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Highlights—May 29, 2004
- Communications Workers of America (CWA): CWA
Settlement with SBC Provides for Employment and Health Security. Excerpts: Among
- The settlement guarantees that there will be no layoffs of employees
currently on the payroll for the life of the agreement, and it calls for the
rehiring of several hundred workers who had been laid off at SBC Southwest and
SBC Midwest (former Southwestern Bell and Ameritech).
- CWA and SBC agreed to work together
to bring back tech support jobs from overseas when the current outsourcing agreement
with Accenture expires.
- The agreement provides that health care benefits continue to be fully paid by SBC,
a major union goal in the talks. There are some increases in co-payments for medical
services and prescription drugs. To help offset these higher costs, active employees
will receive cash bonuses of $1,000 and retirees, who are now under a different plan
from active workers, will receive $2,500.
- The parties agreed to across-the-board base wage increases totaling 12 percent,
compounded, plus an additional 1 percent lump sum in the first year and cost-of-living-adjustments
in the fourth and fifth years. The initial wage increase is retroactive to April 4.
- Pensions will increase 13 percent over the contract term, and the cash balance pension
plan for SBC East (SNET) employees is substantially improved.
- Alliance@IBM (CWA Local 1701): View
the "Value Of A Union Contract" flyer.
Print the flyer (with your home printer) and make copies to distribute to your co-workers.
Visit our Do's and Don'ts of Handing
Out Flyers page to help you with the
rules, before you distribute the flyers.
- Alliance@IBM: Support your fellow employees in their fight to save your benefits and
your rights at work. Help make IBM a great place to work. Join the Alliance@IBM for
free as a subscriber. If you are undecided about full membership, signing
up as a subscriber brings you our newsletter THINK TWICE and e-mail alerts. You also
will be notified of Alliance activities and meetings in your area. Many subscribers
are also Alliance volunteers, helping with newsletter distribution and helping us
organize. Or for only $10 a month, become a voting member of the Alliance.
Voting members can run for office, vote on issues, vote for officers, help set policy
and set up new chapters. You also receive access to
a range of services through CWA union privilege programs. View
more information about Alliance@IBM membership including a set of FAQs.
- Reuters: SBC,
Union Reach Deal After 4-Day Strike. Excerpt: Under the new pact, workers
will receive a 2.3 percent pay raise, on average, for each year of the contract,
with an additional 1 percent lump sum payment in the first year and cost-of-living
increases in the fourth and fifth years. The deal includes some compromises on health-care
costs, which SBC said would provide much of the $2 billion in savings it is targeting.
Workers will still pay no monthly health insurance premiums for themselves, a key
union goal, but must pay a monthly $40 surcharge to cover a spouse or partner who
could be covered by a different employer. Co-payments for drugs and exams increase,
but drug costs are capped at $750 per year for one person and $1,500 per family.
To offset higher health-care costs, the union said each active employee would get
a $1,000 bonus, and each retiree would get a $2,500 bonus. The union also said the
company would set aside $2 billion for retiree health care. The company had said it was
considering contributing at least $1 billion into its retiree health-care trusts this
year. The union said SBC had agreed to bar layoffs of current union workers for the life
of the contract and said the deal called for the company to rehire about 600 workers
laid off in the Midwest and Southwest. SBC said the union accepted a company proposal
that would guarantee a job offer in the same state or region to any employee whose current
job was eliminated, but the guarantee will not apply to new employees.
- Harvard Business School: Book
excerpt from The Watsons: IBM's
Troubled Legacy. Excerpt: Also making their presence known at the fair were
the International Business Machines Corporation and its indomitable leader, Thomas
J. Watson Sr. Watson was sixty-five years old when the fair opened, an age when many
businessmen think about retirement. But Watson had the energy of a man in his thirties,
and we can confidently assert that thoughts of retirement never entered his mind. For
years he had been telling his troops, "The IBM is not merely an organization of
men; it is an institution that will go on forever." He planned to accompany IBM
on its journey—if not forever, then at least for a good many more years. And he
had every intention of using the fair to tell the world that he and IBM—the two
were inseparable in his mind—mattered.
