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    Highlights—June 18 , 2005
  • Yahoo! message board post by Janet Krueger regarding payouts in the Cooper v. IBM lawsuit. Excerpt: ...you can request an estimate of what your payout will be in each of the three possible outcomes by sending a letter requesting it to: Douglas R. Sprong; Korein Tillery, LLC; P.O. Box 4310; Fairview Heights, IL 62208. Include your name, address, and social security number. If you have any other questions, put them in as well. You will get a prompt reply, and it will not have any impact on the settlement amount.
  • Yahoo! message board post by Janet Krueger: Is the Cooper settlement fair?. Excerpts: My answer to whether I think the settlement is fair is posted on the FAQ file I have been referencing people to at http://www.allianceibm.org/pensionlawsuitfaq.htm.
    Q: How can I judge whether the settlement is fair? It seems very small... A: Please bear in mind, as you do your analysis, that it is not illegal for companies to reduce future pension earnings -- it is only illegal if they do so in an age discriminatory way. Much of what IBM did was inherently unfair, but NOT age discriminatory, so the likelihood that any federal judge would have forced IBM to restore the prior plans is extremely unlikely. One example of an unfairness relates to early retirement subsidies, the extra value that IBM had in their plans that made an immediate annuity worth more than the age 65 annuity. Since early retirement subsidies are not protected, it was legal for IBM to provide opening balances that were equivalent to your age 65 annuity.
    The only part of the 1999 cash balance conversion that Cooper v IBM found to be specifically illegal was that extra money was added to the opening balances of younger employees, and not older employees -- this is the "Always Cash Balance" issue referred to in the settlement that IBM is appealing. Cooper v IBM also found that the accruals added to the account in subsequent years was discriminatory -- again, it was not illegal that those accruals were substantially lower than they would have been under the prior formula; it was only illegal that younger employees were receiving higher accruals for equivalent service.
  • Yahoo! message board post by Janet Krueger: Are the legal fees fair, and who is paying them? Excerpts: Q: Why are the Plaintiffs' attorneys for this lawsuit receiving so much money? A: If there had not been a settlement or a judgment against IBM, the plaintiffs' attorneys would have gotten nothing. 3 law firms have dedicated thousands of hours over the last 5 1/2 years to this lawsuit, and will have to dedicate thousands more in order to win the appeal. Additionally, they have hired expert actuaries, staff, researchers, law clerks, and legal secretaries and paid court fees for dozens of motions and filings. Without that effort, the plaintiffs would only be getting what IBM decided to cut their pensions to! The fee requested in the settlement agreement is lower than that recommended by the standard bar.
    Q: Why doesn't IBM have to pay the Plaintiffs' attorneys, instead of deducting the fees from the settlement? A: All of the settlement money comes from the defendant (IBM). Some of it gets paid out to the plaintiffs, and some of it gets paid to the plaintiffs' attorneys. It is all reported as 'settlement money'. While it feels like the plaintiffs are losing part of their fees to pay the attorneys, IBM is actually making the payment.
  • Yahoo! message board post by Janet Krueger regarding the Out of Blue Age Discrimination lawsuit. Full excerpt: I attended the "Out of Blue" lawsuit informational meeting in Rochester on Friday night. The legal team has a web page at http://www.out-of-blue.com and can be reached at 1-800-482-0958.
    There are 10 named plaintiffs in the lawsuit, and about 200 unnamed members. The lawsuit is a collective action, not a class action, which means it only covers those who specifically 'opt in', or who affirmatively join the lawsuit. Members of the lawsuit were dismissed from IBM between July 7, 2001 and May 4, 2005 and were over age 40 at the time they were dismissed.
    If you were dismissed before July 7, 2001, you could still contact the legal team to find out if you would be eligible -- you might be eligible if you timely filed your own age discrimination charge from the EEOC after you were dismissed or if you did not sign the waiver not to sue and did not collect severance pay.
    IBM revised the waiver people have to sign in order to collect severance pay the day after the Thomforde decision was reached, so if you were dismissed from IBM after May 4, 2005, you may not be eligible to participate if you signed the waiver; but you can still call the 800 number and discuss your circumstances.
    The lawsuit is making two sets of claims against IBM relative to their treatment of older workers during lay-offs:
    1. Disparate impact: It appears a higher proportion of older employees are being laid off than younger employees.
    2. Disparate treatment: IBM discriminates against older employees in a number of ways, such as:
      • pension calculations, as evidenced by Cooper
      • retirement savings
      • medical savings accounts
      • college recruiting
      • age-based statements
      • refusal to hire older applicants
      • superior performance of older, laid off workers
    If the lawsuit is won, damages will be determined individually, based on front pay and back pay that has been lost, bearing in mind that each individual had the duty to mitigate the situation. If the lawsuit is settled, a formula for dividing the settlement has been pre-determined and is part of the contract you would sign to participate. If you have questions, and think you might be interested in participating, call the 800 number listed above for more information.
