Business
L.A. hotel workers back on the job, but say more strikes to come
Thousands of service workers at 19 hotels in Los Angeles and Orange counties returned to work Wednesday after three days of strikes over the busy Fourth of July weekend.
According to Unite Here Local 11 spokeswoman Maria Hernandez, workers from what she described as a first wave of walkouts returned to work Wednesday “to make room for [workers at] other hotels who have also authorized a strike to walk out.”
“They felt inspired by what the [striking workers] did and they are more energized. Any of those properties across the region could get ready to go out themselves really soon at any moment,” Hernandez said. Picketing will continue at hotels across the region at authorized strike locations, she said.
All but one of those 19 hotels welcomed workers immediately back on the job Wednesday morning. The Fairmont Miramar in Santa Monica briefly locked out returning workers, according to Hernandez. The Fairmont Miramar did not immediately respond to a request for comment.
Contracts expired at midnight Friday for 61 Southern California hotel sites where workers are represented by Unite Here Local 11. The union has not budged from its position in April, when it proposed a $5 immediate hourly wage increase and a $3 boost annually for three years. The pay raises are necessary, the union says, because of the region’s expensive housing, which is forcing workers to move farther away.
The strike began Sunday morning at hotels, including the Biltmore and JW Marriott in downtown Los Angeles and the Fairmont Miramar in Santa Monica. The Westin Bonaventure Hotel & Suites in downtown L.A., the union’s biggest employer with more than 600 workers, reached a tentative deal June 28, averting a potential strike at that location ahead of the contract expiration.
Peter Hillan, a spokesperson for the Hotel Assn. of Los Angeles, said his group had not heard from Unite Here Local 11 that striking workers had paused the action. “If indeed it’s true, then great. Come on back to the bargaining table,” he said.
Hillan said there has been a lack of clarity with the union’s plan that makes it difficult to figure out how to proceed with negotiations. “There’s a chaos that gets created,” he said. “It’s not helpful for employees to lose wages and tips, it’s not helpful for guests, and, long term, it’s really not helpful for L.A.’s reputation.”
Hernandez said no bargaining is currently scheduled. “At this point, the Bonaventure led the way. Others will just have to sign that deal. If the Bonaventure can do it, others can too,” she said.
While Local 11-represented workers at more than 60 hotels are authorized for a strike, not all have walked out.
“It’s a strategic decision about where we are going to strike next, and many factors go into it,” Kurt Petersen, co-president of Unite Here Local 11, said Monday of the strike rollout. The fact that downtown L.A. and Santa Monica hotels were particularly busy with the Fourth of July holiday and a large anime convention downtown played into the union’s decision to strike at several of those properties first, he said.
Hundreds of workers also gathered Tuesday at the InterContinental Los Angeles Downtown to march to the JW Marriott for a rally with movement leaders and organizers. Speakers included L.A. City Councilmember Hugo Soto-Martinez.
“I know strikes can be hard sometimes, but when I’m out here, I’m always thinking to myself: Why am I striking? We are fighting for the future of our children, for stability, and for respect. It is us who make that money and we deserve more of that piece of the pie,” Soto-Martinez said in a mixture of English and Spanish during a rally speech.
Brenda Mendoza, a uniform attendant at JW Marriott, spoke of her long commutes to work. She received news Tuesday morning that her sister had died. The crowd shared a moment of silence.
“My sister passed away but I just wanted to stand here today with you guys because my sister believed in this and I want to dedicate this for my sister,” Mendoza said.
Traffic in downtown paused as workers crossed streets.
Carlos Silva, a United Parcel Service driver from Gardena, also joined the march. The Teamsters union‘s contract with UPS, which affects more than 340,000 part-time and full-time drivers in the United States, is set to expire July 31 and talks have recently broken down.
“It’s a labor movement that is happening nationwide, so it’s important for us to stick together and fight,” Silva said.
Petersen said in a statement that this weekend’s walkout was “the first of many actions that may come this summer by workers at hotels across Southern California.”
“It is only one tool in our toolbox. We have put the industry on notice that the workers have suffered enough,” Petersen said.
Business
Albania Gives Jared Kushner Hotel Project a Nod as Trump Returns
The government of Albania has given preliminary approval to a plan proposed by Jared Kushner, Donald J. Trump’s son-in-law, to build a $1.4 billion luxury hotel complex on a small abandoned military base off the coast of Albania.
