Kentucky

‘I’m not going back.’ For many, this coal company’s bankruptcy is unbearable.

‘We was basing everything off Donald Trump.’ Miner now planning for life after coal.

Harlan County coal miner Scotty Cox is planning for a future after the bankruptcy of Blackjewel LLC.
Up Next
Harlan County coal miner Scotty Cox is planning for a future after the bankruptcy of Blackjewel LLC.

Scotty Cox liked the $25 an hour he made mining coal in Harlan County, but he’s had enough of the constant worry about job security in the industry.

Cox, 27, was among about 1,100 miners in Kentucky, West Virginia and Virginia who lost their jobs when a coal company called Blackjewel filed bankruptcy July 1, with no warning to employees and no money to cover their final paychecks.

In the month since, a few miners from Harlan County, where the Kentucky losses were concentrated, have found jobs at mines in West Virginia or Alabama. Some are sitting tight in hopes that a company will buy the Blackjewel mines and reopen them.

But like many, Cox is getting out of coal. He has arranged to go to community college to train as a physical therapy assistant.

“I just don’t like the insecurities of the mines,” said Cox.

The Blackjewel bankruptcy is the latest upheaval in a years-long downturn that has shifted the ground beneath Eastern Kentucky’s economy.

Coal jobs in Kentucky have gone down more than 60 percent since 2011 as competition from cheap natural gas battered the industry, along with the rise of renewable energy, plans for tougher environmental protections during the Obama Administration and other factors.

Blackjewel managed to rub salt in the wound. The company issued paychecks on June 28 but didn’t have the money to cover them, so a few days later banks deducted the money from miners’ accounts. Many had made mortgage payments and paid other bills, leaving them overdrawn.

The company also allegedly didn’t make good on other obligations, such as contributions to employees’ 401(k) accounts.

Kentucky Attorney General Andy Beshear has assigned a criminal investigator to determine if there was any intentional wrongdoing by anyone at the company. The Kentucky Labor Cabinet also is investigating.

But it’s been six weeks since Blackjewel miners in Appalachia got a valid paycheck. Many are scrambling to get by.

Some have moved to reduce their rent. Some are mowing grass or doing other odd jobs for cash. Some have sold personal property to get some money, and a number have signed up for food stamps.

LEX_07262019coal02.JPG
Scotty Cox, of Evarts, Ky., was among about 1,100 coal miners in Kentucky, West Virginia and Virginia who lost their jobs when coal company Blackjewel filed bankruptcy in early this month, Thursday, July 25, 2019. Cox does not plan to return to coal mining and has arranged to go to community college to train as a physical therapy assistant Alex Slitz aslitz@herald-leader.com

‘I just had to do something’

Government agencies, churches, businesses, community groups, schools and residents in Harlan and other counties have rallied to support the out-of-work miners, giving donations, collecting food, paying utility bills and holding benefits.

Joyce Cheng, who runs the Panda Garden restaurant in Harlan, has stood out in her efforts to help the miners, said Leslie Bledsoe, who oversees a community group called With Love From Harlan that has collected donations for former Blackjewel workers.

Cheng, 48, an immigrant from China, came to Harlan in 1994 for what was supposed to be a three-month stint at a restaurant, but fell in love, stayed and ultimately bought the business.

Cheng ran around Harlan for hours one day, collecting dollars from people. She donated proceeds from the restaurant and $5,000 that her husband had given her to buy a diamond ring because he couldn’t afford one when they got married.

“I just had to do something, something that is more important than my ring,” Cheng said.

With Love From Harlan has received about $36,000 in donations for the miners altogether, Bledsoe said.

The miners appreciate all the help they’ve gotten, but are used to hard work and would like to earn their keep, Cox said.

“They’d rather work for what they get,” he said.

However, there are few, if any, other coal mines in the area hiring, said Donna Pace, who heads the Harlan County Community Action Agency, a non-profit that provides job services and is accepting donations to help the miners.

“The mines that are working have stacks and stacks of applications,” Pace said.

Pace said one woman called her agency and said she hadn’t received her ex-husband’s child support for June. She had three children and couldn’t pay her rent.

“A lot of ’em are really worried they’re gonna lose their house,” Bledsoe said of the laid-off miners.

Unemployment payments have started for some miners, but it doesn’t match what they made.

Steven Weaver, 34, gets $502 a week in unemployment, less than half what he was making.

Weaver lives at Kettle Island in Bell County, near where an explosion at an underground mine killed 16 men in 1930, but was driving more than an hour one way to work at a Blackjewel mine in Harlan County.

He was on track to make about $75,000 this year before the shutdown.

