The Register-Herald, Beckley, West Virginia

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August 17, 2013

UMWA members ratify pact at Patriot

FAIRMONT — United Mine Workers of America members have voted in favor of the agreement with Patriot Coal Corp. on labor contract terms and conditions.

On Monday, both entities made announcements about the settlement, which shows substantial improvements compared to the changes to collective bargaining agreements and benefits that U.S. Bankruptcy Judge Kathy Surratt-States approved May 29 and the contract terms that Patriot imposed on July 1.

Approximately 1,800 West Virginia and Kentucky UMW members, from 13 local unions, voted Friday at their worksites. Active miners, laid-off miners, and employees who may be off because of workers’ compensation injuries or sickness were eligible to participate.

The settlement was ratified, with 85 percent voting “yes” to the agreement and 15 percent voting “no,” according to a press release from the UMW.

“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,” UMW International President Cecil Roberts said in the release. “This has been a difficult and uncertain year for our members. But I believe that in the end, they understood that we had done a lot to improve what the judge had ordered. They also understood all that was at stake and resolved to move forward in a positive way.”

Patriot said in a news release of its own that these are five-year labor agreements. The company filed a motion with the Bankruptcy Court in St. Louis for permission to establish the settlement, which will be heard at an omnibus hearing on Aug. 20.

“Ratification of these agreements provides labor stability and ensures cost savings essential to Patriot’s plan of reorganization,” Patriot President and Chief Executive Officer Bennett Hatfield said in the release. “These agreements should set Patriot on a path to emerge from bankruptcy by the end of 2013.”

Mike Caputo, District 31 international vice president of the UMW and majority whip for the West Virginia House of Delegates, said he’s proud of the UMW membership across the country, but especially of his district. He said Patriot’s Federal No. 2 mine voted 6 to 1 for the settlement.

“I feel like I’m on a cloud right now,” he said. “I think President Roberts and the negotiating team for the UMWA did a fantastic job in improving what the bankruptcy judge said Patriot could do to the working miners.”

Nobody looks forward to going through something like this, but the union made the right decision, Caputo said. The UMW was able to gain improvements to benefits and wages and to protect the health care of those retired and those working.

“I am very proud of the UMWA membership because they looked at this, they studied this, and the vote showed that they stood behind the leadership of this union and they’re going to do their part to make sure Patriot is a viable company,” he said.

Patriot Coal Corp. went public through a spinoff from Peabody Energy in October 2007. Then in July 2008, the corporation acquired Magnum Coal Co., which formerly gained assets and liabilities from Arch Coal.

With the spinoff from Peabody and purchase of Magnum, Patriot took on the responsibility of providing benefits to some of Peabody and Arch’s former employees and retirees. Patriot filed its Chapter 11 bankruptcy on July 9, 2012.

The UMW has to ensure that its members have a good, safe place to work and can make a living wage with benefits, Caputo said.

The UMW got through this hurdle with Patriot, and will now focus on Peabody Energy and Arch Coal, which the union believes are the real criminals and caused the problem. Peabody and Arch came up with the scheme to shed the obligations owed to the miners who created their wealth, Caputo said.

According to the UMW’s release, the agreement doesn’t include the lifetime health care benefits that Peabody and Arch promised retirees.

“It is also more critical than ever that the bipartisan legislative efforts in Congress to provide help to these retirees move forward,” Roberts said in the release. “This settlement has not solved that problem; it has only bought us time to seek a more permanent solution.

“I urge our friends in Congress on both sides of the aisle to move as fast as they can to renew the government’s promise to these retirees, their dependents and widows.”

Caputo asked the membership to stay calm and vigilant as the UMW continues the fight against Peabody and Arch.

“I truly believe the UMWA is on the side of right here, and we will prevail at the end of the day,” he said.

Peabody Energy provided the following statement earlier this week: “The UMWA is fully aware that Patriot was highly successful following its launch more than five years ago with significant assets, low debt levels and a market value that more than quadrupled in less than a year. At the time, analysts cited a bright future for the companies based on its ‘strong balance sheet,’ ‘strong management team’ and ‘excellent valuation prospects.’

 “A series of other unforeseen events affecting all coal producers followed — all on Patriot’s watch.”

Peabody cited events like the financial crisis impacting the world, the decrease in coal use due to low-cost shale gas, increased costs due to safety regulations and the U.S. Environmental Protection Agency’s rules, and the dropping price of metallurgical coal.

“This is a matter solely between the union and Patriot Coal, and the proper process for deciding such issues is through the bankruptcy court,” Peabody’s statement said.

— Jessica Borders is a writer for the Times West Virginian in Fairmont.

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