CityCenter and Cosmopolitan general contractor Perini Building Co. has asked building trades unions to take pay cuts and make other concessions as they work to complete the financially troubled projects, according to several sources familiar with the negotiations.
In meetings Thursday, Perini Chief Executive Craig Shaw and top executives of the CityCenter and Cosmopolitan projects asked for $2-an-hour wage decreases from about 11,000 trades members on those jobs, say sources involved in the discussion who did not want to be identified because the meetings were confidential.
Perini met in separate sessions with Southern Nevada Building and Construction Trades Council leaders and officials of the local carpenters and operating engineers unions.
In addition to wage concessions, Perini asked both groups to give up raises of about $1.75 to $3 an hour set to take effect over the summer for many trades. They also asked that workers stop taking 15-minute breaks in the mornings, sources said.
The requests come amid an increasingly bleak outlook for the $9 billion CityCenter project and the Cosmopolitan, which costs more than $3 billion. Both projects are facing financial difficulties and are struggling to finish by the end of the year and mid-2010, as planned.
After what was described as heated discussions, neither the building trades nor carpenters groups agreed to the provisions. The building trades will discuss the deal further at a union meeting Monday, building trades Secretary-Treasurer Steve Ross said Friday.
Sources at the meetings said Perini executives did not threaten directly to halt the projects if the unions do not agree to the company’s demands.
Ross and building trades spokesman Steve Redlinger confirmed there were negotiations with Perini on Thursday but declined to provide details.
Redlinger said he thought the talks centered only on the future of the Cosmopolitan and was not aware of a discussion about CityCenter.
MGM Mirage spokesman Alan Feldman said he could not confirm the discussions. He said the company is seeking to cut costs at CityCenter amid the recession.
Perini spokeswoman Leslie Pittman did not comment.
The projects — while on shaky financial ground — nonetheless remain rare bright spots amid a dismal job market for building trades members, who have very little significant work on the horizon.
MGM Mirage is facing a major cash crunch as it seeks more than $1 billion to finish CityCenter at a time when earnings are plummeting and more than $9 billion in bonds comes due in the next three years.
With banks reluctant to lend during the recession, some analysts say the company will be forced to sell casinos to pay for CityCenter or file for Chapter 11 bankruptcy protection, which could eliminate a significant chunk of debt, freeing up earnings to pay for CityCenter and for other needs.
Feldman said there have been no discussions about putting CityCenter on hold.
Structural problems at CityCenter’s Harmon hotel forced the company to scale back the building to barely half its original size. That and cost-cutting moves have trimmed about $600 million from the CityCenter budget, which had peaked at more than $9 billion. Those cost reduction efforts are ongoing, Feldman said.
Cosmopolitan owner Deutsche Bank foreclosed on the property last year when its developer defaulted on more than $760 million in loans. The bank continues to fund work on the Cosmopolitan and hopes to open the 3,000-room resort in June 2010.
Analysts say Deutsche Bank is expected to sell the property once the economy improves and the bank is more comfortable financing a sale because it doesn’t want to own or run casinos.
Ross stressed that unions do not want to be an impediment to finishing the jobs.
“What we want to do is be part of a solution and help contractors to the best of our ability,” Ross said. “Unions are very supportive of contractors and always will be. Our success is based on those relationships and partnerships and we take that very seriously. We’re reviewing our options.”
But some people involved said they doubt the building trades union leaders would vote to approve the concessions because that would likely put unions in a diminished position as they enter into other contract negotiations. It’s also not likely to be popular with members, they said.
One union official involved in discussions with Perini said he is skeptical that the provisions Perini seeks would make a big enough financial impact.
One person estimated the concessions would represent less than $100 million in savings — less than one-tenth of the total financing MGM Mirage is seeking for CityCenter.
“The amount of money is so insignificant,” said one union official involved in discussions. “These things will either get funded or won’t get funded.”
