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    Highlights—June 25, 2005
  • New York Times: Cutting Here, but Hiring Over There. By Steve Lohr. Excerpts: Even as it proceeds with layoffs of up to 13,000 workers in Europe and the United States, I.B.M. plans to increase its payroll in India this year by more than 14,000 workers, according to an internal company document. Those numbers are telling evidence of the continuing globalization of work and the migration of some skilled jobs to low-wage countries like India. And I.B.M., the world's largest information technology company, is something of a corporate laboratory that highlights the trend. Its actions inform the worries and policy debate that surround the rise of a global labor force in science, engineering and other fields that require advanced education.
    To critics, I.B.M. is a leading example of the corporate strategy of shopping the globe for the cheapest labor in a single-minded pursuit of profits, to the detriment of wages, benefits and job security here and in other developed countries. The company announced last month that it would cut 10,000 to 13,000 jobs, about a quarter of them in the United States and the bulk of the rest in Western Europe.
    "I.B.M. is really pushing this offshore outsourcing to relentlessly cut costs and to export skilled jobs abroad," said Marcus Courtney, president of the Washington Alliance of Technology Workers, or WashTech, a group that seeks to unionize such workers. "The winners are the richest corporations in the world, and American workers lose." WashTech, based in Washington State, gave the I.B.M. document on Indian employment to The New York Times. It is labeled "I.B.M. Confidential" and dated April 2005. An I.B.M. employee concerned about the shifting of jobs abroad provided the document to WashTech. [...]
    But looking at job numbers alone, said Joseph E. Stiglitz, a Nobel Prize-winning economist and a professor at Columbia University, understates the potential problem. "What worries me is that it could have an enormous effect on wages, and that could have a wrenching impact on society," said Professor Stiglitz, a former chief economist of the World Bank. The fact that globalization anxiety about jobs and wages does not extend to executive ranks has stirred resentment among workers. "Maybe the shareholders should look offshore for competitive executives who would collect less pay and fewer benefits," said Lee Conrad, national coordinator of the Alliance@IBM, a union-affiliated group that has 6,500 dues-paying members at I.B.M. "In all this talk of global competitiveness, the burden all falls on the workers."
Speak Up!Washington Alliance of Technology Workers (WashTech): IBM Accelerates Hiring in India. Confidential document sheds light on plans. Seattle--According to internal documents, IBM has plans to hire more than 14,000 new employees in its Indian based operations in 2005 alone. An expansion that closely matches the number of announced job cuts from its U.S. and European operations.
The document titled "India 2002 to 2005," shows a rapid increase of hiring in India. In 2002, it shows 6,070 employees and 24,150 employees by 2004. Then it jumps to 38,196 employees by 2005. The document goes onto describe the "growth drivers" for the expansion. It lists areas of the company such as Application Management Services and Global Delivery Center. It also mentions its acquisition of Daksh which is an Indian based offshore-outsourcing company. To view the internal slide see http://www.washtech.org/news/documents/india/
Below is the sample letter:
Subject: Sam - we should export you!
Dear Mr. Palmisano:
I am outraged at the actions of IBM expanding its operations in India while at the same time firing thousands of U.S based employees. Your company's actions clearly demonstrate that globalization is a zero sum game for U.S. employees.
If globalization raises the tide by lifting all boats, why are we seeing job losses in the U.S. rather than hiring? The only boats globalization appears to lift is the yachts of CEO's such as yourself.
IBM is creating a race to the bottom and is threatening U.S. technology leadership with its actions. We should export your job.
Sincerely, Your name here.
Tell-A-Friend: What IBM is doing in exporting jobs impacts every worker in the economy. I think that it is very important for our future that we tell these CEOs that what they are doing is wrong. Join with me in sending this important message.
  • EE Times: IBM to take $150 million stake in India fab, says report. Excerpts: IBM Corp. has entered into an agreement to take a 24 percent stake for $150 million in one of India's fledging wafer fab companies — India Semiconductor Manufacturing Co. (ISMC), according to the Business Standard in India. IBM is also reportedly providing process technology for ISMC, which is expected to have a ground breaking ceremony for its initial fab on Sunday (June 26), according to the report. State chief minister Y. S. Rajasekhara Reddy is scheduled to perform the ground-breaking ceremony for the proposed fab, the report said.
  • Forbes: Putin To Meet With Citi, Intel, IBM Execs. By Chris Noon. Excerpts: What's the Russian for "trust me"? President Vladimir Putin will make all the right noises to top U.S. and German execs this weekend. The poker-faced Russian leader is to assure all and sundry that Russia remains committed to free-market principles, in spite of the Yukos oil company debacle and the Kremlin's increasing influence over the economy. Execs from Citigroup, Alcoa, ConocoPhillips, Intel, IBM and News Corp. will gather for an audience with Putin in St. Petersburg on Saturday, according to a Russian media report.
