Welcome to IBM Employee News and Links
"News and links for IBM employees, retirees, ex-employees, and persons interested in pension, retirement, off-shoring and corporate governance issues."
Web This Site

Quick Links:
  Get involved!
  Press articles
  Important Links
  Insider trading
  Lou's Contract
  Total Compensation
  Add or delete ID
  Change ID
  Contact site owner
Previous Highlights:
  April 21, 2007
  April 14, 2007
  April 7, 2007
  March 31, 2007
  March 24, 2007
  March 17, 2007
  March 10, 2007
  March 3, 2007
  February 24, 2007
  February 17, 2007
  February 10, 2007
  February 3, 2007
  January 27, 2007
  January 20, 2007
  January 13, 2007
  January 6, 2007
  December 30, 2006
  December 23, 2006
  December 16, 2006
  December 9, 2006
  December 2, 2006
  November 25, 2006
  November 18, 2006
  November 11, 2006
  November 4, 2006
  October 28, 2006
  October 21, 2006
  October 14, 2006
  October 7, 2006
  September 30, 2006
  September 23, 2006
  September 16, 2006
  September 9, 2006
  September 2, 2006
  August 26, 2006
  August 19, 2006
  August 12, 2006
  August 5, 2006
  July 29, 2006
  July 22, 2006
  July 15, 2006
  July 8, 2006
  July 1, 2006
  June 24, 2006
  June 17, 2006
  June 10, 2006
  June 3, 2006
  May 27, 2006
  May 20, 2006
  May 13, 2006
  May 6, 2006
  2006 Stock Meeting
  April 22, 2006
  April 15, 2006
  April 8, 2006
  April 1, 2006
  March 25, 2006
  March 18, 2006
  March 11, 2006
  March 4, 2006
  February 25, 2006
  February 18, 2006
  February 11, 2006
  February 4, 2006
  January 28, 2006
  January 21, 2006
  January 14, 2006
  January 7, 2006
  December 31, 2005
  December 24, 2005
  December 17, 2005
  December 10, 2005
  December 03, 2005
  November 26, 2005
  November 19, 2005
  November 12, 2005
  November 5, 2005
  October 29, 2005
  October 22, 2005
  October 15, 2005
  October 8, 2005
  October 1, 2005
  September 24, 2005
  September 17, 2005
  September 10, 2005
  September 3, 2005
  August 27, 2005
  August 20, 2005
  August 13, 2005
  August 6, 2005
  July 30, 2005
  July 23, 2005
  July 16, 2005
  July 9, 2005
  July 2, 2005
  June 25, 2005
  June 18, 2005
  June 11, 2005
  June 4, 2005
  May 28, 2005
  May 21, 2005
  May 14, 2005
  May 7, 2005
  April 30, 2005
  April 23, 2005
  April 16, 2005
  April 9, 2005
  April 2, 2005
  March 26, 2005
  March 19, 2005
  March 12, 2005
  March 5, 2005
  February 26, 2005
  February 19, 2005
  February 12, 2005
  February 5, 2005
  January 29, 2005
  January 22, 2005
  January 15, 2005
  January 8, 2005
  January 1, 2005
  December 25, 2004
  December 18, 2004
  December 11, 2004
  December 4, 2004
  November 27, 2004
  November 20, 2004
  November 13, 2004
  November 6, 2004
  October 30, 2004
  October 23, 2004
  October 16, 2004
  October 9, 2004
  October 2, 2004
  September 25, 2004
  September 18, 2004
  September 11, 2004
  September 4, 2004
  August 28, 2004
  August 21, 2004
  August 14, 2004
  August 7, 2004
  July 31, 2004
  July 24, 2004
  July 17, 2004
  July 10, 2004
  July 3, 2004
  June 26, 2004
  June 19, 2004
  June 5, 2004
  May 29, 2004
  May 22, 2004
  May 15, 2004
  May 8, 2004
  2004 Stock Meeting
  April 24, 2004
  April 10, 2004
  April 3, 2004
  March 27, 2004
  March 20, 2004
  March 13, 2004
  March 6, 2004
  February 28, 2004
  February 21, 2004
  February 14, 2004
  February 7, 2004
  February 1, 2004
  January 18, 2004
  December 27, 2003
  December 20, 2003
  December 13, 2003
  December 6, 2003
  November 29, 2003
  November 22, 2003
  November 15, 2003
  November 8, 2003
  November 1, 2003
  October 25, 2003
  October 18, 2003
  October 11, 2003
  October 4, 2003
  September 27, 2003
  September 20, 2003
  September 13, 2003
  September 6, 2003
  August 30, 2003
  August 23, 2003
  August 16, 2003
  August 9, 2003
