM ?  

      Beer Drinkers & Hell Raisers

      by Patango on Sat Jun 01, 2013 at 11:36:52 AM PDT

      [ Parent ]

    •  You must have forgotten the uproar (2+ / 0-)
      Recommended by:
      T Maysle, 417els

      over Obama's mention of compassion when he nominated Sotomayor. Compassion is for pussies, apparently.

      The GOP can't win on ideas. They can only win by lying, cheating, and stealing. So they do.

      by psnyder on Sat Jun 01, 2013 at 12:01:32 PM PDT

      [ Parent ]

    •  There will be plenty of people (6+ / 0-)

      infected with the Looneytarian virus who will insist that "Patriot" Coal has "the right to run their business as they see fit" and that the workers "have the right to take their labor elsewhere".

      •  Recc'd for 'looneytarian' (1+ / 0-)
        Recommended by:
        Old Sailor

        love it.

        These are the same people who think environmental protections, workplace protections & civil rights should be enforced by private contracts. Dump all that burdensome government enforcement and run the world on private contracts.

        Tell it to the employees of Not-So-Patriot Coal. Oops, how's that private contract working out for you.

  •  who is the Judge? (1+ / 0-)
    Recommended by:
    historys mysteries

    "Tax cuts for the 1% create jobs." -- Republicans, HAHAHA - in China

    by MartyM on Sat Jun 01, 2013 at 11:04:40 AM PDT

  •  Obamacare and Unions (0+ / 0-)

    Fox & Righties are laughing about the Unions "mad with Obama" over Obamacare.
    Something about an exemption.
    What is that about?

    "Tax cuts for the 1% create jobs." -- Republicans, HAHAHA - in China

    by MartyM on Sat Jun 01, 2013 at 11:06:51 AM PDT

  •  anyone who thinks that the coal companies (19+ / 0-)

    care about their workers needs to read up on Patriot Coal... and a long history.

    I genuinely don't get why coal workers vote Republican.

    Do the math. #unfrackCal. @RL_Miller

    by RLMiller on Sat Jun 01, 2013 at 11:07:33 AM PDT

  •  Valuation (8+ / 0-)

    To Pea (brain) body Coal labor has about as much value as a mountain top.  It's best to rid yourself of the overburden in the most expeditious way.

    "Dolce Et Decorum Est Propatria Mori!"

  •  "Patriot" is Orwellian for "Die Quickly" (17+ / 0-)

    Greedy murderous bastards.

    look for my eSci diary series Thursday evening.

    by FishOutofWater on Sat Jun 01, 2013 at 11:13:49 AM PDT

  •  that's obscene! n/t (6+ / 0-)

    "In the depth of winter I finally learned that there was in me an invincible summer."- Albert Camus

    by valadon on Sat Jun 01, 2013 at 11:26:25 AM PDT

  •  pathetic (12+ / 0-)

    How much longer are Americans going to tolerate this corporate bullying which turns peoples lives into nothing but expendable machinery?

    Why is there no outcry?

  •  The New Walmart Ads-Amusing Spin control (4+ / 0-)

    I want 1 less Tiny Coffin, Why Don't You? Support The President's Gun Violence Plan.

    by JML9999 on Sat Jun 01, 2013 at 11:28:49 AM PDT

  •  and they rely on the "I don't have a pension so (7+ / 0-)

    neither should you," sentiment to keep the hoi polloi fighting each other instead of going after the real enemy.

    Let 'em keep up their shameless pillaging.  Eventually, enough people will be mad enough to do something about it.

    If the plutocrats begin the program, we will end it. -- Eugene Debs.

    by livjack on Sat Jun 01, 2013 at 11:35:29 AM PDT

  •  Peabody has long been the epitome of evil (5+ / 0-)

    Also a role model for many existing companies. Blazing the path ...

  •  our elites like to ''stick it'' to us.........n/t (0+ / 0-)

    ''A conservative is a man with two perfectly good legs who, however, has never learned to walk forward.'' FDR

    by lostinamerica on Sat Jun 01, 2013 at 11:39:31 AM PDT

  •  Undercover boss is another propaganda show (4+ / 0-)
    Recommended by:
    Patango, marina, T Maysle, Hillbilly Dem

    The benevolent daddy boss comes in and rewards the "good" workers and punishes the "bad" workers and the "good" ones gush all over for being the recipient of a goody so the company can get some free P.R.  It makes me want to barf.

