Bankrupt Coal Giant Files to Negate Union Contracts, Retiree Benefits

Alpha Natural Resources is asking a bankruptcy judge for permission to cancel certain labor union agreements and to cut retiree benefits.

In documents filed March 28, Alpha writes that it needs to cut costs, including labor costs. The coal company warns that if it can’t, it will have to idle its less efficient mines and maybe even liquidate its assets. Alpha reasons that would be bad for everyone, including the workers who would be affected by the cuts the company is proposing.

Alpha pointed to similar requests from two other bankrupt coal companies, Patriot Coal and Walter Energy, as evidence that the scale of union obligations is too great.

“The unfortunate fact that the debtors’ industry can no longer support employment and retirement benefits for employees – including union employees – at levels previously offered is further demonstrated by the other recent coal company bankruptcies,” Alpha argues.

Alpha declared bankruptcy in August. In January, a federal bankruptcy judge approved the company’s request to pay up to $12 million in executive bonuses.

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