  • Janet Krueger: Q&A from the Cooper legal team. Check out the new links on the Alliance web page at http://www.allianceibm.org. Specifically, there is now an FAQ from the Cooper legal team with answers to the following questions:
    1. What is the meaning of Active Employee?
    2. Who are the “IBM Vanity Fair employees”?
    3. How many class members are there?
    4. When can I expect to receive my benefits from the settlement?
    5. Who decided what claims should be pursued on behalf of the Class?
    6. What remedies are available to the Class?
    7. Is it possible to compare the “loss” incurred by the Class Members as a result of the 1995 and 1999 Plan amendments to the recovery to be provided by the settlement?
    8. How was it determined which Class Members would be entitled to participate in the three separate funds?
    9. Why does the settlement structure use service caps?
    10. Would IBM be required to pay Class Counsel for representing the Class Members if the Class won the case and there was no settlement?
    11. How will the Court determine the attorneys’ fees and reimbursement of costs for Class Counsel?
  • Yahoo! message board post by "ibmmike2006". Excerpts: It is not that IBMers expected entitlements or paternalism. I agree that we should not have counted on it entirely and did the other things also to become financially independent from IBM. However, for nearly 3 decades until Gerstner took over, the lower pay scales at IBM were boasted by management for being so because of the benefits and entitlements. Managers believed it and so did most employees. We were all dumb for falling for it but we had to trust IBM management. Oh, did I mention that many IBM managers who were representatives of Corporate management and policy were also duped.
    The problem is when Gerstner robbed IBM, changed the pension plan, many who were planning for retirement and using the "numbers" that were sent annually, saw it taken away. In the case of the "Cash Balance" conversion, the numbers were obscene. It is difficult for a 40 or older employee to "make up the difference" because of the lack of having the advantage of the "Time Value of Money".
    Where did the $18 Billion of the Pension trust fund disappear to? Have you wondered how IBM was able to buy back $69 Billion in stock to fund the executives stock options purchases in the last 10 years?
    When you connect the dots, like many IBMers who are still working or were employed and affected by Gerstner and his rape of IBM from 1993 did, you may understand. It is not entitlement that is the problem, it is theft of deferred compensation that took place starting in 1993 to present. [...]
    Gerstner and the present IBM executives took away the magic. Three decades of promises that were broken is hard to forgive. Gerstner walked away with a $1 million pension, over 25 million shares of IBM stock and became the 400 richest person in America. The money Gerstner walked away with did not come the profits from the 9 years he was CEO. It came from more than 75 years of IBM Assets that was built by the thousands of IBMers, past and present. IBMers, at least the thousands over the more than 3 decades i worked there did not expect entitlements, they earned them the old fashion way, they worked hard for them.
  • MSN Money: While pensions fall short, CEOs fly high. By Michael Brush. Excerpts: At companies across the country, workers are watching their pensions dwindle. At UAL’s United Airlines, workers stand to lose more than $3 billion in promised benefits as the airline passes its pension obligations on to the government. Unfunded pension obligations at Ford have risen to a whopping $12.3 billion, and General Motors is looking at shortfalls of $7.5 billion. In the executive suites of these companies, however, there's no pain to be found. United Airlines chief executives John Creighton, Jr. and Glenn Tilton collected $13.1 million in the two years leading up to its 2002 bankruptcy. And while the pension pit grows at Ford, chief executive William Clay Ford Jr. has collected $53 million over the past three years. At GM, G. Richard Wagoner Jr. got $40.7 million over that period. It's no secret that corporate bigwigs have paid themselves handsomely while stiffing their workers and sending jobs overseas. It's particularly galling, though, to see these same executives locking in their own lifetime of luxury while rolling the dice with their workers' retirement years.
  • Janet Krueger answers this question in a Yahoo! message board post: Could payments to those who have already taken early retirement be impacted by this bill, were it to become law? Full excerpt: One of the rules to remember when lobbying your representatives in Congress is not to get too tied up in a bill's current wording... They are often amended and changed in major ways before being passed. Never assume you don't have to comment on things a bill doesn't say, or that you don't have to point out the things you like... Tell Congress what it SHOULD cover and what it should NOT cover.
    In other words, if you don't want Congress to make it easier for companies to take away early retirement subsidies from people who already left, then tell them not to do it... I can just hear a speech saying we can reduce the number of corporate defaults and forced PBGC takeovers if we let companies adjust their pension promises to match their pension funding without having to hand the fund over to the PBGC, can't you?
