March 19, 2015
To Local 54 Employees of the Trump Taj Mahal:
This past weekend I read several articles reporting on Local 54 demonstrations at the Taj Mahal, and I noted a number of grossly inaccurate statements about me to which I feel compelled to respond. I want to make clear that I am not against healthcare plans for employees and I am not against unions. In fact, many of the companies I own have unionized employees with fair and balanced healthcare plans. However, the leadership of those unions does not try to squeeze profits from the employees and their employers. That is what I find so abhorrent about your union leadership – they are attempting to hold a bankrupt business hostage by threatening labor unrest if they do not receive exorbitant payments into their own highly profitable healthcare scheme.
Over the last five years, while the Taj Mahal has gone bankrupt not just once, but twice, your UNITEHERE Health plan has made $140 million in net income![1] Yet even against the backdrop of your employer entering bankruptcy for the second time in five years, your union leadership continues to demand that the Taj make exorbitant contributions to the profitable UNITEHERE Health plan, or else suffer labor unrest. But ask yourself – where has that $140 million in net income even gone? Certainly it did nothing to help the Taj Mahal, which continues to lose millions of dollars every month. It all reminds me of that bygone era when organized crime would demand grocers pay for protection or suffer bricks being thrown through their store windows. The only real difference here is that instead of throwing bricks through the Taj Mahal’s windows, your union instead organizes strikes, picketing, boycotts and other attacks to deter customers from patronizing the Taj Mahal. Either way, the message is the same – pay an exorbitant “protection” fee or suffer the consequences. Is it any surprise that in this environment a third of Atlantic City’s casinos went under last year alone? Things are so dire that it will be hailed a success if the $2.4 billion Revel finally sells for less than 5% of its cost!
As you can plainly tell, despite seeing my face, name and motivations mocked and mischaracterized on signs on the Boardwalk and the local news, I will not be intimidated. I refuse to believe that a majority of Local 54 employees at the Taj Mahal do not see through the obviously self-interested motives of their leaders. Nor do I believe that anyone should be told that they have to participate in a murky, opaque arrangement like the UNITEHERE Health plan. If your union wants bankrupt businesses to participate in their profit-driven healthcare plan, they should at least be expected to show why this would be a proper use of such limited resources. Instead, they beat their chests and demand that these barely surviving companies commit to contribute funds that we believe they, and not the employees or the companies, ultimately benefit from.
No one can deny the fact that the problems at the Taj Mahal are not of my making, as I never played any part in managing the Taj Mahal, nor was I ever on the board. In fact, as a creditor of the Taj Mahal, I am today one the many losers in this bankruptcy. Yet your union leadership continues to make your contract negotiations with the Taj Mahal about me, and that is simply a ploy to distract you from the bigger issue. The truth is that the focus should be on them – in particular, their profiteering from the UNITEHERE Health plan and their failure to foster a positive business environment in Atlantic City.
Your union President Bob McDevitt actually said that if the Taj Mahal does not make contributions to the UNITEHERE Health plan he believes Taj workers will just say “then close the place.” But I do not believe that for even a second. On the contrary, I have received numerous letters and phone calls from employees of the Taj Mahal thanking me for committing to lend the Taj Mahal the necessary funds to stay open and urging me to do whatever is necessary to save their jobs. As a result, I sincerely believe that what Taj Mahal employees want is to work for a financially stable enterprise with ownership that is willing to invest in the property.
The bottom line is that, even without making exorbitant contributions to the UNITEHERE Health plan, the Taj Mahal is currently losing millions of dollars every month, and it desperately needs millions of additional dollars to fund long-delayed capital improvements. If the Taj Mahal had to make exorbitant contributions to fund UNITEHERE Health’s $140 million of net income on top of those mounting losses and enormous capital expenditure requirements, there is simply no way it could emerge from bankruptcy as a viable operation. By committing to lend up to an additional $80 million to the Taj Mahal, I believe I have done my part to enable it to remain open and emerge from bankruptcy. But one thing should be eminently clear – I committed to lend the Taj Mahal up to $80 million so that it can be great hotel once again, not so that it can enrich these union leaders.
Sincerely Yours,
Carl C. Icahn
[1] See Form 5500, Annual Return/Report of Employee Benefit Plan, 2013, for Unite Here Health. Retrievable from: https://www.efast.dol.gov/portal/app/disseminate?execution=e1s1