  • Yahoo! message board post by Janet Krueger. Excerpt: I would recommend that anyone who hasn't been tracking Dave Finlay's analyses read his "Once Upon a Pension" story that was posted back in June 2000: http://www.cashpensions.com/onceuponapension.htm. He does a superb job of explaining the sequence of plan changes IBM implemented during the 90s and showing their impact. As you read, remember that the Cooper lawsuit only made claims against things done in 1995 and 1999 -- changes implemented before then were outside the statute of limitations. (This means charges against the 30 year service cap could not have been included, even if there was a legal theory that would conclude such a cap is age discriminatory.)
  • Yahoo! message board post by Janet Krueger. Full excerpt: I just started an interesting analysis. I went into my copy of RetireQ; RetireQ is the spreadsheet Dave Finlay put together to show what our pension benefits would be under each of the Retirement plans IBM has offered since 1991.
    I varied my birth date in 5 year increments, to find out what the impact of the pension changes would have been on someone similarly situated to me who had been 5 and 10 years younger, and 5, 10, 15, and 20 years older. I didn't go back to 15 years younger, as I don't believe it is reasonable to assume IBM could have hired an 8 year old to do the job I started in; even 10 years younger is stretching it.
    I've now got the start of some numbers that can tell me if the settlement was fair, for me, personally. Remember, the lawsuit is not about what my pension would have been had IBM not changed it, and had I decided to work for IBM until age 65. It is about the fact that someone younger than me, but similarly situated, would have received more from IBM's actions, and been hurt less.
    In the process, I was able to verify another observation -- someone older than me, but similarly situated, would also have received more from IBM's actions and been hurt less -- the discrimination was definitely focused on baby boomers, although IBM would probably say they did that for economic reasons, as there were more of us in the work force so they saved the most by hurting us!
    I'll upload a spreadsheet with my analysis sometime this weekend; in the interim, if you want to check out the data so far, I've uploaded my 7 starting pages to the files area of this board in a file named RETIREQ5_JANET_Varying_Ages.pdf -- the first page is data based on my actual birth date.
  • Yahoo! message board post by "ibmmike2006". Full excerpt: If you read the document that was sent, Kathi Cooper will receive $40,000 for the "hell" she has gone through out of the settlement. I think, the 240,000 IBMers should cough up a $10 bill each and thank these two courageous women, Janet and Kathi, for what they have done. Not to dismiss the thousands of supporters who were out there, but it is nothing compared to being in the fray with name and reputation on the line. It would be an ideal world if somehow, someway, the 240,000 could get back some of the $600 Million Gerstner walked away with and put in his bank. We all know that IBM stole more than they will be paying back. What kind of value or price do you put on human misery IBM has caused?
  • Yahoo! message board post by "David Lohman": Overtime utilization. Full excerpt: We were recently told in a department meeting that we are now expected to work an hour overtime for every every hour of nonbillable time claimed. In other words, any time claimed to VACATION, Personal Choice Holidays, Education, Illness, etc. must be matched by overtime. Is this legal? Is it limited to Global Services - Americas? How do other members feel about this?
    • "rufus2002d" comments. Full excerpt: My understanding is that Global Services is the only division that requires "billable hours" and utilization targets. Our target for this year is 2,080 hours. (you can see your "annual target hours" in your PD tool profile - it's the first time I have seen this in print) It forces employees to work x% overtime every "working week" to make up for vacation, holidays, etc. Sure it's legal if you are salaried (exempt). Unless you have a contract that states otherwise.
    • "dave49_98" comments. Full excerpt: Welcome to IBM Global Services. Not only do you have to make up vacation hours, we were told to bill 44 hours, a 10% premium of overtime each week.
    • "informixgoob" comments. Full excerpt: You've got to be kidding... 2080 = 52 weeks x 40 hours per week. So they are expecting you to bill time even when businesses are closed on holidays like Christmas, Thanksgiving, 4th of July, etc? Leaving aside the ethics (or lack thereof), is that even legal?
    • "rufus2002d" comments. Full excerpt: You have to calculate how many hours overtime per week you have to work, based on vacation time,etc. to make up for the time you take off. In other words, if we have 2 days off for Thanksgiving, those 16 hours must be made up some other time. For folks with 5 weeks vacation, the personal choice days, and paid holidays, you basically have to work the equivalent of a 6 day work week (and more, if the job dictates it). Yes, it's legal. Yes, it stinks.
    • "ibmoptioneer" comments. Full excerpt: The problem is that IBM is trying to fool customers into thinking they deliver great service when their people are too tired and under the gun. Recently, an IDC report about services warned companies that bought services that buying services from any company that provided resources with over 85% utilization targets was in effect, taking too many chances and should consider other services suppliers. IDC is now developing a new report that will make some of the services firms like IGS look very bad indeed, if not encourage you choose other vendors for services.
      Have patience, the lid is about to blow here. Make a point to try to get these claims and requirements from management in writing. Ask to have your utilization as part of your PBC. Then you'll have the evidence so when the backlash in the market starts happening, you'll be able to show it to clients who ask. Not only does IGS have allegedly exorbitant rates, they offshore and subcontract without the client's knowledge and they have too tired personnel with little or not training on some deals. We won't talk about client intellectual property "acquisition" or forcing employees to stay in cheap hotels to make more profits on the expenses when they aren't billed actual.
