Saving a $400 Million Contract
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Saving a $400 Million Contract

With Cushman/Amberg Communications, Freemen developed a crisis campaign using the community to apply public pressure on CILCO to force them to retract their decision.

Paul Holmes

After years of litigation, Central Illinois Lighting Company (CILCO) announced that it would pull out of a $400 million contract with Freeman United Coal Mining Company 10 years early.  This action would have forced Freeman to close one of its coal mines and put hundreds of people out of work, which would have had a devastating effect on the economy of central Illinois and threatened the long-term viability of the company. 
 
With Cushman/Amberg Communications, Freemen developed a crisis campaign using the community to apply public pressure on CILCO to force them to retract their decision.  The grass roots effort culminated in a town square rally to save the mine attended by more than 1,500 citizens. The outpour of public support resulted in CILCO agreeing to honor its contract, saving the jobs, the local economy and the company.
 
Challenge
 
Late in December of 2000, after months of wrangling between attorneys, central Illinois-based Freeman United Coal Mining Company received word from its largest customer, CILCO, that it would stop taking coal from Freeman’s Crown II mine and end its long-term contract 10 years early.  CILCO charged that it was paying too much for the Freeman coal and that the mine was inefficient. 
 
Freeman United called upon Cushman/Amberg Communications in early January 2001 to counsel it on ways to save the contract and the mine by bringing public pressure on CILCO.  The agency advised the company to focus on the harm that would be done to the community, rather than the company, by the closing of the mine.  Further, the agency presented a public affairs strategy to force CILCO to re-evaluate its action and continue taking coal from Crown II.
 
The potential loss of 225 jobs may not sound like much in a large metropolitan area, but in a small central Illinois county it would have had the same impact as the loss of 36,000 jobs in the Chicago.  The loss of these jobs would have a negative economic impact of $34 million to the communities surrounding the mine.  This was the central fact that was used as the lever to salvage a $400 million contract that would keep a coal mine operating, and that would in turn keep a county from financial ruin.
 
PLANNING
 
In order to meet the objectives, it was essential to establish the following:
  • Position Freeman as being forced to close the mine because CILCO and its parent company, AES Corp., were pulling out of their contract;
  • Be first to announce potential layoffs and enlist the miners’ support to fight CILCO;
  • Motivate the community to take the lead to fight to save the mine;
  • Show how this corporate decision would devastate a small county and provide no savings to the consumer, while adding profits to CILCO and AES.
 

OBJECTIVES

 
The objectives of the program were very straight-forward:
 
Put public and political pressure on CILCO to force them to honor the remaining 10 years of the contract, valued at $400 million;
 
Create an aggressive grass-roots groundswell of support for Freeman against CILCO among the United Mine Workers of America miners and their families, community business and political leaders, and the general public.
 
RESEARCH
 
Economic Impact.  The Freeman team at Cushman/Amberg conducted extensive research on the economic impact that a mine closing would have on the Macoupin County community.  Data from the U.S. Department of Labor, the Illinois Department of Economic and Community Affairs, and the Macoupin County Economic Development Office was scrutinized to arrive at valid impact figures.
 
Rate Structures.  Using Illinois Commerce Commission data and examination of rate adjustment request filings, the agency researched CILCO’s claim that buying cheaper coal elsewhere would save consumers money.  It was quickly determined that under the plan CILCO had filed with the ICC, none of the savings from purchasing cheaper coal would be passed on to consumers.
 

Political Base.  Freeman and Cushman/Amberg prepared extensive briefing books for all elected officials at the local, state and national levels who represented Macoupin County, and followed that up with personal and phone interviews to gauge understanding of the issue and support.
 
EXECUTION
 
Prepared comprehensive briefing books on all aspects of the issue and distributed them to all area politicians, business leaders, and civic leaders;
Held a press conference at the Crown II Mine to announce its closing, and to place the blame on CILCO;
Worked with United Mine Workers of America to stage picketing at CILCO headquarters in Peoria, Illinois;
Coordinated the writing of more than 3,000 postcards protesting CILCO’s action from local residents to political leaders and government officials;
Conducted approximately 250 interviews with local, regional and national media;
Generated hundreds of articles and broadcast stories about the issue, flooding the central Illinois area;
Organized a community rally in Carlinville, Illinois of 1,500 people, including U.S. Sen. Dick Durbin and virtually all elected officials covering the county, to demand CILCO honor its contract with Freeman United.
 

RESULTS

 
Following the rally and the massive negative media directed toward it, CILCO threw in the towel five days later and announced it would honor its remaining 10 years of the Freeman United contract.  All 225 jobs were saved, the county suffered no adverse economic impact, and Freeman retained $400 million in business.
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