CHARLESTON, W.Va. -- Patriot Coal is making new proposals to the United Mine Workers of America to resolve its conflict with the union over company efforts to cut health-care and pension benefits.
Janine Orf, Patriot's vice president for investor relations, said Thursday that the UMW would be given "a direct 35 percent equity stake in the reorganized enterprise."
The bankrupt company said the union could then sell all or part of the stake and put the money in the new voluntary employees beneficiary association, or VEBA, that the company has proposed setting up.
Under the company's new proposal, retiree health-care benefits would be moved to the VEBA Trust on Jan. 1, 2014, an extension of six months, if the UMW agrees to a short-term funding proposal.
If union leaders agree, UMW retirees and their beneficiaries will continue getting their current level of benefits until the end of the year.
The extension is being offered, Orf said, to give the UMW "ample time" to figure out the "optimum level of health-care coverage the VEBA Trust can provide."
In addition to a "profit-sharing contribution" under previous proposals from Patriot, the company also would pay a royalty for every ton of coal produced at all its mining complexes.
Orf said royalty payments would put additional tens of millions of dollars into the VEBA Trust.
In its bankruptcy filings, Patriot stated: "Unfortunately, Patriot simply does not have the financial resources to support its current benefit levels and will not survive without substantial changes across its cost structure.
"While we very much regret that these changes are necessary, we hope and trust that the UMWA will work with us on a collaborative basis to achieve a successful reorganization.
"Failure to reorganize will almost surely lead to a devastating loss of jobs and health-care coverage for more than 21,000 active workers, retirees and their dependents," according to Patriot's statement.