  • The Salt Lake Tribune: Loss of jobs soon turns into loss of dads. By Robyn Blumner. Excerpts: According to Hallmark, the best way to commemorate Father's Day is by sending Dad a card. One can choose a sentimental message, thanking Dad for his guiding hand and loving devotion. Or one can good-naturedly chide Dad for his universal father foibles, such as never stopping to ask directions, hogging the remote control or reading on the john. But I think Father's Day should have a broader outlook. It should be a day when we reflect on all the ways our government conspires to make fathers an endangered species. [...]
    You want fathers to stick around? Give them good jobs that pay a living wage and offer decent benefits and real hope for advancement - jobs that give the wage-earner dignity and stature within the family. Maybe then we'll see the return of the engaged dad. Over the past 30 years, our economy has supremely rewarded those at the top, while those in the middle and at the bottom have seen their relative position eroded. Most of the modest financial gains for working families over that time have come from women entering the workforce and employees putting in more hours. Wages themselves have not risen much after adjusting for inflation, and good manufacturing jobs are now phantoms of a bygone era. [...]
    Then add the demise of unions - hastened (though not caused) by the federal government's long-running hostility to labor organizing. In the past, unions have demanded that low-level workers and not just executives and stockholders share in productivity gains. Now, though, with the threat of unionization remote, profits head to Wall Street and into obscene executive compensation.
  • HR Policy Association: Kennedy Unveils Pension Reform Principles Recognizing Need for "Fair and Predictable" Rules. Excerpt: This week, Sen. Edward Kennedy (D-MA) unveiled Senate Democrats' principles for strengthening retirement security at a forum bringing together Democratic Senators, corporate and labor leaders, pension experts, and retirees. The principles include general ideas such as, "all Americans should have a secure pension" and that the government should "reward and encourage companies that provide good pensions to their employees." In a press release, Sen. Kennedy accused the Bush Administration of seeking to cut promised pension benefits, but clearly recognized industry's perspective, stating that "any changes in funding rules must be fair and predictable," and "manufacturing companies already face heavy pressure from globalization, and pensions should not be penalized for downturns in the business cycle." The principles were released just before the Senate Finance and HELP Committees are expected to begin consideration of retirement security legislation.
  • Los Angeles Times: U.S. Healthcare Problem Too Big for Employers and Workers. Excerpts: With many Americans already unnerved by persistent trade deficits, airline pension defaults and GM's recent announcement of 25,000 layoffs, the political and economic consequences could be profound if the GM-union conflict escalates into a strike or lockout. Self-preservation alone might encourage a president and a Congress with sinking approval ratings to confront the underlying healthcare problems fueling this dispute with even a fraction of the concern that they mustered for the treatment of a single Florida woman, Terri Schiavo. To put it mildly, exploding healthcare costs present a more tangible problem for many more Americans than right-to-die cases. Since 2000, according to the Kaiser Family Foundation's authoritative survey, healthcare premiums for family coverage have increased by 59%, six times faster than inflation. [...]
    There's no silver bullet for controlling medical costs. The inability of even a massive consumer like GM, with its vast bargaining power, to hold down its bills belies the simplistic suggestions from Bush and conservative thinkers that transferring more of the cost to individuals will significantly reduce costs by making patients smarter consumers.
  • The American Prospect: End of the Private New Deal. As Republicans loudly threaten the public New Deal, the corporate version quietly slips away. By Paul Starr. Excerpts: A ripple of economic anxiety passed through middle America this spring when a bankrupt United Airlines ditched its pension obligations and General Motors announced it would cut 25,000 jobs. That’s capitalism, you may say: Individual companies rise and fall, and America’s prosperity should never be equated with their fortunes. But United’s abandonment of its pensions and GM’s deepening troubles highlight a larger worry that ought to be a focus of our politics. The old corporate America that took responsibility for workers’ pensions and health care is dying, and the nation’s political leadership has hardly taken notice of the implications.
    The rise of corporate social protection had a huge impact, and so will its decline. Conservatives long touted employer-provided pensions and health plans as the private alternative to big government -- the very epitome, supposedly, of the American way. Liberals were ambivalent: Although employer benefits provided security for many workers, especially in unionized industries, corporate America’s New Deal left out millions of other Americans and weakened support for national health insurance. Now corporate social protection is shrinking -- for many Americans, simply disappearing -- and there is no immediate prospect of public programs filling the void.
    The conservatives’ remedy is to take privatization one degree further by transferring obligations for retirement and health insurance from corporations to individual employees. The 401(k) plans and health savings accounts exemplify this approach; both enable employers to shed risks they assumed decades ago and are being sold to the public as ways of creating more “choice.” And, of course, the president wants to move Social Security in the same direction, transferring even more risk to individuals. The trouble with these approaches is that individuals have much less ability than a large fund to spread risks, whether of failed investments or of failing health. Although some workers may invest their 401(k) accounts brilliantly, others make disastrous errors such as not diversifying; the evidence shows that, on average, professionally run pension plans get better returns
  • Guardian Newspapers (United Kingdom): Pensions: last call. Even the best employers could close final salary schemes to all further contributions because of sky-high liabilities. Neasa MacErlean reports. Excerpts: Some of the biggest and best employers in the UK are expected to close the final salary pension schemes they run for their staff to all investors in the next 12 months. About 70 per cent of big employers have already closed their final salary scheme to new staff, but have kept the pension funds open to further contributions from existing members. But the National Association of Pension Funds, an authoritative body that represents the biggest institutional investors in the country, will this week warn that some of the best final salary schemes will take no further contributions.
