Culinary may face uphill battle with downtown hotels

Tuesday, May 28, 2002 | 10:52 a.m.

The Culinary Union, though it settled with the last of the major Strip operators over the weekend, will have a tough time reaching an agreement with several downtown hotels by Saturday's strike deadline, a management lawyer said.

"I can't see this getting done by June 1," said Gregory Kamer, who is negotiating a new contract for seven downtown casinos. "The hotels I represent cannot afford what the Strip has settled for. The settlement is too rich. It would increase operating costs by too much."

Talks with Kamer's clients -- Binion's Horseshoe, Four Queens, Fitzgerald's, Union Plaza, Las Vegas Club, El Cortez and the Western -- are scheduled for 1:30 p.m. Wednesday. The Castaways, represented by another lawyer, also is set to meet with the union then.

Kamer said there's not enough time to reach an agreement by the strike deadline that will guarantee the financial future of his struggling clients.

"I'm going into these negotiations optimistic that the union recognizes that downtown is an historic part of Las Vegas and that Las Vegas is a better town to have the downtown experience," he said.

John Wilhelm, the union's international president and chief negotiator, said this morning that he believes deals could come by Saturday.

But Wilhelm acknowledged that the 50,000-member union hasn't determined how to accomplish that goal.

"We're going to meet with our negotiating committee members," he said. "We're going to listen to what the employers have to say and we'll figure out a plan. We can't make these decisions in a vacuum."

Union leaders, elated over reaching tentative weekend agreements with Mandalay Resort Group and MGM MIRAGE, their two toughest negotiators, held internal meetings Monday in their race to settle with the downtown properties by Saturday's strike deadline. They planned to meet with their own negotiating committee members today.

"We're delighted to have excellent new contracts for 75 percent of our membership," Wilhelm said. "But at the same time, we've been very clear that we're not going to leave anybody behind."

In all, the union still needs to negotiate new five-year deals with 18 of the 35 resorts with contracts that expire at midnight Friday. Though most are downtown hotels, smaller Strip resorts, such as the Sahara, Riviera, Barbary Coast and Stratosphere, also are in that group. The Boyd Group, which owns the Stardust, Fremont and Main Street Station, also has yet to settle.

Wilhelm said he won't hold membership meetings to ratify the contracts until next week, after the strike deadline.

Union leaders will be too busy this week working out new contracts with the remaining casinos, he said.

Wilhelm said he's willing to work with the smaller properties to help them overcome the economic challenges they face in accepting deals similar to those reached by the major Strip operators.

Those close to the negotiations suggested that Wilhelm might be able to subsidize the downtown contracts on the back of lucrative five-year deals he reached with the "Big Four" Strip operators.

But Wilhelm said that would be "unworkable" primarily because the employer contribution rates to the union's $300 million health and welfare fund are fixed. All employers must pay the same amount.

The Big Four -- Park Place Entertainment, Harrah's Entertainment, Mandalay Resort Group and MGM MIRAGE -- all agreed to tentative contracts giving the union its largest ever increase in benefits and wages, nearly $3.24 an hour for each employee during the length of the contract.

All four companies accepted an increase of 65 cents an hour for medical benefits the first year, which is what the union said it needed to keep its health and welfare fund afloat. The fund's administrators had estimated that only a 49 cent hike was necessary the first year.

The tentative agreements also call for a 60 cent increase the second year and 65 cents the remaining three years, which the union can allocate toward wages and its health and pension funds.

Union leaders said they achieved their negotiating objectives of protecting free health care for all members and improving work conditions for housekeepers.

Alan Feldman, a senior vice president for MGM MIRAGE, said Monday his company was pleased to settle with the union.

"We're thrilled that our employees now have the security of a five-year agreement in hand, and we can once again get back to focusing on customer service and building our business," Feldman said.

But Mandalay Senior Vice President Mike Sloan said his company accepted the agreement reluctantly.

"It's the best deal we could make under the circumstances," Sloan said. "Other people reached the agreement before we did and became the pattern for the industry.

"It came down to a choice between those numbers and the threat of a strike that probably could not be won without a united front.

Sloan called the agreement a "very expensive deal at a difficult time for the industry."

He said the deal was the result of Wilhelm's ability to hold his diverse union membership together while dividing the industry.

"This is a tribute to a guy who's one of the best negotiators in America and clearly the rising star in the national labor movement," Sloan said.

"He kept together 50,000 people from all walks of life who have different issues, and we couldn't keep six companies together."

Wilhelm took exception to Sloan's remarks.

"Those comments are a disappointing continuation of an adversarial approach that is damaging to this industry, these companies, our members and this community," he said.

"If you contrast the highly adversarial tone that some companies, led by Mandalay Resort Group, took in these negotiations compared to the last three previous sets of negotiations, the result of the adversarial approach is not a good one.

"Thankfully some of the major companies led, by Park Place Entertainment and Harrah's, took a more positive approach."

Park Place and Harrah's, which kept a low profile during the negotiations, were the first to reach agreements with the union last week. The Tropicana also struck a deal then.

Those agreements put added pressure on Mandalay and MGM MIRAGE to settle with the union over the weekend.

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