I worked on city center and the cosmo. If I was in charge of quality control I could have saved them a million dollars.
i did 2 tours at the city cemetery. i worked on the harmon tower and main tower. if perini would have worried about the lives of the people on that job they wouldnt have to beg the men and women that worked so hard to get it where it is today. if MGM would have hired a competent general contractor, they wouldnt have had to give back the money for the condos that arent being built at the harmon tower. to ask us to work for less, and to risk/lose our lives is BS. how about they cut their labor costs by gettin rid of the guys that messed up the harmon tower? let's slim down on the people that put them in this mess, not the ones getting them out of it. maybe a few less "envelopes" to osha, and we could survive a little longer.
Screw the unions what good are a bunch of slobs that are good for nothing but only whine and complane that they have to work and not just sit around and play with each other. there wouldnt be so many safety accidents if these so called usless skilled labores did ther jobs and replaced the safety equiment they took down in the first place. but as heard over and over again THATS NOT MY JOB.... what kind of idiot removes a safety railing and will not replace it because IT'S NOT MY JOB... so if these idiots are getting injured or killed because of IT'S NOT MY JOB... let it happen. there would be less accidents and deaths at city center if they hired only nonunion people to do the job and the cost of labor would be half of what it is now. really does some dumbass really need to be payed $18.00 an hour to push a broom not to mention he probally cant even speak english. or the carpenter that is anopther dumbass really need to be payed $22.00 an hour to pound nails... get rid of the usless unions and the job will be done better cheaper and with less injurys or death because the atatude of IT'S NOT MY JOB will not be on the job site
Are the people at Perini?
They're making millions on these projects, as general contractor. It is also Perini's neglect in supervising the rebar subcontractor which caused the Harmon tower to be cut short.
It's the union workmen at risk of dying from the physical risks of this job. I have not heard of a single Perini owner, MGM Mirage executive or shareholder or Deutsche Bank's executive or shareholder being hurt on this job.
Perini and MGM Mirage made decisions to build a union project. When Deutsche Bank foreclosed they made a decision to continue using Perini under its union contracts. While this wage cut request sounds like a nut ball idea typical of Deutsche Bank's officers, all of the executives need to get real. Construction union workers do not take a pay cut in the middle of the job.
Either finish the project or shut it down now.
Maybe The MGM Mirage Executives Should Take A Pay Cut.
http://www.spfpalocal7777.org/
http://www.spfpalocal7777.org/DubaiWorld...
MGM Mirage CEO J TERRENCE LANNI Insider Trading 3-Jul-08 03:21 pm
Las Vegas casino stocks hit new lows today on negative analyst reports citing the compounding effect of higher fuel costs, slipping consumer confidence, cutbacks on flights to Las Vegas and slower growth prospects at their casinos in Macau, China.
While MGM Mirage shares continue to FALL, hitting a new three-year low. J TERRENCE LANNI MGM Mirage CEO is proberly glad he sold his Stock WHEN IT WAS HIGH making Him Millions of Dollars in a Single day through his Insider & restricted shareholder transactions.
