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UMW, Patriot trade charges over negotiations

CHARLESTON, W.Va. - Patriot Coal officials are saying statements by the United Mine Workers are "inaccurate and distorted" and that the company never "walked out" on negotiations with the union.

In a statement issued Wednesday night, Patriot CEO Ben Hatfield said company negotiators have "been working diligently" to address UMW concerns about contractual changes approved by a federal bankruptcy judge.

"Patriot continues to respect the need for confidentiality in the negotiations if the parties are to make progress," Hatfield said in a press release.

"Unlike the UMWA, we will not grandstand in the media or issue press releases filled with distortions about the parties' discussions," Hatfield said. "Rather than spending time on such theatrics, we are hopeful that the UMWA will return to the negotiating table and work toward a solution that allows Patriot to survive and continue to provide 4,000 jobs and meaningful healthcare benefits for thousands of retirees and their families."

On Wednesday afternoon, the UMW had said that Patriot had broken off negotiations with the union, "walked out" of those talks and cancelled negotiations that were scheduled for the remainder of this week and into next week.

Last month, a federal bankruptcy judge said Patriot could ignore its contracts with union workers and cut wages and benefits for workers and retirees. Union leaders had said the cuts are too deep, and the company and the union had been meeting in hopes of reaching a new deal,

"We had made significant progress toward reaching an agreement that provided a workable alternative to the severe terms Patriot asked for last spring and that were approved by the bankruptcy court in St. Louis," UMW President Cecil Roberts said in a statement Wednesday. "The union had agreed to more than $400 million in savings for the company over the life of the current contract, which gives them the money they say they need to survive. But that still wasn't enough for them."

Roberts said the union and the company were about $30 million to $35 million apart in negotiations when Patriot "walked out," and a "big chunk" of that money was for future bonuses for Patriot management.

Hatfield responded, "If our goal was to force acceptance of the court-approved contract as is, no further discussions would have been necessary, as that option has been available to us since May 29," when the bankruptcy judge ruled.

"Instead, we have offered up millions of dollars in additional contract enhancements, including wage increases, healthcare improvements, life insurance, and paid personal time off," Hatfield said. "The two-day recess in negotiations that the Company requested for the current week was needed for financial analysis of UMWA demands that Patriot roll back the majority of cost relief approved by the Bankruptcy Court. It remains the assessment of Patriot management that agreeing to the UMWA's demands would sacrifice any chance of making the Company viable."

The UMW is scheduling meetings with local unions representing Patriot workers in preparation for a vote on a possible strike. Local unions are likely to vote during the last week of June.

Under the UMW constitution, all active members working for Patriot, including miners who are laid off or who are on sick or disability leave, can vote on their proposed terms and conditions of employment.

About 1,650 of Patriot's 5,200 active employees are represented by the United Mine Workers union. The bulk of the company's union workers are employed at four mines that represent roughly half of Patriot's 2012 coal production, according to court records and financial disclosures. Three of those mines are in West Virginia: Federal No. 2, in Monongalia County; Hobet 21, along the Boone-Lincoln county line; and Guyan, in Logan County.

The UMW has appealed U.S. Bankruptcy Judge Kathy Surratt-States' decision to the U.S. District Court in St. Louis, and union lawyers are scheduled to file their initial brief on June 25.

Under the union's constitution, rank-and-file miners have the right to vote up or down any collective-bargaining agreement. The authority to call a strike rests solely with the UMW's international president, Roberts.

After Surratt-States' ruling, Patriot President and CEO Bennett K. Hatfield said the company preferred to reach an agreement with the UMW rather than implement the cuts allowed by the federal judge.

"Patriot management will continue diligent negotiations with the UMWA leadership to address their concerns about our court-approved proposals," Hatfield said. "While the court has given Patriot the authority to impose these critical changes to the collective bargaining agreements, and our financial needs mandate implementation by July 1, we continue to believe that a consensual resolution is the best possible outcome for all parties."

Last month, Surratt-States also ruled that Patriot Coal may give $6.9 million in bonuses to "key employees," rejecting union arguments that those bonuses unfairly rewarded executives.

Under the Surratt-States ruling, the current health-care system for Patriot workers and retirees would be replaced with a Voluntary Employee Benefit Association (VEBA) that would receive only $15 million in guaranteed funding from Patriot Coal, along with a royalty of 20 cents for each ton of coal mined.

Patriot also would give the UMW a 35 percent ownership of the company. The union could then decide to sell that ownership interest to raise more funds for VEBA.

Roberts pledged to continue UMW efforts to get Peabody Energy and Arch Coal, which he called "the true architects of the Patriot bankruptcy," to live up to their obligations to their retirees.

Today, Patriot covers many benefits for 23,000 retirees and dependents. After Patriot was created in 2007, it acquired all the union mines operated by Peabody Energy and Arch Coal east of the Mississippi. Many benefits those two companies promised to retired coal miners shifted to Patriot.

Patriot officials have said that the company was not "designed to fail," as union leaders have alleged.

When Patriot filed for bankruptcy, officials said the company was financially burdened by a steep decline in coal markets and by "unsustainable" legacy costs for pensions and health-care benefits awarded under UMW contracts.

Staff writer Ken Ward Jr. contributed to this report. Reach Paul J. Nyden at pjnyden@wvgazette.com or 304-348-5164.


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