Statement from Peabody Energy on UMWA Claims:
The UMWA’s claim that Patriot Coal was ‘designed to fail’ is a desperate attempt to rewrite history. Patriot was highly successful following its launch more than five years ago with significant assets, low debt levels and a market value that more than quadrupled in less than a year.
At the time, analysts cited a bright future for the company’s based on its “strong balance sheet,” “strong management team” and “excellent valuation prospects.”
It is our understanding that when Patriot’s market value was high, the company could have strengthened its financial position. Instead, Patriot made a major acquisition of Magnum Coal Company in mid-2008.
A series of other unforeseen events affecting all coal producers followed – all on Patriot’s watch.
These included an unprecedented global financial crisis; development of low-cost shale gas that reduced coal use; burdensome regulation by the U.S. EPA that dramatically increased Patriot’s environmental compliance costs; an increase in safety regulations that, in turn, increased operating costs; and a significant reduction in the price of Patriot’s major product: metallurgical coal.
Peabody has lived up to its obligations and continues to do so. The UMWA is fully aware that this is a matter solely between the union and Patriot Coal, and the proper process for deciding such issues is through the bankruptcy court – not the court of public opinion.