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    Highlights for week ending June 23, 2001

Call to Action: During the next week, the US Senate will be actively debating the Patients' Bill of Rights. PLEASE call your senators and suggest that in addition to considering patient's rights relative to their HMOs, that they also consider what the rights of retirees should be once they retire from an employer who has promised them lifetime non-contributory health care as part of their retirement package...

CALL your senators and suggest they consider introducing a senate version of HR 1322, either as a stand-alone bill or as an amendment to the Patients' Bill of Rights.

And if your house representative isn't yet signed up as a cosponsor for HR 1322, do a little nagging on that side of Congress as well.

Thanks! Congress will act if we let them know that this is SO important to us that we'll remember at election time...

See details about HR 1322, the Emergency Retiree Health Benefits Protection Act of 2001, and an easy way to contact your representatives...

  • "jamshydt" comments eloquently on the question "Why a union?" Excerpts: "We have allowed the trolls to put us on the defensive. They choose to ignore the immoral actions of IBM's mercenary management and instead fabricate or exagerate allegations of union malfeasence. Yet, they ignore the fact that the current regime has continually reneged on commitments to employees and put the future of IBM at risk. After all, who was responsbile for these actions..."

  • Red Herring: Phone union attempts dial-up Internet connection. Excerpt: "Endicott, New York, the birthplace of IBM (NYSE: IBM), has long been a town of opportunity and myth. There was a time when the portrait of the company's legendary founder, Thomas Watson, hung higher in the local schools than those of Lincoln and Washington, and a job at IBM was considered the ultimate achievement, one that generally lasted a lifetime." If link is broken, view Adobe Acrobat version [PDF-41 KB].

  • Wall Street Journal: While Executives See Their Pensions Grow, Regular Workers See Their Benefits Shrink. Excerpts: "It's also part of a little-known sideshow to the spectacle of surging executive compensation in recent years. Word of CEOs rewarded with millions of dollars for enhancing profits through layoffs has often provoked public indignation. But the ever-widening gap in retirement income between regular workers and executives has gone largely unnoticed by regulators, policy makers and investors. That's true even though in the past decade, many big companies have been setting up or improving special retirement packages for their highest-paid employees while freezing or trimming pension, medical and other retirement benefits for millions of lower- and middle-income workers."

    "International Business Machines Corp. discloses that it has an executive pension plan and reports the plan's liability separately -- but not the liability for a second, less-elite IBM executive pension plan. A spokeswoman confirms this. In January 1995, IBM moved the bulk of its work force into a 'pension-equity' plan, saving the company hundreds of millions of dollars by reducing benefits, even as it set up its special pension plan for executives. A spokeswoman says IBM found that its plan for the regular work force was 'overly generous' compared to other companies' plans. She says IBM also sweetened contributions to its 401(k) plan after deciding that that program was less competitive." If link is broken, view Adobe Acrobat version [PDF-107 KB].

  • Wall Street Journal: Companies Reduce Contributions To Employee 401(k) Savings Plans. Excerpts: "Many companies are putting fewer dollars into their 401(k) savings plans, according to regulatory filings, even as many workers are more dependent than ever on such plans for their retirement. Workers are more reliant on the retirement-savings programs in general because so many employers have cut back the traditional pension benefits they provide." If link is broken, view Adobe Acrobat version [PDF-80 KB].

  • Annex Research’s Five-Year Forecast for IBM: An Unenviable Legacy: New IBM CEO to Inherit Sluggish Giant; Milking the Pension Fund-New LOB. Excerpt: "Unenviable, because IBM’s illusion of prosperity has been created by financial and accounting trickery, such as stock buybacks, tax reductions, or the milking of the IBM pension fund, which we jointly dubbed several years ago as Big Blue’s new 'financial engineering' line of business." ... "If the current trends continue, the milking of the IBM pension fund may account for nearly $2 billion or 19% of IBM 2001 pretax profit. And that would make this 'financial LOB' bigger than the profit IBM earns from all of its servers; and more than double the pretax earnings from technology, PCs or global financing."