  Pension Lawsuit Win
  July 26, 2003
  July 19, 2003
  July 12, 2003
  July 5, 2003
  June 28, 2003
  June 21, 2003
  June 14, 2003
  June 7, 2003
  May 31, 2003
  May 24, 2003
  May 17, 2003
  May 10, 2003
  2003 Stock Meeting
  April 26, 2003
  April 19, 2003
  April 12, 2003
  April 5, 2003
  March 29, 2003
  March 22, 2003
  March 15, 2003
  March 8, 2003
  March 1, 2003
  February 22, 2003
  February 15, 2003
  February 8, 2003
  February 1, 2003
  January 25, 2003
  January 18, 2003
  January 11, 2003
  January 4, 2003
  December 28, 2002
  December 21, 2002
  December 14, 2002
  December 7, 2002
  November 30, 2002
  November 23, 2002
  November 16, 2002
  November 9, 2002
  November 2, 2002
  October 26, 2002
  October 19, 2002
  October 12, 2002
  October 5, 2002
  September 28, 2002
  September 21, 2002
  September 14, 2002
  September 7, 2002
  August 31, 2002
  August 24, 2002
  August 17, 2002
  August 10, 2002
  August 3, 2002
  July 27, 2002
  July 20, 2002
  July 13, 2002
  July 6, 2002
  June 29, 2002
  June 22, 2002
  June 15, 2002
  June 8, 2002
  June 1, 2002
  May 25, 2002
  May 18, 2002
  May 11, 2002
  2002 Stock Meeting
  April 27, 2002
  April 20, 2002
  April 13, 2002
  April 6, 2002
  March 30, 2002
  March 23, 2002
  March 16, 2002
  March 9, 2002
  March 2, 2002
  February 23, 2002
  February 16, 2002
  February 9, 2002
  February 2, 2002
  January 26, 2002
  January 19, 2002
  January 12, 2002
  January 5, 2002
  December 29, 2001
  December 22, 2001
  December 15, 2001
  December 8, 2001
  December 1, 2001
  November 24, 2001
  November 17, 2001
  November 10, 2001
  November 3, 2001
  October 27, 2001
  October 20, 2001
  October 13, 2001
  October 6, 2001
  September 29, 2001
  September 22, 2001
  September 15, 2001
  September 8, 2001
  September 1, 2001
  August 25, 2001
  August 18, 2001
  August 11, 2001
  August 4, 2001
  July 28, 2001
  July 21, 2001
  July 14, 2001
  July 7, 2001
  June 30, 2001
  June 23, 2001
  June 16, 2001
  June 9, 2001
  June 2, 2001
  May 26, 2001
  May 19, 2001
  May 12, 2001
  May 5, 2001
  2001 Stock Meeting
  April 21, 2001
  April 14, 2001
  April 7, 2001
  March 31, 2001
  March 24, 2001
  March 17, 2001
  March 10, 2001
  March 3, 2001
  February 24, 2001
  February 17, 2001
  February 10, 2001
  February 3, 2001
  January 27, 2001
  January 20, 2001
  January 13, 2001
  January 6, 2001
  December 30, 2000
  December 23, 2000
  December 16, 2000
  December 9, 2000
  December 2, 2000
  November 24, 2000
  November 17, 2000
  November 10, 2000
  November 4, 2000
  October 28, 2000
  October 21, 2000
  October 14, 2000
  October 7, 2000
  September 30, 2000
  September 23, 2000
  September 16, 2000
  September 9, 2000
  September 2, 2000
  August 26, 2000
  August 19, 2000
  August 12, 2000
  July 29, 2000
  July 22, 2000
  July 15, 2000
  July 1, 2000
  June 24, 2000
  June 17, 2000
  June 10, 2000
  June 3, 2000
  May 27, 2000
  May 20, 2000
  May 13, 2000
  May 6, 2000
  April, 2000

Join your fellow employees who are fighting for your benefits - Join the Alliance!

Retirees, Vendors, Contractors, Temps, and Active Employees are all eligible to become members of the Alliance.

    Highlights—August 20, 2005
  • Yahoo! message board post by Janet Krueger. Full excerpt: The settlement was finalized almost as is -- the only major amendment was that the folks IBM sold to AT&T as of May, 1999 were shifted to groups 3 and 4, since IBM converted them to the cash balance plan before closing out their pensions in November, 1999.
    Details of the settlement agreement are available at http://www.coopersettlement.com/subclass1and2/ -- if you click on the FAQ file, you'll see sample payouts at about page 3. The detailed formulae are included in the settlement document itself.