    Final salary schemes have traditionally been regarded as the most generous and secure form of pension scheme: the pension they pay is linked to the employee's earnings and the number of years' employment with the company. In contrast, the benefits paid out by money purchase schemes, the alternative to final salary, depend on the size of contributions made by both employer and employee, and the performance of the investment markets.
  • Lexington Herald-Leader: Report highlights bad retirement decisions. By Jeremy Borden. Excerpts: New York Yankees sage Yogi Berra once said, "If you don't know where you're going, you're likely to end up someplace else." Mathew Greenwald, a strategic planner and marketer, used that analogy Monday to describe the current state of American thought on retirement planning, outlined in a report by The American Academy of Actuaries. Anna Rappaport, a former president of the Society of Actuaries, and Greenwald presented their findings at a Capitol Hill press conference. The report detailed 10 common misperceptions about retirement and found, through research on behavior, that people rely too heavily on Social Security for retirement and often make miscalculated decisions on how much money they'll need to maintain the lifestyle they want, among other things.
  • Washington Post: Health Care Costs, Spending Up. More in Middle Class Could Join Ranks of the Uninsured. By Ceci Connolly. Excerpts: About 45 million people, or close to 15 percent of the population, were uninsured in 2003, according to the most recent data from the U.S. Census Bureau. The figure would be higher, Ginsburg said, were it not for expansion in Medicaid and the State Children's Health Insurance Program, both of which are government-sponsored.
    As health costs have risen over the past decade, more businesses have scaled back or dropped coverage entirely. The first group hit were poor workers, but Ginsburg said the trend is continuing into higher-wage groups. "Low-income people got priced out of private insurance a long time ago," he said. "Now it's working into the middle class."
  • Fast Company: Is Your Boss a Psychopath? By Alan Deutschman. Excerpts: Odds are you've run across one of these characters in your career. They're glib, charming, manipulative, deceitful, ruthless -- and very, very destructive. And there may be lots of them in America's corner offices. One of the most provocative ideas about business in this decade so far surfaced in a most unlikely place. The forum wasn't the Harvard Business School or one of those $4,000-a-head conferences where Silicon Valley's venture capitalists search for the next big thing. It was a convention of Canadian cops in the far-flung province of Newfoundland. The speaker, a 71-year-old professor emeritus from the University of British Columbia, remains virtually unknown in the business realm. But he's renowned in his own field: criminal psychology. Robert Hare is the creator of the Psychopathy Checklist. The 20-item personality evaluation has exerted enormous influence in its quarter-century history. It's the standard tool for making clinical diagnoses of psychopaths -- the 1% of the general population that isn't burdened by conscience. Psychopaths have a profound lack of empathy. They use other people callously and remorselessly for their own ends. They seduce victims with a hypnotic charm that masks their true nature as pathological liars, master con artists, and heartless manipulators. Easily bored, they crave constant stimulation, so they seek thrills from real-life "games" they can win -- and take pleasure from their power over other people. [...]
    "These are callous, cold-blooded individuals," Hare said. "They don't care that you have thoughts and feelings. They have no sense of guilt or remorse." He talked about the pain and suffering the corporate rogues had inflicted on thousands of people who had lost their jobs, or their life's savings. Some of those victims would succumb to heart attacks or commit suicide, he said. [...]
    Is Hare right? Are corporations fundamentally psychopathic organizations that attract similarly disposed people? It's a compelling idea, especially given the recent evidence. Such scandals as Enron and WorldCom aren't just aberrations; they represent what can happen when some basic currents in our business culture turn malignant. We're worshipful of top executives who seem charismatic, visionary, and tough. So long as they're lifting profits and stock prices, we're willing to overlook that they can also be callous, conning, manipulative, deceitful, verbally and psychologically abusive, remorseless, exploitative, self-delusional, irresponsible, and megalomaniacal. So we collude in the elevation of leaders who are sadly insensitive to hurting others and society at large.
