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Patriot Coal seeks to cut retirees' benefits

Published on NewsOK Modified: March 15, 2013 at 10:24 am •  Published: March 15, 2013

Patriot said it cannot afford to continue paying higher wages to its 1,600 union workers than its 1,300 nonunion miners.

Patriot said its payments for UMWA-related retiree health care amounts to about $1.6 billion. Patriot proposed transferring retiree health liabilities to a voluntary employee beneficiary association trust. Patriot would make an initial contribution of $15 million to the trust.

Patriot spun off from Peabody in 2007, with Peabody agreeing to pay health care costs for more than 3,000 UMWA retirees who were employed by Peabody entities that were transferred to Patriot.

Peabody has said it might seek an end to liabilities to Patriot employees if Patriot sought a modification to health benefits.

In response to the lawsuit, Peabody said in a statement Thursday that Patriot "is taking the untenable position that our payments should continue in full in the future, even if Patriot's expenses are reduced."

The union previously filed suit against Peabody and Arch Coal in West Virginia, claiming they set up Patriot to fail so that pension and health care benefits could be shed. After the 2007 spinoff, Patriot acquired mines that Arch Coal spun off into Magnum Coal. Arch Coal is also based in St. Louis.

Patriot and the UMWA have been meeting for months to try to find a compromise. Roberts said the talks will continue "in the hopes that something fair for both sides can be worked out."

Union leaders said at the February protests that the benefit cuts would affect retired miners and dependents mostly in West Virginia, Illinois, Indiana, Kentucky and Ohio. At least twice, a handful of protesters were arrested for sitting in the street outside Peabody's downtown office building.