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- The 2004 IBM Proxy statement, available from IBM's Web site in PDF format, includes statements
from the submitters of shareholder proposals as well as IBM's positions on the proposals. Many
of the proposals were submitted by opponents of IBM's pension and retiree medical takeaways.
Download proxy statement from IBM's site [PDF--288 KB].
- Providence Journal: Snip,
snip "In this country, they keep taking away health benefits." --
IBM retiree. Excerpts: In Vermont, where IBM's work force of roughly 6,000 makes it the state's
largest private employer, a job at the company's chip-manufacturing plant in Essex Junction
had always seemed like a lock on the future. But ask some retired IBMers in Chittenden County
what they think about the company, and what you hear is a lot of hard feelings. They say IBM
promised to take care of them -- for life. Nobody expected any less from Big Blue. Then the
bills began to arrive in their mailboxes. For one retiree and his wife, their share of their
health-insurance premiums this year more than doubled, to over $5,000. And that was after they
dropped their 22-year-old daughter from the plan. ...
True Blue. That's what they used to call themselves. Not anymore. RAY'S BARBERSHOP on Railroad Avenue
in Essex Junction is America circa 1950. Chrome-and-vinyl benches. Deer and caribou heads mounted on
the walls. And a guy in the chair getting a $12 haircut whose grandfather worked at IBM. "One of
the original 500," says
Dennis Relyea, a burly redhead seated in the chair by the wall. Trish Cook, the beautician, looks up. "You
mean Vinny?" All day, Cook hears customers talk about how IBM has changed -- how the workdays are
longer, the pensions smaller and the future is less secure. Guys like Dennis Relyea. His father worked
for IBM for 34 years; now he's retired and living in Port Richey, Fla. He drives a bus part-time to pay
for his health insurance. Dennis Relyea, 40, is third-generation IBM. He worked as a maintenance technician.
He didn't make it to retirement. He got laid off in October. He has a wife and two teenagers and no health
insurance. The old IBM was different, he says. "They took care of their people." Relyea stands
up and brushes the hairs off his Sports Illustrated sweatshirt. "Yeah, they talked up retirement
big," says Relyea. "You
put in your 30 years and get your 30-year retirement and everybody's happy. Then things turned."
SANDY ANDERSON e-mailed every IBM retiree he knew. He wanted to find out how they felt about
their health-insurance costs going through the roof. He wanted to fight back. Anderson is
62, with wispy white hair and blue eyes. The son of a stone mason, he worked as a supply manager
for IBM. He retired in 1997. On this afternoon, he is sitting at his kitchen table next to
Gary Sullivan, another former IBM manager. These were guys with six-figure salaries. "I was
one of these guys who got up every year and told the employees: 'Don't just look at salary.
You have to look at your total package,' " Anderson says over a mug of home-brewed
Starbucks french roast. "Implicit in what we were saying is: You had those benefits for
life." The IBM ethic bred a fierce loyalty. Now, it's fomenting a fierce rebellion. They
call their group Benefits Restoration
@IBM. They've e-mailed IBM retirees all over the country.
Every year, IBM holds its annual shareholders meeting in a different city. This year's annual
meeting will be at the Rhode Island Convention Center, in Providence, beginning at 10 a.m.
Tuesday. Anderson and other retirees plan to be there. "We decided we had to do something
more than just be angry," says Sullivan. "It
wasn't a battle that anybody could do on their own." Anderson points to his spreadsheets
and poster charts. "If IBM . . . one of the best corporate citizens, can do this," says
does not bode well for anyone else." Anderson believed in IBM and he sold its message. "We
created a culture where there were certain expectations," says Anderson. "And
what bothered us both more than anything else, was that we really felt like we'd lied to
people." If link is broken, view Adobe Acrobat
version [PDF--91 KB].
- Common Dreams: CEO Pay/Worker Pay
Ratio Reaches 301-to-1. Average Worker Takes Home $517 a Week; Average CEO $155,769 a Week.
Excerpt: From 1990 to 2003:
CEO pay rose 313%.
The S&P 500 rose 242%.
Corporate profits rose 128%.
Average worker pay rose 49%.