The project is one of several involving Mr. Trump and his extended family that directly involve foreign government entities that will be moving ahead even while Mr. Trump will be in charge of foreign policy related to these same nations.
The approval by Albania’s Strategic Investment Committee — which is led by Prime Minister Edi Rama — gives Mr. Kushner and his business partners the right to move ahead with accelerated negotiations to build the luxury resort on a 111-acre section of the 2.2-square-mile island of Sazan that will be connected by ferry to the mainland.
Mr. Kushner and the Albanian government did not respond Wednesday to requests for comment. But when previously asked about this project, both have said that the evaluation is not being influenced by Mr. Kushner’s ties to Mr. Trump or any effort to try to seek favors from the U.S. government.
“The fact that such a renowned American entrepreneur shows his interest on investing in Albania makes us very proud and happy,” a spokesman for Mr. Rama said last year in a statement to The New York Times when asked about the projects.
Mr. Kushner’s Affinity Partners, a private equity company backed with about $4.6 billion in money mostly from Saudi Arabia and other Middle East sovereign wealth funds, is pursuing the Albania project along with Asher Abehsera, a real-estate executive that Mr. Kushner has previously teamed up with to build projects in Brooklyn, N.Y.
The Albanian government, according to an official document recently posted online, will now work with their American partners to clear the proposed hotel site of any potential buried munitions and to examine any other environmental or legal concerns that need to be resolved before the project can move ahead.
The document, dated Dec. 30, notes that the government “has the right to revoke the decision,” depending on the final project negotiations.
Mr. Kushner’s firm has said the plan is to build a five-star “eco-resort community” on the island by turning a “former military base into a vibrant international destination for hospitality and wellness.”
Ivanka Trump, Mr. Trump’s daughter, has said she is helping with the project as well. “We will execute on it,” she said about the project, during a podcast last year.
This project is just one of two major real-estate deals that Mr. Kushner is pursuing along with Mr. Abehsera that involve foreign governments.
Separately, the partnership received preliminary approval last year to build a luxury hotel complex in Belgrade, Serbia, in the former ministry of defense building, which has sat empty for decades after it was bombed by NATO in 1999 during a war there.
Serbia and Albania have foreign policy matters pending with the United States, as both countries seek continued U.S. support for their long-stalled efforts to join the European Union, and officials in Washington are trying to convince Serbia to tighten ties with the United States, instead of Russia.
Virginia Canter, who served as White House ethics lawyer during the Obama and Clinton administrations and also an ethics adviser to the International Monetary Fund, said even if there was no attempt to gain influence with Mr. Trump, any government deal involving his family creates that impression.
“It all looks like favoritism, like they are providing access to Kushner because they want to be on the good side of Trump,” Ms. Canter said, now with State Democracy Defenders Fund, a group that tracks federal government corruption and ethics issues.
Business
Craft supplies retailer Joann declares bankruptcy for the second time in a year
The craft supplies and fabric retailer Joann filed for bankruptcy for the second time in less than a year, as the chain wrestles with declining sales and inventory shortages, the company said Wednesday.
The retailer emerged from a previous Chapter 11 bankruptcy process last April after eliminating $505 million in debt. Now, with $615 million in liabilities, the company will begin a court-supervised sale of its assets to repay creditors. The company owes an additional $133 million to its suppliers.
“We hope that this process enables us to find a path that would allow Joann to continue operating,” said interim Chief Executive Michael Prendergast in a statement. “The last several years have presented significant and lasting challenges in the retail environment, which, coupled with our current financial position and constrained inventory levels, forced us to take this step.”
Joann’s more than 800 stores and websites will remain open throughout the bankruptcy process, the company said, and employees will continue to receive pay and benefits. The Hudson, Ohio-based company was founded in 1943 and has stores in 49 states, including several in Southern California.
According to court documents, Joann began receiving unpredictable and inconsistent deliveries of yarn and sewing items from its suppliers, making it difficult to keep its shelves stocked. Joann’s suppliers also discontinued certain items the retailer relied on.
Along with the “unanticipated inventory challenges,” Joann and other retailers face pressure from inflation-wary consumers and interest rates that were for a time the highest in decades. The crafts supplier has also been hindered by competition from others in the space, including Michael’s, Etsy and Hobby Lobby, said Retail Wire Chief Executive Dominick Miserandino.
