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    Highlights—May 15, 2004
  • iSeries Network: IBM Retirees Protest at IBM Shareholders' Meeting. Excerpt: Mike Seville, once part of Rochester's AS/400 team, now lives in the Salt Lake City area. He traveled all the way to Providence, Rhode Island, week before last to deliver several strong messages to IBM about the way Big Blue is treating its employees, past and present. "IBM retired me in 1998 after 32 years. IBM left me, I didn't leave them," he says. Seville and other retirees traveled miles to voice their concerns and present resolutions to the stockholders. The activity began on Monday, April 26 when Sandy Anderson, among others, attended a press conference of Alliance@IBM to discuss offshore outsourcing of IBM jobs, the cost of medical insurance for IBM retirees, and issues related to disclosure of IBM executive compensation, all while CNN and other network news outlets listened. Anderson spent more than three decades with IBM and retired in 1997. He's not proud of his past employer. "I was one of the management people who told folks that their retirement was safe," he says. "Now I feel like I lied to them." ... Rather than attend the Town Hall Meeting, Don Parry, yet another three-decade IBM employee, retired since 1990, opted for the rally. Parry says, "Many IBM retirees don't trust IBM anymore, and they certainly don't trust Randy MacDonald. It's hard to be sympathetic to the IBM management when it looks like Palmisano has a pension of about $677,000 per month."


  • Letter sent May 1st, 2004 to IBM Canada General Manager Mr. Edwin J. Kilroy from COMJUST, The Committee for Just Treatment of IBM Canada Retirees [PDF--65 KB]. Excerpts: IBM Canada retirees feel abandoned and betrayed. They believe IBM has not fulfilled its assurances regarding regular pension increases and lifetime benefits. Some have written letters to IBM executives, others have expressed their frustration on the REWIND web site. IBM's discouraging responses have relied upon disclaimers of questionable applicability. We are co-chairs of a group of retirees who came together to assess the merits of retiree concerns and determine if retirees would support an organized way of addressing their concerns. Our group adopted the name COMJUST ("The Committee for Just Treatment of IBM Canada Retirees"). We have broad support from retirees and have received input from many of them. They have described the lifetime benefits and regular ad-hoc increases they were led to expect, their perception of IBM's track record, its impact on their retirement, and what they want – both to address the problems and to restore some of the respect they once had for IBM. Our findings, as set out in the attachment, lead us to conclude that IBM has breached its agreement with and failed in its fiduciary duty to employees who have retired."


  • COMJUST, The Committee for Just Treatment of IBM Canada Retirees, has as its mission "To compel IBM Canada Ltd. to treat all retirees in a manner consistent with the company’s basic beliefs and the representations made to them at the time of retirement with respect to ad hoc pension increases and the maintenance of benefits."


  • Syracuse Post-Standard: Oneida executive apologizes to retirees. Troubled company cut their health insurance coverage. "Nobody saw this coming." Excerpt: No one at the meeting publicly challenged Allen about the company's decision to eliminate the health insurance. But the issue bubbled beneath the surface. "I figured my health insurance was protected; that's why I took an early out when they cut back," said Ken Smith, of Vernon. He worked for the company for 34 years, and served on its employees advisory board, before retiring early. But those who took the job he retired from saw their jobs cut too, Smith said. "We never brought a union or anything in here," Smith said. "We could have, but we didn't, because we had somebody in, like when Pete Noyes was here, that took care of the people." Pierrepont T. Noyes, the former chief executive officer of Oneida Ltd., died in 1992. "I think it's rotten," said L. William Ashley of Sherrill, who sat on the advisory board with Smith and served as its chairman. "The people in the factory are devastated. They froze their pensions and cut their wages, then top management gives themselves a raise," he said "That's demoralizing. This used to be a great company. I was proud to work here; now I'm ashamed to say I did."


  • IBM: Ethics magazine names IBM among best corporate citizens. Excerpt: IBM was among the 100 best corporate citizens cited this year by Business Ethics magazine. This is the fifth time the company has made the list since the magazine began it in 2000. IBM, which ranked 12th on the list, scored particularly high for its relationships with minorities and women.


