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The Honolulu Advertiser
Posted on: Sunday, May 16, 2010

Cerberus, Goldman Sachs, meet Local 5


By Eric Gill

Hawaii news photo - The Honolulu Advertiser
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Hawaii news photo - The Honolulu Advertiser

Members of UNITE HERE Local 5 engaged in informational picketing along Kalākaua Avenue in 2006. When the union's contracts were negotiated four years ago, Hawai'i hotels were enjoying one of their most profitable years ever.

Advertiser library photo

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Some things never change. Death. Taxes. And, of course, corporations trying to take money away from workers to increase their profits.

Hawai'i's people will soon be a treated to an up-close-and-personal display proving that corporate greed is alive and well right here.

On June 30, union contracts covering workers at many of Hawai'i's largest and most influential hotels will expire, including most of the Waikīkī beachfront.

Hilton Hawaiian Village Resort & Spa, the four Starwood/Sheraton hotels, the Hyatt Regency Waikiki and the Waikiki Beach Marriott will all be renegotiating labor contracts with UNITE HERE Local 5.

The list of corporations that own these hotels reads like a "who's who" of the corporations that have concentrated on making large profits even as the economy has slumped and put millions of people out of work.

The Hyatt Regency Waikiki and the Waikiki Marriott are owned by guess who Goldman Sachs. Yes, the same Goldman Sachs that took $10 billion of taxpayer money in the recent bailout, then paid out huge bonuses to the same executives (the top five executives made over $183 million between them in 2008, with CEO Lloyd Blankfein alone making $43 million in total compensation) that ran the company into trouble in the first place.

Yes, the same Goldman Sachs that the federal government is now prosecuting for allegedly ripping off unsuspecting investors by selling them bum investments, and then making fabulous profits by betting that the investments go down in value.

Then there's Cerberus, which took advantage of the collapse of the Japanese economy to buy control of Kyo-Ya, the company that owns the Sheraton Waikiki, Royal Hawaiian, Westin Moana Surfrider and the Princess Kai'ulani hotels. Cerberus is no slouch at soaking up taxpayer money either, leaving the American public holding the bag when they got bailed out after their purchase of the Chrysler Corporation.

Cerberus also has a history of laying off hundreds or even thousands of workers after buying up companies such as Chrysler.

It did just that after buying more than 600 Albertson's supermarkets in 2006, after buying a school bus manufacturer in 2006, after buying a North Carolina textile company in 2004, and after buying Mervyn's, a department store chain, in 2004.

And then there's Blackstone, whose founders made a combined $2.6 billion when the company went public, but whose investors lost big when their shares lost 55 percent in value within nine months. Blackstone owns Hilton.

All of these big corporate entities have billions in cash and continue to buy up whole companies as the wave of bankruptcies ripples through the economy. They are finding ways to take advantage of the situation by picking up valuable holdings damaged by the crash.

These are the owners of the largest and most important hotels and who will be bargaining a new contract with Hawai'i hotel workers this summer. When you add in the management companies like Starwood and Marriott that operate these hotels on behalf of these owners (both Starwood and Marriott recently reported very robust first quarter profits), you have a list of companies that have maintained profitability even as the rest of the country suffers and the economy staggers.

If these companies do in Hawai'i what they have already been doing in large Mainland tourist destinations like San Francisco and Chicago, we can expect that they will be proposing that workers take multi-year pay and/or benefit freezes; in essence, forcing workers to cough up money to pay for rising medical insurance costs.

It is absolutely unacceptable for companies that have been making money while the rest of us are suffering to then turn around and demand even higher profits at the expense of workers.

The answer will be no. Hotel workers will fight to defend our livelihood. We will fight to defend Hawai'i.

The worst thing possible for Hawai'i is if greedy Mainland corporations are successful in driving down wages or benefits for workers in our most important industry. If the likes of Goldman Sachs can take money out of the pockets of Hawai'i's people, they are taking that money right out of Hawai'i's economy.

If hotel workers have no money to spend, who will be able to buy at the businesses where other Hawai'i people work? How will Hawai'i's economy ever recover if the money in our pockets is sucked into Mainland corporate profits and paid out in outrageous bonuses to the rich parasites that have already soaked up hundreds of billions of our tax money?

This summer, people in Hawai'i will have a choice to make. Hawai'i people can either support their friends and family members who work in the hotels as we fight to defend our wages and benefits and the local economy. Or they can stand aside and do nothing while the corporations try to pluck more profits out of the wreckage of our economy at the expense of Hawai'i's people.

It's as simple as that.

Eric Gill is financial secretary-treasurer of UNITE HERE Local 5, the hotel and restaurant workers' union. He wrote this commentary for The Advertiser.