  • Yahoo! message board post by "drbeaker2": Did Someone Die & I missed the Funeral? Excerpts: I was very busy for the last few days, talking to the half-dozen IBM friends I know who have just gotten "laid off" (oops, I mean who were just last week offered a package, sorry) at IBM's Silicon Valley Lab (SWG, Rational, etc.) in San Jose. The people remaining in the same depts are working 60 or more hours a week now, but there just suddenly isn't enough work for these people that I know to do.
    Their projects were "cancelled" 2 months ago, and they couldn't find new jobs inside IBM, while other people in the same dept are working very long hours. Just as new hires and new contract people (who will not have pensions, etc.) are about to come in. I'm told that an estimated 100 of the over 1500 people of IBM SVL are in the same boat. So many are in the same boat at the same time, that the 12 people I know are all being given 60 days (not the normal 30 days) to decide whether to take the offered package. And of course, they know that they really don't have a choice about the package. I mean, their offices, desks, and PCs have new-hires and new contractors waiting to move in.
    It didn't seem to matter what the last performance rating was for these people. Some excellent and highly skilled people are being asked to leave. They were assigned to small special projects last year, while doing the same work as other people in the same dept. Then suddenly those special projects were all cancelled about 2 months ago. And of course, you have to know that these people were not able to find other jobs inside IBM. No hiring manager would even talk to them, return e-mails, schedule an interview, etc. They were marked to be let go, and "find another job yourself inside IBM, we can't help you" was a cruel 2-month joke on these IBM employees.[...]
    We are watching another wave of long-term and perfectly good IBM employees (with pensions) being fired and replaced with new IBM employees with no experience and fewer skills being hired to replace them, at a much lower salary and of course, no pension at all, and no matching 401-K money for their first 12 months. In the meantime, IBM's customers are worried, and getting poor service. Customers are dropping IBM products, and no one inside IBM seems to know what is happening. There are no longer the skills or interest in selling products to new customers, or keeping existing customers happy. The number one priority inside IBM today is to replace all current employees who have a pension to save a few bucks. While the business goes down the drain. For years now, I've been watching a great company eat it's seed corn, and get sick. And now the patient has taken a big turn for the worse.
  • In a Yahoo! message board post, "madinpok" responds to this comment from a retiree: Maybe I don't understand IBM's position... I am sure that financial folks at IBM would be happy not to pay a penny toward my health care costs whether I'm 65 or not. However, I assumed they are obligated in some way to do so. I would be interested to know what exactly is the obligation or if they can simply turn their back and let us walk the plank. Full excerpt: Unfortunately, IBM has no legal obligation whatsoever to provide any medical coverage to retirees of any age. So yes, they can turn their backs and provide nothing if they choose to do so. While IBM once provided the same level of coverage that employees received for the rest of your life at no cost, they no longer do that. Over the years, they have been providing less and less medical coverage to retirees. New employees coming into IBM will get absolutely nothing in medical benefits when they retire (if they last that long).
  • Raleigh News & Observer: Employer as shape-shifter. IBM's layoffs follow bulking up to 329,000 last year. Excerpts: Following IBM's employment patterns could give you whiplash. A year ago, the company -- one of the Triangle's biggest employers -- touted aggressive hiring plans. It said it would hire 15,000 workers in 2004 to take its worldwide work force to the highest level in 13 years. It ended the year with 329,000 employees. Now, it's in the midst of laying off as many as 13,000 of them. The company is reducing its staff to improve decision making and lower expenses. In the Triangle, IBM laid off 300 within the past two weeks. Its Triangle payroll, because of layoffs and other actions, is the lowest in a decade.
  • Washington Post: Human Toll of a Pension Default. By Dale Russakoff. Excerpts: "Like Enron, workers' lives and retirements have been ruined," Sen. Charles E. Grassley (R-Iowa) said last week. "But unfortunately, this time it's perfectly legal." In e-mails to Miller that his staff is posting online, and in interviews, United retirees recounted stories of job-hunting in their sixties and seventies, facing medical costs they no longer can afford, uprooting families to move to lower-cost communities, selling dream retirement homes and losing money they had counted on to support elderly parents. [...]
    PBGC Executive Director Bradley D. Belt said in an interview that United is only the latest -- and largest -- illustration of what ails the federal pension protection system: It allows companies to drastically underfund pensions, and even to disguise the problem. Defaults have so escalated in troubled sectors of the economy, Belt said, that the PBGC now is on the hook for $450 billion in pension obligations, compared with $50 billion only three or four years ago. In three years, it has gone from having a $7 billion surplus to a $23 billion deficit. Without changes to the 30-year-old pension protection system, he said, the PBGC could itself become insolvent.
  • Excite: IBM Opens Fifth Software Center in India. Excerpt: IBM Corp. on Tuesday opened its fifth software development center in India and announced plans to hire 1,000 programmers in the new center by the end of 2005. "We are very excited by the skills and talents and the productivity that come from our team in India," Frank Kern, IBM's vice president for Asia-Pacific said, inaugurating the center in the southern Indian city of Hyderabad.
