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    Highlights for week ending November 8, 2003


Call to Action from Janet Krueger:

Lately, Congressional conference committees seem to be taking more and more liberties with the people's will as they supposedly 'merge' house and senate bills together -- instead of just compromising with language that comes from one bill or the other, they seem to think they have the freedom to completely throw language out that appeared in both bills, or create new language that appeared in neither.

There will be a conference committee working on the treasury appropriations bill -- even though both the house and the senate bills include language prohibiting the treasury from legalizing cash balance plans, the conference committee may delete the language -- note the letter from ERIC, URL below, asking them to just that!

Please call your representatives and senator on Monday morning and explain just how unacceptable this would be -- they need to know we are still watching closely. Thanks, Janet

  • ERIC: Remove Sanders and Harkin Amendments from Conference Agreement on Transportation/Treasury Appropriations Bill (H.R.2989).The ERISA Industry Committee (ERIC) sent the following letter [PDF] to Sen. Richard Shelby and Rep. Ernest Istook (chairmen of the House and Senate Transportation - Treasury appropriations subcommittees) urging deletion of the Sanders and Harkin amendments from the conference agreement on the Transportation/Treasury appropriations bill (H.R. 2989). On September 9, Rep. Bernie Sanders (I-VT) attached an amendment that would prohibit the Treasury Department from taking any action to overturn the Cooper v. IBM decision. The amendment was approved 258-160. On October 23, Sen. Tom Harkin (D-IA) attached an amendment to the Senate version of the same bill that would prohibit any funds being used to complete action on the IRS's proposed age discrimination regulations affecting hybrid and other pension plans. The Subcommittees currently anticipate completing work on a conference agreement by next Wednesday, November 12.


  • Carl Lackey comments. Full excerpt: This might be the time to explain to newcomers here just who ERIC (ERISA Industry Committee ...Representing the employee benefits interest of the nations largest employers) really is...in very plain language.

    ERIC is a business ...a special interest Lobby Group focusing their efforts in pleasing Big Business. When they accomplish certain tasks in the interest of many large corporations, those corporations "reward" the lobby group with cash. Those companies frequently "provide seed money" for campaign funds, and huge bonus fund payments for "appropriate voting".

    One of the more effective strategies of this group is to sneak amendments into bills at the last minute. Indeed they did this with both the house and Senate versions of the Medicare Drug bill, and accomplished it without a reading on the floor. This is part of why many legislators are responding so well to our pressure regarding that issue. (Bill S.1 Section 631)

    In the referenced letter about HR 2989 regarding CB pension plans, the language "strongly urges" means that there is lots of campaign money at risk. Again, a sneaky technique that steps around the normal process is being used. If they win, we lose... big time.

    Immediate action is required by us ASAP and don't procrastinate. Bury their phone lines, please. Find numbers here:

    http://www.theorator.com/government/house.html

    http://www.theorator.com/senate.html

  • Australian IT: IBM adds 10,000 jobs this year. Excerpt: The Communications Workers Association's Alliance for IBM, an organisation seeking to unionise IBM workers, has called IBM's hiring plan "a smokescreen" to hide thousands of firings in the past two years. "What a PR scam," said alliance spokesman Lee Conrad. "We are looking at this pretty sceptically." ... The allure of sending some software development and services work to countries with lower wages than the US will be tough to resist, according to analysts and investors. Starting wages for a computer programmer in India are $US5000-$US7000 a year, compared with $45,000-$75,000 in the US, said Forrester Research analyst Stephanie Moore. "At least 50 per cent of the new jobs will be in low-cost countries," Ms Moore says."India is so strong right now because the cost is low and the quality is unbelievably high." Mr Palmisano visited India in May, the first time the head of IBM had visited the country.


  • Janet Krueger explains how IBM's Future Health Account works. Excerpt: 1) It is not vested—IBM can make it completely disappear at any point in time. 2) There are no actual accounts set up for it, nor an actual fund. 3) If it does stay in place, it is IBM script—you can only buy health insurance from IBM, and only for whatever IBM wants to charge. 4) At prices being charged retirees for their health insurance, once you start using the account to buy insurance, it will be used up in less than 5 years. 5) Of course IBM has been doubling the cost of retiree health insurance each year, so by the time you retire, it may not even buy a year's worth of insurance. 6) If IBM lays you off before you turn 55, you get nothing at all.