Inflation rose 41%. ... "While workers are increasingly anxious about their job security,
and how they will pay the rising costs of everything from health insurance to housing, from college
to gasoline, corporate executives continue to distance themselves from the cares and worries of
those they lead. It sends a poor message to demand cost cutting from the factory floor, while
costs in the executive suite are left to soar,"said Scott Klinger, spokesperson for United
for a Fair Economy, an independent national non-profit that raises awareness of growing economic
- Wall Street Journal: Looming
Accounting Change To Add To Cash-Balance Flap, by Arden Dale. Excerpt:
Employers that sponsor cash-balance pensions could face a big charge to earnings and see shareholder
equity reduced by a change accounting rulemakers plan to make soon. Companies would have to
measure owed pension benefits using a new method that would make obligations grow bigger, if
the Financial Accounting Standards Board of Norwalk, Conn., goes through with the change as
now planned. As a result, the pension liabilities that employers carry on their books would
swell, potentially exerting a big impact on balance sheets. The looming change has started
to stir opposition by pension advisers, adding to growing controversy over cash-balance plans.
The looming change comes at a time when cash-balance plans are already under intense pressure
from various quarters. The Treasury Department has been trying to address concerns that longer-service
workers don't get their fair share of benefits when companies convert from traditional to cash-balance
plans. Upping the ante is a recent court ruling in support of employees in a class-action lawsuit
against International Business Machines Corp. (IBM) that claimed the company disadvantaged
workers when it switched to a cash-balance plan. Concerns about age-discrimination have surrounded
cash-balance pensions for some time. In fact, the Internal Revenue Service stopped approving
new plans in 1999 in response to the controversy. Sen. Tom Harkin, D-Iowa, last month sent
a letter to the Treasury Department, the Labor Department, the AFL-CIO, the AARP and other
groups urging action to resolve the controversy over cash-balance plans. "Never again should
15 years go by while companies take action to move in new directions, practitioners attend conferences
to learn about those actions, industry trends are noted and written about, yet regulators wait and
watch," Harkin wrote.
- Jim Hightower: A Thud of a "Boom".
Excerpt: Despite George W's recent cheer leading effort to convince us that – sis-boom-bah, the economy is surging and The Boom Is Back! – most
Americans are shaking their heads and saying, a boom for whom? With the mass offshoring of
both blue-collar and white-collar jobs, and with the Wal-Maritization of wages and benefits here
at home, it's no longer just the unskilled, down-and-out, abject poor who are left out by our "boom
but also skilled, formerly-middle-class workers.
- Wall Street Journal courtesy of the San Francisco Chronicle: Businesses
are rethinking their use of peer comparisons in setting exec pay. Excerpt: A surprising discovery of the peer-group
study is the correlation -- or lack of it -- between pay and company performance. The study
found that CEOs with pay levels below their peer group's median got "larger pay increases,
even though their firms exhibit statistically significantly worse accounting and stock-price
performance relative to firms with CEOs whose pay is above" the median. "It doesn't seem
to matter how badly you've been performing," says Ms. Naveen. Other recent reports also found
fault with peer reviews. A report issued last August by former Securities and Exchange Commission
Chairman Richard Breeden, as part of his duties as the corporate monitor of WorldCom Inc., now
known as MCI, warned about the implications that benchmarking can have for executives' pay. "Excessive
compensation often results from 'benchmarking' exercises," which seek to identify certain
percentiles of pay, Mr. Breeden's report says. "If numerous companies seek to pay salaries
at a 75th percentile level, for example, this process will result in a steady spiral of compensation
as each company's award drives up the percentile level without correlation to the demands of the
- Inc.: Guard Your Exits! With the
job market slowly recovering, brace yourself for a tidal wave of employee turnover. Excerpt:
Ever since the bubble burst about three years ago, anyone with a job probably felt lucky to have
work at all. Fewer overall positions, meanwhile, have translated into demands for increased productivity,
leaving many employees feeling overworked and stretched to the limit. And employers, faced with
falling demand and dwindling margins, cut back on salaries, raises, benefits, and other perks.
It all added up to a kind of human resources perfect storm. "Every survey says people aren't
happy, but the talent has stayed put because there weren't many choices," says Beverly Kaye,
author of Love 'Em or Lose 'Em: Getting Good People to Stay. "That's not going to
be true for long."
