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    Highlights for week ending August 3, 2002
  • Poughkeepsie Journal: IBM workers aim to protest Vermont cuts. Excerpt: "On Friday, James M. Leas, an ex-IBMer who has taken a prominent activist role urging reforms in Big Blue's employment, finance and governance, issued a statement that a group of laid-off and still-active IBMers would begin organizing publicly Monday. Leas said the group analyzed the IBM document when it was issued in June. 'We immediately wrote to IBM,' asking that some older workers be rehired. He said an executive refused."
    • More details are available in a press release on the Alliance@IBM Web site: IBMer's Protest Age Discrimination in Job Cuts. Excerpt: "While hundreds of laid off distraught IBM employees will all appear on August 5 for exit interviews and to sign releases and covenants not to sue in exchange for severance payments, some laid off and some currently employed IBMers will appear at the same place to urge older employees to file complaints with the Vermont Attorney General’s Civil Rights Unit. 'IBM handed out 50 pages of data to each laid off employee. Buried in that data is a clear pattern of age discrimination,; said James Marc Leas, an IBM employee. 'IBM hid the pattern in those 50 pages of numbers.'"

  • "ibm_warrior" provides details on the Question and Answer sheet IBM provided to Endicott employees slated for the new venture EIT.

    • "screwu2lou" comments on his situation. Excerpt: "As a soon to be ex-IBM Endicott employee my blood boiled yesterday when I received my package about our upcoming separation from IBM once the sale to EIT is complete. What frustrates me most is the loss of my future health account as it states that we forfeit that amount due if we leave the company before being retirement eligible."

  • "dr_bendoveru2" comments on post-IBM health care benefits. Excerpt: "I too don't understand why IBM'ers and people of other companies are not demanding health care from their employers. I think most are all walking around with their heads in the sand living from pay check to pay check and afraid to stand up and fight." ... "Now let me ask you something...how is it that Lou Gerstner and other IBM execs can get paid hundreds of millions of dollars and they won't even defer some of that money to help their employees have health care benefits? These bastards are about nothing else than greed and they need to be put in jail."
  • "Frank_Reality" offers his opinion on what it's like to work at IBM today.

  • Boston Globe: Worker loyalty has lost its rewards. Excerpts: "After 35 years on the job, Roger retired at age 55, proud of the fact he had never called in sick. He had a good retirement package, and the monthly cost of health coverage increased slowly, from $70 to only $85 a month. Recently, they opened the mail and began to live another American story - of loyalty rewarded with disloyalty. They were told that as of Aug. 1 they will be enrolled in a Collins & Aikman medical plan. The monthly payments will increase from $85 a month to $830." If link is broken, view Adobe Acrobat version [PDF--65KB].

  • International Foundation of Employee Benefit Plans: Declining Levels of Employee Trust Are a Major Threat to Corporate Competitiveness, Watson Wyatt Study Finds. Excerpt: "Left untouched, low employee trust levels will exact a high financial price, Gochman warns. "Employee trust levels and corporate performance are closely linked. In fact, our survey found that the rate of three-year total returns to shareholders is almost three times higher at companies with high trust levels than at companies with low trust levels," she explains."

  • New York Times: I.B.M. to Purchase Consulting Group for $3.5 Billion.
    • Dow Jones Business News: Lawmaker Says SEC Stance On Pwc-IBM "Inconsistent". Excerpt: "A decision by the Securities and Exchange Commission allowing PricewaterhouseCoopers to audit International Business Machines Corp. while IBM was negotiating to buy the audit firm's consulting arm is 'dead wrong,' according to one House Democrat.

    • "dr_bendoveru2" comments on the Price Waterhouse Cooper acquisition. Excerpt: "Wait till they try and integrate their methodologies with IBM's hodgepodge of Intellectual Capital garbage of random attached files to the ICM databases. They will just love sorting thru all of that crap being 'creative consultants' trying to pull together deliverables on time and on budget. And then there is the Utilization quota game, bending the numbers on CLAIM labor reporting system and the pricing tools and project management reporting so you show your bogus profit. Getting on airplanes week in and week out, flying out on a Sunday and home late on a Friday night because they don't build travel time into the price of the contracts or utilization. Living in hotels working late nights trying to balance all the administrative bullshit, project management, and lack of administrative support while you are trying to do a good job for the client."

    • "i_be_mad_as_heck" comments on the acquisition. Excerpts: "To understand what happens to units acquired by IBM, PWC employees need to research what has happened to Sequent, Tivoli, and Lotus employees since IBM acquired them. How long until you receive a letter stating 'You have been selected for permanent layoff. Effective today, this is your notice that your employment will permanently end on xx/xx/xx.'" ... "In an IBM presentation titled 'Human Resources Strategy' from Randy MacDonald, Senior Vice President, Human Resources, a statement claims 'Tenure: nearly half the workforce has less than five years of service'."

