New Tropicana owners alarm workers, rivals

Michael J. Mishak

Tuesday, May 1, 2007 | 7:14 a.m.

The Culinary Union started contract negotiations with the major casino companies early this year, largely to see how the changing corporate landscape would affect its famously friendly relationship with the industry.

As D. Taylor, the union's secretary-treasurer, put it: "We want to find out sooner rather than later which companies want to have a deal and which companies want to have a fight." Current five-year contracts affecting about 50,000 hotel and restaurant service employees expire June 1.

So far, talks between the union and the industry's two largest players - MGM Mirage and Harrah's Entertainment - have been quiet. Those sessions have the air of two old friends who get together to swap stories, argue politics and part in peace. This time around, however, there's a stranger in the mix. As talks open today with Columbia Sussex Corp., the new owners of the Tropicana, the union has one overriding concern: job security.

Culinary says Columbia cut about 300 of the 1,100 union jobs since taking over in January and labor leaders say they hear that up to 90 more layoffs could be coming. Columbia declined to discuss layoff numbers.

Looming over negotiations is a $2.5 billion redevelopment plan. The property's low-rise motel wings will be replaced by new towers, ultimately expanding the room count from 1,880 to more than 10,000 by 2010, the Associated Press has reported.

What it means for existing workers is unclear. Those interviewed by the Sun painted a grim picture of a resort that was once known as the "Tiffany of the Strip." Cleanliness, safety and service have suffered from the cuts, they say.

"We're worse than Wal-Mart at this point," said Dennis Dunigan, a utility worker at the Tropicana for 12 years.

Columbia Sussex Chief Financial Officer Richard FitzPatrick disputed those claims. "Going into a negotiation process, it would not surprise me that they would make statements like that," he said. "None of those things we believe are true."

Still, the Culinary sees a pattern. Columbia Sussex bought the Tropicana's parent company, Aztar Corp., for $2.1 billion last year. Since the sale was finalized Jan. 3, the company has cut 500 to 900 jobs at the Atlantic City Tropicana alone.

Also, Columbia Sussex is under investigation by the Indiana Gaming Commission on accusations of breaking commitments it made about jobs at a riverboat gambling operation in Evansville.

Columbia executives, whose company enjoys a reputation in the hotel industry for cost control and lean management, defend the cuts. "We understand the union's concerns, but Aztar didn't operate those properties as efficiently as we think they could have been operated," FitzPatrick said.

Concerned casino industry leaders, however, are taking the rare step of publicly criticizing a competitor.

"I'm not going to mince words: This is a troubling situation," Harrah's Chairman and Chief Executive Gary Loveman said last month at the G2E Institute in New Orleans.

Dan Lee, chairman and chief executive of Pinnacle Entertainment, has said : "It seems to me the strategy for Columbia Sussex is to just let their properties get dirty. I'm not sure I'd call their 'strategy' a strategy - it's an accident."

Taylor said he doesn't "understand how the state just sits by" while the cuts are made. "Last time I looked it was a privilege license," Taylor said. "They're supposed to do this for the benefit of the citizens of Nevada. But when you cut like they've cut, it becomes impossible for our members to provide the quality of service they're used to."

For its part, Columbia said it was looking forward to negotiations. "We want to work with the union to achieve our goal: an agreement that's good for our company, our employees and our guests," FitzPatrick said. He added that the redevelopment plan - and the scores of jobs that come with it - would benefit the union in the long run.