- "Tom Zark Richards
IV" offers advice.
Excerpt: An important consideration if you are still working for IBM and are
eligible for retirement (at the rate that IBM has been terminating
older folks this is a very small population) may I suggest that you
may wish to get out of IBM while you are still young enough to work
for the time required to get a decent retirement health benefit
somewhere else. A number of enterprises will give you full health
benefits after you reach 60 and work for a number of years, sometimes
as few as two (my case). Now mind you, do understand that the IBM Retirement Health Benefits
have been extended to this year. The fine print of the IBM Retirement
Health Benefits states clearly that not only will IBM never increase
the coverage (which even now in really pathetic) but can withdraw the
benefit at any time. So if you only have the IBM Retirement Health
Benefit, you actually may have nothing in a few years.
- CIO.com: AT&T Wireless Self-Destructs.
The story of a botched CRM upgrade that cost the telco thousands of new customers and an estimated
$100 million in lost revenue. Hard lessons learned. Excerpt: The breakdown couldn't have come
at a worse time for AT&T Wireless. It deprived the telco of thousands of potential new customers
and cost the company an estimated $100 million in lost revenue. But that wasn't all. The failure
so damaged AT&T Wireless's reputation that many analysts believe it hastened its sale to Cingular
in February for $41 billion, or $15 per share, which was just under half the value of AT&T Wireless's
shares when it went public in April 2000. While an AT&T Wireless spokesman says the company
would have been sold regardless of the fiasco because "it was the right thing to do," the
crash and resulting confusion could not have helped AT&T cut a good deal. "The system problems
made AT&T look like a wounded provider, and the sharks smelled blood and circled," says
Roger Entner, a wireless and mobile services analyst at The Yankee Group, a research company.
AT&T Wireless's mistakes offer valuable lessons for CIOs. For one, it's unwise to freight
major system upgrades with external complications. AT&T Wireless's CRM upgrade was hamstrung
from almost the very beginning by rumors of outsourcing deals and future layoffs. These rumors
generated pervasive morale problems that hurt the productivity of project staff. ...
Compounding these difficulties was the hit employee morale had taken on Nov. 16, when AT&T Wireless
President and CEO John Zeglis confirmed the layoff rumors. Zeglis told analysts in a third quarter
conference call that the company would lay off 1,900 workers. He did not say where the cuts would
come or when. But IT managers started telling employees that layoffs would begin in February 2004,
according to former employees. Some AT&T Wireless IT employees had gotten hold of a report prepared
by Tata Consulting Services of India outlining plans for offshoring pieces of AT&T Wireless's
IT infrastructure. The report, obtained by CIO, also lays out plans for offshoring a portion of the
support and maintenance for the new Siebel system. "You had to wonder why you were working so
hard if the whole thing was going to go away anyway," says a former project employee.
By January, AT&T Wireless was in the advanced stages of plans to move overseas more than 3,000
positions in its computer operations and customer service, according to The Wall Street Journal.
(It backed off from the plan only after agreeing to be purchased.) Some employees became part of
Wireless's "buddy program," in which consultants from Indian outsourcing companies Tata
Consultancy Services and Wipro were assigned to AT&T Wireless employees to learn their jobs. In
February, 220 AT&T Wireless IT employees were told that they would be released from the
company in March. According to one of the terminated employees, another round of 250 layoffs
is planned for June and the same number for September. "It's tough," an employee said in
February. The Indian workers "basically follow people around all day and pepper them with questions." Other
former employees say some staffers resisted helping the consultants. "People would make project
decisions when the Indians weren't around," a former employee says.
- Slate: Capitalists for Hillarycare.
Look who's supporting universal health care now. Excerpt: The American health care system, a
patchwork of government-provided benefits overlaid on a voluntary system of private-sector coverage,
is a case study in economic inefficiency. Companies that provide health care to employees put
themselves at a disadvantage to competitors—domestic and foreign—that don't. And because
uninsured people frequently receive care—from the government or hospitals—those who
pay for health care are essentially subsidizing those who don't. In the early 1990s, big business
largely opposed Hillary Clinton's ill-conceived effort to establish a government-run universal
health insurance plan. But over the past several years—and especially
in the past year—large corporations, and the trade groups that speak for them, have been
subtly changing their tune.
