MGM MIRAGE leader says diversity initiative advancing

David Strow

Tuesday, Feb. 26, 2002 | 11:07 a.m.

For the first time since launching its diversity initiative 21 months ago, MGM MIRAGE has released detailed numbers showing its progress.

The report showed progress being made by the Las Vegas-based casino giant on several fronts, including employment and construction contracts. But the report also showed key weaknesses, including minority representation in management and the awarding of purchasing contracts.

Hispanic and Asian representation ran ahead of the county average, but black representation in both employment and contracts trailed significantly, the report said.

"There are no quick fixes and no magic remedies to address these issues," Terry Lanni, chairman and chief executive of MGM MIRAGE, said at a Monday luncheon. "As a company, as a community and as a nation we have a long way to go."

However, Lanni repeated his company's committed to the diversity initiative, saying executive compensation would be tied, in part, to the progress of diversity initiatives.

"I don't know of any company in this community and this industry that has done as much as we have done on a voluntary basis," Lanni said. "(Diversity) is the law of this company."

Employment was perhaps the brightest spot in the report. The company reported, as of Dec. 31, 2001, 51.3 percent of its 35,000 Clark County employees were minorities. At the end of 2000, minorities were 50.3 percent of the company's local workforce.

"Our belief is that we should mirror the communities in which we exist," Lanni said. "Based on this measure, we are a richly diverse group of employees and we are proud of that."

Hispanics and Asians are better represented in MGM MIRAGE's workforce than in Clark County as a whole; 27.7 percent of the company's workforce is Hispanic, compared to 22 percent of Clark County. Asians made up 14.2 percent of MGM MIRAGE's workforce, compared to just 5.3 percent of the county.

Blacks, on the other hand, did not fare as well. Blacks make up 8 percent of the company's local workforce, compared to 9 percent of the county.

The imbalance is greater at the management and executive level, where 26.1 percent are members of a minority group. Whites make up 71.6 percent of Clark County's population, but they account for nearly 74 percent of MGM MIRAGE's managerial and executive ranks.

Blacks made up just 6.2 percent of MGM MIRAGE's executive ranks, while Hispanics make up 8.9 percent.

Still, the numbers are improving. At the end of 2000, minorities made up 25.1 percent of the company's managers and executives.

"We have a lot of work to do in employment," Lanni said. "When you get to managers and above, where it really counts, it's not acceptable."

Lanni said the company would step up its recruiting efforts to bring minorities into its executive and managerial ranks, through mentoring programs with local universities and historic minority colleges. Lanni also said it was the company's intention to attract a Hispanic board member, preferably a woman, by year's end.

Attracting high-flying talent from minority schools could be easier now, Lanni said, with the downturn in the economy and subsequent lack of jobs in places like Wall Street investment banks.

"We have more of an opportunity there and we're going to strike," Lanni said.

The picture was similarly mixed when MGM MIRAGE reported the amount of business it did with minority and women-owned firms in 2001.

Of the $29.4 million MGM MIRAGE spent on construction in Clark County last year, nearly 23 percent -- $6.7 million -- went to minority and women-owned firms, the company reported. More than $4.3 million went to Hispanic firms and $1.7 million to Indian-owned firms, but just $220,000 went to black-owned firms.

In purchasing, the picture was not as encouraging, Lanni admitted. Of the $445 million spent on purchasing contracts, just $24.3 million -- 5.5 percent -- went to women-owned and minority-owned firms.

Minority-owned firms accounted for $16 million of that total -- $10.7 million to Asian-owned firms, $4.2 million to Hispanic firms, and $750,000 to black-owned firms.

"Purchasing is a disaster, in my opinion," Lanni said. "Five point four percent is ridiculous."

But part of the problem, Lanni said, is trying to find firms with which to do business. Lanni said the company was willing to work to find ways to do business with minority firms, and would even provide advice and assistance to minority entrepreneurs trying to launch businesses.

"Trying to get a listing of (minority-owned) firms is very difficult," Lanni said. "We need more minority firms identified to us."

Both black and Hispanic business leaders praised the company's progress.

"It's incredible what they've done in this short period of time," said Louis Overstreet, executive director of the Urban Chamber of Commerce. "We're 100 percent supportive of their efforts."

Otto Merida, executive director of the Latin Chamber of Commerce, called MGM MIRAGE's progress report a model other gaming companies should follow.

"They've made great progress," Merida said. "We'd like to see the other four major (gaming) corporations in this area have the same commitment as MGM MIRAGE."

Not everyone was pleased with the report, however.

Several weeks ago, the Rev. Al Sharpton and representatives of his National Action Network picketed the MGM Grand, accusing the company of racial inequity at its properties in Detroit and Las Vegas. Representatives of the network attended Monday's luncheon, but weren't placated by the company's report.

"These African-American numbers are at the bottom of the totem pole," said Stanley Washington, a spokesman for the National Action Network. "For them to say $221,000 (the amount of business MGM MIRAGE did with black-owned construction companies in 2001) is worth jumping up and down about is ridiculous."

Washington said the network would still move ahead with a second protest March 9, and would continue pressuring the company until "Terry Lanni and Kirk Kerkorian (MGM MIRAGE's majority shareholder) sit down with us to address the issues we have."

Lanni, however, said he believed the protests were motivated by something else -- a proposal that MGM MIRAGE provide $100 million for investments in west Las Vegas, a predominantly black neighborhood. This proposal was first made by Gene Collins, former president of the Las Vegas chapter of the NAACP and current chairman of the National Action Network.

"We're not a bank. It's ridiculous to ask for that," Lanni said. "We're not in the kind of position to make that kind of investment.

"It's easier to pick on us, and I don't think there's any substance for it."

Washington agreed with Lanni on one point, saying MGM MIRAGE had done more on diversity issues than other gaming companies. But he said the network intended to concentrate its efforts one company at a time.

"The others should expect to hear from us," Washington said. "The rest are coming."

But Overstreet, whose chamber focuses on black-owned business, was quick to defend the company.

"I would tell them not to worry about the Al Sharptons of the world," Overstreet said. "You have to respect them (MGM MIRAGE) for their honesty and openness."

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