  • FCW Media Group: Bush dissolves IT advisory group. By Aliya Sternstein. Excerpts: President Bush has let a council of independent information technology experts lapse. The President's IT Advisory Committee (PITAC) has been shut down and will not examine any other issues, a committee member said. After releasing a June 16 report on U.S. competitiveness in computation science, PITAC had planned to take a broad look at IT research and development, as a follow-up to its 1999 report, according to PITAC members. PITAC is a congressionally mandated committee comprised of industry and academic experts appointed by the president. At the moment, the committee is vacant. The president's executive order establishing the most recent PITAC expired June 1, and Bush did not reappoint current members or select new members.
  • USA Today: Shaming companies into action? By Stephanie Armour. Excerpts: A growing number of states are trying to pressure employers into improving health benefits by publicizing the names of companies that have the most employees in public health programs. But the hall-of-shame approach is rankling some state chambers of commerce and large employers such as Wal-Mart, which has been lobbying against the bills. Some of the bills have been nicknamed "Wal-Mart bills" because, in some states, a large number of the giant retailer's workers are on Medicaid. In a 2002 Georgia survey, Wal-Mart had more than 10,000 children of employees enrolled in a public insurance plan. The entire plan had 166,000 children. The results came from an internal memo that was cited in an AFL-CIO report obtained by the Atlanta Journal Constitution.
  • In a Yahoo! message board post, "ibmmike2006" gives advice to a newly "rebadged" IBM employee. Full excerpt: The excitement you feel for coming to IBM will be short lived, shortly after you arrive within 6 months, you will be getting the "HR Drill". You will be told that your job is in harms way because of work, your work will be "downsized" as it is being transferred elsewhere in the company. More than likely, offshore. If they say it won't be offshored, how will you know, as any work attached by a wire can be moved, like electronic transfer of money. IBM will have 38,000 to 61,000 Indians employees over the next couple of years. Where do you suppose all that work to keep those Indian fingers busy is coming from?
    Then in the next 12 months, you will be a nervous wreck, worrying and IBM management will offer sympathy but without work, you can't work. Then the meeting with your manager, behind closed doors, telling you, he or she is trying their darndest to keep you working but it looks like you are going to be laid off. Then you will be told you have 30 days to find a job within IBM, then maybe, your manager will tell you, looks like we have another position and start self training.....then 30 days later, I am sorry but it looks like you will be laid off. Then sure enough, you are laid off.
    This scheme has been going on for about 5 or more years. AT&T, QWEST amongst others. They work on you with a dog and pony show for about 18 months to see how weak you are. Whether you are a risk for a lawsuit or some other legal action. Most of those prime targets that I have run into are usually in their late to mid 40's. They sometime hire marginal 20 or 30 something employees to lay off with you. That way, it appears it is not age discriminatory. The real financial win for IBM is the older employee whose benefits will be taken back into the bottom line of the company.
    Rest assured, unless you fight back, and are not an easy mark, your termination was determined long before you were transferred to IBM. You better sharpen your resume and network NOW, because you and most of those who transferred to IBM will be gone shortly. You should be able to network on company time because you will have all that free time as your work is offshored.
    Sorry, but IBM is not a very nice employer.
    Please check back periodically and let us know how it is going. By the way, keep a journal of everything that happens at work. You might need it later. There is life after IBM, IBM and your previous employer just want to steal your defined benefits and deferred income they wrote off their taxes all those years. It's all about money. Good Luck.
  • eWeek: The Only Shortage in IT Hiring Is Common Sense. By Jim Rapoza. Excerpts: There's a terrible shortage in the world today. There just isn't enough of this valuable resource to go around, and it looks like this shortage will continue in the future. In fact, if something isn't done soon to address this shortage, the effects on the economy could be disastrous. No, I'm not talking about gasoline. I'm talking about the loss of IT workers and developers that many major software companies are claiming is just around the bend. I guess there's just no one out there who can build corporate applications and maintain corporate systems. In recent weeks, Microsoft has come out in favor of removing U.S. visa restrictions because the company thinks there isn't an available labor pool. IBM recently announced a program in partnership with many universities that would help increase the number of computer science majors to get more IT workers and developers into the economy.
    The fact that there's a shortage of IT workers and developers may come as a surprise to the tens of thousands of tech workers who have been laid off in recent years and now find themselves unemployed or underemployed. But Microsoft and IBM focusing on visa restrictions and college majors points out the real shortage that they and other companies see: It's not that there aren't enough IT workers and developers out there; it's that there aren't enough IT workers and developers out there who will work for low wages and who will forsake family and regular life to log 80-hour weeks. Many employers feel that experienced workers—while they may be desperate for a job—know what their skills are worth in terms of compensation and have families and responsibilities that won't let them put in killer workweeks.
    Potential employers have to realize that there is a definite chicken-and-egg phenomenon going on here. There is no college program that IBM or any company can put in place that is going to make computer science and IT more attractive to college kids, who are no dummies. They've seen friends and family laid off or outsourced from their IT jobs. Students look at the market and see companies desperately trying to cut down the number of IT workers they employ, not increase it. Until this dynamic changes, most talented kids will avoid a career in IT.