- Vault's IBM
Business Consulting Services message board is a popular hangout for IBM BCS employees,
including many employees acquired from PwC. A sample post follows:
Staffing" by "anon200405". Full excerpt: It is true that many legacy
PwC partners (the few who are left anyway) will not staff legacy IBMers. An example
will suggest why. I am a legacy PwCer. I worked on a primarily legacy IBM staffed engagement
that was designed to develop a product development strategy (including IT) for the
client. The IBM consultants staffed on the engagement were very competent from an IT
viewpoint and could expound for years on how to implement various systems and architectures.
But when asked WHY you would implement a particular system, they didn't have a frigging
clue. They had no idea what the business rationale for the system was or why the client
needed to change their processes.
Many of the legacy PwC partners generally sell management consulting
work and NOT IT consulting work (yes, there are exceptions).
Simply put, the vast majority of legacy IBMers are tech wonks or long-term
IBM employees from other parts of IBM that became consultants. Technically,
they are excellent, but they have no experience or credibility doing management consulting
work. So, PwC partners revert to the legacy PwCers who are likely to have these
As for IBM BIS being better before PwC, I have no doubt it was. You had your low
margin, high revenue niche and were happy in it. Similarly, PwC Consulting was better
before IBM also. We had our lower revenue, higher margin niche and were happy in it.
We were forced by events beyond our control (Enron and accounting independence) into
losing our market position and this made us available to IBM. We didn't want you and
you didn't want us ... but here we are. Such is life.
- San Francisco Chronicle: Law
is called stacked deck for insurers. Excerpt: Originally passed to protect employees'
pension funds from unscrupulous or negligent employers, ERISA was interpreted by the
Supreme Court in 1987 to cover all employee benefits, and it would supersede state
laws. The upshot soon became clear. When a claimant sues an insurance company under
an employee benefit plan, the insurer can argue in most cases that state laws don't
apply because, as the court ruled, the company is protected under ERISA. And under
ERISA, a claimant cannot sue for bad faith, breech of contract or punitive damages. A
claimant is not entitled to a jury trial or, in most cases, to even call witnesses before
a judge. If an insurance company is found to have improperly denied a claim, it is required
to pay only what the claim would have been in the first place, plus attorneys fees,
in some cases. The insurers are not liable for damages caused by their decisions.
In other words, ERISA allows insurers that provide insurance through employers to reject
claims with virtual immunity.
The U.S. Supreme Court is set to issue a ruling this summer on two cases out of Texas
that are challenging ERISA. In one, an insurance company denied a second day in the
hospital to a woman who had undergone a complex hysterectomy, even though her physician
recommended that she stay. She was back in the emergency room several days later
with complications. In the second case, an insurance company required a man to take less-expensive
pain medication, even though his doctor recommended Vioxx. The cheaper medication,
the man claims, caused bleeding ulcers and a near heart attack. The litigants and their
attorneys say insurance companies, like doctors, should be held accountable if their
decisions harm patients. The insurance industry says the current appeals process is a
just one, and if claimants are allowed to sue for punitive damages, health premiums would
rise, resulting in some employers reducing or eliminating health coverage.
- Time: The
Rumble Over Executive Pay. Excerpt: In a sense, Spitzer is taking on the whole clubby
system that keeps driving CEO pay higher. Boards stacked with cronies too often still
rubber-stamp excessively rich packages. In most cases, CEO pay is a question not of
what is legal but of what is right. "The nature of CEO compensation is something
that deserves additional scrutiny. One of the things that will emerge from the Grasso
says, "is the failure of compensation committees to fulfill their obligations." The
Grasso case involves some of the most high-profile executives on Wall Street — the
people who approved his payout in the first place. Spitzer's view enjoys broad support
among institutional shareholders. "Excessive
executive pay undermines the very principles of free enterprise," says Phil Angelides,
the California state treasurer and a board member of the California Public Employees'
Retirement System. He endorses recent efforts to rein in those eye-popping stock-option
grants but notes that CEOs still seem to find a way to get richer at their employer's
expense. Grants of restricted stock have in some cases replaced the value of options
for executives. Retirement benefits and deferred-compensation packages can also amount
to millions of dollars and yet remain relatively invisible to investors.