- New York Times Magazine:
Can We Talk About Health Care?, by Hillary Rodham Clinton. Excerpt: I know what you're thinking.
Hillary Clinton and health care? Been there. Didn't do that! No, it's not 1994; it's 2004. And
believe it or not, we have more problems today than we had back then. Issues like soaring health
costs and millions of uninsured have yet to fix themselves. And now we are confronting a new
set of challenges associated with the arrival of the information age, the technological revolution
and modern life. ... The way we finance care is so seriously flawed that if we fail to fix it,
we face a fiscal disaster that will not only deny quality health care to the uninsured and underinsured
but also undermine the capacity of the system to care for even the well insured. For example,
if a hospital's trauma center is closed or so crowded that it cannot take any more patients,
your insurance card won't help much if you're the one in the freeway accident. Let's face it
-- if we were to start from scratch, none of us, from dyed-in-the-wool liberals to rock-solid
conservatives, would fashion the kind of health care system America has inherited. So why should
we carry the problems of this system into the future?
The globalization of our economy has
changed everything from how we work as individuals to what we produce as a nation to how quickly
diseases can spread. American companies -- and workers -- compete not only with one another but
all over the world. It is called competitive advantage, but it can put American businesses and
workers at a disadvantage. The United States' closest economic rivals have mandatory national
health care systems rather than the voluntary employer-based model we have. Automakers in the
United States and Canada pay taxes to help finance public health care. But in the United States,
automakers also pay about $1,300 per midsize car produced for private employee health insurance.
Automakers in Canada come out ahead, according to recent news reports, even after paying higher
taxes. At the same time, American companies are outsourcing jobs to countries where the price
of labor does not include health coverage, which costs Americans jobs and puts pressure on employers
who continue to cover their employees at home. And many new jobs, especially those in the service
sector and part-time jobs, don't include comprehensive health benefits. More uninsured and underinsured
workers impose major strains on a health system that relies on employer-based insurance. In addition,
the failure of government to help contain health costs for employers has led to a fraying of
the implicit social contract in which a good job came with affordable coverage.
- Employee Benefit News: Will cash
balance plans survive? Excerpt: Conversions have not been free
of controversy. The Web site www.cashpensions.com dedicated
to those with the "cashpension
blues," presents information on past conversions and on litigation now under way. The site
states: "If you have the "CASH PENSION BLUES" or any concerns regarding any benefit
reduction(s) due to your company's pension plan changes ... you have come to the right place
to find facts, contacts, gather more information and/or take actions to pursue pension and benefit
reduction grievances or concerns!! If your company has not already slashed your benefits, yours
could be next ... educate yourself before it happens." ... The biggest pending case is Cooper,
et al. vs. IBM in the Southern District of Illinois, in which the initial opinions of Chief District
Judge Murphy are interpreted by both sides as having the potential, if applied broadly, to make
all existing plans illegal under ERISA and the Code of Federal Regulations in the absence of
remedial legislation. Historically, Congress has waited for such decisions to come down in final
form before considering such remedial legislation. Since that final action could involve the
Supreme Court, the current uncertainty could stretch out for years. As a result, conversions
have come to a virtual standstill. Employer decisionmaking on defined benefit plans, however,
has not. Studies previously reported in this publication from Hewitt Associates, Mercer Human Resource
Consulting and AON found that many employers were freezing their current defined benefit plans,
others were planning to do so, and still others were contemplating plan termination and movement
to sponsor only a defined contribution plan.