    The estimated date for when payouts might start is November 2006, based on the probable schedule of the IBM appeal. The total settlement pot will be between $314 million and $1.7 billion, depending on the outcome of that appeal.
    The appeal is likely to go in our favor UNLESS Congress decides to retroactively legalize IBM's age discriminatory actions -- YOU can make a difference by:
    • Signing our petition at http://www.petitiononline.com/rrs01/
    • Printing a copy and sending it to your representative and senators in DC, with a handwritten cover letter letting them know exactly how you will feel if they vote yes to legislation retroactively legalizing cash balance plans and,
    • Asking your friends, neighbors and colleagues to do the same.
  • Yahoo! message board post by Janet Krueger. Full excerpt: I just uploaded a document named CB-Myths-Facts 8-16-05.doc to the Files area of this board... It is another useful resource for fighting the legalization of cash balance plans. Feel free to extract bits and pieces to use in letters to the editor of your local paper. Or hand deliver a copy to the local office of your Representative and Senators while they are home on summer vacation. Share it with your friends and colleagues... Below are some excerpts; I can't include the whole thing in a note, because it contains some good charts and footnotes that don't paste well into plain text. Comments? (Editor's note: An Adobe Acrobat version of Ms. Krueger's excellent document is available from www.ibmemployee.com here) [PDF--32 KB].
    FACT: While some employers have protected their employees from some of the worst adverse impacts of a conversion, even cash balance supporters have acknowledged that "it is not unusual in some cash balance conversions for the 40 to 50 year old employee to lose one-third to as much as one-half of his expected pension." A study of actual cash balance conversions conducted by the actuarial firm Towers & Perrin determined that in over one-third of the conversions the employers provided no transition protections whatsoever.
    In 2002, a General Accounting Office (GAO) report documented the dramatic reduction in benefits for older workers: "a 45-year old worker at the time of conversion receives an annual annuity of about $18,500 at retirement from the cash balance plan instead of the $39,800 annuity the worker could have received from the defined benefit plan with a final average pay formula. Likewise, a worker 50 years old at conversion receives an annual annuity of about $17,800 from the cash balance plan rather than the $35,100 annuity the final average pay formula would have provided."---- 2002 GAO Report
    To make matters worse, some employers structure their conversions so that older employees often work for months or years without accruing additional pension benefits while similarly situated younger employees continue to accrue benefits. During a typical conversion, many older workers experience what is referred to as "wearaway," which means that they continue working without earning additional pension benefits until the amount in their cash balance plan reaches the amount they had already earned under their traditional defined benefit plan. The GAO found that the amount of wearaway any employee experiences is tied directly to age. Older workers suffer the longest periods of wearaway, which may last many years. For example, a typical conversion scenario "generated a 2-year lump sum wearaway for a 35-year old worker, a 4-year wearaway for a 45-year old worker, and an 11-year wearaway for a 55-year old worker at conversion." In such an instance, the 55-year old would earn no additional pension benefit before reaching normal retirement age, in effect working the last decade for no corresponding retirement benefit.
    FACT: From the earliest days of cash balance plans, the employer community recognized the very serious legal issues posed by the age discriminatory aspects of hybrid plans. In fact, as early as the mid-1980s benefits consultants were "writing articles . . . panning cash balance plans, that they are a flash in the pan, that they are a gimmick, that they can't satisfy any of the rules."
    Significantly, following an early meeting of what later became known as the Cash Balance Practitioner's Group in 1990, attendees—which included representatives from four large pension consulting firms and two major law firms--circulated a memorandum acknowledging that "it is well known that a [cash balance] plan is at risk under a literal reading of" the age discrimination laws. The Working Group Report noted that a "number of practitioners believe that there is a very significant risk that the [Internal Revenue] Service will ultimately take the view that it cannot avoid a literal interpretation of the statute." The group concluded that in the absence of a "legislative fix," the "potential employer exposure is extremely high – potentially increasing the plan liabilities four or five times."
    The concerns of the Working Group Report were subsequently confirmed in an Internal Revenue Service document indicating that Onan Corporation's cash balance plan was not in legal compliance: "This plan does not satisfy the clear and straightforward requirement of section 411(b)(1)(H)(i) of the Code because the plan's benefit accrual rate decreases as a participant attains each additional year of age."
