Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, April 4, 1990 TAG: 9004040654
SECTION: BUSINESS PAGE: C5 EDITION: EVENING
SOURCE: GREG EDWARDS BUSINESS WRITER
DATELINE: LENGTH: Medium
The UMW launched its strike a year ago Thursday. The strike, which saw the massive use of civil disobedience by the UMW, has been credited with bringing a renewed spirit to the U.S. labor movement.
Pittston said that during the 46-week period of the strike - which ended Feb. 19 when union miners approved a new contract - the company incurred over $20 million in security, legal and other costs to protect workers and assets.
Pittston's total coal production declined 27 percent last year, but unionized production dropped 36 percent.
The Pittston Coal Group, Pittston's union coal companies based in Russell County, mined 6.8 million tons of coal in 1989, compared with 10.6 million tons the year before.
Pyxis Resources, Pittston's non-union coal subsidiary, could not pick up the slack, selling 3.2 million tons of coal in 1989, the same as in 1988. Pyxis production increased slightly, to 3.3 million tons.
Primarily as a result of the UMW strike, American Eagle, Pittston's coal sales subsidiary, increased the amount of coal it bought from other companies and resold from 2.09 million tons in 1988 to 3.4 million tons last year.
Despite the increase in coal purchases to offset strike production losses, Pittston's overall coal sales were down 2.3 million tons from the year before, or 14 percent. Coal sales brought $446.7 million last year, compared with sales of $511.9 million the year before.
Pittston is a diversified company based in Greenwich, Conn. Operating profits from Pittston's other business - Burlington Air Freight, Brinks armored cars and Brinks Home Security - totaled $48.8 million, or 50 percent above 1988.
Pittston's net income from all businesses in 1989 after interest and tax expenses was $3.8 million on total revenues of $1.6 billion.
The company's new collective bargaining agreement with the UMW runs for 4 1/2 years, expiring June 30, 1994. The contract contains many provisions that are the same as the contract signed between the UMW and the Bituminous Coal Operators Association, which Pittston quit in 1987, but makes "significant changes in certain key areas," the company said.
The contract expands job security and provides wage increases for union miners. It also increases Pittston's flexibility to manage its mines, allowing 24-hour-a-day, 7-day-a-week operations.
The contract also contains provisions for lowering health-care costs and lets Pittston out of the UMW's 1950 benefit fund with a lump-sum payment.
The major issue dividing Pittston and UMW during the labor dispute was retiree health care. Pittston wanted out of the 1974 trust that provides health care to newer retirees whose companies are no longer in business and the 1950 trust that provides health care to all miners who retired before 1976.
In the new contract Pittston agreed to participate in the 1974 fund at a fixed rate and was allowed by the UMW to get out of the 1950 fund for a lump-sum payment of $10 million. It should be noted, however, that the independent trustees of both funds have yet to approve the arrangement.
"Pittston can take some pride in its leadership role in bringing into clear focus the plight of the industry's so-called orphans - those retired coal miners and their dependents whose last employer is no longer providing benefits," Pittston Chairman Paul Douglas wrote to shareholders in the company's annual report.
The cost of providing those retirees health benefits is more than Pittston nor the rest of the coal industry can bear, he said. He praised Secretary of Labor Elizabeth Dole's decision to appoint a commission to examine the health-care issue.
As for the contract talks overall, Douglas said, "Each side came to recognize that it was important that the end result truly be a `winning' solution for all parties."
Pittston and UMW leaders have pledged to work together for the interests of both sides, Douglas said. "Partnership for progress between Pittston and the union is not only our motto but also our mutual commitment," he said.
As of the last week of March, Pittston reported that 1,200 of the 2,500 people it employs in mining operations were UMW members. That compares with the 1,695 union miners working for Pittston at the start of the strike.
Pittston's employment in all businesses is 14,500.
by CNB