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    Highlights for week ending September 7, 2002
Union Memorial Events and Remembrances for September 11. Please take a moment this week to remember our brothers and sisters, including 14 CWA members, and all who perished last year.
  • Wall Street Journal: IBM May Cut About 4,000 Jobs In Wake of Pricewaterhouse Deal. By William M. Bulkely. Excerpt: "About 4,000 people are likely to lose their jobs as International Business Machines Corp. completes its acquisition of PricewaterhouseCoopers LLC's consulting arm, according to people familiar with the matter. It hasn't been determined how many will come from the Pricewaterhouse consulting group, which has about 30,000 workers. It is also uncertain how many will come from IBM's 50,000-employee consulting arm, referred to internally as Business Innovation Services. The deal is scheduled to be completed on about Sept. 30 and the layoffs, which would amount to about 5% of the combined units, are expected to occur during the fourth quarter." If link is broken, view Adobe Acrobat version [PDF--21 KB].

  • iSeries Network: More Layoffs Expected for IBM. Excerpt: "More than 4,000 employees will be laid off as a result of the acquisition, according to speculations of a Wall Street Journal article last week. That would bring total IBM layoffs this year to about 20,000. If true, the rumored layoffs could boost the operating margins of IBM Global Service’s business innovation services unit, which will absorb the PwC Consulting employees, by as much as 12 percent, predicts John Jones, managing director of SoundView Technology Group."

  • "Frank Reality" offers advice to a new IBM employee. Excerpt: "In the environment you are getting shoved into, there are few tips for survival and most of these only prolong the inevitable. In the workplace at the 'new IBM', we all are temporary employees - it's that some are more temporary than others." ("Frank's" tips follow...)

  • In a frank and highly personal posting, "i_be_mad_as_heck" describes his IBM layoff. Excerpt: "What happens when after 28 years of loyal dedicated service to IBM, you are notified your performance is rated 'Unsatisfactory'? This, in spite of the fact that you know your performance is at a level significantly above the PBC requirements. In earlier years, the current work levels would have been rewarded with awards and accolades. In your case, you are rewarded with an unceremonial escort to the door with a confiscation of your ID badge. Later, left to wonder, 'What happened?'"

  • Wall Street Journal: Pension Plans Can Cause Some Earnings Surprises. By Art Berkowitz and Richard Rampell. Excerpts: "It's been said that accountants invented actuaries so that they can laugh at someone else. Well, both the accountants and the actuaries may be laughing when they report on the amounts that companies owe their employees in retirement benefits. Before there were 401(k) plans, or IRAs or Keogh plans, many companies established defined-benefit retirement plans for their employees. These plans were designed to reward employees for long and loyal service by paying them a monthly pension benefit when they retired. The amount to be paid was computed based on their years of service and their wages in the years before retiring." ... "The Pension Benefit Guaranty Corporation, which keeps track of unfunded pension liabilities, calculates that unfunded liabilities of corporations quadrupled during 2001, going from $26 billion to $111 billion. This amount could actually be much higher, since compliant actuaries have blessed assumed rates of return ranging from 6.5% for Buffett's Berkshire Hathaway, to 9.5% for IBM and 10% for General Motors. To be fair, the PBGC uses the 30-year U.S. Treasury Bond rate (now approximately 5%) to make its calculations and the stock market has averaged a higher rate of return over a thirty-year spell. Nevertheless, prudent investors should look closely at companies' reports for unfunded pension liabilities (especially older companies, which are more likely to have defined-benefit pension plans) to see if their assumptions are reasonable."

  • "apsarkis", an employee of a company that was spun off from IBM, comments on IBM management's failure to "take care of" sold-off employees as promised. Excerpt: "IBM HR came in and told us that those of us just under 29 years would NOT be given a retirement bridge, No severance from IBM, and from Cadence we were given our old salary (but NO raises this year), NO pension (their idea of a pension is a 401k), and a pile of worthless stock options (their stock recently hit a new 52 week low, at 1/2 the strike price we were given)."

  • Washington Post: Efforts to Restrict Retirement Funds Lose Steam. Excerpt: "Congress has all but abandoned legislative proposals to ensure that employee retirement funds are not concentrated in their employers' stock, after hearing from businesses that vigorously oppose such restrictions. The recently devastated retirement accounts of employees from Enron Corp. and WorldCom Inc. initially fueled a wave of indignation among lawmakers in Washington and solemn vows to protect their investments. But the anger that pushed tough new accounting standards past corporate opponents this summer has already faded, lawmakers and lobbyists say, allowing businesses to regain their strength on Capitol Hill." ... "Consumer-rights groups, unions and retiree advocates, which were confident that the human wreckage of this year's huge bankruptcies would force real change to the rules, expressed outrage. 'I think it is appalling, and I think the American people would be appalled if they knew,' said Karen Friedman, director of policy strategies at the Pension Rights Center, an advocacy group that supports such mandates. 'It's time for Congress to have some backbone.'"

  • Wall Street Journal: Welch's Lavish Retirement Pact Angers General Electric Investors. By Matt Murray, JoAnn Lublin and Rachel Emma Silverman. Excerpt: "Mr. Welch, who received $16.2 million in total compensation in 2001 and holds 22 million GE common shares and other stock-based holdings, is hardly the only CEO to receive a lush retirement package. As CEO compensation soared during the 1990s, and experienced executives became sought-after commodities by recruiters, many companies used such packages as incentives. At International Business Machines Corp., Chairman and former CEO Louis V. Gerstner Jr., who stepped down from day-to-day involvement March 1, will receive a 10-year consulting contract starting with his complete retirement next March, with a daily consulting fee based on his daily salary rate at the time of retirement, according to the latest proxy. He is getting $2 million in salary this year. IBM also provides him access to company aircraft, cars, an office, apartment, home security and financial planning, and reimburses him for club fees during the life of his consulting agreement and a decade beyond, if he adheres to certain IBM rules. IBM has said it can't predict the value of Mr. Gerstner's agreement other than to say it assumes the expenses may be in excess of $100,000." If link is broken, view Adobe Acrobat version [PDF--24 KB].