    FACT: Authorizing cash balance plans will create significant additional liability exposure for the PBGC at the very time Congress is acting to reduce that exposure. It is indeed ironic that cash balance advocates would suggest that provisions encouraging the use of cash balance plans would be added to legislation designed to reduce PBGC liability exposure and suggestions that cash balances plans are "like" 401(k) plans or defined contribution plans are grossly misleading as neither of those plans generate PBGC exposure. Cash balance plans generate significant additional liability exposure to the PBGC because the "leverage" inherent in a cash balance plan creates funding issues should all benefits come due immediately as would happen in the event of a bankruptcy. This is because even though cash balance plans promise to pay participants a benefit at any point in time which is equal to the employee's account balance, the plans are funded by employers on the basis of "actuarial liability." The result is that, even when the plan is considered "fully funded" for PBGC purposes, the actuarial liability used for funding purposes will often be as little as 70% of the plan's current account balance liability thereby creating additional potential liability exposure to the PBGC.
    In addition to increasing the liability exposure of the PBGC, authorizing cash balance plans leaves a myriad of issues unresolved in terms of what benefits the PBGC will provide to employees covered by cash balance plans in the event of bankruptcy. Employees should not be left to guess what their benefits would be in the event their company fails and they are forced to look to the PBGC to provide their hard earned retirement benefits.
    FACT: It is a total fiction that today's work force is more mobile. As Eric Lofgren, an actuary at Watson Wyatt, explained to the Society of Actuaries: "[B]aby boomers have had the same level of mobility as their parents and grandparents when you look at people at the same age... So far the boomers have been staying on the job longer, actually, than their parents and their grandparents." Mr. Lofgren's comments are consistent with a study conducted in 1998 by his firm which concluded that this phenomenon applied as well to younger workers, age 25 to 34, who in 1996 spent a considerably longer time, on average, with one employer than did workers in that same age group in the 1950's. More recently, the authors in the largest research study to date of conversions to cash balance plans concluded that they had "found no support for claims that CB conversions are a response to labor markets with more mobile employees."
    FACT: More frequently, employers use a conversion to cash balance plans to hide benefit cutbacks. In 1986, shortly after the adoption of the first cash balance plan, Eric Lofgren, an actuary with Watson Wyatt, outlined for a conference of actuaries that a primary objective of conversions to a cash balance plan was to "to camouflage a benefit cutback, or remove early retirement subsidies." Mr Lofgren even noted how a company converting to a cash balance plan could use two very different announcements for the same new cash balance plan. The upbeat version most commonly used to announce a conversion optimistically touts the purported virtues of a cash balance plan, describing it as "an exciting, modern, flexible new plan design with the advantages of both defined benefit and defined contribution." He also suggested what he described as an equally accurate, but more candid, definition:
    "Dear Employee: We've got for you a cash balance pension plan. It's our way to disguise the cutbacks in your benefits. First we're going to change it to career average. We'll express the benefits as lump sum so we can highlight the use of the CPI, a sub-market interest rate. What money is left in the plan will be directed towards employees who leave after just a few years. Just to make sure, we'll reduce early retirement subsidies."
    This ability to use conversions to mask cutbacks was still being touted in 1998, when an actuary with PricewaterhouseCoopers noted to the annual meeting of the Society of Actuaries that "converting to a cash balance plan does have an advantage of it masks a lot of the changes."
    As a practical matter, conversions to cash balance plans also have been used to achieve artificial accounting gains. Existing accounting rules have allowed publicly held corporations to use cash balance conversions to generate "pension income." The company's increased bottom line presents a more attractive financial picture to the investing public. As Mark Beilke, chairman of the Academy of Actuaries Pension Accounting Committee, recently observed, financial statement "gains [from cash balance conversions are] mostly derived from 'accounting gimmicks.'" Similarly, William Sweetnam, then a member of the Senate Finance Committee staff and later a Treasury Department Tax Benefits Counsel, acknowledged in 1998 that the "primary reason cash balance plans are financially advantageous is the accounting treatment of cash balance plans versus final average earnings plans . . . So the reason that cash balance plans are better is that they make the corporations [sic] financial statement look better since pension liabilities are less." Warren Buffet has described the practice by some companies of creating "phantom" pension income to inflate reported income as a misrepresentation that "dwarfs the lies of Enron and WorldCom."
    FACT: Employers repeatedly have converted to cash balance plans as a way to reduce their costs at the expense of older workers' retirement benefits. For example, Chief Judge Murphy held in IBM v. Cooper that IBM's actuaries projected that IBM's 1999 conversion to a cash balance plan "would produce annual savings of almost $500 million by 2009." Consistent with the voluminous anecdotal evidence, a survey of cash balance plan sponsors found that 56% of firms expected the long-term cost of their defined benefit plans to decrease after conversion. Similarly, the largest study of cash balance conversions documented that "firms with employees who are closer to retirement are more likely to convert to the CB format." It also concluded that "the workplace of firms that undertake conversion to CB plans has had a longer tenure with the firm, on average" lending "credence to the claims of CB conversion opponents that firms benefit from these conversions at the expense of older workers."
