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    Highlights—July 3, 2004
  • From Susan Wilson & Katherine Wolter, Co-Founders, www.ibmlawsuits.com. This site, updated regularly, contains hundreds of IBM court documents available to download for free. After spending more than a year obtaining IBM court documents and sharing them with countless plaintiffs and attorneys, we decided to streamline the process by creating a website to serve as a repository of information.

    Our hope is that these documents will help you in your legal battle with IBM. We both have had Federal lawsuits against IBM and understand first-hand the importance of sharing information.

    We have many more court documents that will be loaded in the next few weeks as well as plans to publish additional information of interest. If you have suggestions or requests for documents not yet available on the site, please contact us on our website and we will work hard to meet your needs.

  • New York Times commentary by Bob Herbert: A Second Opinion. Excerpt: an article a few years ago in The Journal of the American Medical Association, Dr. Barbara Starfield of the Johns Hopkins School of Medicine took a look at the overall health of the American people, and compared conditions here to those in other industrialized countries. What she found was disturbing. "The fact is that the U.S. population does not have anywhere near the best health in the world," she wrote. "Of 13 countries in a recent comparison, the United States ranks an average of 12th (second from the bottom) for 16 available health indicators." She said the U.S. came in 13th, dead last, in terms of low birth weight percentages; 13th for neonatal mortality and infant mortality over all; 13th for years of potential life lost (excluding external causes); 11th for life expectancy at the age of 1 for females and 12th for males; and 10th for life expectancy at the age of 15 for females and 12th for males.

    She noted in the article that more than 40 million Americans lacked health insurance (the figure is about 43 million now) and she described the state of Americans' health as "relatively poor." "U.S. children are particularly disadvantaged," she said, adding, "But even the relatively advantaged position of elderly persons in the United States is slipping. The U.S. relative position for life expectancy in the oldest age group was better in the 1980's than in the 1990's." The article was published in the summer of 2000. At the time Japan ranked highest among developed countries in terms of health, and the United States ranked among the lowest. Last week I talked with Dr. Starfield, an internationally respected physician, professor and researcher, and asked whether the situation had improved over the last four years. "It's getting worse," she said, noting, "We've done a lot more studies in terms of the international comparisons. We've done them a million different ways. The findings are so robust that I think they're probably incontrovertible." If link is broken, view Adobe Acrobat version [PDF--18 KB].

  • 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:
    • "the problem is..." by tsm94. Full excerpt: that when I signed up, the mentality and commitment of the firm was "more nights at home" and predicated on a 3 nights / week gone...and home on Fridays. In IBM, this commitment no longer appears to be honored. So, while we are asked to make the sacrifice from family....we get little in return (no bonuses, raises, no adjustment in the evaluation process, etc.)....and we continue to miss BCS targets, so I shouldn't expect anything next time. I guess its either put up or shut up...again, we are simply cogs in Big Blue's machine in which the partners continue to reap the rewards / benefits of our sacrifice and hard work...

    • "You hit the nail on the head" by "Dose of reality". Excerpt: The requirement of travel virtually at the discretion of the company wasn’t a problem when the opportunity for short term (annual) reward was real, and career progression into equity type compensation (partner at PwC or the equivalent at IBM) was within the realm of possibility. It is true that few made it, but the annual bonuses at least made the attempt worthwhile for most, and it was kind of like buying lottery tickets – “you gotta be in it to win it”. So they took away the incentive and the kicker, and expect the same blind devotion and sacrifice. If they were smart, they would adjust their expectations and policies on some of these wedge issues like travel to soften the impact, and generate some goodwill – put the Human back into Human Resources. Instead, the mantra is if you are a consultant, you have to travel – wherever we need you, no questions asked. No matter that at the margin, you can’t get the same caliber of people to drive the business, because the best and the brightest can figure this out and find better opportunities elsewhere. That is somebody else’s problem, and no one will ever connect the dots.

    • "It's not just the travel..." by "feldspar". Full excerpt: For many of us, the travel itself is less of a burden than the squalid conditions we live in while traveling. Sure, we understand that the economy has been in the dumps over the past few years, but being comfortable while working away from home makes all the difference. Expense policies differ project to project but meager meal per diems, four person rental car sharing and motel lodging are hardly uncommon anymore, not to mention policies and practices such as 'Less Nights at Home,' no Amex points and expense report nazis which makes the travel unbearable.

