Tropicana Entertainment Rejects Last-Minute Offer in Trump Taj Mahal Labor Dispute
After an 11th hour attempt to settle issues between management and labor at the Trump Taj Mahal Casino Hotel, owner Carl Icahn said he still plans to close the Atlantic City resort on October 10.
When asked about the reported $100 million he would lose on the investment, Carl Icahn told an Associated Press reporter, “It was a bad bet. How much good money do you throw after bad?”
The two sides are blaming the other for the ultimate demise of the Trump Taj Mahal. Bob McDevitt of the Local 54 UNITE-Here union, which represents 1,000 of the 3,000 workers at the Trump Taj Mahal, claimed Icahn closed the casino for the sake of “spite”. A spokesman for the billionaire investor put the blame squarely at the feet of Bob McDevitt, saying the union leader negotiated for the sake of his own agenda, instead of the well-being of the workers he represented.
$1.3 Million Separates the Two Sides
The union claims its last offer would require Carl Icahn to pay only $1.3 million more than Icahn’s last offer in the negotiations. In the plan, the casino would pay for the same healthcare that workers throughout Atlantic City receive. The plan would begin on January 1, 2017.
The union’s offer included a restoration of paid breaks, while housekeepers’ workload would be returned to the industry standard, instead of the hours negotiated during a time of economic crisis for the hotel. The plan also called for subcontracting protections to be restored.
One Worker’s Opinion
The last-minute offer might seem like a forlorn hope to those on the outside, but members of the union saw it as a significant step forward. Peter Battaglia, a doorman at the Trump Taj Mahal since it opened in 1990, believes the last offer was a well-considered plan that worked for both sides.
Battaglia said, “We came up with a proposal that will restore what we have lost, while at the same time giving the company time to rebuild its business.”
Tony Rodio’s Statement
Tony Rodio, president and CEO Of Tropicana Entertainment, which owns Tropicana Casino and Trump Taj Mahal in Atlantic City, dismissed the offer. Mr. Rodio signaled that the decision was made by Carl Icahn to close the casino and that decision is final.
Rodio suggested the latest offer was a dead issue, stating, “This was not a negotiating session. As previously announced, the Taj Mahal will close its doors on October 10 2016.”
Mr. Rodio was not singularly dismissive. He elaborated on his reasons for Tropicana Entertainment’s stance. He blamed the union leaders for killing jobs in Atlantic City, by pursuing their own agendas, saying, “Bob McDevitt [President of Unite Here Local 54] and the Taj bargaining committee have no one to blame but themselves for this sad outcome.”
Bob McDevitt’s Role
Ironically, days before the Trump Taj Mahal strike, Bob McDevitt negotiated deals with several other Atlantic City casinos, including the Tropicana Casino. Because Trump Taj Mahal is a distressed property trying to pull itself out of bankruptcy, Icahn and Tropicana’s board wanted special concessions from its union.
In Tony Rodio’s opinion, Bob McDevitt stood in the way of a deal, for personal reasons. Rodio added, “If McDevitt cared even one iota about the future of the employees he would have allowed them to vote on the proposal we offered five weeks ago based on his recommendations, which we believe could have saved the Taj. But in the end, he blindsided us and the employees, because closing the Taj served his personal purposes.”
Tropicana’s CEO never elaborated on what Bob McDevitt’s personal reasons were, though he might not know himself. Since the fall of 2014, the negotiations had been remarkably acrimonious, after Trump Entertainment Resorts won a ruling in bankruptcy court which affected the Taj’s union worker’s health and pension benefits. Since that time, the Local 54 has fought to restore those benefits, while the Trump Entertainment and its successor, Tropicana Entertainment, have fought to maintain the status quo. While negotiations continued, both sides fought a public relations battle.
Public Relations Battle Continues
Even with the casino closing, they still fight that PR battle. For his part, Bob McDevitt ignored the charges that he had ulterior motives in the negotiations. The union leader said, “This labor dispute has been going on for almost two years. The company has saved about $25m in labour expenses, but lost between $150m and $200m in revenues.”
One gets the idea that both sides realize now that the Trump Taj Mahal is closing, so both are seeking to blame the other for its demise. Bob McDevitt’s statement read, “The proposal we put forward today allows all of us to move forward. Now it’s time to see if this company is interested in moving forward or just wants to punish workers and Atlantic City.“