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.
  • "One Person's Thoughts" by "T_Slothrop". Excerpts: After a few years with C&L/PwC/IBM I have decided to leave. I have enjoyed reading the discussions in this forum, and would like to throw in my two cents. There are four post-takeover changes that have strongly influenced my decision:
    • Absence of Partner-Level Leadership on Client Engagements and Career Development: Over the last year most of the (old PwC) partners who had been responsible for ongoing projects have been shifted to internal roles or into business development in areas where we have historically had no presence and no experience. We have lost a lot of our strategic-thinking expertise, and it has been difficult for the band 8/9 managers to fill this vacuum. In some areas we have new relationship managers who are supposed to fill this role, but they lack prior consulting experience and I would not feel comfortable putting them in front of my client.
    • Shifting Emphasis from Sales & Delivery to Sales: We used to be rewarded for selling and delivering engagements. At the end of the year you were rewarded if you had done both; if you couldn't do both you lost out. Now the emphasis is almost completely on sales. The client service staff are just another group of workers producing product according to an IBM recipe.
    • Difficulty Working with Business Development Staff: BCS has a one-size-fits-all approach to business development; meaning that when we try to bring in a $250K BPR engagement we follow the same procedures as someone pursuing a multi-million dollar project. This includes a plethora of non-value-added organizations such as pricing, risk-management, and sales. These groups may be useful with the large engagements, but for most of our business development they are dead weight. The days of presenting a spreadsheet and a proposal to a partner for quick review and signature are gone. In practice the BD staff does not want to see low dollar proposals, they want the big $$$. So we go after IT implementations and shy away from small BPR.
    • Authority of HR over Career Development: The roles of engagement management and resource management have almost completely reversed. HR now dictates who goes on what project, and has developed a complex process for promotion from 8 to 9 that requires about two weeks of classes that seem to have little bearing on client work, they are more focused on learning IBM capabilities (and training has been cancelled due to not making first quarter numbers).
    I know some good people who are staying, and some good people who have already left. Now I will join the exodus.

In Good News This Week...
  • Rocky Mountain News: Hospital staff takes on role of guardian angel. By Bill Johnson. Excerpts: In a world where good things seem to occur only in dribs and drabs, I think we need this kind of story. It started about a month ago in the hallway of the obstetrics ward at St. Joseph Hospital on Franklin Street.

Coverage on Social Security Privatization
  • Washington Post, Letter to the Editor: A Simple Save for Social Security. By Senator Robert Wexler (D-Fla.). Excerpt: Two-thirds of retired Americans rely on Social Security for more than half their income. Additionally, medical and prescription drug costs are far outpacing the growth of Social Security cost-of-living adjustments, and pension benefits are shrinking dramatically. In other words, The Post wants seniors to pay for the tax cuts for the wealthiest -- which were funded almost entirely from the Social Security surplus -- with benefits cuts for themselves. Where is the equity in that? The idea of lifting the cap on earnings is not original, but it is the right thing to do. My plan guarantees Americans 100 percent of their promised benefits while closing the Social Security funding gap. More important, benefits would be protected for retirees and future generations of Americans.
  • Economic Policy Institute: Many already lack a steady job before the Social Security retirement age. Excerpts: In the Social Security debate, some policy makers have suggested raising the retirement age as a way to address the projected long-term gap in Social Security's finances. Those who favor a later retirement age seem to assume that people work right up until they become eligible for early retirement at age 62 or until the "normal retirement age" under Social Security, and then immediately retire. The "normal retirement age" is already in the process of increasing from 65 to 67. The assumption is that raising the retirement age further would induce Americans to continue working and to postpone claiming their benefits until they hit the new, later retirement age. If people behaved this way, it would raise revenue and reduce benefits. [...]
    Americans over 45 are disproportionately more likely than their younger counterparts to be among the long-term unemployed (those unemployed for 27 weeks or more). Americans older than 45 make up about 14% of the labor force but 37% of the long-term unemployed. Older workers—even those as young as their late 40s and early 50s—are disproportionately more likely to fall into the ranks of the long-term unemployed. One possible explanation for lower employment rates for older Americans is age discrimination in hiring practices. Compared to other charges of discrimination collected by the U.S. Equal Employment Opportunity Commission, age discrimination tends to display the strongest counter-cyclical trend. That is, charges of age discrimination fall during good economic times and rise during recessions; more so than discrimination based on race or sex. Companies trying to cut costs in bad economic times will benefit more from laying off older workers, who get paid more than younger, lower paid entry-level workers. About 23% of all discrimination charges in 2004 had an age component, compared to 18% of all charges in 1999.