- Center on Budget and Policy Priorities: New Retirement
Medical Account Proposal Would Create Lucrative Tax Shelter and Swell Deficits, But Do Little
to Help Low- and Moderate-Income Seniors with Health Care Cost. Excerpt: Some Members of Congress, including Senate Majority Leader Bill
Frist, have recently expressed support for a new health tax-cut proposal. The proposal, which
would create new Retirement Medical Benefit Accounts (RMBAs) and was apparently designed by Fidelity
Investments, first surfaced during negotiations last fall over the Medicare prescription drug
legislation. ... Due to the lucrative tax break that RMBAs would create, the cost of the RMBA
proposal would escalate substantially over time, worsening the already-dire long-term fiscal
outlook. The proposal also would set a dangerous precedent by allowing substantial amounts deposited
on a tax-deductible basis in retirement accounts such as IRAs and 401(k) plans to be withdrawn
tax free in retirement for designated purposes. Because of the adverse long-term fiscal effects
of RMBAs, the RMBA proposal would further constrain the resources available to finance Medicare
and other basic programs in the future. In addition, RMBAs could be used, as budget problems
mounted, as a justification for cutting Medicare fairly heavily through the imposition of substantially
higher premiums, deductibles, and/or cost-sharing charges or the elimination of coverage for
some significant health care services. Over the long term, the likely result of RMBAs would be further
deterioration of an already grim budget picture, further enrichment of the most affluent members
of society, and more intensive pressure to scale back the quality or affordability of the recently
enacted Medicare drug benefit, Medicare coverage overall, or both.
- Reuters: GAO
Chief Urges Major Health Care Overhaul. Excerpt: The U.S. health-care system needs
a major overhaul in order to control long-term costs and improve the quality of medical care,
the head of Congress' nonpartisan watchdog agency said on Friday. Health-care costs are rapidly
adding to the federal debt, plus straining employers and workers who pay parts of the bills,
warned David Walker, the U.S. comptroller general and head of Congress' General Accounting Office.
- BenefitsLink: IRS Issues Proposed
Anticutback Regulations. Excerpt: The IRS this week issued comprehensive
proposed regulations that would define the scope of the anticutback rule and provide exceptions
for eliminating early retirement benefits, retirement-type subsidies, and optional forms of benefit
from defined benefit plans. 69 FR 13769 (March 24, 2004). Plan sponsors may not rely on these
proposed regulations until they are adopted in final form. The deadline for submitting comments
to IRS on the proposed regulations is June 22, 2004. Following is a summary of some of the proposed
regulations' key provisions.
- New York Times: Commission
to Allow Insurance Cuts for Retired Employees. Excerpt: The Equal Employment
Opportunity Commission voted Thursday to allow employers to reduce or eliminate health benefits
for retirees when they become eligible for Medicare at age 65. The agency approved a final rule
saying that such cuts do not violate the civil rights law banning age discrimination. The vote
was 3 to 1, with Republicans lining up in favor of the rule and a Democrat opposing it.
| Coverage on H1-B and L1 Visa and Off-Shoring Issues
- USA Today: Workers
take on foreign outsourcing. Excerpt: The Communications Workers of America (CWA) Pension
Fund is asking Sprint to look at its foreign outsourcing to see if it may hurt the company's
brand name and reputation. A resolution to that effect will be considered at the company's
shareholder meeting today in Overland Park, Kan. Sprint spokesman Mark Bonavia says determining
the impact on reputation "could require
us to speculate on something that might never occur." Alliance
at IBM, a group of several
thousand current and former employees formed after IBM changed its pension program, is
changing its priority to offshoring. A rally is planned for April 27 after the IBM shareholders
meeting in Providence.
- Kansas City Star: Union
plans action against Sprint policies. Excerpt: The Communications Workers of America said
Monday it will initiate a campaign to force Sprint Corp. to change policies it said “abuse” employees.
Representatives of the union, who are expected to demonstrate outside Sprint's annual shareholder
meeting this morning, held a planning session Sunday and Monday in Overland Park. A union official
said the union's concerns involve cuts to employees' health-care benefits and Sprint's decision
to outsource certain jobs overseas.
- Network World: Sprint CEO
Gary Foresee addresses outsourcing. Excerpt: Sprint Chairman and
CEO Gary Foresee Tuesday defended the company's need to find the best suppliers and partners
-- sometimes though outsourcing -- as he addressed concerns raised by some disgruntled employees
and shareholders worried about potential job losses.
- Washington Post: Putting
a Human Face on Outsourcing. Excerpt: "Outsourcing" is one of those impersonal buzzwords
that politicians and corporate muckity-mucks love to bandy about, but the word itself seems
to downplay how personal an issue this is to the technology workers whose jobs are moving
to India, Eastern Europe and other cheaper labor markets. Enter Fast Company. The technology magazine's
latest issue puts a microscope on outsourcing's human fallout, as editor John Byrne makes
clear in his introduction to the package: "It
may be that competitive organizations have no choice but to play the labor arbitrage game
to survive. It may be that a new wave of innovation and creativity will lead to new industries
and new jobs. But in the meantime, millions of smart, talented, diligent people are losing
something, and that will change them and their families forever. Their loss should never be discounted,
dismissed, or ignored."
