Businessman Carl Icahn said on Tuesday that work rules and benefit costs for members of the UNITE HERE Local 54 labor union were among the main reasons for the closure of four of Atlantic City’s twelve casinos.
Mr. Icahn’s comments came only a day after Local 54 President Bob McDevitt accused him of disembowelling the city, in order to achieve his own goals.
The billionaire investor stated that Mr. McDevitt is purposefully neglecting the fact that four gambling venues closed doors in 2014 due to the “exorbitant” health care and pension plans casino workers demanded. He further commented that the Local 54 President found it easier to put the blame for Atlantic City’s current situation on someone else, which resulted in workers’ continuing unrest.
Mr. Icahn is to acquire Trump Taj Mahal as soon as bankruptcy court cancels the amount of $286 million in debt he owns from the current operator of the venue. Even though he does not own the casino yet, he lent it money to keep it going.
The investor is currently in charge of Tropicana, one of Atlantic City’s operating casinos. Union members have previously accused him of being involved in the closure of Atlantic Club Casino Hotel. Mr. Icahn bought the struggling venue through Tropicana and then announced its closure.
The name of the businessman was even mentioned in relation to the thwarted conversion of Showboat into a university campus.
Mr. McDevitt pointed out that it is Mr. Icahn who has been pulling Trump’s strings for quite some time now.
Robert Griffin, CEO of Trump Entertainment, the company that owns and operates Taj Mahal, commented that pension and health costs for union members as well as work rules were among the main reasons why the company decided to file for Chapter 11 bankruptcy protection in September 2014.
Trump executives started talks with Local 54 members in the beginning of 2014. The company explained to its employees that it could not afford the requested plans and new contract needed to be negotiated for that matter.
Mr. Icahn stated that the union’s pension and health care plans are indeed unaffordable. He also pointed out that Tropicana workers had their previous retirement plan pulled out as it has underperformed the S&P 500 index for more than five years. The casino now offers a 401(k)-type pension plan to its employees.
As previously reported, Local 54 is appealing a court order for the termination of health and retirement coverage for Trump Taj Mahal workers. Mr. Icanh pointed out that he is going to close the casino, if the decision is reversed.