  • InformationWeek: Midcareer Crisis. By Marianne Kolbasuk McGee. Excerpts: After putting in 20-plus years at AT&T Bell Labs and then Lucent Technologies in demanding positions such as being the architect of a computing environment used by 6,000 software developers, who could blame Straka if he had looked forward to mixing work with a little more pleasure time as he entered the zenith of his career? Instead, he felt compelled to accept an early retirement package in July 2001, when Lucent, like other telecom-equipment suppliers, retrenched in the wake of the Internet and telecom-industry bust. He didn't want to leave but worried that his pension benefits would be a lot less lucrative if he stuck it out and then later became a victim of layoffs.
  • CNN: An immodest proposal, by Mark Shields. Excerpts: The captains of American corporate life could learn much about how real leaders treat their troops from the captains and the lieutenants of the United States Marine Corps. The Marine officer looks out first for his men, making sure that they have food to eat and a place to sleep. When deployed, the Marine officer waits at the end of the mess line until all the PFCs and corporals under his command have been fed. Contrast these unselfish military values with self-concerned CEOs who make sure their companies set aside millions of dollars for their own personal pensions, while they and their companies fail to fund the pension guarantees they have made to their employees. [...]
    Many of United's 121,000 current and former employees will have their promised pensions cut in half. Imagine the anguish and the anxiety they must endure. Imagine their fury when they remember that just before the airline went into bankruptcy, United gave CEO Glenn Tilton an iron-clad $4.5 million pension. The airline skies are very friendly indeed to the top brass. Delta Airlines, which is expected to follow United into pension default, while laying off thousands of employees, scrimped to set aside $4.5 million in a pension trust for CEO Leo Mullin. Six months before US Airways filed for bankruptcy, the airline thoughtfully provided a most golden parachute of $15 million for CEO Stephen Wolf. [...]
    Here is one immodest proposal: Before the working families of America have to take over the responsibility for fulfilling a company's broken promises to the workers whose productivity and loyalty made that company profitable, it will be illegal, under criminal penalty, for such a company to award or for any executive of that company to receive any bonus or pension. Is it too much to ask that the barons of the boardroom share just a little bit in the sacrifice and pain that the flight attendants, the machinists, pilots and the baggage handlers are forced to bear? The Bush administration has fought tooth and nail to enact new laws to punish individuals who go through bankruptcy, but it has expressed not even the mildest dissatisfaction with CEOs whose cashmere pockets are lined as the companies they run jettison their obligations to their own workers and instead require ordinary citizens -- most of whom do not have employer-provided pensions -- to pay the companies' bills.
  • Denver Post: Capitalist risk falls on workers' backs. By John Aloysius Farrell. Excerpts: Our economic system is built on risk. It's the soul of capitalism. It's the price of freedom. You decide to start a business. Investors loan you money. You hire workers. You reap the rewards. But there are downsides to risk. Capitalism requires losers. Maybe there is a recession. Maybe the scalawags in Washington plunder the treasury. Maybe your business model stinks. [...]
    And the Senate Finance Committee heard last week how loopholes in federal pension laws have let high-risk companies shortchange retirement plans, endangering "guaranteed" benefits for thousands of workers and raising the specter of a taxpayer bailout. Senators on the panel heard from Jayme Manley from West Chicago, Ill., who has worked as a United Airlines flight attendant for more than two decades. Like thousands of colleagues, she may lose half or more of the pension she's been counting on. "I am a 46-year-old woman," Manley wrote."I am a wife. I am a mother of four young children. I am a daughter of a proud World War II and Korean War veteran. ... I am honest, hard-working, faithful. I am college-educated, community-oriented and family-driven. I am 'the girl next door.' I am exactly what United Airlines sought when hiring me as a flight attendant 21 years ago. "I am their past, but also United Airlines' future. I am a promise broken. I am despair."
    Jayme is not alone. Nor is United a special case. A new study of 5,000 U.S. families by Peter Gosselin of the Los Angeles Times demonstrates how business and government are increasingly shifting economic risk to the backs of working families, who are finding it harder to bounce back from the inevitable consequences. I suppose I'm Pollyanna to suggest we're in this together, that promises should be honored, and risk - and sacrifice - fairly distributed. United chief executive Glenn F. Tilton doesn't seem to see it that way. At the Senate hearing, he was asked why he has not pared back his own $4.5 million retirement package. Sen. Ron Wyden, D-Ore., suggested that Tilton's deal was evidence of "a double standard." No way, Tilton replied. It was simply a promise United made when he was hired. The company guaranteed it. Why, he had earned it through decades of hard work. Just like Jayme Manley.
