Bankruptcy of Trump donor’s coal company is bad news for retired coal miners

Source: By Dino Grandoni, Washington Post • Posted: Wednesday, October 30, 2019

A bulldozer moves coal at the Murray Energy Corp. port facility in Powhatan Point, Ohio. (Reuters/Joshua Roberts)

The bankruptcy of the coal company owned by Robert Murray, a major donor to President Trump, isn’t just another sign of struggle for the U.S. coal business. It is also a troubling development for tens of thousands of former coal miners, whose pension plan is floundering to stay afloat.

Murray Energy Corp., the nation’s largest private coal giant, filed for Chapter 11 protection on Tuesday, Taylor Telford and I reported Tuesday. That move makes it the fifth coal company to land in bankruptcy court in 2019 as coal is being being squeezed out of the U.S. power market by cheaper options such as natural gas, solar and wind power.

The long-anticipated bankruptcy proceedings also put the United Mine Workers of America’s already fragile and underfunded pension plan on even shakier ground, The situation could potentially spur a divided Congress and Trump, who has championed coal workers, to bail out the miners. Currently, Murray Energy pays into the pension plan for UMWA, which represents a large chunk of the company’s full-time employees.

“Hopefully, it will accelerate the legislative process,” said Phil Smith, head of government affairs for UMWA, which represents a large chunk of Murray Energy’s full-time employees.

The UMWA pension plan faces a shortfall after being hit hard by the financial crisis a decade ago, as well as for having fewer active workers contributing to it as the U.S. coal mining sector continues to shrink.

But it is underfunded also because other coal companies have shed their pension obligations through bankruptcy. Among the billions of dollars of debt Murray Energy wants to restructure — or get rid of entirely — are its contributions to the pension plan. Excluding one of its subsidies that is not part of the bankruptcy proceedings, Murray Energy with about $2.7 billion in funded debt, as well about $8 billion in actual or potential obligations to fund pension and benefit plans, according to court filings.

Robert Moore, the company’s new CEO, hinted in a court filing that Murray Energy may seek relief from its pension obligations.

“Murray’s employees are its lifeblood… Nonetheless, the cost of servicing its funded debt, together with the myriad of obligations Murray has to current and former employees, including to a pension fund that has been abandoned by other employers, have substantially reduced liquidity,” Moore wrote to the bankruptcy court. a court filing.

If Murray Energy is able to shed its pension obligations, the fund will be insolvent by 2020, according to Sen. Joe Manchin III (D-W.Va.). The money was previously projected to dry up by 2022.

Manchin and some other senators, including Republicans Shelley Moore Capito (W.Va.) and Rob Portman (Ohio), have pushed for legislation that would transfer certain federal funds into the pension plan.

“We’re talking about 82,000 miners who are going to lose their pensions, and we’re fighting this,” Manchin, whose state is home to large Murray Energy operations, said in a radio interview on West Virginia MetroNews on Tuesday.

But the idea of the federal government bailing out the union miners has divided Senate Republicans. Other budget-minded senators from coal-mining states, such as Mike Enzi (R-Wyo.), have objected to using federal appropriations to bail out a private pension plan.

Standing in the middle of that divided Republican caucus is the most powerful coal-state senator of all: Senate Majority Leader Mitch McConnell (R-Ky.)

Manchin accuses McConnell of “still sitting on” his bill. McConnell met with UMWA members from Kentucky earlier this year and shares their concerns about the potential insolvency, according to McConnell spokesman Robert Steurer. While his office added that McConnell “supports the ongoing process to find a bipartisan solution for pension reform,” it did not commit to bringing any particular legislation to the floor.