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Bankrupt Coal Producer May Give Bonuses To Managers, Cut Benefits For Miners

Landscape photo of mining
Flickr/Wild Earth Guardians
Westmoreland Coal Company owns six mines in the Mountain West and is the sixth largest coal mining enterprise in North America.

A bankrupt coal producer in the Mountain West wants to give $1.5 million worth of bonuses to top managers while potentially cutting retirement benefits for mine workers, according to recent federal court filings.

In a petition to the U.S. Bankruptcy Court in Houston, Westmoreland Coal Company said the proposed bonuses were incentives to keep mid and senior-level employees from jumping ship during the bankruptcy.

The company filed for bankruptcy in October after stocks slumped due to a years-long dwindling demand for domestic coal. Westmoreland owns mines in Wyoming, Montana and New Mexico and is the sixth largest coal mining enterprise in North America.


Robert Godby, director for the Energy Economics and Public Policy Center at the University of Wyoming, said the optics of the proposal are terrible.

“This just looks you’re putting current management’s welfare ahead of those retirees,” he said.


But the move isn’t uncommon among bankrupt coal companies – especially ones that want to sell off mines to another company, Godby said.


“They want to keep key personnel who have in depth knowledge of running that particular mine,” he said.


Westmoreland said its interim CEO, Michael Hutchinson, and other top officials were excluded from the bonuses.


Union representatives are also concerned the company’s restructuring plan could call into question the future of the company’s benefits for retirees.

Godby said cutting them would help reduce Westmoreland’s liabilities. But the United Mine Workers of America have objected to the idea. Retired mine workers and their families have submitted letters asking the judge to protect their retirement benefits.

“I retired with the assumption I would be financially stable and have supplemental insurance for myself and my spouse,” Lee Pierce, a retired worker at Wyoming’s Kennemore mine, wrote. “Now they (Westmoreland) want to take it away.”

This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KRCC and KUNC in Colorado and KUER.


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