UMW agrees to early-bird contract with coal operators

Joe Napsha
| Tuesday, June 14, 2011

The United Mine Workers reached a tentative labor contract covering about 3,000 bituminous coal miners, an early-bird deal that would give the union an additional six months of contributions into its pension fund under the new agreement, observers said on Monday.

The contract with the Bituminous Coal Operators Association covers employees of Consol Energy Inc. and its subsidiaries, the coal operators organization said. The tentative agreement would become effective July 1, replacing the remaining six months of the five-year contract set to expire on Dec. 31.

"This has been a long and intense process. We had many issues to confront, especially with respect to our pension, health care and wages," UMW President Cecil Roberts said in a statement.

"It's certainly a monumental feat that President Roberts was able to reach a contract under all the extenuating circumstances today in the economy and in the industry," said Edward Yankovich, president of UMW's District 2, in Grindstone, Fayette County. The contract covers coal miners and coal preparation plant employees in District 2, which includes Pennsylvania and New York.

The union did not release details of the agreement, but the average wage is about $23 an hour under the current contract, spokesman Phil Smith said.

Consol Energy said in a statement that "we view it as an ordinary course contract for Consol, and in line with our expectations."

Morris Feibusch, a spokesman for the coal operators association in Washington, D.C., declined to comment.

About 3,000 of Consol's 8,600 employees were represented by the UMW, according to the company's 2010 annual report. Union mines accounted for 49 percent of the 62.4 million tons that Consol produced in 2010.

While the agreement pertains to miners working for Cecil-based Consol and its subsidiaries, Smith said about 10,000 additional miners nationwide are covered under the current pact through the union's practice of using the BCOA agreement as a pattern for deals with other coal operators.

Union members are scheduled to get details at meetings on Wednesday and will vote on the tentative pact on Friday.

Companies operating under the current contract include Alpha Natural Resources Inc., which operates mines in the Waynesburg area; Murray Energy Corp. which has mines in Ohio, Kentucky and Illinois; Jim Walter Resources, which operates a mine in Alabama; and Cliffs Natural Resources of Cleveland, which has mines in West Virginia and Alabama. Union members at those companies also will vote on Friday, Smith said.

Yankovich believes unfunded liabilities in the existing pension fund were a motivating factor for reaching an early settlement.

The union's pension fund, which receives contributions based on the amount of coal union members produce, is on the "endangered status" due to losses from the stock market crash in 2008, said Smith, who was not certain of the amount of unfunded liability.

The extra six months of contributions into the pension fund "seems to be the most logical reason" for the new contract to replace six months of the current deal, said James Thompson, editor of the U.S. Coal Review, a trade publication.

Consol's competitors are more likely to agree to the deal "because they're pretty much of an immediate strike target" if they don't, Thompson said.

Subscribe today! Click here for our subscription offers.



Show commenting policy