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Labor's New Roll of the Dice


The UAW and transport workers look to casinos to expand membership depleted by job losses

Swing through the new MotorCity Casino Resort, with its neon-trimmed decor and expansive gaming space, and you will likely find a United Auto Workers member at the poker tables. This is Detroit, after all. Yet they're not just the gamblers. The dealers shuffling cards are also UAW members.

This is the future, glitzier face of the UAW—or at least that's the plan. The union's auto company membership is expected to drop to 150,000 by decade's end, from a peak of 1.5 million in the mid-1970s, owing to troubles at General Motors (GM), Ford (F), and Chrysler (DAI). Since 2002 it has signed up some 50,000 white-collar workers (even lawyers) to diversify. Now UAW President Ronald Gettelfinger sees casinos as a huge opportunity.

So far the UAW has organized only 8,000 or so casino dealers, primarily in Atlantic City, Detroit, and Newport, R.I. Of those, 6,000 have signed up in 2007, and there could be more gains at the 400-odd Indian tribal casinos that employ about 250,000 dealers nationally. A federal appeals court in February knocked down a claim by Indian tribes that their casinos aren't subject to the National Labor Relations Act and hence not open to unionization.

The UAW has since pounced: On Nov. 24 it won the right to represent 2,600 workers at Connecticut's Foxwoods Resort & Casino after a successful vote at the tribe-owned casino. That about covers the jobs lost at Ford's Richmond (Va.) pickup truck plant this year when it closed.

Like auto workers, casino dealers earn on average about $60,000 a year, though that includes tips. "Middle- class jobs that can sustain a family are the heart of union organizing," says Elizabeth Bunn, UAW secretary and treasurer. There's almost no union representation at tribal casinos, which employ 670,000 workers of all kinds.

The UAW isn't the only union seeking new members. In Las Vegas, the Transport Workers Union of America, like the UAW a member of the AFL-CIO, is trying to organize the Strip casinos. It has won the right to negotiate for dealers at Wynn (WYNN) and is expected to snare Caesars Palace (HET) this month.

Once wary of unions, dealers now face cuts in health-care and retirement benefits at a time of industry growth. Some casino owners are trying to cut into dealers' income by requiring them to share tips with supervisors. All this helps explain why some 80% of the dealers at Casino Aztar in Evansville, Ind., last August voted to be represented by the UAW.

Management, however, isn't rolling over. Trump Marina Hotel Casino (TRMP) in Atlantic City defeated the UAW in an election this year. Meanwhile, Foxwoods Resort Casino President John O'Brien, who has yet to sit down with the UAW, is continuing to challenge in court the federal government's jurisdiction over a tribe-owned casino.

O'Brien doesn't want to see his dealers hit with union dues or beholden to UAW leaders. "Employees should have the right to speak for themselves," he says. If the auto workers' union prevails at Foxwoods, its agreement could serve as a model for other casinos.

The UAW also would have a new source of growth from a flourishing industry that can't outsource its services abroad. But the union does face one threat: automation. The Las Vegas gaming commission is testing robotic poker dealers, which can handle 40 hands per hour, vs. 25 to 30 hands for human dealers. No tipping necessary.

Kiley is a senior correspondent in BusinessWeek's Detroit bureau .

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