  • Wall Street Journal (October 25, 2001): Retiree-Medical Plans Are Transformed Into Source of Profits by Sears, Others, by Ellen Schultz. View Adobe Acrobat version [PDF--119 KB]. Excerpts: The rule also offered companies a way to arrange their financial statements so that retiree-benefit programs actually became new profit centers. Employers and benefits consultants have received heat recently for turning pension plans into sources of corporate income. Now, the transformation of retiree-medical programs into opportunities to bolster earnings demonstrates that these companies and their outside advisers possess multiple subtle methods to squeeze profits from their current and former employees. This latest corporate maneuver was made possible by Financial Accounting Standard 106. Accounting authorities required that large companies adopt the rule by 1993. At a time when medical-cost inflation was running in double digits, the rule was supposed to force companies to acknowledge the potentially huge retiree- Using Trust Funds to Pay Retiree Benefits. ... The seeds of the retiree-health windfall for many companies were planted in the late 1980s, when the Financial Accounting Standards Board, the accounting industry's rule-making body, began to develop standards for reporting retiree-health obligations. Major companies, such as General Electric Co. and International Business Machines Corp., played an active role in the process, suggesting ideas to the accounting board. Companies showed the board computer simulations of how various proposals would affect corporate bottom lines.


  • "ibmchaS " comments on IBM's changes to its retirement medical plan. Full excerpt: There is no doubt in my mind many retirees will be priced out of needed medical care, especially if you are still lucky enough to still have a living spouse. This reduction in needed medical care will not only reduce our quality of life, but will also shorten it. The sooner we die, the sooner we will be off IBM's pension rolls, saving them additional money. I worked for IBM for 40 years, of which about 35 were great. It was a family oriented company where honesty and respect for each other was number one. I still remember being told about the deferred compensation we would receive in the form of lifetime medical after 30 years of service. Passing this 30 year mark was a real milestone to be proud of. Then, new management came in, and all promises were considered null and void. For many, it was too late to plan for this major medical expense just before retirement. The IBM we once knew and trusted is now gone. We can't even talk to a live IBM person about our problems anymore. The Fidelity Investment "Firewall" took care of that.


  • St. Paul Pioneer-Press: Growing force fights threat to pensions. Excerpt: When Jim Norby says there's a war going on out there, he doesn't mean the battle against terrorism. He's talking about a war against much of corporate America. For Norby, the battle is against large corporations trying to curb retirees' pensions and health care benefits. Norby, who splits his time between residences in Pelican Rapids, Minn., and Palm Desert, Calif., is the president and principal spokesman for the National Retiree Legislative Network.
  • ... Now its membership is approaching 2 million, most of them members of affiliated associations representing retirees from about 20 large corporations. Increasingly, the network is also reaching out to the baby boom generation. Hundreds of members — typically in their 50s, but some in their 40s — are active IBM workers. They are concerned about that company's attempt to trim their pensions. The network is a creature of far-reaching changes in the "social contract" between corporations and their employees. ... Resistance to these plans has led the network into an alliance with IBM employees, galvanized by anger over the way the company's cash balance plan is slashing the pensions it promised to longtime employees. Former IBM-Rochester employee Janet Krueger has been a leader in challenging the plan, in litigation working its way through the court system. The IBM workers' cause has won backing from two congressmen with widely divergent political beliefs: Republican Gil Gutknecht, a conservative, from Rochester, Minn., and independent Bernie Sanders, a socialist, from Vermont. If link is broken, view Adobe Acrobat version [PDF--30 KB].

  • news.com.au (Australia): Westpac's IBM staff to strike. Excerpt: IBM Global Services employees who support Westpac's national computer system in Sydney have vowed to continue industrial action over working conditions. About 40 Finance Sector Union (FSU) members, who provide computing services that support Westpac's branches, credit cards and internet banking, will continue rolling strike action during the next fortnight. FSU NSW/ACT branch secretary Geoff Derrick said when Westpac outsourced the work in 2000, IBM Global Services promised to preserve members' existing employment conditions. "All they want is to have IBM promise to keep what they (the employees) have already got," Mr Derrick said. Staff rosters, meal breaks and travel allowance were among issues of concern, he said.


