Billionaire Carl Icahn Closes The Trump Taj Mahal Casino After Union StandoffKAYNAK:http://www.forbes.com/
Billionaire Carl Icahn is closing the Trump Taj Mahal Casino Resorts in Atlantic City, N.J. after deciding to cut his losses in the money losing casino due to a failure to reach a labor deal with its thousands of unionized workers. Members of the UNITE Here Local 54 union had been on strike for 102 days amid contract negotiations.
Twenty six years ago, Republican Presidential candidate Donald Trump opened the doors on Taj Mahal, then the most expensive piece of his gaming investments in Atlantic City. However, Taj Mahal and Trump’s other casinos such as the Trump Plaza have endured chronic declines and restructurings as the region failed to live up to its hype as an alternate gaming hub to Las Vegas.
Icahn, a close friend of Trump and a supporter of his Presidential bid, bought the Taj Mahal and other Trump properties out of bankruptcy in 2014. Since then, Icahn and thousands of local union workers were engaged in negotiating a new labor deal, with items such as healthcare and a funding of pension benefits as most important.
Union workers from local 54 take part in a rally outside the Trump Taj Mahal in Atlantic City. / AFP / KENA BETANCUR
However, in a Monday statement, Icahn said he and the union were at an impasse. The billionaire, who’s famed on Wall Street for agitating corporate management change and restructurings, says he lost almost $350 million on his Taj Mahal investment and was looking stem the money bleeding. “Today is a sad day for Atlantic City. Despite our best efforts, which included losing almost $350 million over just a few short years, we were unable to save the Taj Mahal,” Icahn said.
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In addition to Taj Mahal, Carl Icahn’s holding company, Icahn Enterprises, owns casinos in Indiana, Nevada, Mississippi, Missouri and Aruba through Tropicana Entertainment. As of June 30, the gaming segment of Icahn Enterprises generated $888 million in revenues, adjusted EBITDA of $146 million and net profits of $36 million. Icahn Enterprises, which has fallen 21% excluding dividends in 2016, consolidated the Trump Taj Mahal into its financial statements in the first quarter of this year.
“I am extremely grateful to all of the almost 3,000 employees for their hard work, especially those that stayed loyal to us during this trying period. After our last offer, which included medical, was rejected, it was simply impossible to find a workable path forward that would not have required funding additional investments and losses in excess of $100 million over the next year. Like many of the employees at the Taj Mahal, I wish things had turned out differently,” he added.
The shuttering of the Taj Mahal marks the fifth such closure in Atlantic City over the past two years and it comes as hopes of a revival of the coastal gaming and resort town dim. Roughly 3,000 workers will lose their jobs, adding to the over 11,000 jobs lost in the Atlantic City gaming market over the past two years.