  • "newbiebob2002", a retired IBM senior manager, comments on how layoffs and union organizing efforts were handled while he was in management. Excerpt: "Layoffs. There have been continual implications in this forum that management targeted certain groups of individuals (older employees, younger employees, etc.) for resource actions. I cannot speak for recent activity but I can assure you that in the first several layoffs there was no 'targeting'. I know because, to my everlasting shame, I was one of the managers doing the selection."
    • "i_be_mad_as_heck" replies. Excerpt: "Thanks for your post. I think it helps show how much things have changed at IBM in the last 10 ten years. I am guessing you retired about 10 years ago, but I maybe wrong. It is a new IBM. I was part of a group laid off. Those over 50 years of age were 'selected' for layoff at a rate 7 times higher."
    • Linda Guyer replies: Excerpt: "It is very clear to us that in the last few years (as opposed to 1992-
      3) there is a very apparent strategy to let older workers go, while aggressively recruiting college grads and younger employees. In fact, in Randy McDonald's pitch about HR strategy, he states that 50 percent of the current workforce has under 5 year's tenure. Now why would IBM want to encourage a deliberate workforce churn?" (Ms. Guyer provides 8 reasons in her posting).

  • Poughkeepsie Journal: New IBM chip plant ready for work.

  • Poughkeepsie Journal: IBM kicks off chip plant.

  • Wall Street Journal: Early-Retirement Plans Become Thing of the Past.

  • Mother Jones magazine: A More Perfect Union Buster. Forget Haymarket and Harlan County: The front line of today's labor struggle is a hotel conference room in Cleveland. Excerpt: "These days, the descendants of union-busting operations such as the Pinkertons carry briefcases instead of truncheons, stride into CEOs' offices instead of lurking near the gates with bats, and take advantage of weak labor laws and ineffective regulatory agencies to bust unions right and left instead of having employers ask the governor to call out the National Guard."

Articles about corporate governance:

  • MSNBC/Newsweek: How to Look Like a Good Guy. In these scandal-ridden, bear-market days, companies want to be seen as doing something to restore investors’ faith in their bookkeeping. Excerpt: "Economics can get pretty complicated, but there’s one economic principle that anyone can understand: there’s no such thing as a free lunch. Everything has a cost attached to it, even if the diner isn’t presented with a bill. Corporate America’s version of a free lunch is stock options. Executives see them as money, on top of salary and bonus, but companies haven’t had to treat them as an expense."

  • The Nation: Is This America's Top Corporate Crime Fighter? by William Greider. Excerpt: "The cult of the CEO (as some business gurus now call it) promoted a celebration of testosterone and greed that has coarsened the culture and damaged economic life in severe ways. The adoration of corporate executives--those with a tough-guy disregard for their employees and social norms--seems to be receding now, along with stock prices and disappearing profits, but it does resemble a utopian cult, in which the followers obsessively worship a few strong guys said to possess superhuman qualities."

  • United for a Fair Economy (UFE): Titans of the Enron Economy: The 10 Habits of Highly Defective Corporations," a new report by financial analyst Scott Klinger, reveals that key maneuvers leading to Enron’s meltdown are legal and widely practiced.

  • Washington Alliance of Technology Workers (WashTech): AFL-CIO president demands corporate reform in Wall Street speech. Former Enron, WorldCom and Arthur Andersen employees join other workers in call for accountability. Excerpt: "'American workers can depend more on the lottery than on their employers for decency, fairness and security,' Sweeney said. 'As investors, as employees, as consumers and as stewards of our communities, we must demand standards of basic decency and morality from corporate America.' Referring to the corporate accounting reform bill passed by Congress last week, he said, 'cooked books are just a part of the problem and accounting reform is just a part of the solution'."

  • Fortune: The Great CEO Pay Heist. Executive compensation has become highway robbery--we all know that. But how did it happen? And why can't we stop it? The answers lie in the perverse interaction of CEOs, boards, consultants, even the feds.

  • Fortune: CEO Perks That'll Drive You Berserk. Here are a few of the corporate world's most eye-catching extras.

  • Sutherland Asbill & Brennan LLP Legal Alert: Retirement and Executive Compensation Provisions in Accounting Reform Legislation [PDF--135 KB]. Excerpt: "The Act ... contains provisions affecting retirement plans and executive compensation arrangements, including provisions: Requiring advance notice of blackout periods; Prohibiting insider trading of company stock during blackout periods; Increasing the maximum criminal penalties for ERISA violations; and Potentially prohibiting certain split-dollar life insurance arrangements for executive officers and directors."

  • New York Times: G.E. Is Latest to Reconfigure Stock Options. Excerpt: "General Electric, the nation's biggest company by stock market value, yesterday joined a small but growing group of companies that are changing how they account for stock options. G.E. went even further by saying that top executives would no longer be allowed to take profits immediately after cashing in options."

  • Dow Jones Business News: NYSE Approves Measures on Corporate Governance, to Add Trading Floor. Excerpt: "Changes to the NYSE's listing standards had been recommended on June 6 by an NYSE committee on corporate accountability and listing standards, and will now be sent to the Securities and Exchange Commission for final approval. In general, the changes will require NYSE-listed companies to have a majority of independent directors on their boards and to submit all stock-option plans to shareholders for approval."

  • Motley Fool: We're Selling Microsoft. Excerpt: It all comes down to an issue of character. In this case the company has failed to maintain the best interests of outside shareowners. By declining to show true leadership on the stock option expensing issue -- which management claims to agree with -- Microsoft no longer meets the criteria of a Rule Maker company."

  • San Francisco Chronicle: Untangling accounting debate. Excerpt: "The basic issue: Companies can account for the estimated value of options awarded to employees each year in one of two ways: as an expense on their income statement or in a footnote to their annual income statement. The former method decreases reported earnings; the latter does not. So naturally, almost all companies until recently chose the footnote option."
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