Miners object to Westmoreland bonus plan

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KEMMERER — Westmoreland Coal Company’s Nov. 26 bankruptcy motion that seeks to pay bonuses to mid-level “valued employees” is a “disgusting, despicable” act that ignores actual miners, a union official said last week.

Westmoreland is asking a Texas bankruptcy judge to let it reward 243 of its 1,723 U.S. employees with a total of up to $1.48 million a quarter to ensure the company operates smoothly during its bankruptcy transition. The “valued-employee program” would give up to $50,000 per quarter to some individuals — “rank and file employees” the company says — who have an intimate understanding of operational intricacies, leases, coal assets, customer relationships and vendor contracts.

Rewarding management over workers, “it’s appalling,” Michael Dalpiaz, a vice president with the United Mine Workers of America, said in a telephone interview. “They can’t make ends meet, yet find enough money [to give bonuses] to the people who drove the bus in the ditch.”

The motion comes as Westmoreland seeks relief from its financial woes through Chapter 11 bankruptcy, a process that will resolve the fate of the Kemmerer Mine and its approximately 300 workers. The 13,400-acre shovel-and-truck operation is the fuel source for the neighboring Naughton Power Plant.

Naughton, facing its own troubles, plans to cease burning coal at one of its three units by the end of January 2019.

Worries about the twin economic pillars of the Kemmerer-Diamondville community cloud a season normally marked by joy, celebration and unity. Instead, there’s worry, rumor and even anger stemming from years of emigration.

Fully 16 percent of Kemmerer denizens have left since a zenith of 3,273 residents in 1980, a loss that can be seen in boarded-up downtown businesses, dilapidated houses that can’t be sold, and the resignation among some. Dalpiaz claims the company’s delinquency has so hamstrung some employees that its actions are Grinch-like. “Now his children don’t have anything for Christmas,” Dalpiaz said of one miner.

Uninterested in playing victims, a group of 50 or so residents gathered around a bonfire in the Kemmerer Triangle on Thursday evening, with their children singing Christmas carols, sharing hot chocolate and cookies and greeting Santa Claus. In the face of withering obstacles, Kemmerer Mayor Anthony “Tony” Tomassi welcomed the jolly old elf who proclaimed a time-out on pessimism.

“Santa has lots of love for the people of the community and Kemmerer,” Santa told WyoFile. “I think Kemmerer is thriving.” Santa’s world and reality collide on the near-vacant sidewalks of downtown Kemmerer where there’s little hustle and no bustle during the morning rush hour. Westmoreland’s latest legal motion, which follows reports the company paid executives bonuses before bankruptcy and that pensions, health benefits and tax payments are at risk, has spread ill will among many.

“It’s really scary,” said Lorna Gunter who lives in a modest home on the outskirts of town with her retired miner husband Roger. He worked as an equipment operator at the Kemmerer Mine for 37 years, receives a pension and Social Security and doesn’t want his retirement reduced.

“They just told us there’s a possibility they could cut our pensions,” Roger Gunter said in the couple’s neat, sparsely decorated living room. “If they cut mine out, I’d have to do a lot of changes.

“You worked all your life,” Gunter said of his pension plan. “It should be locked in ’til you die.”

WyoFile didn’t receive a response to a phone call to Westmoreland seeking comment, but the company’s motion in the bankruptcy court outlines reasons for seeking the payments to its valued employees. Those 243 persons are not “insider” executives who have any control over major strategic business decisions. Rather, they are employees whose retention is critical to preserving and maximizing shareholder value, the motion says.

More than 100 employees have left Westmoreland Coal Company since June, when it announced bridge financing and anticipated bankruptcy filing, the motion says. The company “contemplates a going-concern sale” of its coal-mining assets and hopes for court approval of bidding and a sale after Dec. 28.

The valued-employee bonuses are necessary because the key workers may jump ship since they don’t know whether a buyer will keep them on, the motion says. The employees face added responsibilities and hours “without any corresponding increase in compensation,” the filing says. The bonuses would replace “historical compensation” that included an annual cash-based award program for some, the company wrote.

The $1.48 million per quarter works out to an average individual award of $6,000 every three months for each of the 243 valued employees, the filing states. Under the proposal, the maximum any one employee could receive in bonuses would be $50,000 a quarter or $200,000 in a year.