  • New York Times: G.E. Expenses for Ex-Chief Cited in Divorce Papers. Excerpt: "General Electric has reported that Mr. Welch's total compensation, including bonus and salary, was $16.7 million in 2000, his last full year at the company before his retirement last September. It has also said that he will remain a consultant to the company on a retainer of $86,000 a year and will continue to have access to G.E. services and facilities. But it did not disclose the value and the details of his perquisites as chief executive that will apparently continue through retirement. Along with access to corporate aircraft, mentioned previously in company footnotes, the documents filed by his wife, Jane, describe his use of a Manhattan apartment owned by G.E., floor-level seats to the New York Knicks, courtside seats at the U.S. Open, satellite TV at his four homes and all the costs associated with the New York apartment, from wine and food to laundry, toiletries and newspapers. The privileges, down to certain dining bills at the restaurant Jean Georges in the Manhattan apartment building where he lives, have continued even in retirement, the court papers indicate, without placing a value on them." If link is broken, view Adobe Acrobat version [PDF--37 KB].

  • Houston Chronicle: Enron collapse boost for labor. Unions aid laid-off yuppies. Excerpts: "For decades, labor union leaders have focused on negotiating contracts and settling grievances for their members. But over the past few months, aided by a string of corporate meltdowns, the labor movement seems reinvigorated. Labor leaders are filing shareholder proposals on auditor independence and executive severance arrangements, lobbying Congress aggressively on pension reform and fighting companies that try to flee offshore to escape U.S. taxes. And they're meeting with something that the labor movement hasn't seen in a while: success." ... "The union didn't even represent any workers at Enron's headquarters in Houston, so "Why would they get involved?" Perrotta wondered. Ultimately, the legal and organizing aid provided by the unions helped Enron employees win about three times more severance than they were initially offered."

  • Midrange Server: Are Programmers the Coal Miners of the 21st Century? Excerpts: "...I am beginning to think that the dozens of hot-shot, politically connected IT companies, along with the tens of millions of MIS organizations that are their customers, are creating the conditions that make it likely that programmers the world over will start to unionize." ... "At about that same time, a former employee of server-maker Sun Microsystems got the attention of the Department of Justice, which is investigating the employees' allegations that when giving the ax to 3,900 employees last fall--about 9 percent of its workforce--Sun had discriminated against workers in America, in favor of foreign workers (who make up 5 percent of Sun's workforce and who come into the country on H-1B temporary visas)."

  • Washington Alliance of Technology Workers: Amazon and Microsoft Demand H-1B Visa Workers. Excerpt: "Despite one of the worst economic recessions ever to strike the local high-tech industry, Amazon and Microsoft continue to file applications to fill vacant job openings with foreign workers under the H-1B visa program."

  • San Jose Mercury News: Layoffs at Sun prompt inquiry over work visas. Excerpt: "The Justice Department is investigating whether Sun Microsystems has discriminated against U.S. citizens in favor of foreign workers here on temporary H-1B work visas. The investigation was prompted by a complaint in April by a laid-off Sun engineer, Guy Santiglia of Santa Clara. Santiglia, 36, lost his job when Sun laid off 3,900 in October. The Santa Clara company makes Unix-based servers that run corporate computer networks and Web sites."

  • New York Times Magazine: Into Their Labor, by George Packer. Excerpt: "In recent years American life has put a rather low value on honest, unglamorous work and brotherly self-sacrifice. 'Solidarity forever' was not a message that made much impression on the post-Reagan mind. In the age of the rising Dow, a wage earner seemed like a has-been, hopelessly out of touch with the opportunities all around. Laid-off manufacturing workers were told to quit whining and get retrained. Staying in the same job for more than a year was a sign not of loyalty but of stagnation, if not failure. The heroes of the decade were entrepreneurs and C.E.O.'s. In the past year, though, we have learned that glamorized corporate chiefs will sell out anyone and that sad sacks with union cards and dead-end jobs are the ones you can count on in a pinch."

  • TomPaine.com: Paris: Living In A Truly 'Family-Friendly' Country. Excerpts: "Any suggestion that Americans need a less barbaric medical system, more affordable day care or decent educational support for children is scoffed at in Washington today." ... "The American people live hard, flinty lives, with every man, woman and child expected to get by or drop out. And as a people, we don’t even know -- and maybe now we never will -- how much more humane life could be, because nobody dares even bring it up."

This week on the Alliance@IBM Site:

  • From Lee Conrad, National Coordinator for the Alliance@IBM: "The Alliance has received many notes from IBMers let go in the recent job cuts who feel they were targeted because of a disability or health problem. Many were also older employees just short of retirement medical. If you feel that this happened to you, please send me your e-mail, name and home phone number. We intend to pursue this. My e-mail is endicottalliance@stny.rr.com.

  • The Alliance@IBM is encouraging its readers to submit comments about employment at IBM, on why readers visit its site, why people join the Alliance, what issues are of concern at workplaces, how the Alliance Web site has been useful, and other related topics. Submit your comments or read others' submissions...
"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.