  • CNN: IBM caught up in Korea raids. Excerpt: Prosecutors searched offices of the South Korean arm of U.S. computer giant IBM Corp. this week to investigate allegations that the company bribed South Korean government officials, a local newspaper says.


  • Forbes: IBM Chief's $200 Million Bet. Excerpt: Intel Chairman Andrew Grove isn't the only business leader worried that the U.S. is losing its grip on tech leadership and innovation. IBM Chief Executive Samuel Palmisano is troubled too, and he's putting up $200 million of IBM's money to help the U.S. get through what he characterizes as a "critical moment." ... Intel Chairman Andrew Grove isn't the only business leader worried that the U.S. is losing its grip on tech leadership and innovation. IBM Chief Executive Samuel Palmisano is troubled too, and he's putting up $200 million of IBM's money to help the U.S. get through what he characterizes as a "critical moment." ... The $200 million will be spent to train 100,000 IBM employees to compete for "high-skill jobs" like services, middleware and Linux systems. These jobs, he says, may otherwise have gone outside U.S. borders to countries like India, South Korea and China, which are rapidly "replicating the structural advantages that historically have made the U.S. the center of innovation."


  • Forbes: Ex-IBM worker in Calif. tells of chemical exposure. Excerpt: A 73-year-old former IBM factory worker at the center of a landmark cancer lawsuit against the company told a court on Wednesday that she was regularly exposed to a thick, pungent-smelling chemical coating while working at a plant making computer disks. Taking the stand at a California court in the heart of Silicon Valley, Alida Hernandez, who blames exposure to toxins for her breast cancer diagnosis in 1993, said full-body protective garments, known as bunny suits, provided by IBM failed to keep out the chemicals she worked with. "You could see the brown coating on the bunny suit," Hernandez, the first person to testify in the case, told the jury. "It would go through my brassiere and get on my skin. It would go through the bunny suit and get on my arms." ... Lawyers for IBM said Moore smoked cigarettes for nearly a decade and had been exposed to chemicals in his earlier work on a farm and at a gas station.


  • KOTV Channel 6 News (Tulsa, OK): IBM lays off some Tulsa employees. Excerpt: An IBM spokeswoman does confirm that about 40 workers were laid off. But one of those workers says it was the way they lost their jobs that has them doubly upset. The worker told us their jobs are being moved to India. What's more, the worker says employees here trained their Indian counterparts, in other words trained the people that are taking their jobs.


  • National Retiree Legislative Network (NRLN): NRLN Members Write Letters to Editors. Excerpt: Many of the things happening to America's retirees are unethical, immoral, and, if not illegal, certainly represent breaches of moral obligations. Just a few years ago these acts would have been unthinkable. As the national president of the Lucent Retirees Organization advocating the interests of 127,000 retirees, their spouses and dependents, I believe there are several questions that millions of retirees need straightforward answers about from President Bush, and our Congressmen and Senators. ... Congress seems to support corporations no matter what they take away from people who were made commitments for lifetime pensions and health care. Many employees were even induced to retire with dollars paid out of pension funds. Once they retire, then the takeaways begin, not only for them but also for those who have been retired for years.


  • NRLN Newsletter: A View from Washington. Excerpt: Next, let’s get serious about how we communicate with our elected representatives. I’ve become increasingly convinced, over the last few months, that Congress knows what our problems are and, furthermore, they know how to fix them. They have, unfortunately, to date, chosen to follow the dictates of the lobbyists employed by our former employers. Individual Congressmen have made many excuses as to why they can’t go along with our requests for support. What they really have been telling us is that they would rather take the money support from the business interests rather than our voting support. There are exceptions, of course. This is an obvious generalization. But, the point is, that the above is true for the vast majority of our elected representatives. This has been hard lesson for me to learn over the last few years.