- Computerworld: ITAA's
Job Dream. Excerpt: Here's a comforting bedtime story: Offshoring won't just save companies
money. It will also create jobs. And reduce inflation. And grow the economy. Those are
the top-line conclusions of a new report from the Information Technology Association of
America, the IT vendors' lobbying group. Just don't read very far past that top line --
at least, not if you want to get any sleep tonight. See, the report says those new jobs
won't be IT jobs. And that reduced inflation will come in part from lower pay -- "wage
it's charmingly dubbed by the report's principal author, Global Insight Inc. chief economist
Nariman Behravesh. And that economic growth depends on the willingness of the foreign employees
who get our offshored jobs to spend their paychecks on U.S.-made exports. Don't take my
word for it. It's all in the report, brought to you by the people who, just a few years
ago, were saying that the U.S. desperately needed to increase its IT workforce. Yes, really.
Since early 2000, the ITAA has predicted the creation of more than 4 million new U.S. IT jobs
-- 1.8 million of which would go begging because there just wouldn't be enough IT people to
- Computerworld: Lost
Your Job Yet? Excerpts: Frank Hayes' fears about techies bailing out of a declining American
IT workforce are already being realized ["ITAA's
Job Dream"]. I've done it. I concluded that IT is largely a dead-end career for Americans
and opted out so that my wife could pursue advanced degrees in education and move up in
a field that can't be so readily outsourced or filled by guest workers. I rebelled at my
former employer's "wage
compression," outsourcing and use of H-1B and L-1 visa holders. ... Though people like
Miller and Fiorina deny it, America's displaced IT workers don't lack for skills or education.
There is no urgent need for guest workers and no internal shortage of technically trained
workers. Technology hasn't made American IT workers outmoded. Access to cheaper, more submissive
and more manageable non-American labor has just made American IT workers undesirable and
frequently unemployable. ...
Free-trade and outsourcing proponents publicly hold out the option of retraining into other
professions, but these other professions are mostly unidentified. The reality, as I told
Bob Herbert, is that there aren't any new middle-class postindustrial jobs for displaced
Information Age workers. There are no opportunities to leverage our experience into higher-value-added
jobs. Instead, there are persistent credible accounts of software engineers taking low-wage
unskilled jobs just to survive. ... There is no employment rebound for IT workers. Recent
college grads or new entrants into IT can't even get jobs on help desks, which are now increasingly
moving offshore. The reports from companies such as Challenger, Forrester and Gartner all
point to increased IT outsourcing and use of IT guest workers. "Global competitiveness" sounds
good in corporate boardrooms and political speeches, but the reality is that increasing numbers
of American IT workers are suffering and losing confidence in our political and business
leaders. We are locked in a merciless, unrestricted competition with low-wage workers of
the developing world. This is ultimately an unwinnable competition. American IT workers,
like many in the middle class, are learning that education, skill and hard work are no longer
indicators of success. It's all about cheap labor -- a fact not lost on Harris Miller, Carly
Fiorina, Mark Hurd and Sam Palmisano. (Editor's note: This is a must read article. It thoroughly
debunks the ITAA's and corporate America's argument that "outsourcing is good for the country.")
If link is broken, view Adobe Acrobat version [PDF--74 KB].
- BusinessWeek: Job
Exports: Europe's Turn. It's following the offshoring trend -- and much of it is white-collar.
Excerpt: Norwich Union is as British as fish and chips. A unit of Aviva PLC, a London financial-services
group, it's the country's No. 1 insurer, boasting a workforce of 30,000 spread across Britain.
But hundreds of those people will lose their jobs in the next few months, and other vacant
positions will go unfilled, as Norwich Union shifts 3,700 customer service and back-office jobs
to India. "There's
a big cost advantage,"says Simon Machell, Norwich Union's customer-service director. Indeed,
the company's costs per employee in India average less than half the figure in Britain.