In the year ending Aug. 30, 2018, Englewood, Colorado-headquartered Westmoreland Coal, the sixth largest coal-mining enterprise in North America, earned $850 million in revenue. But by its bankruptcy filing in October its operations at 19 coal mines in six states and Canada owed $1.1 billion.

Such high-stakes financing decisions don’t convince Gunter, the retired miner, that workers’ needs should be brushed aside. With millions in revenues, “they ought to be able to put some in a pension,” he said.

Dalpiaz had stronger words. “They only consider 240 [employees] valuable,” he said in a telephone interview from his office in Price, Utah. “It’s disgusting, despicable that they would even do that — give bonuses to the people who drove this company to bankruptcy.

“They identified some 1,500 employees as not valuable,” he said. “It’s criminal as far as I’m concerned. They’re a circus of clowns managing the place. They ought to lock these guys up.”

Regardless of the bonuses to “valued employees,” larger worries hang over Kemmerer, retired miners and community members say. Chief among them is that the mine itself would close.

“If they close it, Kemmerer will die,” said Lyle Beebe, a retired miner with 27 years of work at the Kemmerer Mine.

“Kemmerer would just about blow away,” added Ken Hysell, who retired from the mine in 1999 after 31 years.

“Kemmerer will go down the drain,” Lorna Gunter said.

Mayor Tomassi provided a tempered view from his office at E&L Motors in Diamondville where he is a co-owner. “Somebody’s going to dig coal there, mine that mine,” he told WyoFile in his spotless showroom office, surrounded by shiny new cars and trucks but no customers.

“I’m absolutely convinced the mine is going to be open,” he said. The coal at Kemmerer is high in energy and low in sulfur and the mine has the adjacent, although shrinking, power-plant customer next door, plus industrial clients just down the road and rail line in southwest Wyoming.

The mine also enjoys state backing. State lawmakers earlier this year approved a measure that earmarked $15 million to relocate a highway north of the Kemmerer Mine, a move that would allow mining to expand.

“They’re going to produce,” Tomassi said of the mine. “At what level, I don’t know.

“I think the whole community is worried,” he said of the economic outlook. “It affects everybody.”

His own business is “relatively slow,” he said. “If you’re a miner, are you going to come in and buy a car right now?” he asked.

Miners stop thinking about upgrading their vehicles a year before their union contracts are renewed, he said. The last full contract lasted six years and current agreements are short-term, he said. “They want to wait until they get their next contract before they make commitments,” Tomassi said.

He wants a speedy resolution to the bankruptcy. “As a community, we would like to get it settled and move on.”

To “move on,” Tomassi’s staff at town government recently released “Kickstart Kemmerer,” a 20-year comprehensive plan. It doesn’t anticipate much population growth but hopes for a diversified economy and a small-town atmosphere that takes advantage of the natural and man-made attractions.

Blue-ribbon trout streams flow nearby, the town has a rec center and golf course. It’s considered in one ranking to be the second-safest community in Wyoming, “For a small community we have lots of amenities,” Tomassi said.

Some residents are skeptical. “They should have kickstarted 20 years ago,” said the retired miner Hysell.

“You’d think with that mine, all the gas plants, Kemmerer would be pretty busy,” said one merchant who asked to be described only as a businessman. “Kemmerer doesn’t have that much to offer. Town’s not big enough.”

For example, his son drives his granddaughter to Park City, Utah several times a week for gymnastics lessons. Energy workers would rather commute 60 or 70 miles and live on a ranch or in a larger town than Kemmerer, he said. “Evanston – they’ve got Walmarts, things like that,” he said.

It’s not just miners who affect the downturn, its other energy industries as well, Tomassi said. He talks regularly with managers of many of the energy businesses, he said.

“What we really want is we want you to bring your people to Kemmerer,” he said he tells those executives. “We want you to have your people live here. That would be our number-one goal.”

The pitch is not always embraced. They say, “you have one grocery store, you don’t have two,” Tomassi said. It’s a classic chicken-egg scenario, he said.

By Angus M. Thuermer Jr.

WyoFile

By |Dec. 5, 2018|

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