Patriot Coal Corporation (fka PCXCQ)

[marayatano]

WEEK AHEAD: Patriot Coal, Union to Battle Over Concessions

Published April 26, 2013

Dow Jones Newswires

The St. Louis bankruptcy court next week will host a trial over whether Patriot Coal Corp. (PCXCQ) can impose wage and benefit concessions upon its unionized miners and retirees.

Beginning Monday, Patriot will argue for the right to shed obligations it says are unsustainable and may keep it from successfully reorganizing.

"Unfortunately, Patriot simply does not have the financial resources to support its current benefit levels and will not survive without substantial changes across its cost structure," the company said in court papers.

The United Mine Workers Association, whose members plan to gather outside bankruptcy court Monday to protest the looming cuts, will argue against concessions it calls "harsh and radical."

According to the union, Patriot's proposal unfairly forces its members, especially retirees "broken by a lifetime of working in the mines," to bear the brunt of the pain in the coal-mining company's reorganization.

The coal-mining company is specifically proposing to terminate its retirees' current benefits at the start of next year. A trust would be created to administer their benefits, funded by up to $300 million in future profit-sharing contributions and royalty payments tied to mine production.

Patriot also sweetened its offer to include 35% of its new stock, which the union could sell at any time and use the proceeds to boost the trust's funding levels.

With regard to its 1,600-plus current union workers, Patriot would implement new labor terms that incorporate such concessions as reduced overtime, the loss of several holidays and reductions in planned wage increases and vacation time.

Patriot, which mines for coal in West Virginia and Kentucky, sought Chapter 11 protection last July.



-Kristin Jones in New York contributed to this article.

Write to Jacqueline Palank at [e-mail]

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