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Mr. Yates. And you serve more people there than we get here?

Mr. Lyons. You have more public exposure in that particular facility.

Mr. ANDREWS. In the Smithsonian, I was present at a dinner our Government gave for a Canadian delegation. Did you do that? Mr. Lyons. Yes, we are responsible for the total food service. Mr. ANDREWS. Including dinners? Mr. Lyons. Yes. Mr. Yates. You don't mention anything in your letter of June 4 as to what you would do with the present employees, and of course we are very much concerned with that. Could we have your comments on that? What would you do with the present employees? Is this something you would like off the record ? Mr. Lyons. Yes, this is something I would like off the record. Mr. YATES. All right. (Discussion off the record.)

PAY, ETC., OF PRESENT EMPLOYEES Mr. YATES. Is there anything of what you said off the record that you would like to put on the record, such as the fact you would keep the employees on the current wage board rates?

Mr. Lyons. We would have to keep the employees on the current wage board rates. We would have to evaluate each one of them, but under the circumstances there is no other way for anybody to take over this particular operation and not pay wage board rates.

Mr. Yates. But you did mention off the record that you do place stress on loyalty and longevity and so on?

Mr. Lyons. Yes, we do. Mr. ANDREWS. Did you say most of the excess load of employees is in the management sector, or a lot of it is in the management sector?

Mr. Lyons. In trying to compare our type of operation with your type of operation, yes. Let me explain it this way. For instance, the accounting function. You have eight people working in the accounting function of the House restaurants operation. This function would be accomplished at our regional office. As a result, we would not need eight people in this administrative function but could probably cut it back to two people. However, they would be in a different classification, probably clerk-typists.

Mr. YATES. This is because you have your own accounting operation in existence?

Mr. Lyons. We have a system in existence. We have a computer system. This is just one area.

Mr. ANDREWS. Are you concerned about the present wage rates paid employees being too high?

Mr. Lyons. No, we are not concerned about the present wage rates paid employees as long as the person who is paid this rate performs the work to earn it.

Mr. YATES. We are talking about the wage rates currently in existence in the House restaurants.

Mr. Lyons. This is not the problem. The problem is the number of people you are paying. We feel, based on our operations, there are efficiencies that can be effected in your particular situation in the Ray

ther VAT House res is not the feel, by

burn Building and in the Longworth Building and here in this building

TURNOVER RATE Mr. Yates. Mr. Roof, what is the attrition rate for employees of various kinds?

Mr. Roor. You mean the turnover?
Mr. Yates. Yes.

Mr. Roor. It is pretty high in the lower grades. Overall it is about 40 percent.

Nr. YATES. I don't believe you are talking about the lower grades, porters, and so on?

Mr. Roof. That is overall. We include management in that 40 percent. That is computed by comparing the number of W-2 tax forms with the number of positions we have, and we have about a 40-percent turnover overall.

WAGE RATES

Mr. YATES. Are your wage rates comparable with those we pay our employees?

Mr. Lyons. That depends on where they fall on the scale. Our cooks would be at the high end of the scale and I am sure your cooks are at the high end of the scale downstairs.

Mr. Yates. What about waiters? Your specialty is cafeterias rather than restaurants; is it?

Mr. Lyons. Our specialty is really the broad spectrum of services. It would include restaurant-style service and cafeterias, the whole spectrum.

Mr. YATES. Does my memory serve me correctly, are restaurants under the minimum wage of $1.60 per hour?

Mr. Lyons. Yes.

Mr. YATES. And that is the minimum wage you pay your employees? Mr. Lyons. Yes.

MARRIOTT TURNOVER RATE

Mr. Yates. What is your turnover rate?

Mr. Lyons. Our turnover rate is high among the lower paid employees. We would like to think we are doing a better job of training and are spending a lot of money in training, but it is hard to compete in the Washington, D.C., market for this type of employee. And, off the record.

(Discussion off the record.) Mr. ANDREWS. Does your turnover compare with this 40 percent figure that was given? Is it more or less?

Mr. Lyons. It is somewhat the same. I am sure we are between 30 and 40 percent, depending on the division. We have, I think, one of the finest benefit programs in the industry today.

FRINGE BENEFITS

Mr. Yites. You mean fringe benefits?

Mr. Lyons. Yes. We have retirement benefits that our employees participate in after 3 years, and we have insurance programs. All in

all we have a very solid group of employees in Washington, D.C. For instance, I just attended the 25th anniversary of one of our employees at the Treasury Department facility which we operate. She has been there 10 years.

Mr. ANDREWS. You operate the Treasury Department cafeteria ?

Mr. Lyons. Yes, the Treasury Building and the Bureau of Public Debt.

Mr. ANDREWS. In operating the facilities at Smithsonian and the Treasury Department, do they give you a subsidy? Mr. Lyons. No, there is no subsidy at all.

Mr. ANDREWS. In other words, they provide the facilities and you do everything else?

Mr. Lyons. You can't compare the Smithsonian Institution with the Treasury Department. Of the record.

(Discussion off the record.)

COMPARATIVE WAGE SCALES Mr. Yates. Have you had occasion to obtain from Mr. Roof the rates of pay that our employees get?

Mr. Lyons. Yes, Mr. Roof has given us all the information we requested.

Mr. Yates. I notice with respect to some of the testimony of Mr. Roof put in the record by our committee earlier, there seems to be a significant variable between the wage scale paid by us and by commercial restaurants. W'ere you aware of that? For example, bus help, according to the scale Mr. Roof put in the record, is from $1.60 to $1.91, and the union commercial rate is from $1.45 to $1.60, and nonunion it is 90 cents to $1.70.

