One of the largest privately-held coal companies in the U.S. warned Friday that it may be forced to undergo the biggest layoff in the sector’s industry thanks to the Obama administration and stiff competition from natural gas producers.
Murray Energy Corp. notified employees it may have to slash as many as 4,400 jobs, or about 80 percent of its workforce, because of a combination of stiff regulations, low coal prices, and an increasingly crowded, competitive energy market. Company officials said it anticipates “massive workforce reductions in September.”
Murray’s owner, Robert Murray, is a stalwart supporter of Donald Trump and a fierce critic of President Barack Obama.
The possible layoffs were “due to the ongoing destruction of the United States coal industry by President Barack Obama, and his supporters, and the increased utilization of natural gas to generate electricity,” the company said in a press statement Friday.
The current coal price benchmark is $40 a ton, or half its level from five years ago, when the top Central Appalachian coal price ebbed at nearly $100 a ton.
Another massive coal company, Peabody Energy Corp., was forced to file for Chapter 11 bankruptcy in April, joining the likes of fellow coal country gold standards Arch Coal and Illinois-based Alliance Coal, in contemplating drastic measures to pull itself up and out of the muck and mire. All three Goliaths are struggling in a coal market pummeled by low natural gas prices on one side, and overreaching regulations on the other.
Peabody, which was marked as a bankruptcy risk by regulators prior to the company’s decision, acknowledged it reneged on a $71.1 million interest payment to its lenders, putting in place a month-long grace period.
Much like Arch Coal — which filed for Chapter 11 in January — Peabody’s lenders are asking the once-massive coal producer to restructure its debt through bankruptcy. Arch filed in hopes of keeping $4.5 billion in debt off its financial accounts.
At a Tuesday fundraiser for Trump in West Virginia, Murray said Murray Energy Corp. was down to a bare bone workforce of just 5,356 employees — it employed 8,400 people a year ago. Most of the company’s workers are based in what is often called “Coal Country” – West Virginia, Illinois and Ohio.
“Frankly, I am frightened for you, my employees, and the survival of your jobs and family livelihoods,” Murray told throng of Trump supporters. He went on to suggest that the industry’s only hope was to see Trump become president.