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Aug. 4 — Carl Icahn, the billionaire owner of the Trump Taj Mahal, sent a letter to striking employees Aug. 4 that blames UNITE HERE Local 54's leadership for the upcoming closure of the Atlantic City, N.J., casino-resort and the loss of as many as 3,000 jobs.
“We suggest you ask Local 54 leadership several questions that continue to perplex us: Why have they incited you, the Union workers at the Taj, to destroy your jobs and your livelihood rather than accept the prior offer that we made at McDevitt’s suggestion,” Icahn said in the letter, referring to Local 54 President Bob McDevitt.
Icahn's letter to workers came a day after management of the Taj announced that the casino-resort will be shut down after Labor Day weekend, citing the loss of “multi-millions” each month and the strike by about 1,000 Local 54-represented workers.
Republican presidential nominee Donald Trump opened the Taj in 1990. Icahn took ownership of the casino as it was exiting bankruptcy protection in February.
About 1,000 Local 54-represented cooks, housekeepers, bellmen and servers at the Taj have been on strike since July 1. Taj and Local 54 negotiators have been unable to agree on a new labor contract for the workers, particularly health-care and pension benefits lost during bankruptcy proceedings. Local 54 represents about a third of the Taj workforce.
Icahn's letter describes the strike as “the latest and final nail.” The business would have survived if Local 54 members accepted a contract offer presented in July, it 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.
Icahn's correspondence with Taj workers came the same day McDevitt released a written statement saying closing the Taj is “punishing working people for standing up to injustice.”
“Recently, he has made a public promise to put $100 million into the Trump Taj Mahal,” McDevitt said of Icahn. “He told the workers they were the most important asset of the property. Now, rather than negotiate with those same workers, he has decided he would rather close down.”
The intent to close the casino-resort also comes weeks after Local 54 leaders said they 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.
Taj management rescinded the 18-month deal when union officials declined to present it for a formal vote by the July 18 deadline. 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.
Icahn's letter also accuses McDevitt of flip-flopping on a contract proposal. “If the Local 54 employees had been allowed to vote, the outcome may have been different,” the letter said.
“McDevitt now spews out bombastic rhetoric demanding that Icahn Enterprises continue pumping tens of millions of dollars to cover losses at the Taj, although he knows full well that we made our best and final offer which he himself negotiated and believed was acceptable,” he wrote. “Icahn Enterprises is a business with shareholders and legal duties to those shareholders. It is one thing to fund losses when a path to profitability exists; but, to burn tens of millions of dollars when there is no hope is just foolish.”
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. Those closures led to the loss of about 8,000 jobs in Atlantic City, city officials have said.
The losses, in part, have been tied to mounting competition from new gambling venues in neighboring Pennsylvania and Maryland.
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