    FACT: It is first important to note that even if you define large employers as those as few as 1,000 employees, according to the PBGC there are only approximately 625 such employers with hybrid pension plans.
    Putting aside the question of how many large employers have hybrid plans, it is clear that some employers and certain employer groups, such as ERIC, have threatened and will continue to threaten massive terminations in an attempt to scare Congress into giving them immunity for their prior illegal age discrimination. But whatever exposure they have today for their prior age discrimination, they will have the same exposure following the adoption of legislation without regard to whether they terminate or freeze their plan. In other words, prospective cash balance legislation would stop the growth of their future exposure but their existing exposure remains the same without regard to whether they continue, freeze or terminate their plan. In short, while it is a threat that the employers have used in the past and will undoubtedly continue to use, it is a red herring.
    What most employers ignore is that all that retroactivity eliminates is the potential liability with respect to past conduct -- benefits that employees have already accrued. Employers and employer groups are also reluctant to admit that most employers did not provide the kind of transitional protections included in the Senate Finance Committee bill. In other words, they will also have to persuade Congress to eliminate transitional protections against wearaway and other abuses or they won't get any benefit from retroactivity language inserted in the bill.
  • Yahoo! message board post by Jimmy Leas. Full excerpt: A Senate staffer is looking to talk to IBMers whose job was sent to another country or who helped train them to take over jobs. Please forward this to others you may know who either lost their job to offshoring or who helped train Indians or Chinese to take over the jobs of American IBMers.
    Please contact Liz Urschel at Senator Dorgan's office. This senator is very interested in the offshoring issue. Her phone number is 202 224-4354 and her email address is liz_urschel@dorgan.senate.gov. Thanks very much.
  • Benefits Restoration, Inc. is an organization devoted to the restoration of retiree benefits with a focus on Legislation, Media Awareness, Shareholder Resolutions and Litigation. Their August newsletter is now available on their Web site. Excerpts: To all of you, my apologies for being among the missing for the past two months. I had found it necessary to take on full time work in Asia ….in order to be able to pay for the family’s Medical Contributions!! I had foolishly thought that I could continue to at least get out a newsletter while traveling but as you know by now, I failed in accomplishing this. When I left, as things were going, Medical Contributions to IBM were continually increasing while retirement income was remaining unchanged causing many of us to cut expenses, find work or sell homes and “downsize”. Now, however, we all face a new threat…the potential erosion and/or reduction in our pensions. Those of you who have been paying attention have seen the move to convert your pensions (known a Defined Benefit Pensions) to Cash Balance Pensions. Others have been carrying the banner while I have been gone; it is time now for everyone to weigh in on this issue.
    Janet Krueger, Kathi Cooper and the folks at Alliance@IBM have been very active in ensuring that the issue of Cash Balance Pensions and the legislation that is being considered in Washington has been loudly communicated. This is not a time for you to sit on the sidelines and wait for someone else to carry the banner. I already have a case of the guilts for having been AWOL while all of this has been going on. Please keep in mind the way this works….each change that takes place is very small. The culmination of all of these small changes results in major impacts to retirees. Think of your medical benefits; each year beginning in 2000, you were asked to pay a little more, then a little more. Finally, in 2004, there was the big change…IBM realized that we retirees were not paying attention and were not organized to oppose them!
    For a very detailed analysis of the various bills that have been introduced, immediately following this brief introduction is a fine piece of work done by the National Retiree Legislative Network (www,nrln.org) that describes the bills and the NRLN position on each. Benefits Restoration has added highlights and italics in those areas that we feel are of particular importance.
    Lastly, there is a list of Senators who make up the Committee on Health, Education, Labor and Pensions. I heartily encourage you to write to each of these people, whether your own Senator or not, stating your objection to any form of Cash Balance Pension that does not fully protect retirees and those close to retirement. Keep in mind Gary Sullivan’s closing remarks in our last newsletter...
    “In conclusion, just in case you think this can’t happen with our gilt-edged IBM pensions, recall what happened to our ‘medical benefits for life’.”
    Some of you have written regarding the Medicare Modernization Act and the letter sent out by IBM’s own Randy MacDonald earlier this year. Farther down, Art Richter, our New York Director includes a piece on this ….why do I hesitate to call it legislation? Well, read Art’s piece and you will get the idea. While we are under no immediate threat, rest assured this is an upcoming battle that we will have to face and in the not too distant future. Stay aware and stay alert. Sandy Anderson.
