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The Greenbrier Resort in White Sulphur Springs, West Virginia Claims a Significant
 Loss of Revenue this Year Due to the Possibility of a Union Walkout
By Christian Giggenbach, The Register-Herald, Beckley, W.Va.McClatchy-Tribune Regional News

Apr. 8, 2008 - WHITE SULPHUR SPRINGS -- Officials for The Greenbrier say a "significant amount of revenue" has been lost this year due to the possibility of a union walkout and several longtime clients have canceled their meetings and booked their conventions elsewhere.

This adverse pecuniary trickle-down effect and its subsequent cooling of the county's primary economic engine -- which normally boasts an annual payroll of $86 million -- has resulted in widespread economic uncertainty among the resort's 1,600 employees, local businesses, organizations and others fiscally linked to The Greenbrier. Some in the area say the impact won't be as great.

Lynn Swann, the resort's director of public relations, said Greenbrier officials and the Council of Labor Unions are "continuing to negotiate to achieve a collective bargaining agreement."

The union's nine labor contracts and master agreement all expired Jan. 31 and about 1,100 union employees have been working under the terms of their old agreement after a 28-day contract extension ended in February. During peak times of the tourist season, the hotel also employs another 500 non-union, hourly and management employees.

"The discussions have been professional and progress has been made, but at this time our union employees have chosen to work without a contract while we continue negotiations," Swann said.

Swann said several top clients have already canceled their usual spring and summer bookings, which also means less work for resort employees. The hotel is owned by the Jacksonville, Fla.-based railroad giant CSX Corp.

"However, the choice to continue to work remains completely in the hands of the union. Given this situation, we have contacted all groups with meetings scheduled in the next 90 days and have provided them with an update on our current situation," she said.

"And we have done this because we appreciate their business and hope to keep them as longtime clients, and as such, we are keeping them informed of our ongoing negotiations. Some groups have decided to cancel their meetings here because of this uncertainty and as a result The Greenbrier has lost a significant amount of revenue this year. Given this situation, we are staffing based on our business demands."

Swann declined to specify how many employees are currently working or how much revenue the 229-year-old resort has already lost. However, County Commissioner Lowell Rose said he has heard reports the hotel is down about $9 million in revenue so far, and that number is increasing daily.

- -- -

Harold Bock, spokesman for the Council of Labor Unions, which represents all nine hotel unions, confirmed that talks have continuously been bogged down over The Greenbrier's insistence to roll back health insurance and pension plan benefits set under their 2003 master agreement overseen by then-president Ted Kleisner.

The union's "Succession Agreement," also penned in 2003, which ensures the continuity of in-place labor agreements in case of an ownership change, was not on the table during talks which began last fall, Bock said. Both sides said two federal mediators were aiding the labor dispute.

"The Council of Unions has and will be ready to negotiate a fair contract with the railroad; however, the community should know what's holding up the new collective bargaining agreement to date," Bock said. "That's because the company is trying to eliminate insurance for large numbers of employees, freeze their pension plans and also eliminate all their fringe benefits that employees have accrued over the years with holidays and vacations."

Since the last collective bargaining agreement five years ago, the resort has undergone historically dramatic changes in both infrastructure and top-management personnel, all with an emphasis on recapturing its lost -- and now elusive -- Mobile Travel Guide's fifth star, plus returning profitability to the 6,500-acre property.

A 38-year string of five-star status ended when it was stripped away in 2000.

In a period of less than nine months beginning in late 2005, the resort announced the retirements of three top level executives, including Kleisner's. The resort's general manager also left the award-winning hotel at the same time to "pursue other interests." Last year, the resort infused $50 million in renovations, partly to make the historic hotel high tech enough for younger, Generation "X" guests.

Bock also attempted to debunk what he characterized as "rumors" that union members were unreasonably asking for more than their fair share at the table. Union members overwhelmingly approved an "authorization to strike" vote in January.

"The struggle is not about the union asking for too much," he said. "But the struggle is to maintain what we currently have."

- -- -

The county's Convention and Visitors Bureau, which is funded primarily by the resort's hotel/motel bed tax, said it is cutting back its projected numbers because of the expected decrease in revenue.

"In light of this, we have been very conservative in our spending throughout the end of this fiscal year and are preparing the budget for the upcoming 08-09 fiscal year accordingly to closely review our spending in all areas including staffing, operations and marketing," CVB executive director Kara Dense said.

Dense said she has not seen any long-term projected numbers for the resort, but "we expect to get some in the future."

Last year, the county received $1.2 million in bed taxes from The Greenbrier, half of which goes to the CVB by state law. Dense said the looming decrease in revenue will not affect the CVB's ability to maintain its staff of seven full-time and one part-time employees, or the construction of a new downtown Visitors Center.

"That's why we are preparing and hoping for the best," she said. "When The Greenbrier succeeds, the whole county succeeds. It affects everyone."

- -- -

The downturn in business has already hurt Duane Zobrist, president of Greenbrier Limousine and Greenbrier Outfitters, both located in the Spa City.

"I'm scared to death. I've sacrificed a lot to build these businesses that are tied to The Greenbrier and the current state of affairs scares me," Zobrist said from his newly renovated White Sulphur Springs office. "It's already affected me substantially. I've never had to lay off employees in April. We have been adjusting our hiring needs and our budgets accordingly."

The resort's biggest client, the Council of Insurance Agents and Brokers, confirmed Friday its cancellation of two large May bookings with the hotel and transferred them to The Homestead, in Virginia. Its annual October meeting is now on the bubble, pending the outcome of the labor talks.

"My hope for the future is an agreement can be reached shortly and quickly, so the same type of losses can be stopped for the fall business. If we can save fall, that would be huge," Zobrist said.

- -- -

Jerry Sullivan, manager of the Greenbrier Valley Airport, said weathering this economic storm would be easier for him because of the airport's "sound, fiscally conservative policies," also aided by its federal funding.

Sullivan indicated he's noticed a downturn in fuel sales and fewer chartered aircraft landing at the airport this season. He said the airport sold 1 million gallons of fuel last year and has only sold 500,000 gallons to date. His fiscal year ends in June.

"There won't be any major changes at the airport," Sullivan said. "We do not expect any layoffs and we are in a unique position because of our federal funding. We are very transparent. We are here if The Greenbrier needs us."

Sullivan said the airport's once-a-week flight from New York City, which is subsidized by The Greenbrier, has been canceled, although he blamed that more on rising fuel costs.

Lewisburg Downtown Business Association president Donna Toney, who owns High Country Gallery, said the "prosperity of Lewisburg does not solely depend on The Greenbrier resort."

"Last year was the first time that the hotel had buses running to Lewisburg on a regular basis," Toney said. "I could not exist entirely on the resort's business."

However, other shop owners and restaurants do rely on the extra money that resort guests spend downtown, several other business owners said.

Swann said a positive resolution will hopefully come about as labor talks continue.

"We look forward to completing a successful negotiation and resuming normal business operations," she said.

One bright note did occur last Monday, Boch said; however, the next round of labor talks is more than a week away.

"We thought last Monday's meeting went reasonably well. The union gave management a proposal that we thought both parties could live with," Bock said. "They have not rejected it, but they have also not responded to it. We believe there will be an answer for us when we get back to the table on April 17."

-- E-mail:

cgiggenbach@register-herald.com

-----

To see more of The Register-Herald or to subscribe to the newspaper, go to http://www.register-herald.com.

Copyright (c) 2008, The Register-Herald, Beckley, W.Va.

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