LANNI J TERRENCE: Declared Holdings
Insider & restricted shareholder transactions reported over the last two years
10-Dec-07 *50,000 MGM Sale at $92.45 - $92.73 per share. Proceeds of about $4,630,000)
7-Dec-07 *2,696 MGM Sale at $92.06 - $92.16 per share.(Proceeds of about $248,000)
7-Dec-07 *47,304 MGM Sale at $91.50 - $92.05 per share.(Proceeds of about $4,341,000)
REVENUE EARNED FOR THESE TWO DAYS = $5,799,000
28-Feb-07 100,000 MGM Option Exercise at $12.74 - $12.74 per share. (Cost of about $1,274,000)
28-Feb-07 31,400 MGM Sale at $70.85 - $71.13 per share.(Proceeds of about $2,229,000)
28-Feb-07 68,600 MGM Sale at $70.37 - $70.84 per share.(Proceeds of about $4,844,000)
$7,073,000 Minus $1,274,000 = NET PROFIT FOR THE DAY = $5,799,000
16-Feb-07 120,000 MGM Sale at $68.82 - $70.11 per share.(Proceeds of about $8,336,000)
16-Feb-07 120,000 MGM Option Exercise at $12.74 - $12.74 per share. (Cost of about $1,529,000)
$8,336,000 Minus $1,529,000 = NET PROFIT FOR THE DAY = $6,807,000
6-Nov-06 440,000 MGM Option Exercise at $12.74 - $12.74 per share. (Cost of about $5,606,000)
6-Nov-06 900 MGM Sale at $45.64 - $45.66 per share.(Proceeds of about $41,000)
6-Nov-06 41,500 MGM Sale at $45.26 - $45.62 per share.(Proceeds of about $1,886,000)
6-Nov-06 139,900 MGM Sale at $44.96 - $45.25 per share.(Proceeds of about $6,310,000)
6-Nov-06 125,200 MGM Sale at $44.67 - $44.95 per share.(Proceeds of about $5,610,000)
6-Nov-06 132,500 MGM Sale at $44.36 - $44.66 per share. (Proceeds of about $5,898,000)
$14,135,000 Minus $5,606,000 = NET PROFIT FOR THE DAY = $8,529,000
GRAND TOTAL OF J , TERRANCE LANNI MGM MIRAGE INSIDER & RESTRICTED SHAREHOLDER TRANSACTIONS REPORTED OVER THE LAST TWO YEARS
$30,354,000 Million Dollars
My post actually said "Are the people at Perini crazy?"
Don'T cut your pay.. Hold out until they just cancel the completion. That way you will not have given anything back, you wont have a job, but you will have your principles. Just good union thinking.
Hey Cosmo owners - we are a group of 180 unit owners and have already filed a class-action suit on February 10th to get our hard earned deposits back. We did this before Robin Leach did his... Join us! send me an email at ruffus327@aol.com and I will work to get you on our list. DO NOT HESITATE as we do not know how much longer we can accept plaintiffs!
Regards
The Union loafers, for less money, will only slow down their already tepid progress-they know that when this project ends, it's light's out. The business agents are living in fear that they won't be able to put their relatives back to work. Thus it's foolish to think that pay cuts will bring savings-the Union craftymen will simply slow down even more. Perini, from Framingham, Mass., is the last remaining descendant of the East Coast Mob in Vegas, and will go down big time. Good...
Everyone is always blaming the workers for the mess Why don't we look at were it all starts, at the top MGM, Then work are way down. I come from the Midwest and the way projects and safety are run out here, its disgusts me. All the wasted money, because some architect doesn't like the way it looks when its done so they beat up on the workers to help them out by not charging them because it would be costly to the project. Where I come from if you did the way they have drawn it, and they want to change it, you should get paid for it. Not have to get beat up over it, and then maybe get paid, after all they are the ones that approved it. As far as givebacks, I don't see any MGM executive running forward and giving up there big bonuses or taking paycuts to help the project, so why should we? After this is built and the money starts rolling in from the casino are they going to cut checks to the 11,000 workers that took a paycut? Are we going to get that 2 dollars back when they make money? I don't think so. There is tons and tons of waste money on this project from moving a finished wall 2 inches so they can rent out that extra 2 inches, to changing finished square duct into round duct that calculate to the same amout of air being distributed, not to mention now they are going through and and beefing up the steel frame because it was not calculated right for all the load. Were I come from the always overclculate what we call "over kill the calculations" that insures that they have enough wiggle room for more if they need it, not lets see how cheap we can get this then 4 months down the road, OOPS we have to add more, because it is not enough, and oh by the way do it as cheap as possible so we dont go over budget on the project. You know a project like this would take 4 to 5 years to complete were I am from with very little overruns and using Union Worker to build it! We plan better and give the proper time to finish. I am tired of hearing "this is Vegas it needs to be built faster". Well look what happens when you build it fast, look at all the mistakes, example Harman Tower and the Veers Tower back home our inspectors would have caught that right away. We would not have to pour a floor in a week, and oh by the way can you do it in 5 days. Mistakes, mistakes, mistakes. Maybe we should take a step back and let everyone do there work properly and with the skills each and every trade has! Lets put craftsmanship back into building again! Coordinate with each other to do away with some of these mistakes and give inspectors the proper time to do there inspecitons. By doing all this you will also have a safer jobsite, look at the track record back east to here safey works when you let it not rush rush rush rush, thats when you get hurt. So in closing maybe take a bigger look at the top where all this begins not the worker we are just doing our job as directed!