Indeed, while you may not have noticed your raise last year (if you even got one), senior
executives felt theirs. Median compensation for CEOs of companies in the S&P 500
rose 27% in 2003 on top of an 11.4% hike in 2002, according to the latest pay survey
by the Corporate Library. Other surveys, which don't account for exercised stock options,
found just single-digit increases in salary and bonus. And, yes, corporate profits rose
sharply during 2003, up 18%. But that wasn't the case in 2002, and the gap between pay
for the average worker and the typical large-company CEO has widened further. The typical
CEO now makes $301 for every $1 paid to the typical employee. That's up from $42 to $1
- Seattle Post-Intelligencer: Grumbling
at Microsoft grows. Some workers say toll on morale will cancel savings from benefit
changes. Excerpt: In announcing a series of benefit cuts last week, Microsoft Corp.
asked its workers to consider the long-term value of the changes to the company and,
by extension, to them, as employees and shareholders. But many employees are having
a tough time seeing it that way. An informal poll conducted among employees on the
Microsoft intranet, but not under the official auspices of the company, suggests
a groundswell of opposition to the changes and an unusually strong wave of dissent
in a place where employees are known for their allegiance to the corporate cause.
... The poll focuses on changes planned in the company's employee stock-purchase
plan, including a reduction in the discount that employees receive on the price of
Microsoft stock, from 15 percent to 10 percent. ... The company also plans, as of
Jan. 1, to require employees to make a $40 co-payment if they choose a brand-name
prescription drug when there is an FDA-approved generic equivalent. Savings from
the use of generic drugs are expected to total $20 million annually. Also on Jan. 1,
the company will start giving new employees two weeks of vacation annually for their
first two years, down from the current three weeks. In addition, the company will require
employees to take their four weeks of paid parental leave within six months of a
child's birth or adoption, compared with the current 12-month window.
- Seattle Times: Microsoft
workers vent over cuts in benefits. Excerpt: Has the Kool-Aid
at Microsoft gone bad? Employees are incensed over cuts in benefits announced last
week, according to an internal survey posted on one worker's Web site. When asked
to post comments on the cuts Monday, many of workers railed against the company,
its management and its policies. "Microsoft's benefits used to somewhat make up
for what is a difficult place to work," wrote one poster. "Are we now going
in the direction that it will be both difficult and unrewarding?" ... There is plenty
of feedback for Microsoft. Hundreds of employees posted comments, and a few even
praised the stock purchase plan's changes. In general, though, the comments have
one recurring theme: The cuts are leading to a drop in morale. Employees had especially
harsh comments for Microsoft's management, pointing out that the company has more
than $50 billion in the bank. One person recalled that Microsoft forgave a $15 million
loan to former President Rick Belluzzo when he resigned in 2002. Others said Microsoft
should instead cancel its annual employee meetings at Safeco Field, stop printing
the internal newsletter and save electricity by turning off the lights at night. "It
makes me wonder what cuts are next," one
employee wrote. "Microsoft continues to make more and more money every quarter,
yet they are cutting employee benefits? That doesn't make much sense."
- Washington Alliance of Technology Workers (WashTech): Microsoft
employees angry over benefit cuts. Excerpt: Comments included in the survey were also overwhelmingly negative.
Most respondents blamed company officials for being shortsighted. Others charged
that those same officials no longer value the contributions of employees as they
once did. "Personally, I think it is sad that a company with $50 billion in cash
is trying to nickel-and-dime its employees for $60 million in savings," wrote one
me it seems like Microsoft is testing its employees to see how far it can push
breaking point." "The repeated statements from (human resources vice president)
Ken DiPietro and (U.S. director of benefits) Cecily Hall that employees will find
this change to be 'the right thing for them, the company and shareholders' are
another respondent. "This is will adversely affect all three and is a direct pay
cut across the board for all employees." "Unfortunately this reflects the
recent tendency of upper management to shy away from the long term view and focus
on the immediate." ...