    • "It's called substandardization" by "Dose of reality". Excerpt: For a permanent traveler (e.g. BCS), for whom expenses are reimbursed, it makes no sense to institute Draconian expense policies. The incremental cost to the client of allowing consultants to have convenient flights, decent food, and quality accommodations nearby the site are less than 5% of the total cost of an average consultant (fees + expenses). The increase in productivity, and lowered turnover would more than compensate for any revenue lost due to being uncompetitive as a result of this difference. The industry travel standard for consultants is above average to excellent, so in terms of competitive pricing strategy we are subsidizing higher fees by having a relatively lower T&L cost vis a vis the competition. In addition, consultants are usually traveling 70 – 80% or more.

      Contrast this with the occasional traveler who incurs expenses that are subsidized directly by IBM. The “discomfort factor” is much lower with less frequent travel, and the cost savings to IBM is 100%, yet the policies are the same. We are so legalistic in our HR policies, and so focused on revenue generation that the idea of differentiating these policies based on different business models, employee needs, and cost drivers would never even be considered. The expense report Nazis are designed to wear you down so you just give up on the small stuff. It is not uncommon for expenses to be collected and not reimbursed – a tidy little profit center for the business.

    • "It's a suicide strategy for U.S. tech services industry" by "Dose of reality". Full excerpt: When the Japanese auto makers (and more recently Korean) first infiltrated the U.S. market, they began by producing entry-level cars at lower price points than the U.S. big 3. The latter ignored them since it didn't really cut into the bread and butter mid-size and up models. Once they established a beachhead, organization, and capital, they moved up market, and really made an impact on the competitive landscape. In this case consumers have benefited from the beginning until now.

      Offshoring has followed the same insidious strategy – starting with low value add call centers, code jockeys, etc. It seemed harmless, since it lowers costs of production, and in turn lowers prices for consumers. But now the higher value add jobs are being moved offshore, and the unfavorable impact on U.S. income and consumer spending is becoming greater than the favorable impact on corporate cost structures. Eventually, GDP will contract, as we won’t have the same level of wealth and income to pay for unessential “retail” services, and the real engine of the economy (local services, or “doing each other’s laundry”) will really slow down. We have been mitigating this with lax immigration policy, which temporarily props up the increase in demand in the local economy, but this too will have to peak. The problem is that those who are in a position to stop this have no incentive to do so, and/or they believe it is the next generation’s problem. The government uses it as geopolitical bargaining chips, and companies are stampeding herds following their usual “me too”, shortsighted instincts.

      Bringing this back to IBM, we first moved the transaction processing shops offshore, then the lower level coding and development work. Now we are trying to shift more of the analytical work to lower cost labor, requiring both onshore and offshore, hence the surge in H1-B visas. In the long term, this strategy is suicidal. While the offshore analytical competencies and customer service focus are not yet mature, sooner or later they will be. If we don’t have entry-level positions in the U.S. economy, there will be no “feeder system”. Once the offshore capabilities are fully developed, the U.S. companies will gradually be cut out of the mix. We are selling services at premium prices and delivering commodity resources – what is our value add – size?, brand?. These are not sustainable advantages. Fortunately, there is a natural limit as to how much of the labor structure can be moved offshore, but where we will end up will be bad both for IBM, and the U.S. economy overall.

  • Boston Globe: The new rules of retirement savings. Excerpt: A new MassINC report, "The Graying of Massachusetts: Aging, the New Rules of Retirement, and the Changing Workforce," reveals a remarkable fact: Since 1992, the percentage of Americans covered by traditional pensions has dropped from 40 percent to 20 percent, while the percentage with tax-deferred accounts -- such as a 401(k) -- has jumped from 38 percent to 58 percent. In just one decade, the rules of retirement have changed radically. A majority of employees with a retirement plan are now responsible for depositing their own dollars into investment vehicles they select, assuming the risks and rewards of those decisions, often with little or no guidance from financial professionals. In short, this is not your father's pension, which was a pure benefit from an employer who set aside money beyond a worker's salary and assumed the responsibility for managing it and guaranteeing a defined future benefit.

