Welcome to IBM Employee News and Links
"News and links for IBM employees, retirees, ex-employees, and persons interested in pension, retirement, off-shoring and corporate governance issues."
Search:
Web This Site

Quick Links:
  Get involved!
  Press articles
  Important Links
  Insider trading
  Lou's Contract
  Total Compensation
Subscribe:
  Add or delete ID
  Change ID
  Contact site owner
Previous Highlights:
  Current
  April 21, 2007
  April 14, 2007
  April 7, 2007
  March 31, 2007
  March 24, 2007
  March 17, 2007
  March 10, 2007
  March 3, 2007
  February 24, 2007
  February 17, 2007
  February 10, 2007
  February 3, 2007
  January 27, 2007
  January 20, 2007
  January 13, 2007
  January 6, 2007
  December 30, 2006
  December 23, 2006
  December 16, 2006
  December 9, 2006
  December 2, 2006
  November 25, 2006
  November 18, 2006
  November 11, 2006
  November 4, 2006
  October 28, 2006
  October 21, 2006
  October 14, 2006
  October 7, 2006
  September 30, 2006
  September 23, 2006
  September 16, 2006
  September 9, 2006
  September 2, 2006
  August 26, 2006
  August 19, 2006
  August 12, 2006
  August 5, 2006
  July 29, 2006
  July 22, 2006
  July 15, 2006
  July 8, 2006
  July 1, 2006
  June 24, 2006
  June 17, 2006
  June 10, 2006
  June 3, 2006
  May 27, 2006
  May 20, 2006
  May 13, 2006
  May 6, 2006
  2006 Stock Meeting
  April 22, 2006
  April 15, 2006
  April 8, 2006
  April 1, 2006
  March 25, 2006
  March 18, 2006
  March 11, 2006
  March 4, 2006
  February 25, 2006
  February 18, 2006
  February 11, 2006
  February 4, 2006
  January 28, 2006
  January 21, 2006
  January 14, 2006
  January 7, 2006
  December 31, 2005
  December 24, 2005
  December 17, 2005
  December 10, 2005
  December 03, 2005
  November 26, 2005
  November 19, 2005
  November 12, 2005
  November 5, 2005
  October 29, 2005
  October 22, 2005
  October 15, 2005
  October 8, 2005
  October 1, 2005
  September 24, 2005
  September 17, 2005
  September 10, 2005
  September 3, 2005
  August 27, 2005
  August 20, 2005
  August 13, 2005
  August 6, 2005
  July 30, 2005
  July 23, 2005
  July 16, 2005
  July 9, 2005
  July 2, 2005
  June 25, 2005
  June 18, 2005
  June 11, 2005
  June 4, 2005
  May 28, 2005
  May 21, 2005
  May 14, 2005
  May 7, 2005
  April 30, 2005
  April 23, 2005
  April 16, 2005
  April 9, 2005
  April 2, 2005
  March 26, 2005
  March 19, 2005
  March 12, 2005
  March 5, 2005
  February 26, 2005
  February 19, 2005
  February 12, 2005
  February 5, 2005
  January 29, 2005
  January 22, 2005
  January 15, 2005
  January 8, 2005
  January 1, 2005
  December 25, 2004
  December 18, 2004
  December 11, 2004
  December 4, 2004
  November 27, 2004
  November 20, 2004
  November 13, 2004
  November 6, 2004
  October 30, 2004
  October 23, 2004
  October 16, 2004
  October 9, 2004
  October 2, 2004
  September 25, 2004
  September 18, 2004
  September 11, 2004
  September 4, 2004
  August 28, 2004
  August 21, 2004
  August 14, 2004
  August 7, 2004
  July 31, 2004
  July 24, 2004
  July 17, 2004
  July 10, 2004
  July 3, 2004
  June 26, 2004
  June 19, 2004
  June 5, 2004
  May 29, 2004
  May 22, 2004
  May 15, 2004
  May 8, 2004
  2004 Stock Meeting
  April 24, 2004
  April 10, 2004
  April 3, 2004
  March 27, 2004
  March 20, 2004
  March 13, 2004
  March 6, 2004
  February 28, 2004
  February 21, 2004
  February 14, 2004
  February 7, 2004
  February 1, 2004
