UMWA members rallied in St. Louis on February 13, 2013, to protest Patriot Coal's attempts to shed pension obligations. (Courtesy of United Mine Workers of America)
Yesterday, according to the United Mine Workers of America (UMWA),
Patriot Coal walked away from the bargaining table, indicating that
starting July 1, they would unilaterally implement a new contract, one
likely to severely cut the pay and benefits of 1,700 current union
workers and the benefits of 23,000 retirees. Patriot gained this ability
on May 29 after a
federal bankruptcy judge gave the company the power to cancel previous collective bargaining agreements.
Patriot Coal CEO Bennett Hatfield had indicated that the company would
continue to negotiations with the union, saying after the court
decision, “while the Court has given Patriot the authority to impose
these critical changes to the collective bargaining agreements, and our
financial needs mandate implementation by July 1, we continue to believe
that a consensual resolution is the best possible outcome for all
parties.” But the UMWA now says that Patriot has cancelled all
bargaining sessions for this week and next week, which suggests the
company plans on implementing a contract without input from the UMWA.
Patriot Coal did not return a request for comment about why it walked away from the bargaining table.
(See update below.) UMWA, however, was outraged by the decision.
“We are very disappointed by this action,” UMWA President Cecil E.
Roberts said in a statement. “We had made significant progress toward
reaching an agreement that provided a workable alternative to the severe
terms Patriot asked for last spring and that were approved by the
bankruptcy court in St. Louis. The union had agreed to more than $400
million in savings for the company over the life of the current
contract, which gives them the money they say they need to survive. But
that still wasn’t enough for them.”
“When the company walked out, we were only about $30 to 35 million
apart, which given the scope of this problem really isn’t all that
much,” Roberts said. “A big chunk of that money is in bonuses the
company wants to pay management personnel into the future."
Without any agreement on a contract in place, if Patriot chooses to
implement pay terms, the UMWA would be legally allowed to have its 1,700
workers at Patriot strike at any time.
“I have consistently made it clear to management that I could not
recommend to our membership that they work under those terms, because
the sacrifices they require from our active and retired members are too
great,” Roberts said in the statement. He added that the membership of
the union will now vote on whether they want to strike and that the vote
will likely come before July 1.
Striking, though, could be a very risky choice for the union. Hatfield has
hinted in the past
that if the union struck Patriot Coal may be forced to liquidate the
company. If the company sold off its mines, the new owner would decide
whether to allow the union to return to work at them. When Hostess went
through a recent bankruptcy and, after its union workers struck, sold
its factories, the new owners decided to re-open the
factories non-unionized.
The UMWA, however, would prefer not to hold a strike vote and hopes Patriot returns to the bargaining table.
“We want to work these things out. We want to continue these talks,”
says UMWA Communications Director Phil Smith. “We are disappointed that
they walked away.”
UPDATE: After this story went to press, Patriot Coal released a
statement calling the UMWA's charges "distorted and inaccurate" and
insisting that it had "not 'walked out' out of negotiations with the
UMWA." Instead, it said the two days of cancelled meetings this week
"was needed for financial analysis of UMWA demands."