  • New York Times: One Nation, Uninsured. By Paul Krugman. Excerpts: Harry Truman tried to create a national health insurance system. Public opinion was initially on his side: Jill Quadagno's book "One Nation, Uninsured" tells us that in 1945, 75 percent of Americans favored national health insurance. If Truman had succeeded, universal coverage for everyone, not just the elderly, would today be an accepted part of the social contract. But Truman failed. Special interests, especially the American Medical Association and Southern politicians who feared that national insurance would lead to racially integrated hospitals, triumphed. Sixty years later, the patchwork system that evolved in the absence of national health insurance is unraveling. The cost of health care is exploding, the number of uninsured is growing, and corporations that still provide employee coverage are groaning under the strain. So the time will soon be ripe for another try at universal coverage. Public opinion is already favorable: a 2003 Pew poll found that 72 percent of Americans favored government-guaranteed health insurance for all. But special interests will, once again, stand in the way. And the big debate among would-be reformers is how to deal with those interests, especially the insurance companies. These companies played a secondary role in Truman's failure but have since become a seemingly invincible lobby. [...]
    A system in which the government provides universal health insurance is often referred to as "single payer," but I like Ted Kennedy's slogan "Medicare for all." It reminds voters that America already has a highly successful, popular single-payer program, albeit only for the elderly. It shows that we're talking about government insurance, not government-provided health care. And it makes it clear that like Medicare (but unlike Canada's system), a U.S. national health insurance system would allow individuals with the means and inclination to buy their own medical care. The great advantage of universal, government-provided health insurance is lower costs. Canada's government-run insurance system has much less bureaucracy and much lower administrative costs than our largely private system. Medicare has much lower administrative costs than private insurance. The reason is that single-payer systems don't devote large resources to screening out high-risk clients or charging them higher fees. The savings from a single-payer system would probably exceed $200 billion a year, far more than the cost of covering all of those now uninsured.
  • Wichita Eagle: Firm alleges bias in Onex deal. The sale of Boeing Wichita forced too many people over 40 out of their jobs, a lawyer contends. By Molly McMillin. Excerpts: A Wichita law firm notified Boeing Co. and Onex Corp. this week that it plans to file a class-action lawsuit alleging age discrimination by the companies. The letter alleges the sale of Boeing Wichita's commercial aircraft division and the formation of Mid-Western Aircraft Systems, the temporary name of the new company, has "targeted and led to the illegal displacement of individuals above the age of 40." [...]
    Lawrence's letter to Boeing and Onex advises them to preserve all relative documents, specifically those "contained under the 'M' drive of Boeing's current computer system and any systems that may be created as a result of a change of ownership." It also asked that any documents regarding "Project Lloyd," Boeing's code name for the sale, and documents regarding the negotiations, studies, surveys, statistics, case studies and surveys regarding the sale or the issue of reducing costs dating from the year 1999 be reserved. After job offers or rejection letters went out to Boeing employees, "we received so many phone calls," Lawrence said. It was impossible to meet with everyone, he said, so the firm held a meeting on June 4. About 100 people attended, he said, more than the 30 to 50 Boeing employees he had expected.
  • Los Angeles Times: Was Enron Just a Dream? By Jonathan Chait. Cox will return the SEC to its lax old ways. Excerpts: Remember Enron? In calendar years, the scandal occurred just three years ago, but in political time it's been eons. Back then, in the wake of news reports showing how Enron had fleeced its investors and put its employees at risk, the public was up in arms. "Suddenly there may be a political price to pay for not acting," the New York Times reported. President Bush professed "outrage" over the scandal and declared support for reforms. Those days are long over. Today, all the pressure comes from business lobbyists who chafe at tough new restrictions and the Securities and Exchange Commission breathing down their necks. They yearn for the good old lax pre-Enron days. And Rep. Christopher Cox (R-Newport Beach), Bush's nominee to head the SEC, is just the man to give it to them. [...]
    The second rationale, offered with a somewhat straighter face, is that Cox is (in Bush's words) "a champion of the free-enterprise system." This description reflects a common confusion between support for free enterprise and slavish espousal of anything businesses desire, which may or may not have anything to do with free markets. [...] How does it help the "free market" to let companies deceive their shareholders? It doesn't. Economists understand that markets are inefficient when one party has reason to believe that the other is withholding crucial information. (That's why many car buyers steer clear of the used car market.) The same problem applies to capital markets when investors can't be sure that management is leveling with them. Bush, apparently, doesn't see it that way. In fact, according to his former Treasury secretary, Paul O'Neill, Bush asserted in one meeting that post-Enron uncertainty in the markets was caused by "SEC overreach." So, in Bush's way of thinking, the problem wasn't that executives were getting away with too much, it was that they were getting away with too little. If that is indeed what's ailing the economy, then the appointment of Cox is an excellent cure.

Vault Message Board Posts
Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. Some of this week's posts follow.
  • "Abilities Needed for BCS Success" by "Tweetie_Bird". Excerpts: As I leave BCS for another firm. I can now say unequivocally that one thing outsiders cannot fathom about many successful IBMers (in BCS or in other parts of IBM) is their unique ability to be negative yet succeed in business. The schizophrenic ability is one that can be only developed in the poisoned atmosphere of IBM. The ingredients for this were created many years ago by the Darwinian Roman Gladiator environment set up by the then IBM management. Eventually, the customer/client became irrelevant, but winning the intellectual battle was all that mattered. Offer a party of business people and the IBMers (ex or active) will unconsciously seek themselves out and sometimes even isolate themselves. Being in IBM is like being a battered wife. Most will be great business people when not talking about IBM, but most will consider it therapeutic to criticize IBM. Most IBMers character is weakened (or better described as channeled) when IBM is brought up. Very much like a child who has been abused will act when other people talk about a pleasant youth. The pain and environment is so unbelievable that few can free themselves from being negative. [...] So a successful criteria for many IBMers is to be completely living a lie, acting positive and cheerful to your superiors, yet dying on the inside, waiting for an anonymous forum or a group of friendly IBMers to share their abuse with.
