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Show Thursday, October Its new management was able to put Kaiser into Chapter 11 bankruptcy in February, 1987. guest: column What is happening at Kaiser Coal? By Phyllis Johnson I have watched in awe and amazement, destruction befall my neighbors and friends because of, in my opinion, behavior alleged fraudulent-lik- e of a group of uncaring people. Kaiser Steel (now Coal) Sunnyside mine, which has been in operation since before the turn of the century, has had its ups and downs but in the past has always survived. Men and women have been employed in almost every area of mining that has surfaced. Many of the salaried personnel came up through the ranks of the UMWA. Most of the employees of all categories were born or raised in the SunnysideEast Carbon area. great deal less. Nevertheless, Kaiser Steels coal remained competitive, at least in Sunnyside, because of the high quality of our coking coal and most recently, the discovery that Sunnyside coal and most Western coal was very and would not add to the acid rain problem in the low-sulfur- ed East. area was really surprised when U.S. Steel made No one in our the decision to close Horse Canyon but our area grieved at all the young families we were losing and who were having to change professions. Children of older miners, whose grandfathers had also mined the coal, were now being told to go elsewhere and leave their and heritage to find Both Sunnyside and East another mine or to retrain in Carbon (DragertonColumbia) another field. Coal mining is an were built to house the emhonorable profession and much loved by the coal miner and his ployees of two mining companies. The Columbia U.S. Steel family. Many of these young coal mine was closed in 1963 families hung on in the hope of because the coal source was being hired by the one stable running out, according to the employer in the area, Kaiser company, and therefore was not Steel Sunnyside mine. Many profitable. U.S. Steels Horse were hired, but not all. Then things really began to go Canyon mine transferred many laid-oemployees to other downhill. Bills which were mines of U.S. Steel and Kaiser passed in Congress under the Steel took up the challenge of auspices of the Tax Cut laws in hiring many of the other the early 80s allowed Sharks workers. (name taken from Business A number of salaried workers Week article Fat Pension were laid off or retired also Funds Can Make Companies d too young for Tempting Targets from Columbia an Social Security and pension but plan does a lot to whet a too old to be hired in those days, SHARKS appetite, Nov. 10, elsewhere. What little pensions 1986 issue) to mount an attack there were for some, were not against shaky companies and transferred to their spouses force leveraged buyouts. A when they died. Many were leveraged buyout is defined in a sidebar of a U.S. News and pensioned off and did receive medical benefits but many were World Report, Nov. 18, 1985, In the typical disregarded. We still have a page 52: number of widows who survive leveraged buyout, a group of sided by an inon only Social Security and, if investors, black vestment firm are lung lucky," specializing in they is Medicare out a companys their the field, payments. buys shareholders by leveraging, or only medical coverage unless, again if they are lucky, they can borrowing heavily against, the afford a supplemental target companys own assets. These investors put up bethospitalization plan. At that time, in my opinion, ween 1 and 10 percent of the U.S. Steel had a reputation in' total purchase price in cash. the coal fields for unconcern for Executives of the target comtheir employees once they were pany often contribute some of used up, causing little outcry at the money. The rest of the the unfairness, just acceptance purchase price, up to 95 percent of the coal miners lot. in some cases, is financed by Throughout the 60s, Kaiser layers of loans from banks and Steel at Sunnyside had some insurance companies. The usual strategy is to use rough times with a number of Kaiser but the recalls and companys cash on hand, its layoffs cash flow or the sale of some always kept their union contracts and endeavored to be fair assets to reduce the debt. Also, with all of their employees. In bonds may be sold and those the latter part of the 60s, proceeds used to pay back some around 1968, Kaiser picked up of the borrowings. Profits come from again and has since maintained work streamlined less a more or operations or from steady force. Horse Canyon was the later sale of stock to the public. Sharks are not required to same until its demise earlier in show good faith about running a this decade. Slowly but surely, economic company when buying it but it is expected by the creditor banks policies hurt the coal and steel industries. The United States financing