Head cooks are paid by the House of Representatives from $2.62 to $3.02. Union commercial rates are between $1.60 and $2.40, and nonunion commercial rates are from $1.55 to $3.50..

As you have examined these figures, is it your impression that the scale of wage rates for union commercial and nonunion commercial are as represented by Mr. Roof, or is he high or low?

Mr. Lyons. I would say the minimum to maximum is probably represented correctly. I am sure the average would lie somewhere in the middle. Most of the chain operations I know of pay higher than the minimum, and this is where I am sure we would fall. You would have to compare the average of these scale to what you are paying here.

Let me say this: Even in Washington, D.C., in the different areasNorthwest, Southwest, Northeast, and Southeast-you will have a different scale. It is a supply and demand situation. You would have to look at the individual operations and see what they are being paid. If we were to come in here and make a more thorough analysis we would want to know what each employee is being paid by name and by position.

Mr. ANDREWS. You feel the wage rate supplied for head cooks, from $2.62 to $3.02 an hour, is not beyond what they woud be worth?

Mr. Lyoxs. No, it is not beyond what they would be worth, as it applies to the operations of the House restaurant facilities.

Mr. ANDREWS. In other words, you would have no hesitation in paying these rates?

Mr. Lyons. No. What you have to look at is the job description. Some people would require the cooks to do one thing and another would require something else. So the only way you can make a meaningful analysis is by taking the job description and seeing that everybody is calling a cook a cook or if somebody is calling a cook a chef. This takes further analysis.

Mr. YATES. You run the Hot Shoppes; do you not?
Mr. Lyons. No; I am the director of the Business Food Service
Division.

Mr. Yates. But the Marriott Corp. runs the Hot Shoppes?
Mr. Lyons. Yes.

VENDING MACHINES Mr. YATES. As I remember, they have personnel that sell cigarettes and cigars?

Mr. Lyons. In the commercial cafeterias they have vending machines for cigarettes and that is all. In our motels we have a cigar stand built into the gift shop. So we handle it differently in different situations. We have what we call a sundry shop in our International Business Machines operation in Maryland.

NONUNION SHOP
Mr. YATES. Are you a union or nonunion shop?
Mr. Lyons. We are nonunion.
Mr. YATES. All the way through?
Mr. Lyons. Yes.

EMPLOYEE MEALS

Mr. Yates. Do you give the employees their meals in addition to their pay?

Mr. Lyons. Yes; one meal for four hours, for part time, and two meals for 8 hours.

BASIS OF MARRIOTT RESPONSE

Mr. YATES. In submitting your proposal, have you based the statements on the provisions and assumptions contained in the Architect's statement to you of May 23, 1968, as well as your personal inspection?

Mr. Lyons. Yes. Our proposal is somewhat indefinite or the submission of the bid was certainly indefinite.

Mr. YATES. I notice in subparagraph (a) of your proposal it is stated as one of the basic assumptions:

That we have complete control over all food and vending services provided in the House restaurant facilities.

What does this mean?
Mr. Lyons. Why don't we go off the record for a minute.
Mr. YATES. All right.
(Discussion off the record.)

TIOUSE DINING FACILITIES LOSS-FISCAL YEAR 1968

Mr. GYORDA. There are several things I was wondering about. One is your miscellaneous operating loss of $203,631.

Mr. YATES. What items go in this miscellaneous operating loss! Mr. LYONS. That is page 344. Mr. YATES. Of what? Mr. Lyons. Of your previous testimony. Mr. Roof. Mr. Chairman, that is a rather meaningless figure. It is the total loss minus these mandatory fringe benefits-retirement, employees' health benefits, life insurance, and expenditures for equipment.

Mr. YATES. Did you want to ask any questions about that?

Mr. GYORDA. We see the total loss is $236,000, so your miscellaneous operating loss is quite large.

Mr. YATES. What items make up the miscellaneous operating loss?
Mr. Roor. That is the total loss we are talking about.
Mr. YATES. That is the sum total of all the restaurants.
Mr. Roof. Yes.

Mr. YATES. What is the underlying figure for that? Is that in the hearing too?

Mr. GYORDA. I didn't find that when I was reviewing it.

Mr. RooF. Mr. Chairman, that is the total loss of the restaurants from July 2, 1967, through February 10, 1968.

Mr. YATES. On page 345 you have a net loss from operation of $243,000.

Mr. Roof. That is for 1967, the previous year.

Mr. YATES. Are you saying you cannot break down the miscellaneous operating loss any more than that?

Mr. Roof. Oh, yes. You remember the big charts we brought here? We have a complete breakdown.

Mr. Yates. What are the subtotals under the $203,631 miscellaneous operating loss?

Mr. Roof. I am reading from a later statement, through the 11th accounting period rather than the seventh period. The total loss was $318,000.

Mr. YATEs. Compared to the $236,000 ?

Mr. Roor. Yes. That statement was only up to February 10. This one is through May 4.

Mr. YATES. What are the subtotals that make up this amount? Can it be broken down to show losses attributable to each cafeteria and dining room and so on?

Mr. Roof. Yes.
Mr. Yates. Is that in the record ?
Mr. Roor. Yes, in the hearing last Thursday, June 6.
Mr. Yates. Have they seen it?
Mr. Roor. No, sir.
Mr. ANDREWs. This is just updating your losses, in effect?

Mr. Roor. Yes and shows the distribution of losses to the various units.

Mr. ANDREWS. And now we have a bigger loss since you operated 2 more months ?

Mr. RooF. $318,000.

Mr. ANDREWS. And if we operate a couple of more months it will be greater?

Mr. RooF. Probably $354,000.
Mr. YATES. This has been updated through May 4?

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