there are a lot of people w/jobs who continue to hold their ground and complain,shut down both job sites and let them become statistics like the rest of the unemployed then they can be proud because they held their ground.the uaw has held their ground and their brothers and sisters are out of jobs,way to go.put these guys out on the street w/the rest of the hard liners who do not understand that their pay scale helped put us in a recession,its called GREED.let me be the 1st to say welcome to the unemployed.now you can really sit on your butt all day.
construction workers they are ALMOST as lazy as the people who make cars in detroit... all fat and overweight jee i wonder why? Construction and labor IS NOT THE SAME AS IT WAS 100 YEARS AGO
MACHINES DO MOST OF THE WORK
THEY MAKE 50 AND HOUR TO DO AN EASY AS JOB
AND THEN THEY COMPLAIN WHAT A ROUGH GIG IT IS
LAUGHABLE
To MAGSNY1999 and the rest of you Non-Union Mindsets.... Before i dive right into tearing you a new one, lets recap what the unions have Provided for you NON-Union Scabs. The 40/hr work week, Weekends, higher wages, Equal pay and rights for Men and Women no matter the color and a voice to be heard.
The stereotype that all Union workers are fat and overweight is just that. If you were permitted access to go on City Center job site you would not see that, in fact it would be the opposite. Men and Women running around Hustling to get the job done on time and on budget.
Machines do most of the work MAGSNY1999 states. According to her its an easy job to put up with 115 degree heat, dehydration, wind, rain, even snow all trying to keep you from performing your tasks for the day.
Why do union guys get paid so much? Electricians, plumbers, pipefitters, Sheetmetal workers and other trades need to complete a 5 year apprenticeship along with around 1000 classroom hours. This makes them the most qualified, competent and quality workers in the market. If you went non-union, youll pay less but your going to not get QUALITY work!
Its like buying a Corvette, or a hyundai, you get what you pay for! What is costing this job so much is Perini. Mismanagement and misplacement of material, labor, blue print readings has cost this job tenfold. The fact that you have Laborer Management telling other trades what to accomplish is laughable. Installing the wrong rebar cost the Harmon tower. Mismanagement has cost Millions of dollars if not billions.
...So as you sit behind your computer typing away on a subject you have no bearing on, you might want to think twice about publishing something that makes you look like an utter fool to your peers and everyone in Las Vegas. By your comments you have never worked in a Union, and us union people would not want you in our Union anyway because we are Team players with positive attitudes. I hope this explanation has cleared up some viewpoints about the workers at city center. They are not the reason City Center is in jeopardy.
- a Non-fat/ non-uneducated Union Worker
Talk about an uneducated blog; case in point, do you educated people not understand the use of capitalization, punctuation, the forming of complete sentences, etc?
I was impressed with the rants about what professional, educated, and qualified people are in the union and as I sift through the photographs attached to this article I see a variety of safety violations; such as no glasses as an example.
So let me get this straight in my head. MGM, Perini, and Deutsche Bank are at fault right. These are the companies for which you blame worker injuries and deaths upon? Can't possibly be the workers whom make the decision to ignore the law's that mandate the use of PPE, much less the common sense.
You must find blame in everyone around you I suppose, sure beats looking in the mirror and seeing the fool responsible, and I am sure that form of ignorance takes less courage.