  • The Century Foundation: Let's Get Real about the Working Old. By Beverly Goldberg. Excerpts: Those determined to fix Social Security, or perhaps prove it is not really needed, by deciding that people can work forever instead of retiring seem all to be from the class whose work requires little physical effort and pays well enough that a cut in salary would make little difference to them. Their retirement jobs would probably involve writing a book or giving well-paid lectures. The latest expressions of those living in this state of unreality appear in a column in the New York Times today (June 21, 2005). [...]
    Yes, you, senior citizen, come on back to the workforce, and forget your pride. Join that crop of older workers who are not old enough to retire and have spent an average of twenty some weeks searching for a new position. (See Bureau of Labor Statistics here.) Heed the call from that store in the mall or that fast food restaurant and take a job. You were a manager for one of the big car makers, and they aren't hiring? Well, settle for less. A lot of people do just that, especially those too young to qualify for early retirement under Social Security.
    Think about it. You can be like the fifty plus Jim Morris of Woburn, Mass, a former IT manager who took a job at Staples after searching unsuccessfully in his field and has been promoted to a supervisor in a copy-center. Of course his net pay, he says, "barely covers his mortgage and condo fee." Or you can follow in the footsteps of Minna Vallentine, a fifty plus inhabitant of Mountain View, California, who lost her executive position in marketing when her software firm downsized and is patching together enough work to survive, explaining, "I've gone from a six-figure job to barely paying the mortgage every month." (Marilyn Gardner, "Laid off at 50: How Some Bridge the Retirement Gap," Christian Science Monitor, February 7, 2005)
  • The Boston Globe: The new 'leisure class'. By Ellen Goodman. Excerpts: AS IF IT weren't bad enough to see the image of ''senior citizens" transformed into ''greedy geezers," now they're morphing into ''lazy geezers." It seems that Social Security recipients are gradually being redefined as members of the leisure class. The plan to reform Social Security by partially privatizing accounts is going nowhere, but another idea is creeping into the public consciousness: Raise the age of retirement. This notion recently came up in the Senate, where the average age is 60 and heavy lifting consists of dialing for dollars. The 71-year-old chairman of the Finance Committee, Charles Grassley, talked about lifting the age for full benefits to 69. Now it's being chatted up by think-tankers and commentators. [...]
    Today, 38 percent of those who retire early were forcibly retired by illness or downsizing. It's harder and takes longer to get another job after 55. Early retirement can be just another word for unemployment. A recent survey done by Civic Ventures says that baby boomers want to continue working at jobs that do ''good work." But when a huge proportion of the working population takes a reduced benefit to get out of work earlier, we can assume that they are leaving jobs they don't like. Or jobs where they aren't valued. [...]
    One of the best-kept secrets is that we have already raised the age of full retirement to 65 1/2. It's increasing gradually until 2027, when it will be 67. Raising the retirement age further is nothing but an attempt, in economist Alicia Munnell's phrase ''to find a socially acceptable way of cutting benefits." Before this gets out of hand, we have to ask whether this is the best reform. We also have to ask why it's becoming more socially acceptable to target older Americans than richer Americans. Want to talk about age and class? Try two other proposals for Social Security reform. The first is to raise the ceiling on earnings over $90,000. The second and most elegant idea comes from nonagenarian and former Social Security Commissioner Robert Ball: Designate the estate tax to shore up Social Security.

New on the Alliance@IBM Site:
  • Binghamton Press & Sun-Bulletin: IBM to transfer printer division. Endicott manufacturing will shift to Minnesota. By Jeff Platsky. Excerpts: A company-wide restructuring hit at least another 30 people at IBM Corp.'s Endicott operations on Monday when a group of workers in Printer Systems were told that manufacturing will shift to Rochester, Minn. The move will strip Endicott of virtually all of its printer manufacturing and make the site the center for Printer Systems administrative and engineering functions, a spokesman said. [...] Endicott was the site of high-end impact printer manufacturing, long the staple of banks, insurance companies and other financial services groups. That work will be transferred to Rochester, Minn., the center for computer servers. Endicott has a rich history with printers that dates back to the now- defunct Glendale Laboratory, where staff engineered and developed high-speed printers that were long favored in the financial services industry. [...] IBM has about 1,500 workers in Endicott, down from a mid-1980s peak of 11,000.