  • Wall Street Journal: Three Republican Governors Hit Unions. Bargaining Rights Are Rescinded For State Employees, One of Big Labor's Last Strongholds. By Joi Preciphs. Excerpt: Several Republican governors are trying to weaken organized labor in the one place it has remained strong: representing public employees. First-term Missouri Gov. Matt Blunt rescinded collective-bargaining rights for state employees this year, undoing an executive order issued by a Democratic predecessor, and has eliminated a state board overseeing union elections for public employees. Indiana Gov. Mitch Daniels, a former Bush White House budget director, overturned an executive order that for 15 years provided collective-bargaining rights for that state's public employees. And Maryland's Robert Ehrlich, backed by the state Supreme Court, suspended a 2% pay increase unions had negotiated for state employees with his predecessor.
  • New York Times: Death Tax? Double Tax? For Most, It's No Tax. By Edmund L. Andrews. Excerpts: WHEN Congress comes back from its summer recess, one of the first things Senate Republicans will try to do, again, is kill the estate tax. Perhaps no other tax has so many passionate, persevering and politically organized opponents as the estate tax, or "death tax," as they have branded it. As Michael J. Graetz and Ian Shapiro of Yale recount in "Death by a Thousand Cuts" (Princeton University Press), their entertaining account of the repeal movement, opponents of the estate tax have already achieved a remarkable political feat by building broad public support for abolishing a tax that currently affects only 2 percent of all estates. But repeal would be costly - more than $70 billion a year, once it was complete - and many of the populist arguments in favor of repeal are misleading. If estate or inheritance taxes were frozen at today's levels, they would have almost no impact on family farmers and most small-business owners. [...]
    But despite the populist rhetoric and oft-repeated horror stories about families being forced to sell their farms in order to pay estate taxes, the battle is over a very large amount of money held by a very small number of families. A report last month by the Congressional Budget Office found that in 2000 only 2 percent of all estates - about 52,000 - were subject to any estate tax. At that point, taxes were imposed only on estates worth $675,000 or more. The limit rose to $1.5 million in 2004, and if that limit had been in effect in 2000, only 13,771 estates - fewer than 1 percent - would have been subject to the tax. All but 740 of them would have had enough in liquid assets to cover estate tax liabilities, the office estimated.
  • New York Times: Announcing an Award for Greed. By Nicholas D. Kristof. Excerpts: I'm pleased to announce the first annual Michael Eisner Award for Corporate Misgovernance. Last week, a Delaware judge sent a warning shot over corporate boards everywhere, chastising Mr. Eisner, the C.E.O. of the Walt Disney Company, for having "enthroned himself as the omnipotent and infallible monarch of his personal Magic Kingdom." Ultimately, however, the judge turned down a shareholder suit against the Disney board for giving Michael Ovitz a $140 million severance package as a reward for having failed catastrophically in just 14 months as the company's president.
    So I've decided to offer my own prize for executive greed. My aim is to honor those who, in the spirit of Mr. Eisner's pioneering achievements in rapacity, have been so visionary in ripping off shareholders and aggrandizing themselves that they deserve special recognition. The winner of the Eisner award will receive a shower curtain, in honor of the $6,000 floral-patterned shower curtain that Tyco's shareholders unwittingly bought for their former C.E.O., Dennis Kozlowski. This year's grand-prize shower curtain is a lovely translucent model that comes with metal grommets to prevent tearing, suction cups to stick to the wall, and even an antimildew treatment! And it cost just $5.96. [...]
    Corporate America has nurtured a cult of chief executives, hailing them as geniuses and then excusing their misconduct and megalomania. Corporate documents released this spring show that the Fog Cutter board awarded Mr. Wiederhorn $6.3 million in total compensation for 2004 and for the nine months of prison time in 2005. I can't think of a board that has ever so disgraced the principles of corporate governance by overpaying a C.E.O. even as he sits in prison. So as Mr. Wiederhorn uses his prize shower curtain (which I'll send to his office, to await his release), I hope he'll reflect on the need of the business world not only to celebrate genius, but also to feel shame.
  • New York Times: One Global Game, Two Sets of Rules. By William J. Holstein. Excerpts: GLOBALIZATION is imperfectly understood by many American policy makers, with dangerous consequences for the United States economy, says Clyde Prestowitz, author of "Three Billion New Capitalists: The Great Shift of Wealth and Power to the East" (Basic Books, 2005, $26). A former trade negotiator in the Reagan administration, he is president of the Economic Strategy Institute in Washington. Here are excerpts from a conversation: [...]
