Patriot Coal Corp. has asked a court to terminate about $1.6 billion in retiree health benefits for thousands of its unionized U.S. mine workers as part of its plan to survive chapter 11, Reuters reported today. Patriot said that the United Mine Workers of America's labor costs are not competitive with other coal producers that operate "under more flexible work rules and a significantly lower labor cost structure." As an alternative to terminating retiree health benefits, Patriot has proposed creating a trust, known as a Voluntary Employee Beneficiary Association, that includes profit sharing of up to a maximum of $300 million and an initial cash contribution of $15 million.
