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UMWA ratifies new contract with Patriot Coal

UMWA ratifies new contract with Patriot Coal

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Updated to include Patriot comment, details

ST. LOUIS • Union mine workers ratified a new contract Friday with Creve Coeur-based Patriot Coal, a key step toward the company’s effort to emerge from bankruptcy protection.

The final tally was 85 percent in favor and 15 percent opposed, the United Mine Workers of America said. The union represents about 1,800 Patriot workers.

“The membership has made it clear that they are willing to do their part to keep Patriot operating, keep their jobs and ensure that thousands of retirees continue getting the health care they depend on and deserve,” UMWA International President Cecil E. Roberts said in a statement.

The five-year contract restores 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 retirees would be maintained, and current active members would continue earning pension credit.

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

Patriot, which filed for bankruptcy protection in July 2012, received court approval earlier this year to impose more severe cuts. It chose instead to negotiate terms with the union.

Patriot President and CEO Bennett Hatfield in a statement released after the vote said the ratification "provides labor stability and ensures cost savings essential to Patriot's plan of reorganization."

"These agreements should set Patriot on a path to emerge from bankruptcy by the end of 2013," Hatfield said.

The bankruptcy court still must approve the agreements. A hearing is scheduled for Tuesday, Aug. 20. 

The agreement leaves some key labor issues unresolved.

Roberts said the settlement with Patriot fails to provide enough resources to provide lifetime health benefits to retirees, an obligation he contends is owed by Peabody Energy and Arch Coal.

Peabody and Arch have been the targets of repeated union-led demonstrations in St. Louis, and Roberts vowed to continue to pressure those companies.

Patriot Coal was created in 2007 when Peabody spun off its eastern mining operations. The connection between Arch, also based in Creve Coeur, and Patriot is less direct. Arch sold two Appalachian mining subsidiaries to Magnum Coal Co. in 2005. Patriot then acquired Magnum Coal in 2008.

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