Hyatt Gold Passport - Hotel Workers on Strike at Grand Hyatt in San Francisco

SAN FRANCISCO--(BUSINESS WIRE)--Hotel workers walked off the job this morning at the Grand Hyatt Union Square in San Francisco, announcing a 3-day strike against the property, according to Unite Here Local 2. The Grand Hyatt is owned and operated by Hyatt Hotels Corporation [NYSE: H], which consummates its initial public offering today raising more than $900 million for its principal owners, the Pritzker family.

“Hyatt’s cashing out almost a billion dollars for its owners, but at the same time they’re pushing to make health care unaffordable for me and my family?” remarked Aurolyn Rush, a 13-year telephone operator at the Grand Hyatt. “That is unforgivable, and we’re not going to stand for it.”

...[snip]...

Despite amassing record profits over the preceding five years, hotel corporations in San Francisco and elsewhere have been using the economic downturn as an excuse to squeeze workers for long-term concessions. During the past two months, Local 2 has indicated an openness to reaching an exceptionally low-cost contract settlement, totaling as little as 1.5% increase in labor costs. Nonetheless, the industry has persisted in trying to win permanent takeaways in the areas of affordable health coverage and retiree coverage.

Hyatt has distinguished itself for making workers pay a steep price for the recession. In Boston, for example, Hyatt recently fired all housekeepers at its three non-union hotels, replacing them with outsourced workers paid about half of what the fired workers had earned. The company’s CEO, meanwhile, was paid $6.7 million in compensation in 2008, and its chairman received a bonus of $1.4 million.

Full article link (here) (http://finance.yahoo.com/news/Hotel-Workers-on-Strike-at-bw-2723633675.html?x=0&.v=1).

[Moderator, should this be moved to GH SF master review thread?]

SAN FRANCISCO--(BUSINESS WIRE)--Hotel workers walked off the job this morning at the Grand Hyatt Union Square in San Francisco, announcing a 3-day strike against the property, according to Unite Here Local 2. The Grand Hyatt is owned and operated by Hyatt Hotels Corporation [NYSE: H], which consummates its initial public offering today raising more than $900 million for its principal owners, the Pritzker family.

“Hyatt’s cashing out almost a billion dollars for its owners, but at the same time they’re pushing to make health care unaffordable for me and my family?” remarked Aurolyn Rush, a 13-year telephone operator at the Grand Hyatt. “That is unforgivable, and we’re not going to stand for it.”

...[snip]...

Despite amassing record profits over the preceding five years, hotel corporations in San Francisco and elsewhere have been using the economic downturn as an excuse to squeeze workers for long-term concessions. During the past two months, Local 2 has indicated an openness to reaching an exceptionally low-cost contract settlement, totaling as little as 1.5% increase in labor costs. Nonetheless, the industry has persisted in trying to win permanent takeaways in the areas of affordable health coverage and retiree coverage.

Hyatt has distinguished itself for making workers pay a steep price for the recession. In Boston, for example, Hyatt recently fired all housekeepers at its three non-union hotels, replacing them with outsourced workers paid about half of what the fired workers had earned. The company’s CEO, meanwhile, was paid $6.7 million in compensation in 2008, and its chairman received a bonus of $1.4 million.

Full article link (here) (http://finance.yahoo.com/news/Hotel-Workers-on-Strike-at-bw-2723633675.html?x=0&.v=1).

[Moderator, should this be moved to GH SF master review thread?]

Thanks for the heads-up. I was going to have an upcoming stay this weekend.

[Moderator, please leave this thread here and not merge with the master thread. IMO master threads should be reserved for information that is relevant to one's stay such as hotel facilities, guest amenities, service, lounge, etc. Newsy threads are better left separate so as not to make those master threads unnecessarily long.]

This thread will soon become a candidate for Omni status.

[Moderator, please leave this thread here and not merge with the master thread. IMO master threads should be reserved for information that is relevant to one's stay such as hotel facilities, guest amenities, service, lounge, etc. Newsy threads are better left separate so as not to make those master threads unnecessarily long.]

Since it is posted in a separate thread, we will leave it here. If it was in the Master Thread, we probably won't move it to its own thread.

However, a "newsy" thread is probably better off on its own so that we don't have to go through and delete them after the fact which we do occasionally to try to make the master threads as short as "possible". We also delete "old" rate discussions that may no longer be valid.