  January 18, 2004
  December 27, 2003
  December 20, 2003
  December 13, 2003
  December 6, 2003
  November 29, 2003
  November 22, 2003
  November 15, 2003
  November 8, 2003
  November 1, 2003
  October 25, 2003
  October 18, 2003
  October 11, 2003
  October 4, 2003
  September 27, 2003
  September 20, 2003
  September 13, 2003
  September 6, 2003
  August 30, 2003
  August 23, 2003
  August 16, 2003
  August 9, 2003
  Pension Lawsuit Win
  July 26, 2003
  July 19, 2003
  July 12, 2003
  July 5, 2003
  June 28, 2003
  June 21, 2003
  June 14, 2003
  June 7, 2003
  May 31, 2003
  May 24, 2003
  May 17, 2003
  May 10, 2003
  2003 Stock Meeting
  April 26, 2003
  April 19, 2003
  April 12, 2003
  April 5, 2003
  March 29, 2003
  March 22, 2003
  March 15, 2003
  March 8, 2003
  March 1, 2003
  February 22, 2003
  February 15, 2003
  February 8, 2003
  February 1, 2003
  January 25, 2003
  January 18, 2003
  January 11, 2003
  January 4, 2003
  December 28, 2002
  December 21, 2002
  December 14, 2002
  December 7, 2002
  November 30, 2002
  November 23, 2002
  November 16, 2002
  November 9, 2002
  November 2, 2002
  October 26, 2002
  October 19, 2002
  October 12, 2002
  October 5, 2002
  September 28, 2002
  September 21, 2002
  September 14, 2002
  September 7, 2002
  August 31, 2002
  August 24, 2002
  August 17, 2002
  August 10, 2002
  August 3, 2002
  July 27, 2002
  July 20, 2002
  July 13, 2002
  July 6, 2002
  June 29, 2002
  June 22, 2002
  June 15, 2002
  June 8, 2002
  June 1, 2002
  May 25, 2002
  May 18, 2002
  May 11, 2002
  2002 Stock Meeting
  April 27, 2002
  April 20, 2002
  April 13, 2002
  April 6, 2002
  March 30, 2002
  March 23, 2002
  March 16, 2002
  March 9, 2002
  March 2, 2002
  February 23, 2002
  February 16, 2002
  February 9, 2002
  February 2, 2002
  January 26, 2002
  January 19, 2002
  January 12, 2002
  January 5, 2002
  December 29, 2001
  December 22, 2001
  December 15, 2001
  December 8, 2001
  December 1, 2001
  November 24, 2001
  November 17, 2001
  November 10, 2001
  November 3, 2001
  October 27, 2001
  October 20, 2001
  October 13, 2001
  October 6, 2001
  September 29, 2001
  September 22, 2001
  September 15, 2001
  September 8, 2001
  September 1, 2001
  August 25, 2001
  August 18, 2001
  August 11, 2001
  August 4, 2001
  July 28, 2001
  July 21, 2001
  July 14, 2001
  July 7, 2001
  June 30, 2001
  June 23, 2001
  June 16, 2001
  June 9, 2001
  June 2, 2001
  May 26, 2001
  May 19, 2001
  May 12, 2001
  May 5, 2001
  2001 Stock Meeting
  April 21, 2001
  April 14, 2001
  April 7, 2001
  March 31, 2001
  March 24, 2001
  March 17, 2001
  March 10, 2001
  March 3, 2001
  February 24, 2001
  February 17, 2001
  February 10, 2001
  February 3, 2001
  January 27, 2001
  January 20, 2001
  January 13, 2001
  January 6, 2001
  December 30, 2000
  December 23, 2000
  December 16, 2000
  December 9, 2000
  December 2, 2000
  November 24, 2000
  November 17, 2000
  November 10, 2000
  November 4, 2000
  October 28, 2000
  October 21, 2000
  October 14, 2000
  October 7, 2000
  September 30, 2000
  September 23, 2000
  September 16, 2000
  September 9, 2000
  September 2, 2000
  August 26, 2000
  August 19, 2000
  August 12, 2000
  July 29, 2000
  July 22, 2000
  July 15, 2000
  July 1, 2000
  June 24, 2000
  June 17, 2000
  June 10, 2000
  June 3, 2000
  May 27, 2000
  May 20, 2000
  May 13, 2000
  May 6, 2000
  April, 2000
 