  • Associated Press: Hallmark Cards to Outsource Some Jobs. Excerpt: Affiliated Computer Services, based in Dallas, is taking over 30,000 square feet to set up a technical services center. The center will employ 145 former Hallmark workers, who will provide their former company with technical support, network programming and other computer assistance, said Hallmark spokeswoman Julie O'Dell. ACS spokeswoman Lesley Pool said her company will likely move out of Hallmark's building when it signs more information technology clients. As part of Hallmark's agreement, O'Dell said the 145 jobs cannot be shifted to ACS's information technology operations in India, where many companies have outsourced positions to save on labor costs. But any positions beyond the initial 145 would be subject to different rules.

  • Kansas City Star: Judge allows collective case against Sprint. Excerpts: Up to 6,800 workers over age 40 who were dismissed in Sprint Corp. work force reductions may join a collective action alleging age discrimination by the telecommunications firm. U.S. District Court Judge John W. Lungstrum in Kansas City, Kan., on Friday granted provisional certification of the collective action. The case stems from layoffs Sprint made between October 2001 and March 2003. ... The case is expected to attract national attention because of its references to “forced ranking” appraisal systems, a version of which Sprint implemented before its reductions in force. Forced ranking systems, which gained fame under Jack Welch at General Electric Co., fell into the spotlight again when used — and subsequently abandoned — at Ford Motor Co. In forced rankings, managers must evaluate their employees on a bell curve. Generally, as the system has been practiced, a certain percentage of workers each year must be given the lowest rating and targeted for dismissal. Advocates say forced rankings keep workers on their toes, help companies get rid of “deadwood,” and provide employment opportunities for new workers who might bring in innovation. Critics say that forced rankings may work as intended for one or two years but that if companies hire well, there shouldn't be any deadwood left to cut. In the meantime, they say, teamwork and morale are hurt. If link is broken, view Adobe Acrobat version [PDF--53 KB].

  • WashTech News: Overtime likely to disappear for millions. Excerpt: When it became apparent that the rules governing overtime would not survive a vote in the Senate or House — indicating that some Republicans were against the changes as well as Democrats — the White House used an executive order to push the overtime rules changes into law. Over the course of the year-long fight, the House has twice voted down the rule changes. The Bush administration pressured the House and threatened a veto if the amendment passed; and now House Republican leaders are using their majority vote to keep the amendment from being attached to any bill that comes up for a vote.

  • Jim Hightower: A Corporation That Breaks the Greed Mold. Excerpt: Do big time CEOs – no matter how compassionate and cuddly they might be personally – have to be SOBs on the job? Yes, says the conventional wisdom of greater CorporateWorld. The bottom-line dictates that wages and benefits be slashed and that offshoring be pursued with a vengeance. It's not personal, just business. "Look Ye to Wal-mart," boom the Market Gods, directing CEOs to follow the anti-labor, low-wage, no benefit, move-it-all-to-China ethic of this giant. The gods decree that no one can out-compete Wal-Mart, so best to imitate the beast.

    Apparently, Jim Sinegal has been going to the wrong church. He's CEO of Costco, the profitable warehouse club retailer that's fast growing across the country. He takes a shockingly heretical view of his job, boasting of his company's fair treatment of employees: "We pay much better than Wal-Mart," Sinegal says. "That's not altruism. It's good business." Indeed, Costco's pay is much, much, much better – a full-time Costco clerk or warehouse worker earns more than $41,000 a year, plus getting terrific health-care coverage. Wal-Mart workers get barely a third of that pay, plus a lousy health-care plan. Costco even has unions!

    Yet, Costco's labor costs are only about half of Wal-Mart's. How's that possible? One reason is that Costco workers feel valued, which adds enormously to their productivity, and they don't leave – employee turnover is a tiny fraction of Wal-Mart's rapidly revolving door. Another thing Sinegal rejects is offshoring: "We could move [some operations] to Bangladesh or somewhere. But what kind of message would that send to our employees? Not a good one, I think."

Coverage on H1-B and L1 Visa and Off-Shoring Issues
  • Seattle Times: Outsourcing, the Movie. Excerpt: It's tempting to compare filmmaker Greg Spotts with Michael Moore. Like that pugnacious documentarian, Spotts aims to champion the little guy — in this case, Americans losing their jobs to foreign competition. But while Moore tempers his savage criticism of The Man (usually a corporate profiteer) with humor, Spotts can't bring himself to give this subject a light-hearted touch. "I'm not sure it's appropriate to find too much humor," he says from his home in Santa Monica, Calif., where he's editing his self-financed documentary, "American Jobs," set to be released on DVD on Labor Day. It could be the first feature-length documentary to chronicle the outsourcing trend, which appears to be quickening. Forrester Research recently revised its estimates on the number of U.S. technology jobs being sent overseas. The firm now figures some 830,000 white-collar jobs will move abroad by 2005, compared to the 588,000 it projected two years ago.

