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UMW, Patriot Coal reach settlement over retiree benefits

CHARLESTON, W.Va. -- United Mine Workers of America and Patriot Coal announced a settlement Monday on retirees' health-care benefits, after a federal bankruptcy judge earlier this year allowed the company to throw out union-negotiated contracts and significantly reduce those benefits.

In a news release, the UMW said the settlement includes significant improvements in the terms and conditions of employment from those approved by federal U.S. Bankruptcy Judge Kathy Surratt-States in Missouri on May 29 and implemented by Patriot on July 1.

UMW President Cecil E. Roberts said in the statement, "After several weeks of nearly around-the-clock negotiations, I believe we have reached something that can be taken to the membership for ratification."

Roberts and other UMW officials said they would not talk about details of the settlement until union members have a chance to learn about its terms.

But Roberts said the agreement will restore, or improve on, many of the most drastic changes Surratt-States approved, including "wages, health-care benefits, paid time off and pensions."

"We have negotiated a mechanism that will allow retiree health-care benefits to continue," he said.

Patriot Coal President and CEO Bennett K. Hatfield said the settlement "represents the successful conclusion of a difficult negotiation in which both the UMWA leadership and Patriot management have invested many long days.

"Both parties want to preserve jobs and protect health-care benefits for retirees by keeping Patriot on track for reorganization -- and not liquidation," Hatfield said. "We appreciate the cooperation of the UMWA leadership and the sacrifices of all of our employees and retirees as we work to restore Patriot to viability."

Patriot is also filing a legal motion, Hatfield said, with the federal bankruptcy court in St. Louis seeking approval to enter into its proposed agreement with the UMW.

UMW members will vote on the new agreement Friday. About 1,800 active and laid-off members in West Virginia and Kentucky will be eligible to vote.

Most of the retired miners under the jurisdiction of Patriot Coal today worked most of their careers for either Peabody Energy or Arch Coal -- companies whose union mining operations became part of Patriot after it was created.

Patriot Coal was founded in 2007 when Peabody Energy sold all its union operations east of the Mississippi to the newly created company. In 2008, Patriot bought Magnum Coal, a company that had taken over union mines previously operated by Arch Coal.

Those two deals, the UMW argues, handed Patriot Coal far more liabilities than assets. Today, Patriot is paying many benefits to 23,000 UMW retirees and dependents -- many of whom never worked for Patriot.

The cost of paying those long-term retirement and health benefits was a major factor forcing Patriot to file for bankruptcy protection.

Most political leaders, and West Virginia Coal Association officials, withheld comment Monday until more details of the settlement became apparent. But Rep. Shelley Moore Capito, R-W.Va., said, "I applaud the negotiators at Patriot and the UMWA for their efforts that led to today's announcement.

"Throughout this difficult process, I encouraged both parties to work toward an agreement that would be fair to miners and retirees, and would allow Patriot to preserve thousands of West Virginia jobs. I am pleased that the leadership of the UMWA and Patriot have reached an agreement," Capito said.

The West Virginia Coal Association had no immediate comment on the announcement.

Today, Patriot operates 11 active mining complexes from West Virginia and Kentucky west to the Illinois Basin. Patriot ships its coal to domestic and international electric power companies, as well as to metallurgical coal customers.

The company controls about 1.8 billion tons of unmined coal reserves.

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


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