  • "Accountants sinking the ship" by "I_Been_Mugged". Full excerpt: Forget raises, NONE in 4 years - I was recently put on the 30 day termination list- extended for 30 days - billable for 110% on a great client - offered to come back as subcontractor at higher rate - How can we make the numbers when accountants are running the store?
  • "Let me see if I understand you" by "Dose of reality". Full excerpt: You are filling a role on a project that is expected to continue and you were terminated? What was the reason given for your termination - performance?...skills obsolescence? I don't get it. Were you offered a position as subcontractor - through IBM or independently, or are you just hoping to do that? In the meantime, there are dozens of BCS jobs posted on a number of search engines. I guess the key qualification for new or continuing employment at IBM is staff ignorance about what they get in return, so that we can manage to get more from you in good faith than what we return to you in compensation and reward.
  • "The Method behind the madness", humor by "Dose of reality". Full excerpt: NEW YORK, N.Y.(Bigblueballoon.com) - IBM will reduce its workforce by an unprecedented 120 percent by the end of 2005, believed to be the first time a major services firm has laid off more employees than it actually has. IBM’s stock price soared more than 12 dollars on the news. The reduction decision, announced Wednesday, came after a year-long internal review of cost-cutting procedures, said IBM BCS head cheerleader GR. The initial report concluded the company would save $6.8 billion by eliminating 20 percent of its 320,000 employees.
    From there, said GR, "it didn't take a genius to figure out that if we cut 40 percent of our workforce, we'd save $13.6 billion, and if we cut 100 percent of our workforce, we'd save $34 billion. But then we thought, why stop there? Let's cut another 20 percent and save $40 billion. "We believe in increasing shareholder value, and we believe that by decreasing expenditures, we enhance our competitive cost position and our bottom line," he added. IBM plans to achieve the 100 percent internal reduction through layoffs, attrition and early retirement packages. To achieve the 20 percent in external reductions, the company plans to involuntarily downsize 70,000 non-IBM employees who presently work for other companies.
    "We pretty much picked them out of a hat," said GR. Among firms IBM has picked as "External Reduction Targets," or ERTs, are Quaker Oats, AMR Corporation, parent of American Airlines, Lockheed, Boeing, and Charles Schwab & Co. IBM's plan presents a "win-win" for the company and ERTs, said GR, as any savings by ERTs would be passed on to IBM, while the ERTs themselves would benefit by the increase in stock price that usually accompanies personnel cutback announcements. "We're also hoping that since, over the years, we've been really helpful to a lot of companies, they'll do this for us kind of as a favor," said GR. Legally, pink slips sent out by IBM would have no standing at ERTs unless those companies agreed. While executives at ERTs declined to comment, employees at those companies said they were not inclined to cooperate. "This is ridiculous. I don't work for IBM. They can't fire me," said Kaili Blackburn, a flight attendant with American Airlines. Reactions like that, replied GR, "are not very sporting."
    Inspiration for IBM's plan came from previous cutback initiatives, said company officials. In January of 2003, for instance, the company announced it would trim 30,000 jobs over the next year. However, just two months later, IBM said it had already reached its quota. "We were quite surprised at the number of employees willing to leave IBM in such a hurry, and we decided to build on that," GR said. Analysts credited GR’s short-term vision, noting that the announcement had the desired effect of immediately increasing IBM's share value. However, the long-term ramifications could be detrimental, said Bear Stearns analyst Beldon McInty. "It's a little early to tell, but by eliminating all its employees, IBM may jeopardize its market position and could, at least theoretically, cease to exist," said McInty. GR, however, urged patience: "To my knowledge, this hasn't been done before, so let's just wait and see what happens."

Coverage on Social Security Privatization
  • Washington Post: Senators Consider Boosting Retirement Age. By David Espo. Excerpts: Work till you're 69 before getting full Social Security benefits? That's one possibility _ for Americans who retire two decades or more into the future _ as Republicans on a key Senate committee review suggestions for improving the program's solvency.

New on the Alliance@IBM Site:
  • In My Opinion: For Middle Class, Retirement Pillars Are Tumbling. By Morton Bahr, CWA President. Excerpts: A potentially huge crisis looms. Of all the existing defined benefit pension plans, 75 percent are under-funded - lacking the assets to pay out their benefit obligations. The reason, writes UCLA professor Katherine V.W. Stone, commenting on United's plight in the Washington Post: "In the stock market boom years of the 1980s and 1990s, the funds became so flush that United, like many large corporations with surpluses in their pension plans, diverted some of the money earmarked for pension contributions to dividends, executive mega-salaries and general operations. Now after five years of stock market decline...." You get the picture.