Join your fellow employees who are fighting for your benefits - Join the Alliance!

Retirees, Vendors, Contractors, Temps, and Active Employees are all eligible to become members of the Alliance.


    Highlights for week ending February 16, 2002
  • Reuters: After Enron, Tech Sector Accounting Under Scrutiny. Excerpt: "Many of the major technology companies are believed to have tweaked their numbers in order to meet Wall Street expectations, or at least look better, industry experts said. International Business Machines includes income from its pension fund in its earnings reports, for instance."

  • Andy Lang comments on why pensions for ordinary workers have been "abused for so long"...

  • Business Week: A Little Less in the Envelope This Week. Excerpt: "A decade ago, the deal didn't get any better than at IBM. Big Blue's generous compensation packages offered medical coverage that was virtually free, cushy pensions, and salaries that rose dependably each year. Today, those guarantees are gone."
  • Business Week: The Fine Print: How to Read Those Key Footnotes. Excerpt: "The sudden collapse of Enron (ENE ), until recently the nation's seventh-largest corporation, took investors by surprise. But had the Wall Street analysts, mutual fund managers, journalists, and individual investors who followed the company dug a little deeper, they could have had a heads-up that all was not quite right at the Houston energy giant long before the bad news broke in October. The source of this information? The footnotes companies are required to publish with their financial statements." ... "Take IBM. Nowhere does Big Blue's 2000 income statement credit its pension fund for boosting earnings by $824 million, or 7% of pretax income. Yet the pension fund's contribution is spelled out in a footnote. Combined with a section of the annual report called 'Management's discussion and analysis,' the footnotes 'give you some powerful information about the story behind the numbers,' says Lynn Turner, director of the Center for Quality Financial Reporting at Colorado State University."

  • New York Times: As It Beat Profit Forecast, I.B.M. Said Little About Sale of a Unit. Excerpts: "When I.B.M. announced in mid-January that it had beat Wall Street's profit forecasts in the fourth quarter, it did not disclose that the sale of a business had generated $300 million that the company. The company did not provide details of the transaction to investors or account for it as a one-time gain, as is the practice. Instead, I.B.M., during a conference call about fourth-quarter earnings, said that its profits had grown — even as revenue in most categories had declined — because of increased productivity and higher sales of certain products.

    "... some investors had begun to wonder whether I.B.M.'s quiet sale of its optical transceiver business to JDS Uniphase (news/quote) on Dec. 28, the last Friday in 2001, was intended to help the company over the earnings bar. JDS agreed to pay I.B.M. $340 million in shares and cash, a price that is nearly five times the business's sales."

    "Robert A. Olstein, manager of the Olstein Financial Alert Fund, said that he had considered buying I.B.M.'s stock in recent years but stayed away because the company's earnings appeared to be engineered more than generated. 'Mr. Gerstner did a great job turning the company around when he came in,' Mr. Olstein said, 'but basically they've had a series of what I call lower quality of earnings sources' to meet analysts' earnings estimates.'" If link is broken, view Adobe Acrobat version [PDF--103 KB].

  • "ThomWatsonIII" comments on what "good companies" do and do not do...

  • USA Today: Flap exposes tricks of accounting trade. Excerpts: "Accounting has come a long way. The mere mention of the word used to glaze over the eyes of students and investors alike. But suddenly, the cryptic ways of bean counters have ignited a firestorm stretching from Wall Street to Capitol Hill and beyond and possessing the power to destroy billions of dollars in value." ... "During the '90s, executives increasingly had their pay tied to stock options, which provided intense incentive to keep the share prices rising." ... "About 10% of the 2001 earnings reported by IBM under the helm of CEO Lou Gerstner came from gains from its giant pension plan, vs. just 3% in 1999, says Merrill Lynch's Steven Milunovich. That jump was due in part to IBM raising the expected rate of return from the plan to 10% from 9.5% in 2000." ... "'Such maneuvers have made financial statements so complicated even CPAs have trouble reading them,' says Joseph Wells, chairman of the Association of Certified Fraud Examiners. It took a bear market, and Enron, to make investors care. 'It's been getting this way for 25 years,' he says. 'Enron is the latest and greatest of a system that's broke. How many Enrons are there out there getting ready to blow up?'"

  • CBS MarketWatch: Massive debt and messy books. Specialist, after correct call on IBM, sees danger. Excerpts: "Pravin Banker, editor of daily report LDC Bond Watch and a specialist in out-of-favor securities, pointed the finger weeks ago at IBM's practice of shuffling assets for the benefit of the bottom line. On Jan. 17, Banker said IBM would be in the accounting spotlight for various practices designed to prop up earnings during a period of declining sales. Banker, a principal at The Financial Network Inc., is a former director of treasury operations for IBM's World Trade Corp. He also was a senior treasury consultant at IBM."