When these workers get injured, do your Union Officials ever perform a root cause analysis, or do you just blame the first person that is not there to defend themselves?
For the really ignorant; I spent many years in the union and we were our own worst enemy, wanting everything for very little in return.
Best wishes to all of you, I choose not to line the pockets of "Pot smoking, coke snorting" Business Agents. I choose to not malign myself with a union, my work performance keeps me employed, I certainly do not need the aforementioned to cry for my job whilst I sit on my ass and break the rules, and do little to earn the wage for which I am being paid.
For those of you in the various unions who do earn your wage and are proactive in safety, to include policing your own, congratulations and GOOD JOB!
Wow these idiots' writings are proof that jealousy runs deep in non-union workers and ex-union workers. They can't make union wages to support themselves so they have got to trash good hard working union members... to make what point?
It will take a decision walking on a fine line regarding the union workers at city center if they should have to give up some of their hourly pay or lose a job.
The problem stems from the contract agreement between the MGM and Perini. Their contract was written for "X" amount of work for "X" amount of money. The union construction workers had nothing to do with the bidding process. They have to deal with the contractual price in working hours agreed upon between the MGM and Perini and all the other subcontractors.
The responsibility falls on each contractor if the job goes over the contractual agreement. They will have to bill Perini on costs above and beyond the original agreement. Perini will then have to bill the MGM. If the MGM wants the job done they will have to pay. A project labor agreement shouldn't be written up at the end of the job to lower the workers wages. We have been led to believe that the money is running out, 2 to 3 billion dollars is needed to finish this project. I feel bad for the MGM that they are going through this especially at this time with the economy as it is, but the union workers should not be made to lose some hourly pay unless it is true that the job will shut down if they don't. Smaller paychecks or no paychecks? Where does the truth lie?
If you really feel this strongly about your opinion, how about you leave your names in your comments. I can tell you this, the conditions and wages that are in the non-union world are directly related to what is in the union world. The non-union is generally given just a little bit lett than the union in every aspect of there employment. The difference is, your employer get to keep the piece of the pie you don't get allowing them to line there pockets from your hard work. Try getting your employer to cover your healthcare 100%, or pay for your continuing education or certifications. I have never had to pay for my families healthcare (thats my whole family, not just myself) Before you comment about union vs non-union and how it would effect this project, get the facts straight. My name is B. Osborne and I am proud to be an IBEW member for over 20yrs.
all I know is Perini is trying to save thier budget because the underbid the job or poorly managed it with change orders. to all you union haters I am in the union and when I work I do what I am told and don't say thats not my job. I also won't do things I am not trained to do like a nonunion person sucking up to a foreman. I unlike some yahoo on a job trying to be a hero I won't perform unsafe acts to get the job done. In my union I went to crane school and get recertified yearly, forklift,manlift, welding certification yearly to keep me fresh to understand scaffolding safety that my carpenter brothers erect for me, proper respirator wear, safety harness use and checks, lifting device checks for chokers, chainfalls,comealongs,shackles and proper lifting methods. I am sure that the five years I spent making sure I do my job right and safely that some person that is a jack of all trades and been everywhere could definity work harder, safer, more knowledgable and do whatever the boss says because that college educated foreman knows everything about every trade and will do it for less money is the person you want building something thousands of people are in everyday. I am sure gary65 or magsny1999 would feel they could to anything whether right or wrong on that job for thier $18 and no breaks. Good for you and just remember that Perini boss will definity share his bonus saving, cutting wages and costs on that job with you because you saved them money to come under budget :) I also think that MGM executive that earns his millions each year keeping that maid or dealer at $10 hour instead of $11 thank goodness for you union haters and thank you rich people for making sure to hire the nonunion to make sure your wage stays up there and to keep them scared and happy to have a job that squeaks them by each month with crappy health benifits and no extra money to save for a future :) I would also like to add my union made a concession with your local utility to cut my pension this year 70% and increase my medical cost to save rate payers money. Check his bonus, it was quite nice but your rates still went up so you tell me :)
On March 6 2009 the Sun Published This:
http://www.lasvegassun.com/news/2009/mar...