    We have a very distorted global economy. It is tilted. There's one consumer, which is the United States. All the other major countries are producers and net exporters. The United States consumes far more than it produces and has to borrow money from the rest of the world to finance that consumption. The rest of the world, particularly Asia, and particularly the central banks of Japan and China, provide a kind of vendor financing to the United States to enable it to continue buying their exports. You have a kind of Ponzi scheme that constitutes the global economy. Like any Ponzi scheme, it's not indefinitely sustainable. At some point, the world will run out of savings to finance American consumption, or the rest of the world will begin to doubt the ability of the United States to make good on its obligations. There will be a collapse of one kind or another. [...]
    Q. Why is it a problem if other people want to sell the United States their things and finance the purchases? A. It's not a problem for a while. In fact, it feels really good for a while because you get free consumption. But as Warren Buffett has pointed out, in the long term, it turns you into a sharecropper. To finance the consumption, you keep selling off your assets. You sell the garage. Then you sell the guesthouse. After a while, there's nothing left to sell and you have to go to work and earn real money to pay your debts. Your kids and grandkids will have less opportunity and lower standards of living. [...]
    Q. Aside from fiscal policies, what are the other elements of a response? A. We need to have a strategy. When I.B.M. sold its PC division to China, C.E.O. Sam Palmisano told The New York Times that I.B.M. wants to be part of China's strategy. I don't blame him. If I were the head of I.B.M., I'd want to be part of China's strategy, too. But it raises an interesting question: If you ask an American C.E.O. if he or she wants to be part of America's strategy, none of them can answer the question. Because America doesn't have a strategy.
  • Asbury Park Press: Many employers say they need visas to bring in high-tech workers from abroad. But critics contend the process has been abused. By Lorraine Ash. Excerpt: The way Manoj Prasad sees it, he came to the United States from his native India to fill a void. When he came to the United States in 1995, he was one of 65,000 specialized workers who got an H-1B visa that year to work at a specific job. Like all H-1Bs, he was not considered an immigrant. His stay had a time limit — three years, with the likely promise of a three-year extension.
    Filling voids, supplementing the American work force. That was the intent of H-1B legislation in the United States where, some industry leaders contend, there is a dearth of workers capable of filling cutting-edge positions in technology, science and engineering. But not every economist is so sure that is how H-1Bs are playing out. [...]
    The ideal staff, then, for Prasad and for others in the tech industry, is a mix of workers — local and H-1B. As a business owner and an American, he prefers bringing in an H-1B worker to fill a domestic job than offshoring that job.
    But Eileen Appelbaum, an economist and member of a National Research Council committee that studied the impact of H-1Bs on the U.S. economy, does not accept the way the H-1B option is typically framed: One can have an H-1B worker in an American job, or lose that job to exportation. "Industry said in 2001, "Let us have the H-1B visas and we'll do the work here, or you can say no and we'll just move the work offshore,' " she said. "Well, they got all the H-1Bs they wanted, and they still moved work offshore. In 2005, that's an argument industry can't make with a straight face."
  • New York Times: Social Security Lessons. By Paul Krugman. Excerpts: Social Security turned 70 yesterday. And to almost everyone's surprise, the nation's most successful government program is still intact. Just a few months ago the conventional wisdom was that President Bush would get his way on Social Security. Instead, Mr. Bush's privatization drive flopped so badly that the topic has almost disappeared from national discussion.
    But I'd like to revisit Social Security for a moment, because it's important to remember what Mr. Bush tried to get away with. Many pundits and editorial boards still give Mr. Bush credit for trying to "reform" Social Security. In fact, Mr. Bush came to bury Social Security, not to save it. Over time, the Bush plan would have transformed Social Security from a social insurance program into a mutual fund, with nothing except a name in common with the system F.D.R. created. [...]
    Last week Jo Anne Barnhart, the commissioner of Social Security, published an op-ed article claiming that Social Security as we know it was designed for a society in which people didn't live long enough to collect a lot of benefits. "The number of older Americans living now," wrote Ms. Barnhart, "is greater than anyone could have imagined in 1935." Now, it turns out that an article on the Social Security Administration's Web site, "Life Expectancy for Social Security," specifically rejects the idea the Social Security was originally "designed in such a way that few people would collect the benefits," and the related idea that the system faces problems from "a supposed dramatic increase in life expectancy in recent years." And the current number of older Americans as a share of the population is just about what the founders of Social Security expected. The 1934 report of F.D.R.'s Commission on Economic Security, which laid the groundwork for the Social Security Act, projected that 12.7 percent of Americans would be 65 or older by the year 2000. The actual number was 12.4 percent. [...]