And while many British university graduates shun call-center jobs, in India Norwich Union has
been swamped with résumés from highly qualified Indian graduates.
- BusinessWeek: Dell's
Hiring Binge -- Abroad.
Of 7,000 jobs it added in 2003, only 1,000 were in the U.S. The PC giant now employees
more workers overseas than at home. Excerpt: Dell, which is always looking for more efficient
means for building, distributing, and servicing its growing product line, has been one of the
more active outsourcers around. It manufactures all of its notebook PCs in Penang, Malaysia.
And it runs call centers in Panama and India that respond to tech-support questions from customers
around the world, including the U.S. Dell even created a minor stir when complaints from some
corporate customers about the quality of support they got from the Indian locale led it to
reroute their calls to the U.S.
- Newsweek Business, care of MS-NBC: Should I
Stay or Should I Go? Sending jobs offshore to countries like India seemed like a sure
bet. Now, some firms are having second thoughts. Excerpt: Wesley Bertch admits he fell
for offshore outsourcing "hook, line and sinker." So when Bertch, chief techie for
Minneapolis-based Life Time Fitness, a health club chain, needed software to evaluate potential
new locations for gyms late last year, he looked overseas where he could pay $6 an hour instead
of $60 for programmers. He hired a large, reputable Indian outsourcing firm a few months ago,
then sat back and watched his troubles mount. Not only did the offshore team produce code that
was full of bugs, they ran up big bills working overtime to fix their mistakes. Bertch finally
canned the offshore contractors, hired several local programmers and started preaching to industry
colleagues that managing such projects across oceans is doomed to failure. His biggest
since talked to scores of my peers, and we are all singing from the same hymn book," Bertch
afoot to exempt 20k from H-1B cap. The
bill would allow hiring of more foreign grads with advanced degrees. Excerpt:
The bill, introduced earlier this month by Rep. Lamar Smith (R-Texas), is supported by
Compete America, a coalition of manufacturers, academic groups and IT vendors such as Microsoft
Corp., Intel Corp., Oracle Corp., and Sun Microsystems Inc. This year's H-1B cap of 65,000
was reached in mid-February, less than five months after the Oct. 1 start of the federal
fiscal year. Smith's bill, the American Workforce Improvement and Jobs Protection Act,
wouldn't raise the cap, but it would exempt from that limit up to 20,000 graduates with
a master's degree or higher from a U.S. university.
- New York Times editorial by Thomas L. Friedman: Losing
Our Edge? Excerpt: I was just out in
Silicon Valley, checking in with high-tech entrepreneurs about the state of their business.
I wouldn't say they were universally gloomy, but I did detect something I hadn't detected
before: a real undertow of concern that America is losing its competitive edge vis-à-vis
China, India, Japan and other Asian tigers, and that the Bush team is deaf, dumb and blind
to this situation. ... The bottom line: we are actually in the middle of two struggles
right now. One is against the Islamist terrorists in Iraq and elsewhere, and the other is a competitiveness-and-innovation
struggle against India, China, Japan and their neighbors. And while we are all fixated on the
former (I've been no exception), we are completely ignoring the latter. We have got to get our
focus back in balance, not to mention our budget. We can't wage war on income taxes and terrorism
and a war for innovation at the same time.
on the Alliance@IBM Site:
Call to Action: Major Anti-Offshoring Rally. Join Us at the IBM Shareholders'
Meeting Lend your voice to protect American High Tech Jobs The Alliance@IBM/CWA Local 1701
will join Jobs with Justice, the Programmers Guild, TORAW and other organizations to hold
a major rally against offshoring of American jobs by U.S. high tech companies.
When: April 27, 2004
Where: Rhode Island Convention Center, Providence RI. The rally will be
held in the plaza outside the rotunda entrance to the Convention Center.
Time: Immediately following the IBM Shareholders' Meeting, about 11:30 am.
Demonstrators who wish to join us are welcome. Please contact Ralph Montefusco for more
information, (802) 598-5613 or email at Rmontefu@Sover.Net
Press: All press reporters are welcome. We are available for interviews
the day before the event, the morning of the event, and during the event. Please contact
the Alliance Office at (607) 658-9285 or email us at firstname.lastname@example.org.
to the Center are here. The Train station is about 6-7 blocks away for those who prefer