Abingdon, Va.-based Alpha's announced Thursday that it also is giving 25 shares of stock to each of its 3,600 employees, and paying bonuses of up to $9,000 to miners who stay three years and extra cash to members of specially trained rescue squads.
Alpha is following the lead of Massey Energy Co., the nation's No. 4 coal producer. Richmond, Va.-based Massey recently started giving guaranteed three-year contracts to individual miners.
Both are trying to fend off the kind of employee poaching that rippled through the industry during a price spike in 2005 and 2006. Prices have jumped even higher this year, more than doubling to about $95 a ton for utility-grade coal and $200 or more a ton for coking coal used by steel manufacturers. Demand for experienced underground miners also is up as Alpha, Massey and others trying to boost production.
''Every able-bodied, drug-free coal miner is working today if he wants,'' Alpha Chief Executive Mike Quillen told The Associated Press. ''You basically have to try to steal them from somebody else.''
In underground coal mining, losing veteran employees typically cuts productivity, which quickly pumps up per ton costs and eats into profits. Rising demand for miners puts nonunion companies such as Massey and Alpha at a disadvantage to union operators such as St. Louis-based Patriot Coal and Pittsburgh's Consol Energy.
Patriot and Consol are among 11 large coal companies with United Mine Workers contracts that include 20 percent raises over five years.
Massey Chief Executive Don Blankenship declined a request for an interview to discuss his company's approach.
But UMW spokesman Phil Smith called the company's individual contracts ''yellow dog'' deals that harken to the 1920s when operators ran roughshod over miners. The contracts largely disappeared, but Smith says it's bad that deals barring miners from leaving one company to join another have come back.
''It's almost an indentured servitude sort of thing,'' he said. ''Things like that are just wrong.''
Alpha is taking a different approach.
''We look at it as kind of a reward, retain and recruit program,'' Quillen said.
While he considers the stock being given to miners in West Virginia, Virginia, Kentucky and Pennsylvania more of a thank you, Quillen said incentives such as $30 a month for gas are aimed at keeping people. All told, the package adds up to more than $3 an hour on average for miners Alpha says earn approximately $60,000 a year.
''This is going to be a big factor in employees' and families' lives,'' Quillen said. ''That's cash going into their pocket.''
Alpha calculated the gas incentive on a daily, round-trip commute of 50 miles and an average fuel economy of 18 miles per gallon. Quillen says the figure will be recalculated - and probably increase - as the company gets a better idea of mileage and commutes, noting that many coal miners drive SUVs and pickups and often drive 60 to 80 miles each way to work.
The gas money is designed to address what Quillen says is one of two major reasons for turnover at Alpha. The other is the opportunity to get a better shift.
''Energy is just such a huge issue for America going forward,'' he said.
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