Vol. 77/No. 32      September 9, 2013

In 2007 Peabody Energy spun off its UMWA-organized mines, forming Patriot Coal as a separate company. This allowed Peabody to get out from under union contracts and obligations affecting benefits of thousands of retired miners. The following year, Patriot Coal acquired Magnum, a similar spin-off of Arch Coal. In July 2012 Patriot submitted a series of deep concessions as part of its bankruptcy filing.

Over the past year, miners and their supporters have taken part in numerous demonstrations in coalfield areas and other locations, including Peabody headquarters in St. Louis. They mobilized repeatedly to protest the expected ruling handed down May 29 by bankruptcy Judge Kathy Surratt-States, sanctioning the company’s proposals.

The agreement imposes a $1 per hour wage cut with a 50 cents annual increase for three years starting in 2015. Judge Surratt-States had approved Patriot’s proposal to cut wages by as much as $7.53 an hour. Workers’ dental, vision, accident and life insurance plans, as well as job-bidding rights will not be cut as the company initially demanded.

Patriot will eliminate some paid holidays, raise workers’ medical expenses, cut overtime pay, end pensions for new hires, and walk away from obligations to maintain guaranteed health care insurance for some 20,000 retirees.

“We took concessions to help our retired brothers and sisters,” said Darryl Hedgepath, a member of UMWA Local 1793 and scoop operator at the Patriot’s Highland No. 9 Mine in Uniontown, Ky. “On any one day they could still close down the mines.”

The deal keeps the company “on track for reorganization — and not liquidation,” Patriot Coal President and Chief Executive Bennett Hatfield said in a press statement.

Funds for retiree health benefits, which will run out in the coming months, will be shifted to a union-administered Voluntary Employee Benefit Association fund. Patriot agreed to pay a one-time sum of $15 million to the VEBA and 20 cents per ton of coal mined. As part of the agreement the union will get a 35 percent stake in the company that it can sell to fund the VEBA if and when Patriot emerges from bankruptcy, which company officials project will happen by the end of the year.

UMWA officials are pursuing a suit against Peabody and Arch for retiree health care funds and lobbying politicians in Congress to press for legislation to transfer federal Coal Act funds slated for reclamation of mined land to the VEBA. “We do not have the resources in the VEBA to guarantee retiree health care forever,” said UMWA President Cecil Roberts in a video address explaining the contract proposal ahead of the vote.

In a reversal of the May 29 court decision, the Bankruptcy Appellate Panel for the Eighth Circuit ruled Aug. 21 that Peabody maintains responsibility for health care benefits for some 3,100 of the retired miners.

The union is organizing the next rally Aug. 27 in front of Peabody Energy headquarters in St. Louis.
 
 
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