Thanks!!!

peteropny - co-moderator Hyatt

Yawn, another hotel worker strike in SF, with the usual one-sided article associated. The Hyatt remained fully functional through the last one of these strikes.

if possible just replace the workers; that would be fine with me

This is not a news article, at all -- it is a press release.

If one could not have guessed, it is issued by the Unite union representing the subject workers. Nothing wrong with that but calling it a news article usually conveys some sort of expected objectivity -- a press release from one of the parties to the dispute, does not.

What I find ironic is that the Pritzkers have been and still are big supporters of Obama and yet, one of his core union contituencies happens to be at war with one of his biggest money supporters.

http://www.chicagobusiness.com/cgi-bin/article.pl?articleId=32578

Yet in this instance, I guess the depth of one's support truly does depend on whose ox is being gored.

On the local news this morning, an employee mentioned that a big sticking point is the health care coverage. According to the news report, the employee pays $0/month for their coverage and $10/month for family coverage and the SF hotels (several including Hyatt) want the employees to pay more. The employees wanted this action to coincide with Hyatt's IPO claiming that Hyatt has plenty of money.

I just walked by the hotel. It's a pretty noisy picket line with about 40 demonstrators. Pedestrians have to walk in the street to get by. The front door is open and where the picket line ends. Management is helping guests with their bags. :) I didn't recognize any of the employees.

These employees probably don't make a true living wage so health care coverage is a real and tangible benefit of employment. It's sad that many do not have this basic benefit against financial ruin.

I have a stay here in December and really have no apetite to deal with pickets.

I just stayed there three days ago. Must say that I am saddened by the 'news' of strike.

That being said, I must agree fully with the prior post regarding the nature of the 'news article' -- it is a biased press release, and while it may have some merit and make the union's argument ardently, it is not objective.

I am probably not objective either. I am a Chicagoan with a longtime loyalty to Hyatt.

I will also confirm that Hyatt is a progressive organization with a conservative management approach, and its owners, the Pritzkers, do lean decidedly to the left. Hyatt generally have great relations with their labor as well (strikes are VERY rare at Hyatt.)

I do not know the details of the current dispute, and so cannot make a judgment -- but if the chief complaint is that Hyatt is going IPO while seeking a modest increase in Healthcare contributions (from $0/$10 to ??) the one thing has nothing to do with the other -- as I read it, the IPO is to grow the company and provide capital for expansion into existing and new markets, and to grow new brands (e.g. Hyatt Place and Andaz) -- not to line the pockets of the Pritzkers or deprive the workers their due.

That is just not the track record of the Pritzker Family or the Hyatt organization.

Also, the hotel industry is in the crapper currently, and no amount of success in the past years will overcome the challenges currently faced by the industry. :( Hyatt is stronger than most because, while they are progressive as an organization, they are deeply, disciplined, conservative and sophisticated when it comes to management. Even still, they have slowed in their growth the past year.

I hope they come to a mutually satisfactory resolution soon.

as I read it, the IPO is to grow the company and provide capital for expansion into existing and new markets, and to grow new brands (e.g. Hyatt Place and Andaz) -- not to line the pockets of the Pritzkers or deprive the workers their due.


Well, not exactly. The "lining the pockets" comment is probably closer to the truth, but that is a bit out of context.

You haven't been keeping up. Just do a search for "Pritzker family trust".

The family is splitting up the trust. The IPO is just one of many things that is part of that process that started with a lawsuit by 2 younger family members in 2002 ...



Hyatt's IPO: Bad Timing or Family Necessity?

http://www.time.com/time/business/article/0,8599,1920367,00.html


When the smoke cleared, the clan had agreed to divvy up the family's $15 billion fortune to family members by 2011. The payout plan would involve selling or floating many of the family's businesses.




-David

Ouch, sounds like Hyatt kinda got screwed here as they got stuck right in the middle of this union fight right as they were about to have their IPO. The article stated that the local union voted that they could strike at any of 31 upscale SF hotels. Sounds like Hyatt got the short end of the stick solely cuz their IPO was today. :(

You haven't been keeping up. Just do a search for "Pritzker family trust".

The family is splitting up the trust. The IPO is just one of many things that is part of that process that started with a lawsuit by 2 younger family members in 2002 ...
-David

I have been keeping up and am very familiar with the lawsuit and the split of the trust -- in Chicago this is old news. Even with these trusts being split, none of the beneficiaries are hurting for cash. That being said, the division of trusts has little if nothing to do with the IPO -- the trusts are family trust, and while Hyatt is a private company, it is part of a larger organization with diversified holdings that include manufacturing, materials, technology, transportation, investment banking, real estate, and many, many other interests. Indeed, Hyatt is not even the largest of the Pritzker holdings.