the buyouts. (See the movie Wall Street for a good policy of allowing any outside depiction of the process and the country which wanted into our steel market was greed involved.) Recent changes in the acThese foreign countries, which were government-subsidizecounting laws under the undercut the American steel direction of the Financial Achence a hard counting Standard Board such industries situation for Sunnyside and as pension accounting rules effective December, 1985 and Horse Canyon mines. hit were titled SFAS87 and SFAS88 make mines Underground hardest because costs are it easier to tap the rich pension funds of companies. See the higher, per ton, to deep mine than to open pit mine. However, article Tapping the Golden the environmental costs are a Pool in April 21, 1986 issue of homes ff over-funde- g. d, Forbes magazine. easier was Also made taking out bankruptcy. See article Caveat Creditor in July 7, 1980 issue of Forbes. As the decade of the 80s proceeded, smaller companies all over the U.S. began to fall. Large companies began to quake and take evasive action if possible. Many people of the middle class were suddenly losing their jobs, their pensions and their medical benefits. Families were and are ending up on the streets or, if they are lucky, welfare. The unemployment figures are now low around the U.S. according to official reports but no one explains that once the unemployment payments run out there are only a few options open. Any worker who can find a job (also the spouse) does, hopefully good paying jobs with benefits but most new jobs are at minimum wages, part time or a little higher but no benefits. The rest end up on welfare after they are forced to sell (and to whom do they sell?) all their worldly goods it has taken their whole life to accumulate or they can go on the streets hoping for the best but expecting the worst. Woe to those who have medical problems. As the unemployment figures shrink, you can be sure the welfare rolls are growing and the streets are getting crowded. In the mid- - 80s, a shark group led by Joe Frates and partners, took over all of Kaiser Steels assets in a friendly leveraged buyout. Read the bankruptcy papers. There seems to be another group involved that bought out the Frates group and began to sell off the assets of Kaiser. This following is all my opinion and estimation of what has since happened. Because they couldnt get to the rich pension plans without proving they needed it for operating funds, they acquired a lot of worthless properties, i.e., Columbia mine, Horse Canyon mine, Wellington Washer Plant, etc. and put nothing back into the main- tenance of the existing properties. Also, once they were in, they were able to cancel the saving and sharing plans and start new ones so they could get at the earned interest in the millions of dollars of the existing plan. They neglected paying creditors who had learned by past practice that Kaiser was always good for it and always came through and now the creditors (many of them small businesses in this area) were hung out to dry. I feel these sharks allowed unscrupulous people to take over management. Equipment and valuables began to get sold off or just disappeared. This was happening all over Kaiser Steel, including Fontana, Calif. In East Carbon and Sunnyside, we could see what was happening here but the concept of avenues to turn to suddenly disappeared and probes were blocked. Even Carbon County or Utah state didnt prosecute or stop anyone when it all came to light. Kaiser Steel was changed to Kaiser Coal during this process. Then, somehow, when Sunnyside proved they could make a profit and get contracts and had, under adverse working conditions, three managed months of working in the black, the federal mine inspectors shut down operations on a safety violation but within the month the federals called Sunnyside and told them to put everything back the way it was at the time the order was written and they would lift the order. At the same time DOGM (state surface environmental people) were demanding full payment of a reclamation bond before reopening. At that point it was all but over. Once the sharks got no profit it closed down no mine. That all showing happened in April, 1988. So, here we all sit. Six men, all formerly salaried by Kaiser, but now being paid by a creditor bank to protect the mine from harm and flooding, are all that is left. These six men have no medical or life insurance and some of the families have major medical problems. They stay, and will stay as long as possible, because it is the last hope we have of someone, somewhere, seeing, before it is too late, what has been done to our beloved area and communities in the name of greed, Reaganomics and a general disregard for human dignity. The coal miners have never been legally laid off so they havent received their benefits pay