Patriot Coal Corp. wants out of it’s current contract with the United Mine Workers union.
Lawyers for Patriot Coal on Thursday asked a U.S. bankruptcy judge to throw out the terms of the company’s current contract with the UMWA and modify the healthcare plan covering thousands of retired miners.
The exact details of the proposal have not been released but lawyers, in a press release, said the company wants to cut wages, reduce benefits, and adjust work rules for its unionized employees to a level similar with the regional labor market.
Last July, St. Louis based Patriot filed for Chapter 11 bankruptcy, seeking to reorganize amid what the company called “unsustainable labor-related legacy liabilities” that include pension and health-care payments.
Patriot President and CEO Ben Hatfield said in a release that employee pension and healthcare costs have increased to the point the company can’t sustain them in the current industry struggles.
UMWA President Cecil Roberts told the Charleston Gazette that the current proposals are”totally unacceptable, unnecessary, and put thousands of retired coal miners, their dependents or their widows, on the path to financial ruin, worsening health conditions or even death.”
Roberts continued by saying this is exactly what the UMWA thought was going to happen.
Peabody created Patriot as a spin-off company where Peabody tucked union mines in West Virginia and the Midwest, along with pension and health-care obligations for union retirees. Patriot later bought Magnum Coal, which had been similarly spun off by Arch Coal.
UMWA officials claim Patriot was created only to fail so Peabody Coal and Arch Coal could get out of obligations of paying pensions and healthcare benefits to retired union workers.
Over the past few months, negotiators from Patriot and the UMWA have been meeting privately in an attempt to reach an agreement. At the same time, union members have been engaged in a series of protests in St. Louis against the bankruptcy proceedings.
Neither side has released the specific details of the company’s proposals.
A hearing has been set for April 10-11 on Patriot’s contract and healthcare benefit proposals.
Patriot is also set to go into bankruptcy court Monday to seek approval for almost $7 million in bonuses to corporate executives and salaried employees.