  • Minneapolis Star-Tribune: Executive pay: Incentive to cheat? Excerpt: Executive compensation, largely in stock options, has skyrocketed during the past two decades. Why? Has the supply of or demand for executives changed radically in recent years? Were executives so much less valuable 20 years ago? Several factors might contribute to the pay explosion. And, new research has shown, exploding pay packages should be viewed as an indicator of possible trouble ahead. ... The norms of top managers also seem to have changed. Managers at American Airlines, for example, did not appear embarrassed or ashamed to get large bonuses and pension protections the day after they asked employees to take pay cuts to avoid layoffs. Many top managers have no shame over receiving excessive compensation. While we do not know which factors matter most, we do know several things. Employees recognize hypocrisy when they see it. A hypocritical manager advocates "leading by example" but feathers his nest while cutting employee wages. A manager who pretends "we're all on the same team" cannot divide the world into two different teams. At effective organizations, employees care. While managers can push and threaten employees to extract concessions and formal compliance, real cooperation and high performance comes from employees identifying with the organization. Pretending to care and actually caring differ.


  • USA Today: Employers consider insurance pools. Excerpt: Millions of Americans work for companies that provide health insurance but don't qualify for it because they are part-time or contract workers. On Monday, 45 of the nation's largest employers, including IBM, Sears Roebuck, Ford Motor, Gap, Home Depot and Textron, will unveil a possible solution — pooling all of their uninsured workers, then seeking an insurer willing to offer them a variety of health policies at prices lower than the workers could get individually. ... "We're tired of waiting for people to figure out what to do about the uninsured," says Randy MacDonald, senior vice president of human resources at IBM. "We could not get that reform through the halls of Congress," he says, "so we are reforming the marketplace." The idea comes as health insurance becomes increasingly unaffordable for many workers, but critics question whether uninsured employees will be able to afford insurance even at the group price, as the companies are not going to help pay for the coverage.


  • Workforce Management: Today's Mantra for Employees: More, More, More! Excerpt: Whether it's technology, fancy management techniques, financial incentives or bosses just pushing employees to step up the hours in a workweek, today's mantra for boosting revenues is "worker do more." Some productivity approaches work. Others just get companies in hot water. And the risk of employee burnout still looms large.


  • Workforce Management: Employees Are Close to the Breaking Point. Excerpt: "We’ve reached a breaking point," says Tony Lee, editor in chief of CareerJournal.com, an executive career site published by the Wall Street Journal, about companies pushing workers to be more productive, especially when they don’t see the extra sweat end up in their paychecks. Corporate profits continue to rise, and workers aren’t getting their fair share, experts say. A study put out in March by Northeastern University’s Center for Labor Market Studies, titled "The Unprecedented Rising Tide of Corporate Profits and the Simultaneous Ebbing of Labor Compensation: Gainers and Losers from the National Economic Recovery in 2002 and 2003," tells the story. It found that corporate profits accounted for nearly 41 percent of the change in national income between the first quarter of 2002 and the fourth quarter of last year. That exceeded the share employees got in their paychecks. "In no other recovery from a post-World War II recession did corporate profits ever account for as much as 20 percent of the growth in national income, and at no time did corporate profits ever increase by a greater amount than labor compensation," the report states.


  • Houston Chronicle: Surge in corporate profits not reaching average workers. Excerpt: U.S. corporate profits surged 87 percent from the third quarter of 2001 to the end of 2003, according to Commerce Department figures. Wages and salaries grew 4.5 percent. The increase in workers' pay was the smallest for the first nine quarters of any recovery since World War II, said Barry Bosworth, who directed the White House Council on Wage and Price Stability during Jimmy Carter's administration. After inflation, real wage gains were 1.1 percent, Bosworth said. "What you have here is a dual economy," said Bosworth, now an economist at the Brookings Institution, a research group in Washington. "You can talk all you want about the benefits from the rapidly expanding economy, but the only people who have gained have been the stockholders."


  • Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. Some sample posts follow:
    • In "Hot Buttons to Press" "Dose of reality" offers advice to potential IBM Global Services consultants. Excerpt: To the excellent and timeless advice from Ancient, I would add the following. The IBM culture and HR polices are decidedly not for everyone, to put it mildly. Your willingness to work within the confines of this environment are probably the most critical trait that your recruiter will be looking for. Without going too much "over the top", you need to demonstrate that you are the type of person who will work exceedingly long hours, with little incentive pay as reward, meager raises, extreme flexibility with regard to work/life balance, acceptance of any role that is asked of you, regardless of its fit with your career goals, and a tolerance for administrative inefficiency.

  • American Prospect: Future Retirees at Risk. Bush's "ownership society" would replace existing social-insurance systems with personal savings accounts. His approach threatens to make old age and poverty synonymous again. Excerpts: Retirement security for middle-class Americans is at risk. First, the push to privatize Social Security has diverted attention from solving the program's financing problems. Second, unchecked reliance on 401(k) plans has made employer-provided pensions less reliable. Third, the president's "ownership society" initiative has led to policy proposals that undermine pension coverage and splinter the health-care system. Finally, massive budget deficits have now made it more difficult to fix Medicare and Social Security. ... Social Security, private pensions, and our employer-sponsored health-insurance system have been extremely successful programs. Because of them, being old in America no longer means being poor. But this success is about to be reversed. Enthusiasm for replacing our existing social-insurance systems with personal savings accounts and a gutted federal budget threatens to make old age and poverty once again synonymous for much of the American middle class.


  • Jim Hightower: The Grand Larceny of Pinstripe Thieves. Excerpt: If a thief broke into your home and stole a couple of thousand dollars that you'd carefully saved from your paychecks and stashed away over the last three years, you could call the cops and try to get your money back. But who do you call when that thief is the CEO of your company? CEOs have been routinely stealing hundreds and even thousands of dollars from the deserved paychecks of each and every worker in America, pocketing much of this loot themselves and converting the rest to corporate profits. The grand larceny of the CEOs is that they've been filching every workers' share of the enormous productivity gains that America has racked up since the recession officially ended in November of 2001. Productivity is the increase in products or services that each worker churns out – and Americans have been phenomenal at this, fueling an explosion of new economic growth.


  • Jim Hightower: "Fixing" Social Security. Excerpt: Wouldn't you be a little skeptical if you took your car in for a routine checkup and the repair shop said it had found a mysterious and costly problem deep in the engine that "needs fixing"––even though you can't detect any problem at all? Welcome to the shady world of today's Social Security mechanics, including politicos of both parties and a phalanx of banking lobbyists. They're telling us in the direst terms that there's a major problem deep in the Social Security system that must be fixed right away. The "fix" is going to be costly, they solemnly inform us––it'll require raising people's retirement age to as high as 70, cutting the monthly payments for retired workers, and even privatizing part or all of this public safety net for retirees. But we must accept these fixes, they warn, or the whole system will sputter and die. B. S. ALERT, B. S. ALERT! Of all government programs––including the bloated, fraud-ridden Pentagon––Social Security is least in need of fixing. It's the most efficient program we have, requiring a mere one-percent of its total budget for administrative costs. And even the political mechanics who want to mess with the program admit that Social Security is perfectly sound and capable of paying full benefits to future retirees through at least 2042. What insurance company or bank can make that claim? And with only minor adjustment, the system is solid through 2075––long after most of today's "fixers" will be dead.


  • The Benchmark Companies: The Heat is On Pension Consultants. Excerpt: Faced with mounting allegations of wrongdoing, lawsuits and regulatory scrutiny, the pension consulting industry is bracing for harder times ahead. Quietly some of the larger firms are retiring or replacing key senior managers who have overseen pay-to-play schemes, spinning off conference organizing and money manager marketing operations and erecting “Chinese Walls.” Since it is virtually certain that full disclosure of sources and amounts of their conflicting revenues will be required either as a result of growing client sophistication or SEC rule in the near future, firms today are implementing strategic changes intended to blunt criticism once the numbers come out. The goal is to reduce the appearance of impropriety.