  • Business 2.0 Magazine: Why Should Anyone Believe You? What ruined Enron wasn't just accounting. It was a culture that valued appealing lies over inconvenient truths. Are you sure your company is all that different? Excerpts: "Sokol's experience left him with a low opinion of Wall Street analysts, a feeling that is widely shared. "Why do we care what some 27-year-old who's never run a company thinks?" Pfeffer asks. "If you run a company for the analysts, you'll run it into the ground." Indeed, one of the biggest complaints against Wall Street is its preoccupation with steadily rising earnings and immediate results, neither of which occur naturally in business, at least not for long. To meet such demands all but requires some manipulation of earnings. It's the only way to make the numbers. And once management starts playing games with the numbers, honesty gets harder all the way down the chain of command." ... "Many CEOs of public companies feel compelled to feed the market's hunger for rapid and predictable growth. That way lies the potential not only for accounting chicanery but also for turning internal discussions into cynical, bazaar-style haggling over financial targets, with substantive business issues going neglected." ...

    "But too many managers make important policy decisions without considering the effects on the level of trust in their organization and on their credibility with employees. Enron is just one of many firms with 'rank and yank' plans that call for the annual removal of a specified portion of the workforce. Schemes of this sort magnify insecurity and encourage artificial and scripted communication, according to Prusak and Cohen. At Enron one of the 'redeployment' program's most visible consequences was the large amount of time people spent at the local Starbucks, buttering up superiors and bad-mouthing peers." If link is broken, view Adobe Acrobat version [PDF--64 KB].

  • Business Week: The Pension Bomb. Excerpt: "Brace yourselves, investors. There's another big earnings booby trap lurking out there. Like other recent market stunners, companies set this one for themselves during the late 1990s when their traditional pension plan investments were earning outsize returns. Thanks to the wizardry of pension accounting, companies could apply those gains to their bottom lines, where they worked wonders on stock prices. Now, of course, most pension-plan returns stink. And the effect on corporate profits will be anything but wonderful. Stock prices are already signalling the message: Poor pension-plan returns will depress earnings for years." ... "An even touchier issue is the assumption companies make on how much their pension portfolios will earn. GE decided in November to trim its rate to 8.5% from 9.5%. Sounds small, but that cut could cost GE more than $550 million, a hit of 2% to pretax income. Dow Chemical Co. says it cut its assumed rate of return to 9.25% from 9.5% last year, helping knock $100 million off its pretax results in 2002, vs. a $45 million boost in 2000. Whirlpool Corp. (WHR ) said in a Feb. 5 conference call that it had cut its rate to 10% for 2002 from 10.5% last year. If the 50 biggest companies with pension plans all sliced one percentage point from their projections, their collective pretax income would fall $5.2 billion, according to consultants Milliman." (Editor's note: Last year, IBM increased its assumed pension-plan return from 9.5% to 10.0%.)

  • Wall Street Journal: Retirement Rules Won't Affect Bush Administration Appointees. Excerpts: "Top Bush administration appointees in charge of shaping retirement policy won't themselves be greatly affected by any changes they implement. In their jobs in the private sector, Labor Secretary Elaine Chao and Treasury Secretary Paul O'Neill accumulated substantial retirement wealth in executive pension and savings plans that aren't available to regular workers.According to financial-disclosure forms filed with the U.S. Office of Government Ethics, and filings with the Securities and Exchange Commission, their retirement benefits are worth millions of dollars.

    The growing divide between the kinds of retirement benefits enjoyed by top executives and regular workers has received more attention in recent weeks with disclosures about how Enron Corp. workers lost the millions of dollars in their 401(k) savings that had been invested in Enron stock -- much of it involuntarily -- while top Enron executives were able to shelter their special executive benefits in partnerships and insurance trusts..."

  • U.S. Secretary of Labor Elaine L. Chao announced that the second National Summit on Retirement Savings will be held Feb. 27 to March 1, 2002 at the Capital Hilton Hotel in Washington, D.C. Among the appointed delegates at the meeting is Janet Krueger, a leading advocate for pension and retiree benefits rights for IBM workers. For more information, visit this Department of Labor Web site.

  • Humor: An economic lesson. You have two cows...
"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
This site is designed to allow IBM Employees to communicate and share methods of protecting their rights through the establishment of an IBM Employees Labor Union. Section 8(a)(1) of the National Labor Relations Act states it is a violation for Employers to spy on union gatherings, or pretend to spy. For the purpose of the National Labor Relations Act, notice is given that this site and all of its content, messages, communications, or other content is considered to be a union gathering.