  •  Retiree health benefits are not vested under ERISA (12+ / 0-)

    This is nothing new - companies have been terminating retiree health benefits for decades, including the auto makers and other companies big enough to have ever offered them.  ERISA quite clearly does not provide vesting protection to retiree health benefits, and as a result they have been lost to retirees everywhere.  My own mother lost hers under her Ford retirement plan in  2006, I think - it panicked her, she thought she was losing Medicare coverage, and I had to talk her down off the ceiling.  She was fortunate enough to be able to afford the Medigap options Ford offered, but that's not the case for lots of people.

    So, yeah, it's appalling, but it's not new and it's all just part of the long chain of assaults on worker old age security.  All the more reason the Democrats must stop this nonsense of offering up cuts in Social Security and increases in the age of eligibility for Medicare in any budget "grand bargain" talks with the Republicans.

    •  Yup - my outrage goes over the top (7+ / 0-)

      when the Democratic Party starts cutting entitlements.  I mean they haven't done diddly for protecting benefits provided by the private sector and now they want to "strengthen" Social Security by cutting it.  At least they've been rolled on that one.  Even Harkin's latest e-mail goes after the rats on the "strengthen" messaging.  

      But none of the outrage matters, if we don't hold them accountable at the polls which I intend to do.  

  •  One thing missing (5+ / 0-)
    Recommended by:
    Amber6541, patbahn, T Maysle, 417els, Odysseus

    IMO , to the Coal Pension story , when I read about this happening , we never get to here of all the profits made by these companies over the years , and how they are now just ripping these workers off , publishing the amount of money taken from these pensions/medical benefits would really help make these snake oil salesmen look bad , when you just say " THE PENSIONS ARE ALL GONE " not many people can grasp what exactly was ripped off

    I am willing to do some leg work on this , if need be

    Beer Drinkers & Hell Raisers

    by Patango on Sat Jun 01, 2013 at 11:46:35 AM PDT

    •  it's serious analysis (2+ / 0-)
      Recommended by:
      Odysseus, Patango

      but figure out how much of net earnings was from
      adjusted payments to the pension plan and benefit plan.

      hard part will be determining a baseline payment model
      which may be best modeled using a straightline model.

      try and figure if 1.5% or 2% straightline gives a
      pension  and then, take that percentage of payroll,
      vs what they actually paid.

      •  I was thinking of starting (1+ / 0-)
        Recommended by:

        with just PROFITS MADE by the company it self over the years , I am not a numbers guy by any means , off the top of my head , just looking at what the lady made as income , then what she paid into the pension , and kind of go from there

        But I am willing to do it any way that might be suggested

        In my mind you can qualify workers as getting part of the profits when they have a pension / healthcare in their contract , which is mentioned in the diary speaking about litigation , yet another outrage  that is never spot lighted in workers rights , the fact that it takes years to settle these cases

        When you SPOT LIGHT profits over all , imo it exposes them as the rats they are , for leaving sick people on the side of the road while they stash their money with THE ROMNEY GANG , it is sick

        Beer Drinkers & Hell Raisers

        by Patango on Sat Jun 01, 2013 at 09:02:22 PM PDT

        [ Parent ]

  •  Reading about these horrors (4+ / 0-)

    brings a couple things to mind:  

    First, this is the kind of thing that should wind up in the International Court of Human Rights.  If there are no accepted economic breaches recognized by the court, then they need them. This kind of thing is absolute, sheer evil as far as I'm concerned.  I am enraged.

    Second, this is yet another situation that clearly shows how stupid and essentially anti-democratic the whole notion of elected judges is.  If judgeships were civil service positions as they are in most countries, such outrageous decisions would be far less likely to occur.  In Europe this would be unthinkable.

    -7.13 / -6.97 "The people never give up their liberties but under some delusion." -- Edmund Burke

    by GulfExpat on Sat Jun 01, 2013 at 11:51:29 AM PDT

  •  but they're PATRIOTS (5+ / 0-)

    anything with Patriot in the name must be good

    PLEASE donate to a global children's PEACE project: Chalk 4 Peace

    by RumsfeldResign on Sat Jun 01, 2013 at 11:58:14 AM PDT

  •  Just skip the whole "delayed" and go directly to (3+ / 0-)
    Recommended by:
    Amber6541, Patango, 417els

    Justice denied is Justice denied.