So, no offense, but equity investors tend to be a savvy bunch -- especially those with an inside track or first stab at an IPO -- and they could see right through a cynical raise to recoup lost trust funds, and would not participate. They are not in the business of charity.

IMHO, it is too easy to fall back on the trust fund lawsuit as a justification for anything and everything -- the owners will make money if the IPO is successful (as is the case with any successful IPO), but the objective is to grow the company, not to top up their trust funds. :)

I guess we'll just have to agree to disagree, and I have no problem with that. You're certainly entitled to your opinion.

It seems to have been a successful IPO. Why? I have no idea. New shareholders won't really have any say or meaningful vote in the company, and the interests of those that hold the voting power may differ from individual shareholders. They even said that in their materials.

It was never clear to me if they intended to use the money to buy back the interest they sold to a brokerage firm a couple of years ago and another company or for something else. We really don't know what they intend to use the money for and they aren't saying.

BTW, how much of your own money did you invest in the IPO or shares on the open market?

http://online.wsj.com/article/SB10001424052748703816204574481231950842014.html (sub required, but you can get there if you go through google, search for "Hyatt IPO Prospectus" and click on the link in the search results.)

http://www.businessweek.com/bwdaily/dnflash/content/aug2009/db2009086_519328.htm

http://www.bloomberg.com/apps/news?pid=20601087&sid=ajhWbfs7OuZw&pos=5

http://www.time.com/time/business/article/0,8599,1920367,00.html

http://www.familybusinessmagazine.com/index.php?/news/single/pritzkers_could_gain_900_million_from_hyatt_ipo/


Pritzkers could gain $900 million from Hyatt IPO

The feuding Pritzker family, which controls Hyatt Hotels Corp., could reap about $900 million from the company's initial public offering, while the company itself "could receive no proceeds," the Wall Street Journal reported.

The article cited an amended prospectus filed Oct. 19 with the Securities and Exchange Commission:

The latest filing set out for the first time an estimated offering price of $23 a share to $26 a share and said that the Pritzkers ... would be offering 38 million shares for sale. However, the company said it wouldn't be issuing stock in the offering unless there is enough public demand beyond the Pritzker shares. In that case, the prospectus said, Hyatt would allot the offering's underwriters, led by Goldman Sachs & Co., up to 5.7 million shares. The sale of that full allotment would net Hyatt an estimated $125 million, the prospectus said.



The report noted that the arrangement "is a departure from the plan laid out in the most recent prior prospectus, filed four days earlier on Oct. 15." In that version, the company said it planned to sell shares and additional stock would be offered by the Pritzkers, with a possible offering of further shares through the underwriters' allotment.

Even if the Pritzkers sell all 38 million shares offered, the family will retain control of Hyatt, the prospectus said. The Pritzkers will have about 60% of the outstanding shares and a higher percentage of voting power.



Many of the modifications to the IPO have been made "as a result of a simmering family feud," primarily "involving the control and parceling out of the family's vast holdings," the Journal reported. (Source: Wall Street Journal, Oct. 23, 2009.)


And an opinion piece that I agree with:

http://articles.moneycentral.msn.com/Investing/top-stocks/blog.aspx?post=1355210

Just to make sure I'm not leaving you with the wrong impression, I love the Hyatt brand, and Gold Passport. I'm just not a big fan of the terms of their IPO and the special share class they created for it. Apparently there were enough fans of the IPO terms out there because it was a successful offering.

-David

I guess we'll just have to agree to disagree, and I have no problem with that. You're certainly entitled to your opinion.
...

BTW, how much of your own money did you invest in the IPO or shares on the open market?

I agree with your first statement. We do have different opinions, and are entitled to our own. Unlike many I have encountered, you at least seem to be well-read and have reasons for your concerns that extend beyond pure conjecture.

I also would note that most IPOs create different classes of shareholders, and if your concern is that the Pritzkers will enjoy a preferred position -- you are certainly correct that they will, but this is not unusual or part of some cynical plot to recoup their trust monies. And, I guess that is what I take most issue with... the tenuous connection people seem to make (not just you, but many others) between the IPO and the lawsuit between family members.

Despite the efforts of many to suggest otherwise, it is unlikely the two have anything to do with each other. Again, the division of the trust impacted a fraction of their personal wealth, and the family members remain individually exceedingly well-off.

