STATESIDE
Stateside A
ny good poker player knows “when to hold them and when to fold them.“ Being willing to reach the edge and hang in may ultimately win, but when dealing with people and issues, brinksmanship
may not be the best option. We remember that in the Bible, young David defeated the powerful giant Goliath, but that is the exception and not the rule. Success may depend on the stakes and an
Of the 3,000 affected employees, more than 1,200 nonunion workers never had a voice in the strike and worked to keep the Taj open.
adversary’s resources. In a scene from the movie “Fried Green Tomatoes,” actress Kathy Bates goes to park her car when two teenage girls steal her space. Bates objects and they sneer that they’re “younger and faster.” An enraged Bates then repeatedly rams her car into theirs. Responding to their screams, she says, “Face it girls, I’m older and have more insurance.” The moral is that when you start something, you should prepare for any result. On July 1, the Unite Here Local 54 union workers at Atlantic City’s Trump Taj Mahal aimed to force billionaire owner Carl Icahn into meeting their employment demands by striking during the busy summer season. It was Atlantic City’s first casino strike since 2004, when 10,000 walked off their jobs at several casinos. Icahn Enterprises L.P. owns nine casino properties in six states and Aruba. Atlantic City‘s two venues – the profitable Tropicana and the struggling Trump Taj Mahal – are owned and/or operated by subsidiary Tropicana Entertainment. President Tony Rodio manages both sites. Icahn saved the Taj from bankruptcy in 2014 after four other Atlantic City casinos had closed. But, under threat of closure after all in December 2014, Local 54 accepted a cost-cutting deal to stay open. The compromise canceled workers’ health insurance and pension coverage. Icahn has since invested $86 million into the site, but has lost over $100 million. Local 54 appealed the plan in court, but the 3rd U.S. Circuit Court of Appeals, which recently defeated legalized New Jersey sports betting, and the U.S. Supreme Court both rejected Local 54’s lawsuit. With a five-day acceptance deadline in mid-July,
the Taj offered – in writing – a plan to restore union and nonunion employee health benefits for 18 months and decrease housekeeper workloads. Icahn also promised another $100 million investment if the November ballot question for two new North Jersey casinos failed.
10 SEPTEMBER 2016
Sharon Harris pores over the details of a summer of strikes in Atlantic City and finds few positives
Local 54 President Robert McDevitt and union officials rejected that offer, calling it unequal to other casino contracts. The Atlantic City Press Editorial Board urged them to give Icahn those four months until November. I agreed, but the deadline expired. In August,
Rodio announced the scheduled October 10 closure of the Taj. His formal statement claimed the strikers‘ demands “blocked any path to profitability.” Of the 3,000 affected employees, more than 1,200
nonunion workers never had a voice in the strike and worked to keep the Taj open. The closure also impacts several private businesses within the Taj, worth millions, and their employees. Local 54 went to the edge, bet against Taj
ownership and lost. Not only did these strikers lose their jobs, but also sacrificed their prime summer earning time while picketing on the Boardwalk. To me, the strike was futile and counterproductive.
You don’t bet against an opponent with less to lose. The strikers never recognized this is not 2004, when Atlantic City held a gaming monopoly. After that walkout ended, customers returned in droves and rewarded Atlantic City with its best year. This summer, customers who didn’t want to walk
past picket signs to enter the building could stay away and patronize dozens of other close regional casinos. While Local 54 focused on Icahn’s personal wealth,
they never acknowledged how long Tropicana Entertainment could continue to lose millions – as a public company – with fiduciary obligations to shareholders’ investments. These are people too. What will happen to these thousands of families? Who knows. With job fairs hosted by Maryland and New York casinos, many will relocate. That is good for them, but a loss of local productive taxpayers. I don’t see this happening in other jurisdictions
where unions have less control over the employment market. States like Nevada have dominated the convention business model because their union presence does not permeate so many aspects of operation. That makes exposition planners able to book events and offer more defined deals to their attendees. The Taj did great meeting business in its day and operated a huge entertainment arena. This debacle should remind people to be careful what
they wish for. It just might come true with unfortunate results. I wonder if McDevitt understands that now.
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