  • Dow Jones News Service: Pension Returns Loom Large In Many Companys' Earnings: Study Excerpt: As Wall Street's scrutiny of pension plan income intensifies, a new study shows that nearly a third of big U.S. companies are getting part of their earnings from the plans - sometimes a significant part. The report, issued last week by Credit Suisse First Boston Corp. accounting analyst Jane Adams, also hints that companies can use pension accounting to manage their earnings by changing assumptions to boost the amount of pension income that can be factored into operating income. Thirty-four companies, the analyst said, including giants such as International Business Machines Corp. (IBM) and Verizon Communications (VZ), raised their expected return rates and thus benefitted their earnings without apparent justification based on past performance.
  • A new retirement security advice bill, which would allow your employer to give you individualized investment advice, was just introduced in the U.S. House... The articles listed below give some pros and cons of the new bill; based on the list of those lined up to back it vs. those against it, my guess is that it isn't going to help baby boomers amass any new retirement funds; read through the articles and form your own opinion. Then, one more time, use the bill as an opportunity to let your reps in Washington know how you feel about retirment issues. See links to additional information...
  • In a new book, White Collar Sweatshop: The Deterioriation of Work and Its Rewards in Corporate America, author Jill Andresky Fraser fingers the "merger frenzy," ushered in by federal and state regulatory changes, for the layoffs, longer work days, shrinking benefits packages and the rise of contingency workforces that have beset white-collar workers since the early 1980s. As soon as hostile takeovers, leveraged buyouts and corporate bustups dominated the landscape, financial goals took priority over all other business considerations, making cost cutting, layoffs and benefit reductions the order of the day. The single-minded pursuit of these strategies, Fraser opines, has gradually transformed the paternalistic workplace familiar to white-collar workers circa 1979 into our present Darwinian arena, which Fraser characterizes as a sweatshop.

    Page 72 of the book states: "Anyone who discounts the worsening effect of pension erosion on the quality of people's lives should stop by 'The IBM Pension Club,' an Internet chat room that got launched during May 1999 by a disgruntled employee...the site managed to attract fifteen thousand 'hits' per day."

  • Austin American Statesman: Business Focus: Turning To Foreign Labor. Excerpts: BANGALORE, India -- Betty Coulter is a typical 21-year-old college grad from Illinois. She wears bell-bottom jeans and is a faithful fan of "Friends" and "Buffy the Vampire Slayer." Or so says Betty, if asked, while taking calls from Americans. Her real name would be difficult for those callers to pronounce: Savitha Balasubramanyam. And if they listen closely, her Midwestern accent has a touch of South Asian. Balasubramanyam is Indian. She is a member of a booming business trend in southern India that is saving Western companies millions of dollars and earning young college graduates here their first real rupees. Thousands of Indians right out of college line up for the jobs. They get months of speech training in American or British accents, depending on the client they represent. They bone up on sports terms and slang and a good dose of "Baywatch" and "Friends" to bridge the cultural divide between Bombay and Boston. Balasubramanyam earns just $213 a month on the overnight shift. She takes dozens of calls from customers of a U.S. company that she can't identify, because some clients don't want Americans knowing their calls get answered in India. Read full article in Adobe Acrobat format [84 KB].

  • A new Web site has been started for former employees of IBM U.K. See http://www.communigate.co.uk/hants/ukexibmersinformationsite/

  • Poughkeepsie Journal: IBM head gets honorary knighthood in Britain. Excerpt: Her Majesty, Queen Elizabeth of the United Kingdom, has put IBM Corp.'s CEO and chairman, Louis V. Gerstner Jr., on her ''birthday honours'' list to be an honorary Knight of the British Empire. It was given for ''services to e-commerce and to education,'' the announcement read, adding that the queen approved the nominations on recommendation of the foreign secretary. The nomination comes even as another part of the British government, Inland Revenue, continues auditing IBM's tax returns, now several years in the works. Carol Makovich, an IBM spokeswoman, said the audit is ''still ongoing, but it's very routine.'' If link is broken, view Adobe Acrobat version [85 KB].
"The test of our progress is not whether we add more to the abundance of those who have too much; it is whether we provide enough for those who have too little." — Franklin D. Roosevelt
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