The next day the RJ published this:
http://www.lvrj.com/business/40891687.ht...
So basically, what I gather from all this information is this. Banks are not in the construction business, and they have no idea of how to run a project like this. You don't finish a project and then change your mind on something, and spend millions of dollars going back and demolishing finished work. They have done this three times. Now they expect the General Contractor to lower their bid so that they can cover their cost of the changes. The General Contractor doesn't want to lose any of their profits, so they want the subcontractors to decrease the pay of the workers. It looks like MGM is even getting sick of dealing with Deutsche bank.
I am an electrician at the Cosmopolitan, and I have had to demolish finished product, and redo it several times, because of these changes. Months of work for nothing. You can't blame the workers. We are getting the job they want done, on time, and in budget.
Now for the non-union comments about safety. The death that occured at the Cosmo was from one of Perini's non-union Safety inspectors. The person was checking a steel guard railing line. The way he checked it was leaning on it, and it broke. As far as the City Center goes, Perini was taking safety shortcuts and giving envelopes to OSHA. Not to mention putting way to many workers in the same areas working on top of each other. Now that there is media coverage of all the deaths, Perini is playing by the rules. The above picture is a picture of the workers already off of the job site, they are crossing Las Vegas BLVD. In the other picture, the iron workers have all proper PPE.
Union workers have on average 5 years of school plus 5+ years of on the job training before getting their Union Journeyman ticket. If a worker is lazy and not producing he will get fired. Contractors can't afford to have lazy workers. If it weren't for unions you would be working for a little over minimum wage for a skilled job with little to no benefits. Look at the states where non-union has taken over.
Bottom line is that banks aren't in the construction business, just as they aren't in the business of selling houses. Greedy banks are the reason that the economy is so messed up. Workers should not take pay cuts in order for the bank to save money to fund all of the changes and blunders that they have made. If you don't have the money to pay for a MAJOR change, then don't change it.
Has anyone looked at Perini? Why don't there people take a pay cut I am sure Craig Shaw would give back a little to keep his job.
Craig W. Shaw
Chairman of Perini Building Company Inc and Chief Executive Officer of Perini Building Company Inc, Perini Corp.
Compensation $650,000 USD This person is connected to 12 board members in 2 different organizations across 1 different industries.
See Board Relationships
* http://investing.businessweek.com/resear...
There are a host of problems at City Center- Design, management, and workers just not paying attention. All involved are working diligently to get the project completed on time and under budget but problems arise daily that have to be resolved. Design flaws take much too long to resolve resulting in contractors being rushed to get back on schedule. I don't have the answers but a suggestion would be to have owners representatives available to work out minor issues on the spot as opposed to waiting 3-4 weeks for an answer.
As far as Union or non union, I have worked both, and Union, by far has better trained workers. Your check is there every week and you have health and pension benefits payed on a regular basis. Granted, there are some good non-union shops, but most will continually beat you down and keep you scratching while they reap the benefits from your hard work. Some even pay in cash and send you a 1099 form at the end of the year. No unemployment benefits, no social security paid in, no workers compensation. You may bash the union all you like and justify your hard work, but you are just uneducated when it comes to the union worker. We do work hard! When work gets plentiful is when you see the occasional worker that seems to be screwing off but when work slows guess who goes first? Don't knock the Union unless you have tried it. JD
Hmm, Perini is in such financial peril that they're building a HUGE, new multi million dollar office off of Patrick near Sunset!! Typical corporation trying to exploit the middleman, so they can go on to make their estimated millions! Sorry Perini, this contract was signed a long time ago and if you want to save a lot of money, start by closing all these giant office buildings you have all over town!
(Removed by the site staff)