Sep
28
What’s going on in Waikiki
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The announcement by its management that the Royal Hawaiian Hotel will close for renovations next year is a partial surprise, but not unexpected altogether, and there appears to be a good chance that labor and management will be able to work collaboratively to save the jobs affected.
In the last contract talks, Starwood Hotels & Resorts Worldwide Inc., the company behind the Sheraton, Westin, St. Regis and W brands, told Local 5 is had major renovation plans that would take rooms out of service and force furloughs. I don’t know what was said in closed-door negotiating sessions, but the public discussion focused mainly on plans to reinvent the Princess Kaiulani hotel.
Keith Vieira, senior vice president of Starwood for Hawaii and the South Pacific, who appeared on KGMB9 this morning to discuss the plan, hinted that the original idea may have been to close some rooms, then others, so the hotel did not have to close altogether at any point. But doing all the work at once can be cheaper and faster. That matters if the project costs millions and if the company is going to keep paying health insurance while employees are furloughed.
And it may. Vieira did not say so, but he did acknowledge that management and the union plan to try to work some kind of way to keep the employees whole. He specified that he doesn’t want to lose any employees and admitted that many of them may be considered desireable hires by rival hotels. Local 5 says its priorities are (1) no break in medical coverage, and (2) preserving seniority.
Vieira is a hard-headed businessman but he is also a guy who worked his way up through the ranks, so he’s not the sort who can’t imagine what it’s like to be on the rank-and-file end of such a matter. And if he forgets, Local 5 will be happy to remind him. But the best hope for the employees is the economic reality that it’s hard at any time to find people with the high octane aloha to serve guests in a high-end hotel, and harder still at a time of 2.6% unemployment.
Many, perhaps most of the employees may find that they are never idle at all: Starwood wants to transfer them to other properties. Starwood holds the management contracts for all of the Waikiki hotels owned by Kyo-ya Corp.: the Royal Hawaiian, the Moana Surfrider, the Sheraton Waikiki, the Princess Kaiulani and the W (up the road on the Gold Coast side of Diamond Head.) If there aren’t enough openings at these properties, Starwood also manages resort hotels on Kauai, Maui and the Big Island.
The project is scheduled to begin next June and take just a few months. Warning to furloughed employees: construction schedules have a way of slipping in the best of times, and some kinds of construction foremen are in short supply at the moment. But it is fair to assume Starwood will seek a fast turnaround because every day the Royal is dark means a lot of lost revenue and the possibility that some regular customers will discover and enjoy a rival property.
In other news…
The Italian Film Festival is on. (I inadvertently called it the Hawaii International Film Festival on the air this morning.) Check newspaper for local listing but tonight’s screening is at the Doris Duke Theatre.
The bankruptcy judge in the Hawaiian suit against Go has ruled that Go parent Mesa did indeed destroy a business plan that Hawaiian lawyers were entitled to see.
KGMB9 lets me continue to do “Everybody’s Business” on PBS Hawaii, which airs Fridays at 7:30 p.m., and this week’s show will focus on the housing crisis.
I also still play classical music on Hawaii Public Radio on Saturday mornings 5am-7am. This labor of love is called “Howard’s Day Off.” Set your alarm now!
Sep
27
Sugar land, the sweet and sour
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The U.S. Department of Agriculture this week issued its final report on 2007 sugarcane production. Hawaii production rose from 1,681,000 tons in 2006 to 1,778,000 tons in 2007.
Sounds good, right? But Hawaii is only the fourth largest sugarcane producing state. Read this:
- Florida: 14,612,000 tons.
- Louisana: 12,180,000 tons.
- Texas: 1,841,000 tons.
- Hawaii: 1,778,000 tons.
Not only is Hawaii responsible for less than 1/15th of the nation’s 30.4 million ton sugarcane production, but there is sugar beet production in many other states.
Sugar, like pineapple, stopped being a major economic driver for Hawaii when production shifted to places with cheaper labor, chiefly Central America.
What’s left of sugar in Hawaii is the small Gay & Robinson operation on Kauai and Alexander & Baldwin’s Hawaii Commercial & Sugar division on Maui.
HC&S is the exclusive source of the contents of “Sugar in the Raw.” That’s turbinado sugar, which is only lightly refined so you still get a faint taste of molasses. Sales rose after the packets were reprinted to say that the product was made in Maui.
It’s instructive and pleasing that HC&S was able to hit upon a way to maintain some sugar production and make an occasional profit. But don’t think this means Hawaii specialty agriculture is secure.
All agriculture in Hawaii is endangered — not by cheap labor in Central America; premium branding has essentially solved that problem — but by the high value of the land if it is developed instead of farmed.
Mainland stock advisors have written favorable reports on Alexander & Baldwin Inc. (Nasdaq: ALEX) based not on its sugar and coffee divisions or even on its Matson shipping subsidiary but on the future development potential of its agriculture properties.
Alexander & Baldwin management felt obliged recently to tell mainland investors on a conference call that they intended to accelerate their efforts to capture the value of some marginal farming lands by selling them to others who will want to build on them.
The real news in the announcement, I’ve decided, was in how limited A&B’s plans were. Its executives confined their comments to land which, while zoned for agriculture, isn’t really very good for farming, and they said they wanted to position the land so that it was used by wealthy people who want to build estates in remote areas, which will have less impact on scenery and resources than 1,000 houses.
But the long-term issue remains: with the population growing worldwide as well as here, and with the beauty and comfort of Hawaii widely known worldwide, there is and will continue to be enormous pressure to develop more land.
We all need to watch this. The beauty of Hawaii, and for that matter the value of land that has already been developed, depends on leaving plenty of remaining land undeveloped altogether, or confined to farming, which is the next best thing. There is no way to keep farmland in farming except to require it by law — zoning law is the closest any local government comes to having police powers — or to create such powerful financial incentives to farm the land that no one in his right mind would consider putting houses on it.
Sep
26
go! figure: the porn defense
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The interisland airline war just got weird.
Mesa Air, parent of go!, is in court, accused by its legacy rivals of improperly using proprietary data and documents it gleaned when it came forward as a prospective buyer during the bankruptcies of Hawaiian Airlines and Aloha Airlines. Until this week the matter turned on mostly dry legal issues.
Now Mesa has isolated one of its senior executives, its chief financial officer, first putting him on leave and then claiming in court that computer files pertinent to the case were accidentally deleted by him while he was deleting porn.
Allegations of unlawful preservation by Mesa of confidential files from Hawaiian have centered on this executive. Hawaiian lawyers said he deleted files they had a right to see as they prepared their case.
The pornography erasure defense — “he wasn’t doing questionable thing A, he was doing questionable thing B” — was met with disbelief by Hawaiian lawyers. But as near I can tell, Mesa lawyers didn’t snicker or anything.
I’ll leave it to the court to try to figure out what the truth is. But I can tell you this: displaying pornographic images on your workplace computer is basically illegal, because it is against the law to create “a toxic workplace,” and people have lost their jobs over it.
Anything you say, do, or display at the office that offends co-workers can be a serious offense. Some have apologized for their transgression, expecting to be rebuked, only to be fired by an employer that wants to innoculate itself from a lawsuit.
Ironically it may be better for Mesa stock if the market disbelieves the story and thinks it’s a legal expedient. Otherwise, Mesa’s finances may be managed by someone who surfs porn at work and isn’t good with computers.
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