The letters submitted to Judge David R. Jones of the U.S. Bankruptcy Court in Houston are heartbreaking. There are hundreds of them from coal miners around the United States, begging the judge to make Westmoreland Mining Co. live up to its contract with workers and continue to provide the health-insurance benefits it promised retirees.
The letters came from coal miners who worked for Westmoreland, sometimes for decades, mostly in places like Kemmerer, Wyo., and Appalachia, Va.
And Beulah, N.D. Westmoreland's North Dakota lignite coal mine is located about 75 miles northwest of Bismarck.
"If Westmoreland coal does not fulfill their obligation, it will be a hardship to my family and me," wrote Marvin Bauer, a retired heavy machinery operator and mechanic from Beulah. "I have a chronic health condition, which requires me to take medications for the rest of my life. In addition, I have had back and shoulder surgeries. Losing our benefits would make it more difficult for me and my family to access the healthcare service we need."
Bauer worked the coal mine in Beulah for nearly 40 years, his letter says.
The letters did not sway Jones' ruling. On Feb. 15, he ruled that Colorado-based Westmoreland could end retiree benefits and dismiss its union contract with workers at some of its mines after the company argued it needed to slash labor costs to survive bankruptcy.
That means Westmoreland — $1.4 billion in debt through what many letter writers claim was mismanagement — shed $329 million in medical benefits promised to thousands of retired employees, including more than 200 who worked at the Beulah mine. Westmoreland hopes reducing its benefit obligations will allow it to sell its 19 mines in six states and Canada under chapter 11.
Bottom line: Workers like Bauer, promised full health coverage for himself and his wife in retirement through a collectively-bargained union contract, are faced with health insurance premiums costing thousands of dollars they didn't save.
The Beulah mine's 22 active workers, too, face uncertainty because the contract under which they were working has essentially been torn up and they'll have to negotiate new terms with whatever company purchases the mine.
Wait, there's more.
Westmoreland also paid eight of its top executives more than $10.2 million in salary, bonuses and severance pay in the year before the company filed for bankruptcy protection in October 2018. The Wall Street Journal reported executives also received $3.8 million in retainer payments and management fees, while taking additional compensation in benefits and expense reimbursements.
It's all added up to a messy and uncertain situation for retirees and miners who bargained in good faith with Westmoreland and, as another letter from a Beulah miner says, "made Westmoreland millions of dollars in profits."
Richard Morgan, a representative from the United Mine Workers of America, called the situation "tragic." He said retirees are currently paying about $200 a month for full health coverage.
"They are now facing insurance and medical bills that could be thousands of dollars every month. Mining is not an easy job. These guys worked hard and their bodies took a beating. They have medical problems, often because of the work they did," Morgan said. "These guys worked 35 or 40 years, often taking less money than their peers in other mines around the country on the promise that their health benefits were going to be covered in retirement. Now that's been taken away."
Nationwide, the union represents about 300 current and laid-off Westmoreland workers and about 1,500 retirees and their dependents, Morgan said. Westmoreland's lenders have agreed to pay $6 million to fund nationwide retiree benefits for one year.
But after that, it's unlikely the retired workers will have their health care covered. Potential buyers for Westmoreland's mines, including a Virginia businessman who just purchased the company's Kemmerer mine, have said they will not fund retiree benefits.
(Listen to a discussion about Westmoreland Mining Co. with Casper Star-Tribune energy reporter Heather Richards on the McFeely Mess Podcast here.)
U.S. House Democrats Rep. Bobby Scott of Virginia and Frederica Wilson of Florida last month introduced a bill that would ensure retired miners do not lose their health care. HR 934 mirrors a bill Congress passed with bipartisan support in 2017 that preserved the health-insurance benefits of 22,600 retirees and widows when Patriot Coal filed for bankruptcy.
North Dakota U.S. Rep. Kelly Armstrong, a Republican, called retirees losing their benefits "patently unfair" and said "their deal should be honored," but stopped short of saying he supported HR 934 because he has questions about language used in it regarding bankruptcy law.
Morgan, of the UMWA, said the union strongly supports it as a continuation and extension of the 2017 bill.
"This is proven legislation that has been working and would be a viable solution to the problems that these retirees now face," Morgan said.
One of the letters submitted to the bankruptcy court by a Beulah miner said two of Westmoreland's top executives traveled to North Dakota to assure workers that benefits were safe.
"Westmoreland interim chief executive officer Michael Hutchinson and chief operating officer Joseph Micheletti stood in front of us at the Beulah mine before they filed bankrupsy (sic) and told us 'Don't worry guys your benefits are safe and guaranteed by your CBA (collective bargaining agreement),'" a letter written by Michael Bauer of Zap, N.D., said. "They further went on to state that they were only going through this bankrupsy (sic) process to stick it to the Institutional Investors who have made millions off of the interest payments received and made more money than they ever invested."
Court papers say Hutchinson received more than $2.36 million in bonus payments while Micheletti received $1.24 million in bonuses, according to the Wall Street Journal. Another top Westmoreland executive, chief financial officer Gary Kohn, resigned in January after taking more than $1 million in bonuses designed to keep him with the company through its bankruptcy proceedings.
"I just cannot understand how you can get a bonus for running a company into the ground," Michael Bauer's letter said. "Those large bonuses would have paid for the promises Westmoreland made to me under our CBA."