“It did not necessarily learn to evolve like its nearby competitors,” Miserandino said of Joann. “Not many people have heard of Joann in the way they’ve heard of Michael’s.”
Joann is not the first retailer to continue to struggle after going through bankruptcy. The party supply chain Party City announced last month it would be shutting down operations, after filing for and emerging from Chapter 11 bankruptcy in 2023.
Over the last two years, more than 60 companies have filed for bankruptcy for a second or third time, Bloomberg reported, based on information from BankruptcyData. That’s the most over a comparable period since 2020, when the COVID-19 pandemic kept shoppers home.
Discount chain Big Lots filed for bankruptcy last September, and the Container Store, a retailer offering storage and organization products, declared bankruptcy last month. Companies that rely heavily on brick-and-mortar locations are scrambling to keep up with online retailers and big-box chains. Fast-casual restaurants such as Red Lobster and Rubio’s Coastal Grill have also struggled.
High prices have prompted consumers to pull back on discretionary spending, while rising operating and labor costs put additional pressure on businesses, experts said. The U.S. annual inflation rate for 2024 was 2.9%, down from 3.4% in 2023. But inflation has been on the rise since September and remains above the Federal Reserve’s goal of 2%.
If a sale process for Joann is approved, Gordon Brothers Retail Partners would serve as the stalking-horse bidder and set the floor for the auction.
Business
U.S. Sues Southwest Airlines Over Chronic Delays
The federal government sued Southwest Airlines on Wednesday, accusing the airline of harming passengers who flew on two routes that were plagued by consistent delays in 2022.
In a lawsuit, the Transportation Department said it was seeking more than $2.1 million in civil penalties over the flights between airports in Chicago and Oakland, Calif., as well as Baltimore and Cleveland, that were chronically delayed over five months that year.
“Airlines have a legal obligation to ensure that their flight schedules provide travelers with realistic departure and arrival times,” the transportation secretary, Pete Buttigieg, said in a statement. “Today’s action sends a message to all airlines that the department is prepared to go to court in order to enforce passenger protections.”
Carriers are barred from operating unrealistic flight schedules, which the Transportation Department considers an unfair, deceptive and anticompetitive practice. A “chronically delayed” flight is defined as one that operates at least 10 times a month and is late by at least 30 minutes more than half the time.
In a statement, Southwest said it was “disappointed” that the department chose to sue over the flights that took place more than two years ago. The airline said it had operated 20 million flights since the Transportation Department enacted its policy against chronically delayed flights more than a decade ago, with no other violations.
“Any claim that these two flights represent an unrealistic schedule is simply not credible when compared with our performance over the past 15 years,” Southwest said.
Last year, Southwest canceled fewer than 1 percent of its flights, but more than 22 percent arrived at least 15 minutes later than scheduled, according to Cirium, an aviation data provider. Delta Air Lines, United Airlines, Alaska Airlines and American Airlines all had fewer such delays.
The lawsuit was filed in the United States District Court for the Northern District of California. In it, the government said that a Southwest flight from Chicago to Oakland arrived late 19 out of 25 trips in April 2022, with delays averaging more than an hour. The consistent delays continued through August of that year, averaging an hour or more. On another flight, between Baltimore and Cleveland, average delay times reached as high as 96 minutes per month during the same period. In a statement, the department said that Southwest, rather than poor weather or air traffic control, was responsible for more than 90 percent of the delays.
“Holding out these chronically delayed flights disregarded consumers’ need to have reliable information about the real arrival time of a flight and harmed thousands of passengers traveling on these Southwest flights by causing disruptions to travel plans or other plans,” the department said in the lawsuit.
The government said Southwest had violated federal rules 58 times in August 2022 after four months of consistent delays. Each violation faces a civil penalty of up to $37,377, or more than $2.1 million in total, according to the lawsuit.
The Transportation Department on Wednesday also said that it had penalized Frontier Airlines for chronically delayed flights, fining the airline $650,000. Half that amount was paid to the Treasury and the rest is slated to be forgiven if the airline has no more chronically delayed flights over the next three years.
This month, the department ordered JetBlue Airways to pay a $2 million fine for failing to address similarly delayed flights over a span of more than a year ending in November 2023, with half the money going to passengers affected by the delays.
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