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Hotel’s owners dig in for labor fight

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Times Staff Writer

On some days, Christine Hsu scarcely sees the city whose political and labor leadership her family has up in arms. Instead, she stays inside the Hilton Los Angeles Airport, the hotel her father bought, the hotel his company still owns, the hotel where she and her brother live for weeks at a time, 15 floors above Century Boulevard.

The Hilton, with more than 1,200 rooms, is the second-largest hotel in Los Angeles County. Over the last year, it has become the primary battleground for one of the city’s loudest disputes: a union organizing campaign of a dozen airport-area hotels.

The effort by the union, Unite Here, has spawned other fights, including the city’s attempt to extend so-called living wage protections to hotel workers and a boycott of the Hilton supported by eight members of Congress, seven City Council members and a presidential candidate.

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Last month, union protesters criticized the famous “hugging saint,” a mystic from India named Amma, for violating the boycott by holding a spiritual retreat at the hotel.

Although the clash has been described as a contest between labor and business, or poor immigrant hotel workers versus corporate hotel owners, the central players are the Hsus.

Union officials claim the Hsus are the most hostile of airport-area hotel owners to labor’s efforts to organize. And, like the immigrant workers the union seeks to represent, the Hsus are from overseas.

Hilton does not own the property. The Hsus hire Hilton to provide management and the corporate name.

The family is at once well-known and reclusive, isolated from Southern California and connected to prominent athletic and charitable organizations.

Patriarch Henry Hsu (pronounced “shoe”) is 94 and lives in Taiwan, where he has been a major sports, business and political figure, but he maintains church ties to Los Angeles and is listed in public records as chairman of Universal Fortuna Investment Inc., the hotel’s parent company.

His son, David, is Fortuna’s president and spends weeks at a time in the hotel, employees say. Henry Hsu’s daughter Christine also lives there and supervises the finances.

“It certainly is a family business. Christine actually lives in the hotel,” said lawyer Edward Zaelke, who represented the Hsus in their 1992 purchase of the hotel. “They are salt-of-the-earth people.”

Acquaintances say the Hsus also share key traits: stubbornness and a history of pursuing fights for years without giving ground.

In Los Angeles, that pattern is recurring.

Throughout the fight, the Hsus have maintained a public silence. Through a lawyer and a public relations consultant, they declined to be interviewed or to answer written questions from The Times.

Family members did not respond to repeated phone messages left for them in Los Angeles and Taipei.

“They’ve never talked to the media, and they’re not going to start now,” said Harvey Englander, the consultant, who said he had never met the Hsus.

For most of the last year, hotel managers and spokesmen have issued statements accusing politicians and Unite Here organizers of lying about the hotel and demanding unionization without a vote of workers.

One statement said the union and city councilmen who support its efforts are “deliberately hurting our employees’ way of life.”

The owners of other airport hotels say they have had little contact with the Hsus, who prefer to communicate through their Hilton managers.

“We have tried to communicate with them, but we have not been able,” said Michael Gallegos, chief executive of American Property Management Corp., which owns the Sheraton Four Points. Like the Hsus, he opposes unionization, but he has backed the living wage legislation that the Hsus fought.

Elia Roan, a Fortuna Enterprises partner whose family has been close to the Hsus for years, says they offer little information on the hotel, including during annual meetings in Los Angeles. Roan said she had not been made aware of the union organizing effort.

“My family is close,” Roan said. “And their family situation is closer than mine.”

The Hsus have been hurt by the criticism, particularly the suggestion that they are hostile to immigrant workers, said Paul Szeto, president of a Monterey Park-based Christian ministry the Hsus have supported.

“They are immigrants helping immigrants,” Szeto said of the Hsus. “They really want to help the people, the staff. And they themselves live frugally. They save. They don’t waste. It’s a very Christian kind of living.”

Long career

When Henry Hsu bought the Hilton in 1992 for $45 million, the purchase appeared to cap a long career for a renowned Taiwanese businessman, legislator, sportsman and philanthropist.

Born in China to parents who were doctors, Hsu had planned to be a doctor himself until his mother was killed in a hotel fire when he was 18, he said in an oral history project that was obtained and translated by The Times.

Hsu’s father had studied in the United States. Henry Hsu competed internationally in numerous sports, including basketball and volleyball. He graduated from naval college, earned a law degree and later attended the U.S. Naval Training Center in Miami.

More than 6 feet tall, Hsu later boasted that he had been “the tallest man in the Chinese navy,” one friend recalled.

Posted to Hong Kong during the Japanese attack in 1941, he helped hundreds of people escape, including British soldiers. In 1942 King George VI named him an honorary officer of the Order of the British Empire.

After the communist takeover of China in 1949, Hsu focused his business career on Hong Kong.

He invested in real estate and started a travel agency. That led him to the hotel business.

He was a majority shareholder in the luxurious Hotel Fortuna in Hong Kong, serving as chairman. He sold the hotel and other Hong Kong assets in 1981 and moved to Taiwan, telling a newspaper he feared what the communists would do after Britain handed over Hong Kong to China in 1997.

He had reason to distrust the Chinese government. He had done battle with it for decades in one area that was close to his heart: the Olympics.

In 1959, the International Olympic Committee, recognizing the rise of communist China, said Taiwanese athletes could no longer compete under the name China.

Hsu fought that decision and won, for a time. But in 1976, Canadian Prime Minister Pierre Trudeau, who was close to Beijing, effectively excluded Taiwanese athletes from the Montreal Games.