    Of course the executives who apparently failed to foresee that markets go down as well as up, who raided their workers' pension plans while mismanaging their companies to the point of collapse, have done okay themselves. As United CEO Glen Tilton tries to shed his commitment to employees, he retains his own $4.5 million pension trust. [...]
    The fact that union workers have deferred wage gains for years to win health and retirement security gets lost in the storyline about industries handicapped by their "generous" benefits. In every round of bargaining, CWA members and others have to fight to keep these benefits. Of course, Social Security becomes ever more important as corporate America demolishes a major pillar of middle-class retirement security, the pension. And now President Bush wants to chop that crucial pillar as well. Amazingly, Bush's plan for "reforming" the system would be worse than doing nothing at all. [...]
    The projected shortfall in Social Security can be resolved through gradual and modest increases in contributions to the trust fund that fall mainly on wealthy individuals and corporations. For instance, at least half the funding deficit would be erased by raising the income ceiling for Social Security contributions from the current $90,000 to $140,000-well above the income of most working people, and within the means of high-earners. For example, last year, Verizon CEO Ivan Seidenberg had paid off his Social Security obligation by 3 p.m. on Jan. 2 (based on straight salary, no perks). Here's when other CEOs of CWA employers hit the $90,000 pay mark: For GE head Jeffrey Immelt, 1 p.m. Jan. 3; for Disney/ABC Chairman Michael Eisner, 3 p.m. Jan. 3; and for Delphi CEO J.T. Battenberg III, 9 a.m. Jan. 7. Is it too much to ask the Seidenbergs and Eisners and other high-income-earners to contribute a few more workdays to preserve our most successful and critically important social program?
  • Alliance@IBM: Attention IBM employees: IBM is blocking e-mail to and from the Alliance@IBM e-mail address endicottalliance@stny.rr.com from inside the company. Please send your job cut information and other correspondence from your home e-mail. You can also contact us the following ways: Phone 607 658 9285 or Fax 607 658 9283.
  • IBM Pension Lawsuit FAQ about Cooper v IBM, Updated 6-2-05. Excerpt: Below is a list of frequently asked questions about the class action lawsuit against IBM's 1995 and 1999 pension plans. The answers are my personal opinions, have not been verified with either IBM or plaintiffs’ counsel, and should not be construed as legal advice. On July 31, 2003, a federal district court judge ruled in favor of the employees in this case. IBM will appeal portions of the ruling. On September 28, 2004, IBM and the legal team on Cooper v IBM announced that an agreement had been negotiated that settles some of the claims and set the amount of damages that IBM will pay to the class if IBM's appeal of the district court's age discrimination rulings is unsuccessful. Click on any question to jump to the answer. Or scroll down and read them all.
  • Resource Action Tool Kit. Along with the CWA Job Survival Kit, here are some resources you can use when challenging or questioning a company policy, procedure or practice.
    • Reduction in Workforce actions (RIF)...
    • Escalations, Appeals and Skip level meetings...
    • Implied contracts vs. Employees at Will...
    • In General...
  • Job Cuts Status & Comments Page. Excerpts: Job cuts are coming. Information needed: What is Your location? How many job cuts at your location? What locations are cutting jobs? Name of Division and Business Unit? Some sample submissions follow:
    • Comment 06/12/05: At SVL it appears that there were several 'oldies' that wanted to retire anyway so they welcomed the package, but because of age discrimination laws they had to throw in a few younger ones to offset the numbers. This is tragic. -Anonymous-
    • Comment 06/12/05: Thanks to lack of any feedback from management this only comes from the rumour mill. Word in the UK is that despite many EOIs being accepted by IBM take up was not as hoped so the UK will see involuntary cuts in July. numbers unclear. -Anonymous-
    • Comment 06/12/05: Look for a job within IBM within a 30 day timeframe. Just who is IBM kidding? Skills rebalancing my foot. It is all about $$$. -Anonymous-
    • Comment 06/12/05: IBM Global Services in Kansas - Promised something but giving something else. Forget promise, They are not laying off people because they have to give severance package. They are putting Visa Candidates in such a legal difficulty, many of them are forced to leave their jobs. IBM is not renewing the H1 Visa's, Took all the Green Card Processing documents from Sprint. Now THEY Deny to process Visas as well as Green Cards. IBM probably should write a IBM 101 ways of letting people go without have to laying them off document. -Anonymous-
    • Comment 06/14/05: I'm in SWG, in the DR division, and we've had serious clamp downs on funding, headcount reductions, and expenses. One guy got forced into retirement already, and our business has unusually slowed down for this time of year. It is REALLY slow. I've already been telling people since the beginning of the year that the direction of the company is suspect, and with the Forbes article, it somewhat validated my opinion. At any rate, you need contraction before growth can occur in a monster company like this, and it looks like we're heading for a contraction, or Palmisano is a business genius (or real lucky) and heads the company in a necessary direction for growth. Either way, it's owed to the stakeholders -- by definition of being a public company. Anyhow, I'm glad I'm young, no family, and no responsibilities but myself. I know better now to stay in I/T and big corporations. Time for a career change. -Anonymous-