I am pleased that the IPO was successful, that the market has shared my view, and believe this has to do with the underlying value proposition of the Hyatt brand. As for control: Pritzker leadership grew the brand to its current level of success, and I for one prefer it not be micro-managed by a new infusion of stakeholders who may have more money than sense. The investors who invested most likely did so because they saw it as a long-term growth and income opportunity.

As for your final question, I did not invest any money in the IPO and have no money invested in Hyatt directly or indirectly (other than my hotel stays!) I would not be commenting in advance of the IPO in so public a forum if I had intended to invest, as this would be less than fair without giving some disclosure -- it would be required ethically at the very least, and possibly legally were I attempting to influence investors (which, for the record, I was not.)

In any case, we can also agree that Hyatt does a good job overall, and hopefully the IPO will not screw this pooch. :D

I also would note that most IPOs create different classes of shareholders


I'm referring specifically to shares that have basically no voting power as long as the Pritzkers hold at least 10% of the shares, if I figured that correctly. This is not standard at all. That's what I meant.


and if your concern is that the Pritzkers will enjoy a preferred position -- you are certainly correct that they will, but this is not unusual or part of some cynical plot to recoup their trust monies. And, I guess that is what I take most issue with... the tenuous connection people seem to make (not just you, but many others) between the IPO and the lawsuit between family members.


Cynical plot? there's nothing cynical about it. You said it was primarily for the company to raise funds for expansion. I'm simply pointing out that this it not accurate.

There's nothing cynical or clandestine going on here. The Pritzkers sold up to 38 million of there own shares. If there's a market for it, the company may sell up to 5.7 million shares and might raise as much as $125 million. There's a small fraction of the IPO. That's all based on information that was published publicly as part of the IPO.

Look, all I'm saying is that what you said was not correct and I was setting the record straight. This is what I think was incorrect:


...
as I read it, the IPO is to grow the company and provide capital for expansion into existing and new markets, and to grow new brands (e.g. Hyatt Place and Andaz) -- not to line the pockets of the Pritzkers or deprive the workers their due.


I think the facts about why they had the IPO speak for themselves. It's all there in the prospectus and the articles that were cited. Fact: 38m Prizker family shares offered, and possibly (while we're at it) 5.7m company shares offered, maybe, that will net a small fraction of the total amount raised in the IPO.


I am pleased that the IPO was successful, that the market has shared my view, and believe this has to do with the underlying value proposition of the Hyatt brand.


There are people out there that think they will make money off the shares. That is true. But see also: Barnum. hahaha.

I think they might make money because those shares were offered at a discount to the assumed value of the company. But there's a lot of unknowns in the future. Which is why they had to issue them at such a discount.

Again, you have your view I have mine. I would suggest you steer clear of stating your opinions as fact, when they are in fact, opinions.

For the record, shares with no voting rights, or limited voting rights, or other restrictions, as well as other classes of shares are frequently a part of and/or the totality of an IPO. You seem to think that this is unusual, that is your right. It is not. I do not know how many IPO disclosures you have read, or for what types of offerings, but there is nothing unusual about the Hyatt float.

And, again, as evidence of this, I would point out that a highly sophisticated group of investors and specialists (as well as common investors on the open market who hopefully completed their own due diligence with advice from counsel) reviewed the offering and opted to invest.

Your suggestion that this was because the shares were offered at a discount is tautological -- of course investors in the IPO sought the shares at a discount, and believe it will appreciate in value...if they didn't then Barnum indeed!

Again, believe your conspiracy theories if you please...we are so far off topic for FT I don't even know why we continue -- but the markets seem to believe that this (like most IPOs) is meant to raise capital to facilitate the further growth of the company; those who elected to invest believe that the company will grow and provide a return on their investment. I hope they are correct.

Everything else is just so much hearsay and finger pointing. You can have the last word, I will not rely further to this thread.

I thought this thread was about a strike and not an IPO? Any updates on the topic of this thread?

SAN FRANCISCO (KCBS) -- Hotel workers in San Francisco ended their strike Sunday against the Grand Hyatt hotel in Union Square.

Hundreds of members of the Unite Here Local 2 say hotel management is proposing unreasonable reductions in health and retirement benefits.

Officials with the Grand Hyatt San Francisco released a statement saying that they were disappointed that "after only five bargaining sessions the union had decided to engage in disruptive and counterproductive action instead of trying to achieve progress at the negotiating table."
http://www.kcbs.com/San-Francisco-Hotel-Workers-End-Strike-Sunday/5622908