Carl Icahn Announces the Trump Taj Mahal’s Closure, Effective on Labor Day
Carl Icahn announced he was closing the Trump Taj Mahal, effective on Labor Day. In the announcement of the casino’s closing, the investment billionaire put the blame on the workers of the UNITE-Here Local 54.
Even the date Carl Icahn chose to close his casino, Labor Day, is a swipe at the Local 54 union. Labor Day is a national holiday which celebrates the labor movement and the working people of the United States. Closing on Labor Day sends a message that the workers are to blame.
34-Day Union Strike
The Trump Taj Mahal is in the midst of the longest strike in Atlantic City in 38 years. Carl Icahn said the union workers were standing in the “path to profitability”. Tony Rodio, the CEO of Tropicana Entertainment, said the casino loses millions of dollars a month and the management team had to perform his “fiduciary duties to their shareholders” to close the operation down.
The casino said it intends on sending mass-layoff notices to the state this weekend. Thus ends a 26-year odyssey for a casino which once was considered the crown jewel of Donald Trump’s casino empire.
Bob McDevitt Blames Carl Icahn
Local 54 President Bob McDevitt accused Carl Icahn of taking the 34-day strike personally. The public statements from both sides have been antagonistic through many months of negotiations and PR moments. Carl Icahn has criticized the union leaders, while the workers have protested both of Icahn’s Atlantic City casinos (on multiple occasions).
Trump Entertainment’s board of directors won a key court ruling in bankrutpcy court in October 2014, which stripped the Taj Mahal’s workers of their health and pension benefits. Losing their benefits through a court proceeding outraged the union members, because they had traded over the bargaining table 12 years of wage increases, in order to retain those benefits.
Dispute over the Benefits Package
Over the months, Carl Icahn never budged on the pension and health benefits package. He offered a less robust package which the Local 54 viewed as next-to-worthless. Outraged that other Atlantic City casino workers were given full benefits and Trump Taj Mahal workers could not, they voted to strike over the Fourth of July weekend. That strike is still ongoing.
Bob McDevitt said of the decision to close on Labor Day, “For a few million bucks, he could have had labor peace and a content workforce, but instead he’d rather slam the door shut on these long-term workers just to punish them and attempt to break their strike.”
McDevitt characterized Icahn’s negotiating style as inflexible and miserly, when he added, “There was no element of trying to reach an agreement here on Icahn’s part; it was always ‘my way or the highway’ from the beginning with Icahn.”
Signed a Deal for Tropicana Workers in June 2016
Ironically, Bob McDevitt and Carl Icahn previously had been able to work out a labor deal for the Tropicana Resort without much rancor at all. The difference seemed to be the fact that Carl Icahn had a judge’s ruling that he did not need to give workers benefits, and he had no intention of giving away that advantage in a negotiation.
According to the New Jersey Division of Gaming Enforcement, the Trump Taj Mahal has 2,100 workers at present. About 1,000 of those workers are members of the Local 54 of the UNITE-Here union. The union represents casino staff, including chefs, waiters, bellmen, bartenders, and cleaning attendants. In the most recent round of negotiations, Carl Icahn had agreed to lower the minimum number of hours workers would remain on a shift, but refused to chance his position on the benefits package.
Reaction from Residents
The decision drew mixed reactions from residents and gamblers who spoke to the media. Dan Worman, a 47-year old Trump Taj Mahal player from Egg Harbor Township, said both sides of the dispute had a point.
Worman seemed to have sympathy with management’s position, “It’s a shame. I see both sides, really. Atlantic City is not as strong of a market as it used to be. And I do believe in Icahn and Tony Rodio, that if they would have turned it around, they would have gave (the workers) their money. It’s just right now, it’s just bad timing.”
Reaction from Workers
Others had a more skeptical view of management’s decision. Pete Battaglini, a 60-year-old man who works as a bellman at the casino, pointed out that Carl Icahn promised a judge a $100 million investment in a casino to get the injunction on pension and health benefits.
Battaglini said, “Carl Icahn said he was going to invest in the building, invest in the workers and get the Taj Mahal going to the days of what it used to be. Now today he announced he is going to close it. I feel that it’s just that Wall Street mentality, ‘We will take what we can get and then move on.’”
History of the Trump Taj Mahal
The Trump Taj Mahal’s demise is a sign of the times for Atlantic City. When it opened in 1990, Donald Trump called the casino “The Eighth Wonder of the World”. At the time, Las Vegas and Atlantic City were the nation’s only land-based gaming destinations. Throughout the 90s, the Trump Taj Mahal was the site of world-class concerts and sporting events. Many world championship boxing matches took place at Donald Trump’s top gaming resort.
In the time since, more than 40 U.S. states have developed land-based gambling. As Atlantic City no longer could expect gamblers throughout the northeast to visit, those casino industry faded. From a $5.4 billion industry in 2006, Atlantic City’s casinos generated a little over $2 billion in 2015.
Meanwhile, 4 casinos closed in 2014, putting 8,000 workers out of work. In a city of 40,000 people, that touched off a major financial crisis for the Atlantic City government. It property taxes collapsed, and so did the city’s finances. With either a bankruptcy or a state takeover of finances in October 2016 facing the city, the closure of the Trump Taj Mahal and lose of 2,100 more jobs is going to be bad news.