    • Comment 06/14/05: Concerning the offer of allowing 30 days to find a job: IT WILL NOT HAPPEN. ANY manager that offers a position to ANYONE on an RA list will be terminated. Let me repeat: Anyone on an RA list will not be offered another position in the company. -Anonymous-
    • Comment 06/15/05: A heads up to folks who have been 'surplused' and have aspirations of returning to IBM as a contractor or supplemental and using the job board to search for open positions and get rehired -- the system has been locked to exclude all nonregulars. And you can't use an IBM friend's to search, either, because you need to complete a skills profile first before you can view details on matches (and perhaps call the hiring manager). So make the most of those 30 (actually 20, counting weekend) days you have left....good luck... -Anonymous-
    • Comment 06/15/05: I was supposed to be laid off on June 8th, but my manager could not get his "meeting" sorted out properly that day. Then I was told "the meeting has to be done" on Friday. On that Wednesday and Thursday, I was at a major client representing IBM. When that client got told through an email that I would not be coming back, they looked up my home phone to call me to see if I was ok. It is a relief of sorts, in a very grim way, to see that I was not the only person let go, and from the sound of it, they may be another wave coming along as well. All I can say is that the severance pay was decent - 5 months of salary - one month for each year and 4 months of DBM. Hugs and best wishes for everyone else caught in the Romper Room mirror layoffs. -Anonymous-
    • Comment 06/15/05: I hope that people will start to use the actual location of where they are being laid off from. I know I can't be the only one that has no idea what half these acronyms being thrown out actually are located. Please state the city/state you are in. Latest news in Endicott Printing Division is that Monday we will be told what is going on after weeks of rumors....I pray that it is not as bad as we hear it will be. -Anonymous-
    • Comment 06/15/05: I am another software group marketing professional over 40 victim of the recent resource action in Cambridge Mass. -Anonymous-
    • Comment 06/15/05: Noticed that IBM stock price is at a long time low; guess the market does not believe that layoffs are good business either.-Anonymous-
    • Comment 06/15/05: I am in Charlotte, NC; I only know of two others names besides myself that have been laid off; those two work out of Lexington, KY. I've heard that 4 people were let go in Mechanicsburg. -Anonymous-
    • Comment 06/15/05: East Fishkill. 5 managers have been re-assigned due to letting many employees work 8hr shifts while paying them AWS night shift premiums. The managers and employees were NOT let go but rather "hidden" into other depts. -Anonymous-
    • Comment 06/15/05: Updated numbers appear to be 70 people at Rational and 80 people at Lotus. The majority of people riffed appears to be over 40 and bands 8 & 9 -Anonymous-
    • Comment 06/16/05: Received an email from HR in the UK yesterday telling me my job is safe because I am in a global centre of excellence, still feel very sad when I read of the pain my brothers are suffering in the US, perhaps some of it is survivor guilt. -Anonymous-
    • Comment 06/16/05: Those who came to IBM as part of an acquisition beware - some, like those in Lotus have two "hire" dates. One date (service hire date) that corresponds to the date they were hired by Lotus. Certain benefits, such as vacation, are calculated based on that date. The other is what they call the "effective hire date", which is when Lotus went from a subsidiary to a division of IBM. My group (most of which was laid off) just found out that their severance is based on the "effective hire date" - so they are just finding out that their severance is significantly less than they thought. The last lay off used the service hire date. -Anonymous-
    • Comment 06/18/05: I am... was... on a virtual team... no specific location. We had 5 people cut (all over 40 and most 50+ with many years experience). Others, more fortunate and/or political than me, "somehow" were able to move over to other groups like the day before... we were supposed to know about the RA. Supplementals and Contractors stayed.?? Adding insult to injury, I was reporting to a manager that was previously a peer. This person had taken credit and received an award for work not performed solely by them. Everyone knew. Adding this RA to a current divorce situation.. I cannot believe my company has ended up like this. It is so sad. -Anonymous-
    • Comment 06/18/05: 150 Jobs were transferred from IGS BCS to a company called One1. Most of the jobs = The Educational Ministry Account in Jerusalem. Employees were given a very decent severance pay - 2 months of salary + two months for each year of service and 4 months of DBM. Also, employees will continue to work for One1 for the same pay and benefits. Also, around 30 older employees (over 55 years old) were offered the "Package". -Anonymous-
    • Comment 06/18/05: The actual number of people surplused in Corporate CIO is 60 people which I believe is 20% of the organization. Even for those who can retire with full benefits, it's an ugly way to leave IBM. It certainly points out that IBM now only considers people as things...which you only have to treat as well as the law requires. Very sad for those of us who joined IBM 30+ years ago and know what working for IBM once meant. more...now IBM -Anonymous-
    • Comment 06/18/05: Hey all. Those who had been told that he or she will be laid off and are within Lotus Division located in RTP, look up job reference 006260 especially anyone with some portal or java experience. Just a FYI -Anonymous-
    • Comment 06/18/05: The information provided by an HR rep about when those laid off from the Lotus division were officially hired and upon which severance is based was wrong - fortunately. They are using the service hire date. -Anonymous-

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