Many of the comments expressed feelings of betrayal. "Working
is a relationship — I
give you 110 percent all of the time, and you give me 65 percent of what I'm worth
on the open market. Now you're giving me a little bit less. Thanks. Forget that
110 percent, you can now have 65%. Any good feeling I've had has slowly been eroded
to the point where Microsoft is just an also-ran." ... Microsoft program manager
Matt Goyer is currently conducting his own survey of Microsoft employees on his Web
log, or blog, site. Yesterday Goyer wrote that an informal survey he recently conducted
shows that companies such as Apple Computer Inc., Hewlett-Packard Development Company
L.P., Adobe Systems Inc., Nortel Networks Ltd., CIENA Corp. and Cisco Systems Inc.
all offer a 15 percent discount through company ESPP programs.
- Boston Globe: Bush's
health care scam. Excerpt: President Bush, speaking Tuesday at
a Youngstown, Ohio, community health center, promised to help more uninsured Americans
obtain affordable health care. But his key proposals are dubious health policy, waste
taxpayer dollars, and are unlikely to increase coverage. They deserve more attention
because they epitomize Bush's utterly cynical approach to governing. ... The new
and insidious wrinkle in the Bush proposal is that it would exempt such associations
from regulations that currently prohibit discrimination against individuals based
on health status. With this new provision, insurers could offer very favorable
rates for health plans whose members were limited to the young and the healthy. As
younger workers bail out of larger insurance pools, middle-aged workers and their dependents,
as well as those with histories of illness, would face huge rate increases. The
bipartisan Congressional Budget Office has estimated that some 20 million Americans
would face higher insurance costs if this proposal were enacted. Both The Wall Street
Journal and Forbes magazine, not exactly lefty news organs, have published articles
pointing out the serious flaws in this approach.
- Congressman Bernie Sanders: Bernie's
10 Question Quiz. Test your knowledge on some
of the most important issues confronting us today. Sample questions: Under the new
Medicare plan, if your prescription drug bill comes out to $500 annually, how much
would you pay? The average out-of-work American is unemployed for how long? Since
2001, how many private sector jobs have been added?
|Coverage on H1-B and L1 Visa and Off-Shoring
- Boulder Daily Camera: Offshoring
hits home. Sending jobs overseas beaches local workers. Excerpt: Louisville resident Jeffrey Antman has seen offshoring up
close. After graduating with a master's degree in mechanical engineering at
age 21 in 1974, Antman spent the bulk of the next three decades working for
local startups and technology firms, including IBM, Quantum and Storage Technology
In the 1990s, he personally assisted the transfer
of local disk drive manufacturing offshore to China, where volume manufacturing
could be done cheaper. Today, the engineer says he is struggling to find
a job. And he says the current trend in offshoring — sending highly paid professional
jobs to low-wage countries — is
to blame. "Now, when the next big thing hits, all of the software to run it
is going to be written in India, and it's going to be built in China. What's
going to happen here?" Antman said. ...Antman said companies
should have a wider interest in keeping jobs in the United States than just
the bottom line. "I think we're at risk of becoming
a Third World country," Antman
said. "We had taken the knowledge jobs, and sent factory jobs overseas. And
now we are chopping off the top of the pyramid. What are we going to
do when those jobs are all gone? "They say that
the stockholders benefit. But what are they going to do when the country has
no jobs for educated workers? We can't compete with someone who's going to be
paid a nickel to our dollar. No matter how smart, or how experienced you are,
you can't compete with an educated worker overseas who wants to make $2,500
a year," Antman said.
- Jim Hightower: A Hair
Net in Your Future. Excerpt: This is where Colin Powell steps in. Bush's secretary
of state recently sought to reassure people on this issue of offshoring. Unfortunately,
the people he reassured were in India. On a recent trip there, he promised that
the Bushites would do nothing to stop the outsourcing of U.S. high-tech jobs
to India and, indeed, would oppose all congressional efforts to stop it. He even
posed as an economic philosopher, declaring that "outsourcing
is a natural effect of the global economic system," adding adamantly that "you're
not going to eliminate outsourcing." Well, we're certainly not going to eliminate
it if our government won't fight for our people. Oh, but Powell said, while "these
kinds of dislocations will take place," the Bushites plan to train the American
people for new jobs. What new jobs, exactly? He didn't say. He didn't have
a clue. But Bush's labor department knows. It lists 30 job categories that
will have the greatest growth between now and 2010. Number one? Fast food workers.
Two-thirds of their "growth jobs" pay less than $20,000 a year. Forget
high-tech, Colin Powell envisions you in a hair net.