  • 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 06/20/05: EMEA HR just found out this morning that the voluntary redundancies were not enough to meet the corporate targets. They need to go back to ALL departments and find more candidates for involuntary redundancies. No one is afforded any protection. Past notices sent out to calm nerves and improve retention of individuals with skills paid below market, are void. What was expected to be a minor involuntary RA will now be much larger. UK is especially going to get hit hard. -Anonymous-
    • Comment 06/20/05: From a reliable source...IBM's overall goal for global resource is to have ONLY 25% of the total to be US. -Anonymous-
    • Comment 06/20/05: Yes, I was one of those 70 at Rational and was band 8 and 41 years of age. I would be interested to know if any other minority employees were let go; visible or invisible? I feel that there was a level of "permissible prejudice" directed towards me over the last four years. Anyone else in a like boat? -Anonymous-
    • Comment 06/21/05: A resource action was announced on 06/20/05 in Endicott Printing Systems Division. While the exact numbers are still being collected, initial percentages indicate a 30% reduction, with rumors that the final number may go somewhat higher. At this time, it appears that only one PSD Manager was 'laid off'. Printing Systems business will eventually be dismantled, with all manufacturing moving to other locations across the country. The high end printers (4100) are going to Rochester, MN., with mid-range products following a direct ship model. Refurbishment of high end printers still remains for the time being, but common sense indicates this is only temporary. Rumors seems to suggest that the IBM Corporation has negotiated w/ the Huron Campus to 'buy out' the remaining time on the lease, and PSD will vacate B/57 by year end 2005, if not sooner. The supplies business and the spare parts business will most likely move, possibly to Mechanicsburg. The handwriting is on the wall for PSD as a Division to be totally absorbed by another Division, most probably Server, and cease to exist. Ignorance and arrogance are a dangerous combination, and the Witches of PSD have managed to soar to new heights of incompetence. Leadership has been replaced by reactionary short sightedness, although nepotism is one skill, at which, at least one of them excels. My heart goes out to those people and families that were let go today. -Anonymous-
    • Comment 06/21/05: Was wondering about the minority issue myself; my ex-team of about 11 employees is an homogeneous group of non-minority persons now that I'm gone. I was part of a visible minority who participated in a diversity group. And I also met many others like me at an out placement session where the demographics are quite obvious. -Anonymous-
    • Comment 06/21/05: This is a response to those concerned about race discrimination. Proving discrimination is not impossible as long as you can show some willful intent by IBM. IBM will usually bury these individuals in group resource actions so their claims are weakened for race discrimination. As the only minority laid off in a group resource action is worthy of studying! Your replacement may also be important especially in an offshoring example where you were replaced by a much younger and lesser paid employee. Use the 30 days wisely, apply for every job you can, keep contacts open once you leave, you want to find out who eventually got the jobs you applied for. Race discrimination is hard to prove but your efforts will certainly help others. Read Title VII. -Anonymous-
    • Comment 06/22/05: To quote from the 6/21/05 post, the person said, "I am on the fence when it comes to unions. I am a republican and believe in getting what I deserve instead of because the contract says it is due to me." So, are you saying you deserved to be layed off? Do you know how many IBM middle managers are pulling in 200K plus bonuses each year for doing nothing but creating bureaucracy, playing politics, spending IBM's cash, and sitting on their thumbs? They are a self protecting fraternity club of good ol' boys and girls within IBM who look only to serve their own self interests and protect each other. So, these non-producers deserve their fat salaries while the workers who actually produce something tangible for far less compensation deserve a layoff? It is so naive to say people get what they deserve. Very naive. I'm a Republican myself, but of the Teddy Roosevelt and Lincoln variety, certainly NOT of the corporate spin/greed variety. The country is no longer for the people, by the people. It's for the corporations, by the corporations, via the corporate lobbyists who command tremendous influence in D.C. via enormous wealth. We must be wary of this unbridled engine of fierce and heartless Capitalism, or it will steamroll all of us common folk. -Anonymous-
    • Comment 06/22/05: I have two sources that confirm that during the SWG Layoff planning (code named Maple) that managers would be told either by HR or legal to remove individuals from the layoff list. In one case no explanation was given. In another a comment made that this would be disparate. Can anyone confirm the profile of the people removed from the lists? SWG had to delay their RA 3 times because of such list adjustment requests. -Anonymous-
    • Comment 06/22/05: Forget "Title VII". Unless you can afford a lawyer, you are wasting your time. If you are in Minnesota, you will find the MN Dept. of Human Rights (MDHR) prides itself on handling cases within a year, and considers taking 9 months to "begin" an investigation "acceptable". As a result, employers know to increase the retaliation to the point where the victim is so humiliated they are forced to leave. The MDHR will ignore your pleas for assistance during the above year, and in fact appear to look more for reasons to not take action as opposed to reasons to take action. Many lawyers will provide free consultation, and this is your best route for good advice. Try "lawyers.com", or the State Bar Association (e.g. MSBA), which charges a $25 referral fee. If in Minnesota, avoid MDHR like the plague. Your complaint is little more than another bean counted in the MDHR's effort to justify their existence. Furthermore, under the current administration government assistance in these matters has become virtually non-existent (read the TRAC report). -Anonymous-
    • Comment 06/23/05: I received word of yet another resource action in IGS this morning. This is madness! -Anonymous-

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