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Monday, Nov. 23, 2009 | 2 a.m.
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The Culinary Union heightened the drama in its fight with Station Casinos last week, blaming a management-led buyout for the company’s bankruptcy filing and aligning itself with the company’s creditors.
The union issued a detailed report on the company’s financial woes, arguing that Station could have avoided bankruptcy had it not pursued a $5.7 billion deal to take the company private in 2007. It concluded with a call for creditors to demand that Station’s owners reinvest a significant part of the profits from the deal to help the company recover.
The move is the latest chapter in the Culinary’s ongoing battle to organize the 13,000 workers of the nonunion casino giant, and piggybacks on a lawsuit filed by a group of aggrieved creditors that claim the company relied on unrealistic, rosy financial assumptions.
“When you’re organizing you’re always looking to figure out how to make strange bedfellows,” said Janice Fine, a Rutgers University labor relations professor. “Where are the common interests with other players who have leverage?”
Labor experts say the strategy also fits with the union’s long history of corporate opposition campaigns and reflects a larger trend within the labor movement to paint unions as the moral counter to corporate excess and focus public and employee outrage on management.
Among the union’s findings: Company insiders, led by the Fertitta family, nearly tripled Station’s long-term debt from 2005 to 2007, borrowing money to buy back 14 million shares and complete the buyout. Forty percent of the proceeds — more than $660 million — went to company insiders. The Fertittas alone received $495 million.
“Clearly, the owner-managers and other insiders were more interested in extracting wealth from the company for themselves than ensuring its and its employees’ future,” said D. Taylor, Culinary secretary-treasurer. “Now it’s time for them to give back.”
Station, which filed for Chapter 11 bankruptcy protection in July, has said its reorganization is the result of the recession, not the terms of its leveraged buyout. In a statement, spokeswoman Lori Nelson called the report “silly” and dismissed it as “just more of the same corporate harassment by the Culinary Union leadership that has been going on for years due to their frustration over not being able to persuade our employees to join the union.”
Nelson said the report failed to include the nearly $900 million the Fertitta family reinvested in Station as part of the leveraged buyout.
Regardless, the Culinary sees Station’s bankruptcy as the most significant opening yet for its organizing campaign. The union has used bankruptcy proceedings in the past to outmaneuver hostile employers.
In 2000, the Aladdin opened nonunion and fought the Culinary’s organizing efforts. But when the debt-laden company filed for Chapter 11, its expenditures, including those for management labor lawyers, became subject to court approval. The union then stepped up its campaign, staging protests and filing complaints of unfair labor practices.
“Historically, the hotel union, when they encounter companies that resist and pursue anti-union strategies, they continue to go after them, they never let them alone,” said Rick Hurd, a Cornell University labor expert. “That demonstrates to other companies that there are costs that go along with fighting the union. It also demonstrates to workers that the union has their best interests at heart.”
Attempting to stoke public outrage, the Culinary also highlighted in its report a number of Station’s cost-cutting measures, including the suspension of 401(k) matching and the doubling of health care premiums. The report also notes layoffs, slashed shifts and the expansion of subcontracted restaurants.
Station called the report a waste of time:
“You would think that in these difficult economic times, when thousands of union members have lost their jobs, that the Culinary Union leadership would have something more productive to do with their members’ dues than to create and distribute this silly report concerning a bankruptcy proceeding in which they have absolutely no involvement.”
Pilar Weiss, the Culinary’s political director, disagreed, saying the union is dedicated to “fighting for all casino workers — both union and nonunion.”
Hang in there against the crooked goons. If you go to a unionized casino don't tip anyone.
It's just amazing how it is legal to strip the guts out of a company by issuing debt. Debt that, in the cases of Stations and Lake Las Vegas turned into folly quickly. Did the banks that gave the money to the Fertittas and Colony Capital perform any due diligence? Just because they are the primary lien holder-So what? Lien holders of what? Huge empty buildings with massive amounts of fixed costs. Producing nothing of importance.
Why would Credit Suisse give almost 600 million to the Bass Brothers and Ron Boeddecker, and end up with a BK resort with 2 empty golf courses and a failing casino that has never made a dime? Did they ever think that the good times might end?
Something wrong with the system-except for the few, few winners.
How lame. Just how much are the Station execs still being paid? And just how generous are those stock options? And they won't let their workers organize? And now they're taking away worker benefits in the name of "cost cutting"?
Go get 'em, Culinary 226! This current batch of Fertittas just don't know how to run casinos.
The actions of management in a non-union casino is not subject to scrutiny by anyone who does not have a legitimate claim in the casino's operation. In other words, all unions need to tend to their business in operations they have an interest in, and leave this one alone. Non-union casinos have that right.
Screw the unions. This country has become all about entitlements. Im curious what personal risk the Station employees took when the company borrowed the money? Its not the employees homes and assets that the bank will take when and if Station defaults on the note. They go after the Fertittas. Unions are worthless in todays society. If the Unions weasle thier way into Stations, the costs will be passed on to the consumer in the form of tighter machines, more expensive menus, hotel rooms etc. You will never punish the owners, they are smart enough to pass the costs along.
The Unions are a business killer, a joke, and anti business. You cant make money and have the unions happy, they're only there to protect the weakest and worst employees. Station goes union it will be closed in 90 days
The purpose of Unions - to protect the integrity of the worker- is now served with civil law and extends to each and every individual regardless of position. Naturally Unions would have you believe otherwise as they paint themselves as the guardian the worker. It is true Unions fight for their members (they are required to do so) including the most unproductive & underperforming employees. As a result the Union serves as a drag on American industry and productivity. Managers/owners are good and bad just like workers but Unionization artificially burdens companies for reasons now archaic. NO ONE would hire a union member on a level playing field, particularly Union reps who know the inherent flaws the system develops.
Whatever the pros and cons of unions, this report is right on the money. These folks really did their homework, and it's good to see someone calling these Fertittas out for their ridiculous profiteering by debt loading their company to infinity and beyond. This whole Propco thing stinks to high Heaven, and the Fertittas have a ton of mysterious connections to some shady people. Yet, the "family" greased the wheels and kept all the right people quiet. Whatever their motivation, the union here is at least taking a moral stand for the little guy and poking a stick at the big boys who think they rule the world.
The Unions are a business killer, a joke, and anti business. You cant make money and have the unions happy, they're only there to protect the weakest and worst employees. Station goes union it will be closed in 90 days
Ridiculousness
Good name it fits. 90 days!! yea not the greed but the unions!! Are you out of your mind?? Yea! that's why all the properities here with unions have closed - oh wait none have. especially due to the union. You know if owners could act and treat their employees with respect then a union wouldn't be necessary. But they can't and they won't - ever.
I wonder how many people leave their job after going union - I bet it is "0". My friend has worked in a union property for about 18 months every time management tries to hurt thier staff they have lost - thanks to the union. There has been almost 10 losses and management has been grossly in the wrong. And still after almost 10 can't treat employees with in the guidelines of humanity. Who owns a company and keeps managers who treat people this way. Let alone the cost $$$ - I thought we were in some kind of economic downfall the last 18 months yet owners and managers at the cost of the company continue to bully and treat people like slaves. GO UNION!!!