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Patriot Coal begins making wage, benefit changes

CHARLESTON, W.Va. -- Patriot Coal began making changes on Monday to wages and benefits received by working coal miners under the company's contract with the United Mine Workers.

The changes were made with the approval of U.S. Bankruptcy Judge Kathy A. Surratt-States, who ruled on May 29 that Patriot could throw out current contracts it negotiated with the UMW and cut health-care benefits for workers and retirees.

Patriot officials could not be reached Monday, and UMW leaders did not want to discuss the details of the changes being made.

Joe Carter, president of UMW District 17, based in Charleston, said Monday that Patriot was "supposed to change some benefits today for working miners."

Most Patriot miners are on vacation, Carter said. The vacation period will end in three weeks.

"After the vacation period is over," Carter said, "we will have an explanation meeting with the miners and discuss the changes. Sometime shortly thereafter, we will be taking a vote, from the working men and women at the mines."

The vote could lead to a strike, but negotiations between the UMW and Patriot are still going on.

"President Cecil Roberts is still meeting with Patriot. They are still discussing the various benefits. We are not exactly sure what the final package will look like," Carter said.

Janine Orf, Patriot's vice president of investor relations, was out of her office in St. Louis on Monday. Representatives from Joele Frank, a New York City-based communications firm that represents Patriot, did not return a telephone call.

"Patriot is implementing changes as they were allowed to do by the judge," UMW national spokesman Phil Smith said Monday.

"Some terms and conditions for working miners are changing from what they were before. But we are still talking to them. We are not finished with negotiations," Smith said.

"Retiree health care remains intact and will remain intact at current levels through the end of August," Smith said.

In a letter to Patriot employees June 24, Patriot President and CEO Ben Hatfield wrote, "While Patriot and the UMWA have made substantial progress in our discussions, Patriot continues to lose money and will run out of cash if we do not act quickly.

"As we currently anticipate being in breach of our bank covenants beginning in July, Patriot has no choice but to implement new contract terms that achieve critical cost savings and put us on the path to becoming a viable company."

Today, Patriot covers many benefits for 23,000 retirees and dependents. After Patriot was created in 2007, it acquired all the union mines operated by Peabody Energy and Arch Coal east of the Mississippi. Many benefits those two companies promised to retired coal miners shifted to Patriot.

Roberts has called Peabody Energy and Arch Coal "the true architects of the Patriot bankruptcy." Patriot officials have said their company was not "designed to fail," as union leaders have alleged.

Reach Paul J. Nyden at pjnyden@wvgazette.com or 304-348-5164.


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