  • "madinpok" reports on employee morale in the Server Group. Full excerpt: A lot of folks in server group who knocked themselves out over the last couple of years to get the new round of servers out the door were really angry when their reward for all their hard work was no raise at all this year (40% of them got nothing). The poor treatment has finally become too much and they are saying "never again." Now personal stuff takes priority over work and there are far fewer people are willing to work long days and weekends. Even many of the younger folks who normally don't understand what the older guys are complaining about have seen the light and are putting in a lot less effort than they used to.

Now on the Alliance@IBM Site:
  • Alliance@IBM has heard of job cuts in the past few weeks. This affects regular employees and contractors. Contractors have faced numerous pay cuts over the past few years. For many contractors, pay has been cut 20% in the last two years. Please send any information to: endicottalliance@stny.rr.com The Alliance needs copies of resource action cover sheets, and "employees selected" pages. You can fax them to Alliance@IBM at: 607-658-9283.


  • PBC Alert. Full excerpt: Contrary to information you may have received from your manager regarding the new PBC ratings, and a 'clean slate' this year for a previous "3" performance rating; the Alliance has been receiving information that employees getting two 3's in a row, are being fired anyway.


  • Letter to Australia IGS General Manager from employees being offshored. Excerpt: Some time ago the Community and Public Sector Union (CPSU) raised a proposal that IBM manage any job losses associated with the IBM India role transfer by a company wide call for voluntary redundancies, allowing job swaps and staff retraining. If IBM were to agree, this would allow people who may have mortgages and young families - highly motivated staff who desperately need the work - to swap roles with those who may want to leave the company. We believe this is a reasonable proposal and is in line with the company's policy of investment in people and commitment to training. In light of the extremely upbeat presentation and excellent profit announcement by you at the kick-off meeting in February, we also believe that this request is easily within the means of a large, profitable company like IBM.


  • Demonstration at IBM La Gaude. Site employees worried for their jobs. Excerpt: On Thursday, May 6th, from 7:30 to 10:00AM, employees from IBM Microelectronics (40 people) demonstrated their fear to see their jobs disappear in the near future. The people involved, willing to remain IBM employees, distributed an information handout explaining their situation to other site employees. It was written with the cooperation of all representative unions - CFDT, CFE CGC, CGT, FO, SNA . More than 300 hundred people participated in ad-hoc discussions about the current situation as well as future threats to employment on the site. In the last 10 years, several downsizing operations have resulted in a reduction of the local IBM workforce from 1200 employees down to 650 today. During the same period, IBM's profits have increased, doubling in 2003 to reach a record of $7.58 billion.

Coverage on H1-B and L1 Visa and Off-Shoring Issues
  • Linda Guyer reports from "the outsourcing front." Full excerpt: Project "A" (web site development) is slated to be transferred to 1 guy in Russia and 2 guys in Brazil next month. The Brazilian guys are in Endicott getting trained by two programmers who do not know their fate. My guess is they'll be offered the June 1st severance package along with many others. The customer for this project cannot understand the Russian guy's English and asks Tim - the guy training them who will be let go - to try to interpret his notes. Customer is not pleased when she is told not to have too many web site update requests this summer because the Brazilians take a lot of time off in the summer. Her words were, "aren't I the customer?" The project manager (still in Endicott) has been spending time looking for additional work, to try to save perhaps one of the two programmers' jobs. Her manager finds out about this, and tells her that if she finds any additional work it will go to a global resource, not the Americans whose jobs she is trying to save. She is understandably livid when she hears this.

    Another person reports that their BAM (IGS term for Business Area Manager) is having their job go to an Indian. I also hear through the grapevine that some managers are trying to sabotage the offshoring efforts higher up in the IGS chain of command, and that funding seems to be needed for training and equipment. That is why it is rolling out more slowly than originally expected.

    • Randy Ray comments. Full excerpt: Along the same lines, I have an IBM friend who is a Project Mgr (in IGS) over a development group. All of the developers are in India... (he has most of his conf calls with them in the middle of the night). He is in the US. He needs one "US" developer for customer interfacing (and would gladly give up 2 Indian developers for it) and was told that he could have all the Indian developers he needed but under no circumstances will he get a "US" developer as the executive's bonuses are tied to how many jobs he "offshores".....and he intends to get his bonus!


"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.