    With a $3,500 digital camera — a gift from his mother and wife — and borrowed lighting and sound equipment, Spotts visited 15 cities from January to April , usually crashing on a friend's couch. He interviewed those at the center of the trend, both in manufacturing and technology: laid-off Boeing workers in Seattle, computer programmers in Florida, garment workers in Los Angeles. These were folks whose jobs had moved to India, Turkey or China. Their social fabric, often intertwined with work, was torn. Their unemployment benefits were running out. Their health coverage was gone.

Now on the Alliance@IBM Site:
  • Impact of Outsourcing on Development; Restoring Global Balance Together, by Communication Workers of America Executive Vice President. Excerpt: Recently, CWA negotiated a new five-year contract with SBC, the second largest telecommunications company in the United States. In the agreement, SBC made a commitment to not outsource customer service work. The agreement reads: "The Union and SBC share similar views about utilizing SBC service reps to interface with the customer. CWA-represented employees shall do all customer service work of SBC products." The agreement runs counter to the practice of most service providers today that are racing to outsource customer service to the lowest-cost provider. Why has SBC taken a different approach? SBC CEO Ed Whitacre explained his reasoning to me this way. The only thing that differentiates SBC from any other telecommunications company, he said, is the quality of its service and the relationship it has with its customers. Developing these relationships adds value to the company, and therefore is worth the investment. Building on SBC's strategic partnership with CWA, together we make this investment work for the company and for employees.

    Outsourcing interferes with the relationship between the service provider and the customer. Employees of outsourced companies have no possibility to build long-term relationships with customers, or to provide information feedback to the core service provider, who is not their employer. Outsourced call center employees are not building careers like the ones our members have at a company like SBC. Further, employees at overseas outsourced call centers experience alienation and stress when they are forced to take on false identities and accents to pretend they are from the country of origin of the caller. We are now reading stories about the high turnover rates in these overseas call centers as a result of these practices. There is something fundamentally wrong when workers must leave their identity at the workplace door, denying their very humanity. It's not good for workers, it's not good for quality service to customers, and it's ultimately not good as a development strategy.

  • Update: Alliance@IBM sends a message to IBM India employees (including a prelude to the flyer). Excerpt: On the mornings of June 21 and 22, employees at IBM’s major work sites in Bangalore, India were greeted by an unexpected site: American volunteers from the Alliance@IBM/CWA distributing leaflets with a message of solidarity from their US co-workers. Several hundred employees at IBM’s facilities on Airport Road and Bannerghatta Road paused to pick up the one-page leaflet with an open letter from the American union members. Alliance@IBM organizer Joshua Sperry, from San Jose, CA, was on vacation in India with friends and decided to do a little organizing on his time off. Says Sperry, “hopefully this leaflet will open channels of communication between American and Indian workers. IBM is the same company after all, and I think that the employees should talk to each other.”

    A major motive behind the leaflet was to counter the impression created in the Indian media that American workers, upset about job losses in the USA, while tech companies expand in places like India, are angry or hostile to Indian employees. “We don’t blame the individual employees, who after all are trying to earn a living in global economy like everyone else. We do have a problem with companies like IBM trying to drive down the living and working standards of employees by firing workers in the US and shifting jobs around the world in search of lower labor and environmental standards,” Sperry says. “I think that the solution to this problem is not in turning off the global economy, which probably isn’t possible even if we wanted to. It is my hope that bringing workers together from different countries to understand each others’ experiences and needs, and building on what we all have in common as employees, we can hold IBM and other multinationals to a higher standard. In this way the tremendous wealth that they generate will benefit all the workers-American, Indian, and in other countries-and not just a handful of executives.” Lee Conrad also said, “ on the heels of the IBM Stockholder meeting we also wanted to show IBM that we will challenge them anywhere, be it Providence Rhode Island or Bangalore India.” Conrad also stated “As union members we must promote worker organizing and strive to bring working people up economically around the world and fight the Corporations drive to bring standards of living down. Labor standards, the right to organize into unions and fair treatment of workers around the world must be a priority.”

"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.