or been given a blue slip to enable them to get a new job easier. The salaried people were laid off but told they would have to claim severance pay through the bankruptcy court. Kaiser withdrew all funds at Travelers Insurance, the company which administered the medical program of Kaiser, on July 22, 1988. At that point, no more medical bills for anyone could be paid, even those acquired before layoff. None of the medical bills, union, salary or pensioner, since videos, typewriters, etc. for their use. Dont they and havent they always had their own? if we This does not compute are no longer under Kaisers domination as we have papers stating from the bankruptcy (Editors note: Phyllis Johnson is a resident of East Carbon. Her husband works for Kaiser Coal.) ATTENTION Dr. Scoville is now a preferred provider for ELECTRIC MUTUAL BENEFITS ASSOCIATION DonltlSuffer m(Pain! DIZZINESS NECK PAINS HEADACHES SHOULDER PAIN BACKACHE LOWER BACK PAIN INDIGESTION NUMBNESS STIFFNESS LEG PAINS SCOVILLE CHIROPRACTIC CENTER 55 North 600 East, Price "We're Making It Affordable FREEilNITIALlCONSULTATION Call Today For An 637-482- Appointment LET GENTLE CHIROPRACTIC or 2 TAKE YOU OUT OF PAIN Hut. -- Large East of Price Two 637-641- carry out PiCa Join now, by yourself or with an entire team. -- Teams) SIGN UP NOW! I Coupon good Carbonville Rd. t Ask for Jim or Joe both locations October 22 November5, Hut. KI.I,WR Free Delivery Area Limited 58 West Main at 1988 0 Dine in or Topping Pizza and 2 Liters Pepsi Tues. & Wed. 4:00 p.m. 12 and up Thurs. 4:00 p.m. 637-077- 7 8 MHaiNCY-37- .a SPECIAL 1988 Jensen's Country Lanes 637-482- Deer Hunter Widows 11 (4-M- an To Be Healthy! MOST INSURANCE PLANS ACCEPTED COUPON: TWO DIVISIONS 8-- Meanwhile, we are hit by another low blow. Kaiser is reorganizing but according to stockholders papers, Sunnyside is a separate business entity and under different bankruptcy orders. Raton, New Mexicos York Canyon mine, during this last episode is operating under the auspices of a creditor bank and is being allowed to take Sunnysides equipment such as ap- proximately April, have been paid by Kaiser, yet the company neglected to notify employees that their claims would not be paid. (There was a union meeting where a company representative did warn the union they may not receive any benefits due them.) Premiums were taken out of the salaries of the salaried employees through July 31, 1988, the final day of Kaisers employment of anyone here. Yet they give no explanation of what happened to those premiums. Letters were given the salaried people stating if a certain amount was paid each month (in our case $253 per month) our medical insurance would be extended at least for a period of 90 days. Many of the salaried people sent personal checks m to Fontana or to Ratons Bob Vogule for the continuance of this insurance. At the present time, the premiums have not or the been acknowledged or the agreement honored checks cashed or returned. "Boys and Girls Ages Ages are in. self-insur- Junior League Starts Tuesday, Oct. 25, have discontinued a program? In fact, I feel the International UMWA has even turned its back on its union brothers and offers no help to pensioners with medical or monetary needs, although UMWA District 22 and Joy Huitt are trying their best to get action and help the people cope. Even local news and state media ignore what has happened and is still happening in our area. Isnt a towns demise worth an investigation? What has happened to moral outrage? I dont believe the rest of Carbon County knows what a bind we computers, Price Additional Toppings at regular menu prices 5 court, why are the courts allowing Kaiser management to loan our equipment to York Cany on ( an open pit coal mine ) ? Those assets at Sunnyside are the only thing besides coal we can offer a bidder (if Colorado Springs will let the courts see the bids) and our assets are being given away. I am wrong on one point. Equipment and coal are not all that is being offered by our Sunnyside mine. The Sunnyside workforce is the best in the world. They will outwork any other miners anywhere and they have always been loyal to their employers (even the ones who dont deserve it), their families, their homes, their schools and their communities. Time is fast running out for the young families and the pensioners. They are left with depreciated homes, a clinic on the verge of closing down because of thousands of dollars of unpaid insurance claims, cities with no tax base and a promised power plant that just doesnt seem to materialize. Is anyone out there? Is someone, somewhere listening? Does anyone even care? Or are we to be sacrificed to greed? Just remember, the next time it could be you. Arent there laws to protect people from this type of flagrant taking of premiums after they cats, Sun Advocate, Price, Utah 20, 1988 637-570- 0 Y |