Trump Taj Mahal Closing Amid Labor Dispute

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By Tyrone Richardson

Aug. 3 — The Trump Taj Mahal will close after Labor Day weekend, the owner of the Atlantic City, N.J., casino-resort announced Aug. 3.

The closure comes amid a strike by about 1,000 UNITE HERE Local 54-represented workers because of a labor contract impasse regarding benefits.

The Taj “is losing multi-millions a month, and now with this strike, we saw no path to profitability,” Taj manager Tony Rodio said in a written statement. He added that management has “reached the point where we have no choice but to close the Taj after Labor Day weekend.”

The casino-resort intends to file notices under the Worker Adjustment and Retraining Notification (WARN) Act with the state before “end of weekend,” Rodio said. The Taj employs about 3,000 workers, with about a third represented by Local 54.

Republican presidential nominee Donald Trump opened the Taj in 1990. It is currently owned by billionaire Carl Icahn, who took ownership of the Taj as part of the casino exiting bankruptcy protection in February.

The closure of the Taj will add to a handful of other casinos that have closed in Atlantic City in the last two years, shedding an estimated 8,000 jobs, city officials have said.

Closure Comes Amid Labor Dispute

The closure of the Taj comes as about 1,000 Local 54-represented cooks, housekeepers, bellmen and servers at the Taj have been on strike since July 1. Local 54 President Bob McDevitt criticized the intent to shutter the Taj, describing it as “petty.”

“I would never have thought Carl Icahn was so one-dimensional,” he said in a statement. “The great deal-maker would rather burn the Trump Taj Mahal down just so he can control the ashes. 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.”

Icahn has faced criticism from Local 54 leaders, who have alleged he sought a bankruptcy exit plan that would remove Local 54-represented workers' pension and health care benefits. Icahn has defended his position, saying that concessions were needed to make the Taj financially stable.

The strike has also had a political backdrop. Democratic presidential nominee Hillary Clinton joined picketers while in town July 6 to criticize the business acumen of Trump.

Contract Talks Ceased

Local 54 negotiators have declined to accept the Taj's offer for an 18-month labor contract, which would have restored many of the benefits lost in the Taj's recent bankruptcy. The union has insisted on stronger health-care benefits and the return of pension benefits lost during the bankruptcy, leaders have told Bloomberg BNA.

The Taj management rescinded the 18-month deal when union officials declined to accept it by the July 18 deadline. Taj management defended the proposed contract, describing it as a short-term deal that would allow the casino to repay its debts and become a success story similar to the Tropicana, which is also owned by Icahn.

Rodio's statement Aug. 3 reaffirmed the need for profitability, saying that Icahn has “lost almost $100 million trying to save the Taj.” Local 54 halted efforts to save the Taj, he added.

“Even if the union accepted what we previously offered, which included the UniteHere healthcare plan we were led to believe they wanted, we would still be losing significant amounts each month, but at least there would be hope,” Rodio said in the statement.

Union: Closure Not a Business Decision

Local 54's McDevitt said the decision to close the Taj was “not a business decision.”

“It’s a classic take-the-money-and-run: Icahn takes hundreds of millions of dollars out of Atlantic City and then announces he is closing up shop,” he said.

Bill Dwyer, a professor of conflict resolution at the Rutgers School of Management and Labor Relations, told Bloomberg BNA Aug. 1 that a months-long work stoppage during the Taj's busy summer season could mean large losses for the both sides, especially the casino-resort. That includes lost profits for the Taj, in addition to workers only receiving a portion of their wages from the union's strike fund.

“Assuming this is a peak business [season] for the Taj, the timing of this strike favors the union in terms of leverage,” Dwyer said.

Trump Taj and Local 54 negotiators haven't held contract talks since June 30. The Taj was the only one of five Atlantic City casinos unable to reach a new labor contract and avoid a union strike by July 1.

Series of Closures in Atlantic City

The closure of the Taj will come after a series of casino-resorts shuttered in Atlantic City in 2014, including the Revel Casino Hotel, Trump Plaza, Showboat and the Atlantic Club.

The losses, in part, have been tied to mounting competition from gambling venues opened in neighboring states such as Pennsylvania and Maryland.

When Trump Entertainment filed for Chapter 11 bankruptcy protection in September 2014, it cited mounting debt and revenue losses stemming from increased competition from casinos in neighboring states.

To contact the reporter on this story: Tyrone Richardson in Washington at

To contact the editor responsible for this story: Susan J. McGolrick at

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.

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