Beset by protests as it pursues cutting benefits to its unionized workers, Patriot Coal Corp., the bankrupt mining company, also seeks to reduce or end benefits for nonunion retirees.
The coal producer Tuesday asked the U.S. Bankruptcy Court in St. Louis for permission to cap life insurance benefits for nonunion retirees at $30,000 and end coverage for current nonunion employees. Patriot also asked in court papers to halt medical benefits for nonunion retirees.
Patriot officials "determined, after careful deliberation, that they must also modify the life insurance benefits they provide and terminate substantially all of the retiree medical benefits they provide," the company said in the filing.
More than 6,000 people gathered April 1 in Charleston, W.Va., to protest actions in Patriot's bankruptcy case, the Associated Press reported. The president of United Mine Workers of America and 15 others were arrested, the AP said.
Marchers from Indiana, Kentucky, Pennsylvania, Ohio and Virginia rallied in support of "decent wages, health care and working conditions" for miners, according to a statement from the mineworkers' union. The UMWA represents about 42 percent of Patriot's 4,000 employees.
Patriot filed for bankruptcy in July, citing falling demand for coal and obligations to pay $1.6 billion in lifetime health care for its 8,100 retirees.
Stricter environmental regulations along with increased competition from natural gas and companies that didn't share its labor and retiree costs also hurt business, the company said.
Patriot is seeking to trim costs by negotiating with unionized employees, and a hearing on the issue is set for April 29. The St. Louis-based company said it needs to shed at least $150 million more in labor expenses to avoid liquidating in bankruptcy, an outcome it says would be worse for retirees, employees and creditors.
Benefits to nonunion retirees carry a balance sheet liability of about $51.3 million and have a five-year cash cost of $26.9 million, the company said in court papers yesterday.
The UMWA and protesters have said that if Patriot can't shoulder health-care benefits and retiree costs, Peabody Energy Corp. should be held responsible. Peabody's 2007 spinoff of Patriot gave it about 43 percent of Peabody's pension and health care liabilities and 11 percent of its productive assets, according to the union.
"I never worked a day for Patriot Coal," said Shirley Inman, a retired miner whose health-care benefits are threatened, according to the UMWA. "I don't care what the corporate name is, those executives made us a promise: We'd mine their coal, and in exchange we'd have good health care while we worked and after we retired. I kept my promise; they should keep theirs," Inman said in the April 1 statement.