Coverage on H1-B and L1 Visa and Outsourcing Issues
  • Representative Bernard Sanders (Independent-Vermont): Free Trade Means America’s Biggest Export is its Jobs. Excerpts: Unsurprisingly, proponents of an unfettered free-trade seem unwilling to admit the error of their ways. This group, which includes virtually all of corporate America, every major editorial board, as well as Presidents George H.W. Bush, Bill Clinton, George W. Bush and Ronald Reagan, has told us for decades how many new jobs free trade would create here at home. Now the evidence is in and guess what — they were dead wrong. The exact opposite is true. ... So free trade has not only cost us our textile industry, our shoe industry, our steel industry, our tool and die industry, our electronic industry, our furniture industry and many others but will now cost us millions of high tech jobs as well. The United States needs to have a strong, positive relationship with China, but that does not mean allowing corporate America and its supporters in the White House and Congress to destroy the American middle class by making jobs America’s No. 1 export. If we continue to force American workers to “compete” against desperate people throughout the world, American workers will continue to lose.


  • Salon.com: Want to stop your job from being outsourced? Join a union. At least one systems administrator has had enough: It's time to hit the picket line. Excerpt: When I was a kid, my dad's pager was the least favorite item in our house. When he was on-call, my family couldn't go to dinner or a movie or Grandma's house, for fear that the contraption would go off and call him away to the office. When it did go off, and there weren't many weekends when it didn't, my dad would trudge to the phone, speak into it using loud and profane words, and then, if needed, put on his coat and shuffle off to the location of the latest emergency. Things got so bad, I seriously considered running over his beeper with my neighbor's Big Wheel. Was Dad a doctor, volunteer fireman or paramedic? Nothing of the sort. He was in I.T., before the term "information technology" ever existed. As a mainframe technician, he would be called in at a moment's notice to replace a defective board or swap large DASD units in order to keep a customer's big iron running. Although he endured many lost weekends and dirty looks from his wife and children, he did so knowing that his sacrifices would be rewarded with overtime pay, at time-and-a-half rates on many occasions. His sacrifice enabled my family to live a comfortable middle-class existence and provided my brother and me with quality college educations. In fact, both of us have followed in his footsteps, working as system administrators to pay the bills.


  • Salon.com: Gone in the blink of an eye. Berkeley researchers declare 14 million U.S. jobs are at risk of being outsourced. Excerpt: The report highlights in bright color two pressing questions. In this century, will Silicon Valley become the faded symbol of a race-to-the-bottom global job market in the same way that Flint, Mich., and its fading car-manufacturing factories did in the last? Or, will globalization bring new opportunities to developing economies that desperately need them? Salon spoke with Bardhan on the phone from his office in Berkeley, Calif., about the implications that outsourcing has for the U.S. labor market and the world. If link is broken, view Adobe Acrobat version [PDF--73 KB].


  • WashTech News: IT Workers Protest Offshoring at Boston Executive Forum. Excerpt: High-tech workers concerned about the offshore outsourcing of U.S. jobs conducted a sidewalk protest October 27 at a Forrester Group conference titled "Extending your business reach using the Internet." The Internet is used extensively in offshoring. Picketing on the sidewalk in front of the Westin Copley Hotel, protestors armed with signs and leaflets called for corporations and government to stop offshore outsourcing, which they say is damaging the U.S. economy. WashTech/CWA members and supporters handed out leaflets and talked to people about the more than three million jobs that are predicted to move out of the country in the next 10 years.
This week on the Alliance@IBM Site:
  • San Jose Mercury News: Valley paying close attention as worker safety case begins. Plaintiff win could spark similar suits. Excerpt: Opening statements in a closely watched trial that could have major implications for Silicon Valley tech companies began Tuesday with attorneys painting dueling portraits of corporate defendant IBM. While Richard Alexander, attorney for two workers suing their former employer, portrayed IBM as a company with little regard for the health and well-being of its employees, company attorney Bob Weber argued that IBM is a model for worker safety and has aggressively worked to provide safe environments for its workers. The suit, which contends IBM hid knowledge of unsafe working conditions from employees, is the first of more than 200 similar claims to go to trial. The outcome will be closely watched by the tech industry because a ruling for the plaintiffs could set a precedent and open up a flood of similar lawsuits.
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