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Crushed By Competition, UAW Bosses Roll Snake Eyes As Trump Announces Likely Casino Closure

UAW bosses rode into Atlantic City with promises of change and fell flat on their faces

The Trump Plaza hotel and casino in Atla

Although the hotel union UNITE-HERE has been in Atlantic City for decades, it appears that the United Auto Workers gamble in the casino industry is not going too well.

In fact, after a few minor election wins, taking four years to negotiate first contracts in the midst of the great recession and, now, one of the iconic targets of its much ballyhooed 2006-2007 attempt at unionizing all of Atlantic City’s dealers announced Saturday that it will likely close, one could say that the UAW’s foray into the casino industry is not going well at all.

Atlantic City’s crumbling casino market disintegrated even further Saturday as the owners of the Trump Plaza casino in Atlantic City said they expect to shut down in mid-September.

Trump Entertainment Resorts told The Associated Press that no final decision has been made on the Boardwalk casino. But the company said it expects the casino to close its doors Sept. 16.

Notices warning employees of the expected closing will go out to the casino’s 1,000-plus employees Monday. [Emphasis added.]

In 2006, as the Detroit Three were dying a slow death due to foreign and domestic competition and the UAW was losing members by the thousands, for UAW bosses, gambling was supposed to be a new and emerging market for the ailing auto union.

Using a Detroit-based contract like a sales brochure that UAW bosses—as part of a coalition of unions that unionized Detroit’s casinos—had in their back pockets, the UAW’s organizers stormed the Atlantic City strip in an effort to unionize all of Atlantic City’s casinos.

By making promises to dealers that it could not keep, the UAW did see some initial election victories but, almost immediately, the union’s campaign lost its momentum.

When the UAW first swept into town in 2006, it promised dealers higher wages, job security and better health benefits — along with less management interference — if they joined the union. But the UAW’s campaign fizzled, never coming close to plans to unionize dealers at every casino. [Emphasis added.]

While the UAW never achieved total-market penetration and its campaign sputtered almost as quickly as it started, The worst was yet to come for the UAW.

After the UAW won a few elections, it lost elections at Trump Marina and the Atlantic City Hilton. Then competition hit Atlantic City….hard.

Just as happened over decades with Detroit’s auto industry, competition has been brutal to Atlantic City.

First, Connecticut’s casinos opened, then Maryland, Pennsylvania and New York all allowed casino gambling—each of them drawing away Atlantic City’s (primarily) east coast customers.

With newer casinos opening in other nearby states, many of AC’s former die-hard gamblers from other states can now save their gas money and spend it in casinos closer to home.

When the recession hit in 2008, prior to any initial contracts being negotiated at the casinos where the UAW bosses won elections, the UAW bosses’ odds for succeeding in Atlantic City went from bad to worse as industry-wide layoffs ensued, weakening the UAW’s bargaining leverage, and the casino owners bargained hard.

At three of the casinos, it took nearly four years for the UAW to negotiate its first contracts–each of them lasting until 2015.

At the Trump Plaza, the UAW has failed to ever reach an agreement with the company.

Due to local politicians (including now ex-Congressman Bob Andrews) injecting themselves into the election on behalf of the UAW, the company appealed the UAW’s election victory and, despite having a contract with UNITE-HERE and other already-existing unions, the company has never sat down with the UAW.

In 2010, the NLRB rejected dealers’ efforts to decertify the union.

Although the owners of Trump Plaza will have to negotiate the effects of the casino closure with the UAW, in the end, the result will be the same—unemployment.

While nearly all of Atlantic City casinos (and unions) are facing an uncertain future, one thing is certain: Unions like the UAW do not provide job security and cannot escape the reality of market competition…no matter how many times they tries to tell workers that myth.

* While the Trump Plaza still bears his name, Donald Trump hasn’t been involved in the running of the casino and hotel for seven years.
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“Truth isn’t mean. It’s truth.”
Andrew Breitbart (1969-2012)

Cross-posted on LaborUnionReport.com

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