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Union: Most wage cuts restored under Patriot plan

John Raby, Associated Press

CHARLESTON, W.Va. (AP) -- A proposed settlement between the United Mine Workers of American and Patriot Coal would restore most wage cuts the company had sought as part of its bankruptcy reorganization, the nation's largest miners' union said Wednesday.

Union members on Wednesday met in Charleston and in Evansville, Ind., to hear details of the settlement that the UMW said was reached last Friday with St. Louis-based Patriot. The proposed settlement was announced on Monday.

Some 1,800 current or laid-off Patriot workers in West Virginia and Kentucky will be eligible to cast a ballot on the proposal Friday.

The union said the proposed settlement includes "significant improvements" over what a federal bankruptcy judge allowed the company to impose in May. They include restoration of all but $1 per hour in wage cuts, which were as high as $7.53 per hour for some job classifications.

Wages would increase annually by 50 cents an hour starting in January 2015 and monthly premiums for health care benefits would be eliminated. Pension benefits for thousands of current retirees would be maintained and current active UMW members would continue earning pension credit.

The annual out-of-pocket maximum for health care benefits would be reduced from $4,000 to $1,600. Life insurance, vision and dental coverage, and accidental death and dismemberment insurance would be restored.

Union President Cecil E. Roberts made the presentation to union members in Charleston and Secretary Treasurer Dan Kane led the discussion in Evansville.

Last month, Patriot said without elaborating that it had imposed less severe wage and benefit cuts on its miners than it could have under the bankruptcy judge's ruling, and that it would keep retired workers' health plans unchanged for two months as negotiations with the union pressed on.

Patriot's proposed cuts were the most contentious aspect since the Peabody Energy Corp. spinoff filed for Chapter 11 bankruptcy in July of last year, saying it would have to spend an unsustainable $1.6 billion to cover the health care costs, putting it at risk of folding.

Roberts said he believes "that current Patriot management — which is no longer dominated by former Peabody executives — truly wants this company to survive and were willing to work with us to make that happen."

Bennett Hatfield, Patriot's president and chief executive, has said the "successful conclusion of a difficult negotiation" helps the company avoid being dissolved.