    How many more people have to be killed, maimed, ripped-off, or mercilessly abused before we stand up en-mass to unfettered capitalism run amuck?

    Goddamn Fascists

  •  If you see my recs, my intentions are clear. If (0+ / 0-)

    not, please consider "outside influences" (not of the conspiratorial mindset).  

  •  Cruel (4+ / 0-)
    Recommended by:
    Patango, T Maysle, 417els, Hillbilly Dem

    This is the cruelest wealthy country on earth.

  •  as judge surratt - states proves (0+ / 0-)

    the scum on the right include women as well as men when it comes to having a lack of empathy and compassion.

  •  US West did something similar... (2+ / 0-)
    Recommended by:
    marina, 417els

    they didn't cancel their retirees health benefits, they raised the premiums TEN FOLD!

    A dear friend of mine retired early when US West moved their operations out of Portland. She received 2+ years of
    unemployment + retraining due to federal law when companies move offshore.
    Anyway, the only reason she wasn't too freaked out is that one of the deals made was that US West would continue health benefits until age 65. Her premium was $82 a month. With only 2 months warning-US West raised her premium to over $800 a month.
    That sounds kind of reasonable to fully employed people, however her unemployment was exactly the amount of her mortgage. She'd been using her 30 years of savings to live on.

    Her husband was quite ill, but had been turned down twice for SS disability. She looked for different insurance and was turned down due to existing conditions.

    Luckily for her, she heard about a program through OHSU that accepted her and her husband. They paid a total of $600 a year and received very good care.
    Her husband passed away 6 months ago.

    These companies should be BOUND BY LAW to continue agreements made. They should be required to put the $ into some kind of escrow that cannot be touched by the companies.

    It seems criminal and obscene that these black-lung patients should lose their insurance. Shame on them. Shame.

    FORWARD! Obama/Biden 2012

    by Esjaydee on Sat Jun 01, 2013 at 12:54:38 PM PDT

  •  I'll post this diary to Facebook as a reminder to (4+ / 0-)
    Recommended by:
    marina, T Maysle, 417els, Hillbilly Dem

    an article posted a few days ago to which I quoted this part with the local people in mind that are part of the fight against the building of the biggest coal terminal i n North America, the 'Gateway Pacific Terminal'....
    THIS part of the article should be highlighted for any labor group that supports building the coal terminal.

    "The Bankruptcy Judge’s ruling creates a path for Patriot to throw out its current collective bargaining agreements with the UMWA and implement substandard conditions of employment at its operations where the UMWA represents the workers. This includes cutting wages by several dollars per hour, taking thousands of dollars out of family incomes; eliminating paid time off by about one-third, with higher cuts for more senior employees; and drastically increasing out-of-pocket health care costs.

    The ruling also allows Patriot to eliminate retiree health care for currently active employees, more than half of whom have worked long enough to be eligible for health care under the cancelled UMWA contract. Several hundred more are within 3 years of eligibility."
    Here's a bit more from the article by the United Mine Workers of America (UMWA)...
    “We are disappointed that the Bankruptcy Court failed to see that, and we intend to appeal the ruling to the Federal District Court,” Roberts said.

    “But I want to make it emphatically clear that despite this ruling, the UMWA’s effort to win fairness for these active and retired workers is by no means over,” Roberts said. “Indeed, this ruling makes it more important than ever for the architects of this travesty, Peabody Energy and Arch Coal, to take responsibility for the obligations they made to thousands of retirees who are now at imminent risk.”

    Patriot was created by Peabody Energy in 2007 with 43 percent of Peabody’s liabilities but just 11 percent of its assets. Because Patriot was created with insufficient assets to meet its liabilities to retired miners, analysts such as Bruce Rader, Professor of Finance at Temple University, have described the company as “designed to fail.” Even Patriot CEO Ben Hatfield said that “something doesn’t smell right” about the manner in which his company was founded.

    In 2008, Patriot acquired Magnum Coal, a company created by Arch Coal and other investors, into which Arch had shifted all its long-term liabilities to retirees, spouses and widows.

    Under the Bankruptcy Court’s ruling, Patriot will be allowed to cease paying for retiree health care benefits as early as July 1. Responsibility for paying benefits would be handed over to a Voluntary Employee Beneficial Association (VEBA), which will only have guaranteed funding of $15 million plus a royalty payment of $0.20 per ton of coal the company produces, which may add approximately $5 million to the VEBA per year. Current health care costs for these retirees average nearly $7 million per month.

