Not even a year has passed since coal businesses and Norfolk Southern Railroad were begging for workers. Now, after promises from several experts that West Virginia would be exempt from the economic slump hitting the rest of the country with phrases like “this is not your grandfather’s coal boom,” coal mines are not only laying off workers but closing several. Adding to the fear spreading throughout the area, 12 men from the Williamson NS railroad yard have recently been furloughed with more rumored to come.
NSC Manager Public Relations Robin C. Chapman confirmed the furlough status of 12 people via email to the Daily News.
“Furloughs are done by seniority,” he wrote. “It starts with the most junior employees and goes up the seniority roster, and employees are recalled by seniority, starting with the most senior.”
Chapman said all furloughed employees have recall rights, however, according to the agreement between Norfolk and Brotherhood of Railway Carmen Division, rule 14 (A), “the seniority of any employee whose seniority under an agreement with BRC is established after the date of this agreement (Jan. 1, 2003) and who is furloughed for 365 consecutive days will be terminated if such employee has less than three years of seniority.”
All 12 men recently furloughed have less than three years of seniority and are therefore in danger of permanently losing their jobs if not recalled within the 365 days. Each man was offered transfers to yards in New York but had they accepted, rule 16 states “employees transferred from one point to another, with a view of accepting permanent transfer, will, after 60 days, lose their seniority at the point they left and their seniority at the point to which transferred will begin on date of transfer.” Not one of the 12 accepted the transfer.
Chapman explained the furloughs are a result of a slow-down in traffic. While rumors are that up to 42 employees will be laid off by the time all is said and done, Chapman said, “at this time, there are no plans for additional furloughs, but that could change with changing in business conditions.”
The company, based in Norfolk, Va., said the cuts began in early December. Company wide, Chapman said 570 workers have been laid off.
The lower demand for new autos and parts has contributed to less traffic for the railroad. Another element factored in the slow down of traffic is production of coal has been slashed along with idled mines and a reduction in jobs.
One AP report states that at least 1,310 jobs have been trimmed at various Appalachian mines.
Massey Energy Chief Executive Office Don Blankenship said Wednes-day that in addition to cutting production, the company could reduce its workforce, cut overtime and Saturday shifts, and even idle some mines.
Massey shares fell over nine percent Feb. 4 after the company posted less than expected quarterly earnings.
"There are a lot of customers with blast furnaces down," Blankenship told Wall Street analysts. "Some customers are looking for longer-term contracts, some want discounts, it's a hodgepodge.”
A collapse in demand for steel from automakers, the construction industry and others have cut demand and prices for metallurgical grade coal used to fire blast furnaces. Now mine operators have begun scaling back steam coal production in response to a decaying demand from electric utilities.
Two more big U.S. producers, Arch Coal Inc. and Foundation Coal Holdings, also announced cutbacks. Peabody Energy, Consol Energy, Alpha Natural Resources, Alliance Re-source Partners and Patriot Coal have begun to curtail as well.
When asked if Massey will close mines Blanken-ship said, "We will be able to reduce the workforce by attrition and can deal with less production with reduced overtime. We can cut back on Saturday and idle some mines, but we will try to avoid that."
AP reports Blankenship said the company had improved production efficiency in the fourth quarter, but pricing and market demand were weaker than expected because of a continuing economic slump.
Massey expects to transfer 44 million to 46 million tons of coal this year. These numbers are down from its previous mark of 46 million to 48 million. It said the average price is expected to be $65 to $67 per ton, down from an earlier estimate of $78.
The director of Work-force West Virginia's Unemployment Compensation Division Michael Moore says 10,407 claims had been filed with the state through the week ending Jan. 17. This is a jump of 36 percent over the same period in 2008.
These numbers do not yet include the rounds of layoffs that hit the state this week which includes the mining industry.