“Once you’re used to making that amount of money, it’s hard” to get by on far less, said Weaver, who has two teenagers at home.

Weaver ended up overdrawn by $1,400 after his last paycheck bounced, and said Blackjewel also didn’t pay all it was supposed to into his health savings account.

His monthly bills total $700 more than the combination of his unemployment and his wife’s salary from her job at a chiropractic office.

Family members have helped them and he has signed up for food stamps, but Weaver, who has been mining since 2003, is checking on getting a truck-driving job.

“There ain’t no future in it, really,” he said of coal mining in Eastern Kentucky. The coal that was easiest to get was mined long ago, meaning higher costs to get what’s left, he said.

The hardships of being a miner, including finding a job, are part of Central Appalachia’s lore and music. The industry has boomed and busted more than once, but looking ahead 30 years, federal analysts don’t project another boom for coal in the region.

LEX_07262019coal03.JPG
Scotty Cox, of Evarts, Ky., shows his coal miner’s helmet at his home, Thursday, July 25, 2019. Cox was among about 1,100 coal miners in Kentucky, West Virginia and Virginia who lost their jobs when coal company Blackjewel filed bankruptcy in early this month. Alex Slitz aslitz@herald-leader.com

‘All I know how to do’

There aren’t many jobs in the area to absorb the number of people laid off from Blackjewel, and almost none that pay as well as mining for people without college degrees.

“A lot of ’em, they can’t find nothing,” said David Estep, who worked as an electrician at Blackjewel’s Huff Creek mine before the shutdown.

Estep said he plans to train to be a utility lineman. It will likely mean less money and more time away from home, but he won’t have to uproot his family while his son is in high school.

Joseph Jones, a Blackjewel miner from Bell County, said he’ll start a training program to work on power lines next month.

Larry Neff Jr., who worked at a mine in Leslie County, said he found work at a trucking company about a week after Blackjewel declared bankruptcy.

But it won’t be easy for some to leave mining, said Mark Holland, who worked at a Blackjewel mine in Harlan County.

“Coal mining is pretty much all I know how to do,” Holland said. “I know a lot of guys, they’re in the same boat I am. There’s really no jobs out there for us.”

Several miners said they know former Blackjewel employees who have gotten mining jobs out of state. Some have moved, but others, unable to sell their house in a down market, may have to work out of state and see their families on the weekends.

Holland’s last check from Blackjewel bounced after he already deposited it into his bank account and used it to pay bills. That left his account overdrawn by about $1,500.

To get by, his wife got a job at a restaurant in Hindman. His dad and some other family members have helped, too.

“If it wasn’t for my family, we’d of probably starved out,” Holland said.

‘God will get us through’

Cox, the former Blackjewel miner who is returning to school, lives in Evarts, where several men died in a 1931 gun battle during a conflict between union advocates and coal operators determined to keep miners from organizing.

He had wanted a different career even before the Blackjewel shutdown because of concern over the decline of coal, and had left a mining job in 2017 to work at the county jail and later at a state prison in Virginia.

But he made just $31,000 a year at the prison, so he decided to return to mining in June in order to pay off debts and get in better financial shape to go to college. He would have made more than $60,000 annually at the mine.

He knew there was a chance he would get laid off someday, but he and his wife, Haley, had discussed the risk and believed the job would last as long as President Donald Trump was in office, at least through 2020 and maybe through 2024, giving them time to build up their finances.

Trump promised in his campaign to revive coal mining jobs, and has rolled back environmental rules to try to help the industry.

There were 2,200 more coal jobs in the country in June than when Trump took office, according to the Bureau of Labor Statistics, but Kentucky hasn’t shared in the upturn.

The number of coal jobs in the state averaged 6,442 last year, down from 6,610 in Trump’s first year in office.

Cox got two checks before Blackjewel shut down.

“I was expecting four to five years, not four weeks,” he said.

Cox sold an AR-15 rifle so he could pay off a $500 loan he’d taken to buy equipment he needed to return to mining, and he has canceled satellite television and signed up for unemployment and food stamps.

The Harlan County Community Action Agency paid his first utility bills due after the shutdown, and Cox hopes funding will continue for a program through the agency that would essentially continue his unemployment payments while he is in school.

Haley Cox makes $860 a month as a teacher’s aide, but is getting her degree in early childhood education. The couple knows times will be tight for them and their children, 5-year-old Asher and 11-month-old Ella, while Cox is in school the next three years, but are convinced they have to make the change.

Scotty Cox said he wouldn’t go back even if someone reopens the Blackjewel mines.