    (emphasis mine)

    without the ants the rainforest dies

    by aliasalias on Sat Jun 01, 2013 at 12:54:51 PM PDT

  •  the DoL is letting companies underfund pension (3+ / 0-)
    Recommended by:
    T Maysle, marsanges, Odysseus


    Used to be the pension plan was fully funded, in the 80's reagan changed the rules to anticipated funding it went from straight line to weighted (You would fund nothing for 20 something workers and a lot for 50 something workers).

    Surprise, companies started sacking workers in their 40s.

    Also companies were allowed to declare pension plans over funded and raid them.

    That's how all these wall streeters and romneys got rich.

    hard to fix now, except by capital taxes.

    Bernankes zero interest policy is now crushing pension plans

    •  capital taxes then (0+ / 0-)

      plus legislation to set up pension funds as independent entities to which companies must pay for their workers, but which are legally separate from companies. Then this shit is over.

      this cries out for legislation. This is what a government is for: making laws preventing gross outrages such as this one.

      Pension funds in Europe (here) are among the big investors on the money market (ABP for example), but they are under strict legal rules what they can and cannot do exactly because they arent dealing in their own money but in peoples livelihoods. And they are strictly separate from companies (and unions too). Government guarantees of them vary. Yet a story like this one would be seen as completely intolerable here - not just from workers eyes - it wouldnt be legal here and would not be allowed to become legal. Ultimately this is the responsibility of the electorate: to elect parties/politicians that make laws to outlaw such a gross injustice.

      Honestly ... it should be obvious that pension money can not be subject to either companies or workers access as they are always Motivated by day to day interests. I can not understand how the US (its population) allows a system to exist that is one giant enticement to fraud like this or irresponsibility.

      pensions are part of the costs of a worker. Everyday - reagrdless whether they are 25 or 65 y/o. Companies must pay the cost of laor and that involves pensions. And workers can not depend on companies to pay pensions because these go under, fraud or no fraud.  Conversely when a worker is done working for a company, the company must be free of them in order to not be sunk by heritage costs after a long existence. So there must be an independent, state-guaranted social security system to which companies pay for workers - the full price - so that when a company goes under, the pension of retirees is already covered and doesnt go under with it.

      Germany has such a system - And Germany has one of the most competitive economies on the planet - as a recent report reconfirmed, forgot whether it was IMF or World Bank or who. The US need not reinvent the wheel - it need only copy what successful economies do all over the world, and atrocities like this would be over.

      and the people to get the US to do that is its own electorate. This is why all advanced countries have socialist parties. If the US electorate does not create itself one, then ultimately it is itself responsible for stuff like this.

  •  As I was posting the above comment I got a message (2+ / 0-)
    Recommended by:
    marina, 417els

    on Facebook from a guy in Africa who has been in touch about a coal operation there (Chinese company) which he says will displace 35 thousand families and he has been trying to get that story out.

    without the ants the rainforest dies

    by aliasalias on Sat Jun 01, 2013 at 01:01:26 PM PDT

  •  That is an outrage, complete sellout by the judge. (0+ / 0-)

    He's treating his opinion about unions as a relevant finding, but whether or not the company was created to fail? "Maybe not, maybe."

    Art is the handmaid of human good.

    by joe from Lowell on Sat Jun 01, 2013 at 01:50:38 PM PDT

  •  The Bankruptcy Code was manipulated some (2+ / 0-)
    Recommended by:
    Hillbilly Dem, Odysseus

    years ago to allow breach of union contracts as part of the process. So it has proceeded apace.

    I hate what's happening.

  •  Thank you for this! I am a UMWA pensioner... (0+ / 0-)

       ...and luckily quit Peabody years ago. My neighbors were not so fortunate. My friend's  father worked for Peabody until he retired, he's passed, but his 91 year old widow lives on, in an assisted care place. What is she to do? It's a bit tardy now to suggest a different field of work for her dead husband......

       Living near St. Louis, I have been priveleged to attend several of the UMWA-sponsored rallies there. As we marched on one of the rallies, another miner pointed out to me a statue about 300 or mebbe 400 feet from Peabody's big building, in the City Park. It is a statue of, you can't make this up, Pinocchio! The Peabody mascot, presumably.....

    Compost for a greener piles?

    by Hoghead99 on Sat Jun 01, 2013 at 05:43:16 PM PDT

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