DETROIT - Following the strike that began on October 17 for improved wages and working conditions, casino workers in Detroit have seen mixed outcomes in their contract negotiations. While Hollywood Casino at Greektown and MotorCity Casino workers have ratified new contracts with immediate benefits, their counterparts at MGM Grand have not.
The newly approved contracts at Hollywood and MotorCity Casinos are landmark five-year agreements affecting 2800 employees, featuring unprecedented wage growth within Detroit's casino industry. The package offers a direct $3 per hour wage increase and guarantees no health care cost increases. Over the term of the agreements, workers are set to receive up to $5 per hour in wage hikes, alongside unchanged health benefits, a retirement plan match, and lighter workloads. Additionally, the contracts include severance pay for those impacted by technology changes and a $1k employer match on the second-year 401k contributions. Importantly, Juneteenth has been recognized as a paid holiday.
In contrast, MGM Grand casino employees stood firm, rejecting their proposed contract as they continue to advocate for better terms. The ongoing dispute comes despite analysts maintaining a 'Strong Buy' rating on MGM Resorts International (NYSE:MGM), with a price target suggesting a significant 37.3% potential upside. This optimism is underpinned by a recent 12.3% uptick in MGM shares, buoyed by strong property assets and attractive valuations.
The October strike, described as historic due to its wall-to-wall nature involving five unions including UAW Local 7777 and Operating Engineers Local 324, was coordinated by the Detroit Casino Council. This council is continuing its efforts to secure a five-year deal that would bring pay raises, cost-of-living adjustments, reduced workloads, and job security measures for casino staff.
As negotiations proceed under the Detroit Casino Council's guidance, the outcome at MGM Grand remains uncertain today. However, the deals at Hollywood Casino at Greektown and MotorCity Casino indicate positive momentum for workers' rights in the industry. The agreements also guarantee prior notice and requisite training for transitions due to technological advancements, protecting employees from sudden job shifts.
InvestingPro Insights
As the labor dispute continues at MGM Grand, it's important to note some key financial insights about MGM Resorts International (NYSE:MGM) from InvestingPro. The company's management has been aggressively buying back shares, which can be seen as a sign of confidence in the company's future. Moreover, the strong earnings should allow management to continue dividend payments, which is a positive sign for investors (InvestingPro Tips).
In terms of real-time data, the company has an adjusted market cap of $13.73B and a P/E ratio of 13.4. The revenue for the last twelve months as of Q3 2023 stands at $15,333.95M, representing a growth of 22.17% (InvestingPro Data).
It's also worth mentioning that InvestingPro offers numerous other tips and data points to help investors make informed decisions. Currently, there's a special Black Friday sale on InvestingPro subscriptions, offering a discount of up to 55%. This subscription includes access to many more tips, with 13 additional ones currently listed for MGM Resorts International.
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