In retaliation, Hsu abandoned an investment in Vancouver and vowed never to put money into Canadian properties, according to published reports -- a promise he has kept to this day.

Hsu, by then a member of the International Olympic Committee, took the extraordinary step of suing the Olympic movement in international court. Some IOC members wanted him removed, but Hsu’s legal gambit helped force a compromise. In 1981, Taiwan and the IOC agreed to allow Taiwan to compete as “Chinese Taipei.”

“Henry fought a distinguished and classy battle against pretty overwhelming odds for a number of years,” said Dick Pound, a longtime IOC member from Canada.

Building churches

It was charity work that first connected Hsu to Los Angeles.

While living in Hong Kong, Hsu began attending services run by Evangelize China Fellowship, an interdenominational Christian group based in Monterey Park. Hsu later helped Evangelize China build a church in Hong Kong and orphanages around the world.

He supported efforts to distribute Bibles across the globe -- a natural for a devout Christian hotelier -- and for a time served as president of the Taiwanese arm of the Red Cross.

“I feel I am a very lucky person, and this luck was given by God,” he said in the oral history. “I rarely fail anything I do. Those things that couldn’t be accomplished by others, I finished them successfully.”

Though Hsu’s three children have not matched his prominence, he put two -- David and Christine -- in charge of the Hilton. David “is more talented in business than I am,” Henry said in the oral history.

Hotel employees say the siblings occasionally throw parties at the hotel for friends but otherwise keep to themselves and have few exchanges with workers.

“It’s just ‘hi’ and ‘bye,’ ” says Miguel Vargas, 34, a waiter who has worked at the hotel for 15 years and has seen more of the Hsus than most employees. “They come down to the restaurant for breakfast, lunch and dinner. But we don’t talk, and definitely not about what’s going on with the union.”

After buying the Hilton, the Hsus reduced the staff from 800 to about 400, according to the oral history. (The number appears to have since rebounded to more than 600, according to industry estimates.) Henry Hsu also spent $25 million to remodel the hotel completely.

The Hsus have few dealings with public officials. Councilman Bill Rosendahl met with David Hsu during the recent turmoil, but Rosendahl says the meeting was “off the record.” By contrast, the Zen family, known best for its stewardship of the Westin Bonaventure, has been an active player in city politics.

“In the Chinese American community, they’re not really visible at all,” said former City Councilman Mike Woo, whose father has been a friend of Henry Hsu. “They didn’t come up through the community. They came in as overseas buyers.”

Despite their isolation -- perhaps because of it -- the Hsus have proved to be a difficult foe for the union.

In Los Angeles and other cities, Unite Here has used an organizing formula that relies heavily on public pressure, criticizing hotel owners until they agree to let the union organize workers without interference or federally supervised elections. But the Hsus have been unmoved by the campaign or public criticism.

“They need to know the union is going to back those workers as long as it takes,” says Bruce Raynor, general president of Unite Here.

The hotel is ready for a long march as well. David Hsu has told associates that he feels Unite Here can be forced to retreat, much as the Teamsters gave up after an organizing campaign at the hotel in 1998.

The Hsus have hired Lupe Cruz, a former Unite Here organizer, to fight the organizing effort. Federal filings show that the hotel paid Cruz & Associates more than $480,000 last year.

While other hotels have ignored attacks by the union, the Hilton has responded in kind.

Hotel employees have been brought forward by Hilton to accuse the union of harassment, vandalism of their vehicles and visits to their homes that made them uncomfortable.

In 2006, hotel managers suspended more than 70 workers for a week after they gathered in the cafeteria to protest the firing of an employee who was active in the union effort. The employee had been caught stealing by a “mystery shopper” employed by the hotel to impersonate a guest, hotel officials said.

The next day, City Councilwoman Janice Hahn and a hotel security guard had a physical collision as she tried to walk into the hotel with some of the suspended workers.

Hahn claimed she was manhandled. A hotel security videotape appears to show Hahn hitting a guard with her elbow. The guard filed a battery complaint with the Los Angeles Police Department. No charges have been filed.

When the City Council, led by Hahn, voted to extend the living wage of $10.64 per hour to Hilton workers last fall, a Hsu family company donated $235,000 to an effort to qualify a ballot referendum to reverse the new law.

The council later passed compromise legislation to avoid a referendum vote, but that law was thrown out in Superior Court this spring; the city is appealing.

Although the Hsus have thus far avoided the application of the living wage, their opposition to that legislation and to unionization has come at a cost.

Unite Here has led a boycott for almost a year. According to boycott organizers, 19 hotel clients have pulled out, including the California Teachers Assn. The union says the boycott has cost the hotel more than $3 million in lost business. The hotel, in a statement, said “the impact, if any, has been minimal.”

The union has made the area in front of the hotel the main stage for actions about how workers are treated.

Last fall, the union helped put together a massive demonstration in front of the hotel that saw the arrests of some 300 protesters. In a statement, the hotel said it treats employees respectfully.

And this spring, Unite Here helped stage a Good Friday religious service in front of the hotel, with a reenactment of the crossing of the Red Sea. Union officials said they asked pastors friendly to their effort to reach out to the Hsus, to no avail.

For now, the union and the Hsus remain at odds.

But the Hsus would seem to have the resources for a long fight. Alan Reay, president of Atlas Hospitality Group, a consulting and brokerage firm, estimates that the Hilton has annual revenue of about $50 million.

If the Hsus were to sell, they would probably turn quite a profit. Public records and industry estimates put its value at approximately $150 million -- more than three times what they paid for it 15 years ago.

joe.mathews@latimes.com


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