The UMWA released the terms of the agreement, which include: the restoration of all but $1 per hour in wage cuts that were as high as $7.53 per hour for some job classifications; annual wage increases of 50 cents per hour beginning January 1, 2015; keeping Patriot in the UMWA 1974 Pension Fund, so there will be no effect on pension benefits for current retirees and active members will continue to earn pension credit; elimination of monthly premiums for healthcare; reduction of annual out-of-pocket maximum for healthcare benefits from $4,000 to $1,600; restoration of life, vision, dental and accidental death and dismemberment insurance; and the establishment of a Voluntary Employee Benefit Association (VEBA) to pay retiree healthcare benefits going forward.
As part of the settlement, Patriot gave the union a 35-38% stake in the company and the VEBA will be funded by initial contributions by Patriot, the sale of the union’s stake, and ongoing royalty payments of 20 cents per ton of coal mined by the company.
A vote will take place today (Friday, August 16). Some 1,800 active or laid-off members in West Virginia and Kentucky are eligible to vote.
“We have been able to restore, or at least improve upon, many of the most drastic changes that the judge ordered, including in the area of wages, healthcare benefits, paid time off, pensions and more,” said UMWA International President Cecil E. Roberts.
Patriot Coal will also be filing a motion with the Bankruptcy Court in St. Louis seeking authorization to enter into this agreement.
Patriot President and CEO Bennett Hatfield also released a statement following the announcement, and said, “Both parties want to preserve jobs and protect healthcare benefits for retirees by keeping Patriot on track for reorganization—and not liquidation. We appreciate the cooperation of the UMWA leadership and the sacrifices of all of our employees and retirees as we work to restore Patriot to viability.”