“As far as me, I’m not going back,” he said. “It would be a tough way to say no, but I’ve prayed about this, and my wife has prayed about this, and I think that it’s settled, that God will get us through the next three years.”

LEX_07262019coal04.JPG
Scotty Cox, of Evarts, Ky., was among about 1,100 coal miners in Kentucky, West Virginia and Virginia who lost their jobs when coal company Blackjewel filed bankruptcy in early this month, Thursday, July 25, 2019. Cox does not plan to return to coal mining and has arranged to go to community college to train as a physical therapy assistant Alex Slitz aslitz@herald-leader.com

The future of the mines

Last week, a judge gave Blackjewel permission to sell two giant surface mines in Wyoming and a West Virginia mine to another coal company, but the future of its Kentucky mines remains uncertain.

It’s also not clear yet if miners will get the money the company owes them for the bounced checks. Most Blackjewel miners got shorted for three weeks and one day of work.

According to a company update sent to employees this week, the company’s management has continued “to do everything possible to secure additional financing to safely resume as much of Blackjewel’s operations as possible and to bring more employees back to work.”

It has yet to secure that financing.

Ned Pillersdorf, a Kentucky attorney who has assisted some miners in finding legal representation in the case, said the chances of the mines re-opening under Blackjewel grow more slim with each passing day.

“The overall view is the fact that it’s been a month is reason to be very concerned,” Pillersdorf said. “We’re worried they’re gonna go to liquidation, sell assets and these (miners) are all gonna get hammered.”

The company is facing two separate class action lawsuits seeking wages for miners in Kentucky, Virginia and West Virginia.

One of those suits, filed earlier this month, alleges Blackjewel violated a federal labor law and would compel the company to pay employees for 60 days of wages. Those payments would serve as a penalty, not a replacement for time worked.

Another suit, filed Thursday, seeks back wages and damages for about 1,100 miners in the three Eastern states. That suit also alleges the company did not make 401(k) contributions as promised.

In addition, the suit challenges the basic claim that the company is actually bankrupt.

Blackjewel’s former CEO Jeff Hoops, who resigned as part of the bankruptcy, operates another business called Lexington Coal Company that continues to bring in “substantial revenue” even as other former Hoops companies covered in the bankruptcy sit idle, the complaint alleges.

‘It’s gonna hurt’

The financial blow from the shutdown has spread beyond miners into their communities.

Don Parsons, who operates a grocery store in Harlan called Don’s Super Saver that also cashes checks for miners, said he is sitting on about $93,000 of Blackjewel checks that bounced.

For a small business in an already economically-depressed county, that’s a big hit, Parsons said.

“If I lose that $100,000 it’s gonna hurt us substantially,” he said. “I had to go and borrow money to keep operating.”

Parsons entered the bankruptcy as an unsecured creditor, but said he isn’t likely to get anything there.

The store touched off a backlash among miners in recent days with a letter saying the miners needed to arrange to pay off the bad Blackjewel checks or agree to begin making payments.

The letter said that while Don’s understood the miners were not at fault in the bounced checks, “we must start the collection process,” causing concerns that Parsons planned to take miners to court or hire a collection agency to come after money many don’t have.

Parson’s son, Scott, clarified in an open letter to miners Monday that the store isn’t pressing charges or “coming after” miners, and is only asking that they pay off the bad checks once they get replacement checks from the coal company.

“This is a bad situation for all of us,” the letter said. “We believe it is fair that when you get a replacement check that you reimburse us for the amount of cash we gave you before the first paycheck bounced.”

Gwen Blair, who runs Homeowner’s Hardware in Cumberland with her son, Tyler, said business is down.

One recent afternoon, a man who had bought tools for a project at home, including a shovel and pick, brought them back. He said his check from Blackjewel had bounced, so he needed his money back.

Blair refunded him $45.27.

Blair said two laid-off Blackjewel miners had moved out of rental housing she manages, either to move in with family or to find a cheaper place.

Jonathan Fields, who operates Fields Furniture in Cumberland, said he’s seen a slowdown in sales, but is also worries about the shutdown hurting community morale.

“I don’t know that it’s hit as hard as it’s going to,” he said of the shutdown.

Harlan County Judge-Executive Dan Mosley said he hopes a federal bankruptcy judge will order Blackjewel to pay miners for their back wages as the company moves to sell off its Western mines.

“That’s our only hope,” Mosley said. “If it doesn’t happen, this county will see a recession like it hasn’t seen in its 200 year history.”

Will Wright is a corps member with Report for America, a national service project made possible in Eastern Kentucky with support from the Galloway Family Foundation. Based in Pikeville, Wright joined the Herald-Leader in January 2018 and reports on Eastern Kentucky.
  Comments