The ascendency of Donald Trump’s presidential campaign is a joke that both bores and terrifies me, but that is not the subject of this blog post. An article in today’s NY Times, “Donald Trump and the Art of the Public Sector Deal,” provides an interesting insight into his shrewd use of public/private deal-making to build up his real estate empire, but misses an even more interesting story about an early example of Trump’s pragmatism around unions.
Unlike his more ideological counterparts in the business world, or his Koch-funded competitors for the Republican nomination, Trump has treated unions as a cost of doing business – when, that is, those unions have organized and demonstrated the power to make their existence a fact of life.
The Times story tells of how Trump, in 1978, secured a 40-year tax abatement from city and state officials in order to redevelop the “closed, blighted eyesore” that had been the truly grand Commodore Hotel into the shiny glass monstrosity that we now call the Grand Hyatt Hotel. What the story does not mention is that part of the price tag for that tax abatement was a card check neutrality deal with the NY Hotel Trade Council, the union that had represented the workers at the Commodore when it had closed six years earlier. Although not well known, it is probably one of the earliest examples of such a neutrality card-check agreement in the modern era.
But the union just won the card check by the skin of its teeth. It is difficult to reconstruct precisely what happened. It’s possible that the neutrality was quietly subverted by lower ranked managers who conducted a whisper campaign of lies or intimidation. (Early neutrality agreements didn’t build in strong penalties for violations of the agreements.) It’s also possible that, like the workers at the VW plant in Tennessee a portion of the Grand Hyatt workers psyched themselves out that the union could make the hotel less profitable and lead to layoffs. (After all, the previous workers at the Commodore had all lost their jobs.)
Whatever the case, the union went to the table in a weakened position…which Trump exploited. All hotels represented by the NY Hotel Trades Council are under the terms of the same collective bargaining agreement, and have been since 1939. Trump pushed for concessions, not in wages but in working conditions. He got them in a side agreement, while the hotel nominally signed on to the Industry-Wide Agreement.
But then he did something truly clever. He signed a “Me Too” agreement with the union for the upcoming round of negotiations. A “Me Too” is basically a “pre-signing” of the next contract. It means that an employer agrees in advance to all the terms that its competitors will ultimately settle upon, while securing a no-strike pledge during the contract campaign and beyond. You can see the value of a “Me Too” to a non-ideological employer. But the value is also huge for the union, freeing it to single out particular members of the employers’ bargaining coalition for job actions and pressure.
Trump signed a “Me Too” for every round of negotiations, and after he sold his stake in the hotel the new owners continued to do the same. There actually was a lengthy industry-wide strike in 1985, but the Grand Hyatt Hotel remained open for business.
It wasn’t until the year 2004 that the Hotel Trades Council finally got the Grand Hyatt fully signed on to the Industry-Wide Agreement and won for the workers at the Hyatt the same work rules as the rest of the city, which is, itself, an interesting story but one for another time.