    But the campaign for privatization provided an object lesson in how the administration sells its policies: by misrepresenting its goals, lying about the facts and abusing its control of government agencies. These were the same tactics used to sell both tax cuts and the Iraq war. [...] Forewarned is forearmed: the real goals of reform won't be as advertised, the administration will say things about the current system that aren't true, and the Treasury Department will function in a purely partisan capacity.
  • Reuters, courtesy of the New York Times: Democrats Demand Conditions on Social Security. Excerpts: On the eve of Social Security's 70th anniversary, Democrats said on Saturday they are ready to move toward revamping the financially troubled retirement program but warned against stripping away benefits to retirees and relying on private accounts for funding. "We have a moral obligation to stand up and protect Social Security for the next 70 years and beyond -- that means stopping privatization and dropping partisan demands for private accounts," said Rep. John Salazar, a Colorado Democrat, in his response to President George W. Bush's radio address. [...]
    "Social Security has never failed to pay promised benefits, and Democrats will fight to make sure that Republicans do not turn a guaranteed benefit into a guaranteed gamble," said House Democratic leader Nancy Pelosi of California. "Democrats stand ready to address the challenges facing Social Security's solvency, but this cannot begin until Republicans begin talking about ways to make Social Security stronger, not weaker," she said.
  • New York Times: The Promise and the Pitfalls of Health Savings Accounts. By Michelle Andrews. Excerpts: HEALTH savings accounts, a sort of I.R.A. for health care, let people set aside money tax-free to pay for medical expenses, both now and later. But the accounts have been controversial since their introduction in January 2004. Depending on whom you ask, they are either a wonderful tool to help Americans become wiser, more price-conscious health care consumers, or just another way for employers to pass along more health care expenses to their workers. Critics also contend that the accounts are basically a tax-shelter gimmick for people who are healthy and wealthy enough to invest in them but don't have to rely on them to cover their care costs. [...]
    Some people are discovering downsides to the accounts. Ric Joyner, president of the National Association of Professional Benefits Administrators, says he has received frequent calls from companies and individuals interested in setting up the accounts. But lately, Mr. Joyner, who is also president of eflexgroup.com, a benefits administration company in Madison, Wis., says he has been getting calls from people complaining that their account balances are shrinking even though they have not used the money. "The money they're setting aside for health care is being eaten up by fees," he said. [...]
    But even if you deposit the maximum amounts and don't touch the money to pay for health care before you are 65, you won't accumulate enough to cover medical expenses in old age, according to an analysis by the Employee Benefit Research Institute, a nonprofit research organization based in Washington. In a model created by the institute, a 55-year-old who set aside the annual maximum - as well as catch-up contributions - starting in 2004 would save $44,000 in 10 years, assuming a 5 percent return. If that person lived to 80 and had retiree health coverage, he would need anywhere from $137,000 to $337,000 to cover premiums and out-of-pocket medical expenses, according to the institute's analysis. Investing in a health savings account at an earlier age won't solve the problem, said Paul Fronstin, the institute's director of health research and education and a co-author of the report.
  • New York Times: Patients Turn to Advocates, Support Groups and E-Mail, Too. By Jan Hoffman. Excerpts: Privately hired patient advocates can, among other things, research medical options, make appointments and negotiate with insurance companies. The advocates, who include doctors, nurses and lawyers, charge anywhere from several hundred dollars for a consultation to the $30,000 initiation payment and $25,000 annual fee for a soup-to-nuts service for the wealthy. There are also nonprofit advocacy centers. Patients can find advocates through the Internet or through support programs for their conditions.
  • The Century Foundation: Health Care: Universal Coverage. Four Plans for Health Care Reform. Excerpts: s the crisis in U.S. health care worsens, ideas for universal health coverage have returned to the headlines. Despite the passage of only a dozen years since the failure of President Clinton's health care reform effort, several key trends have emerged which may point to a more receptive reform environment in the near future.
    • Untenable costs for businesses. Employer-based coverage is eroding rapidly and employers are increasingly dissatisfied. The cost of employer premiums is up 59 percent since 2000 alone, and employers are increasingly paring back or dropping coverage and shifting risks to employees.
    • Financial strain for the middle class. Previously, most Americans have been pretty satisfied with their own health insurance even as they've sympathized with the problems of the uninsured. But as the numbers of uninsured rise and employers cut back, this is increasingly a pocketbook issue for the squeezed middle class.
    • Industry cooperation. There's an increasing possibility that a coalition of interests in the healthcare industry will band together to seek reforms in place of combined interests or a single powerful interest thwarting reform.
    • Consensus on the financial wisdom of reform. The trend is moving away from the conventional wisdom that achieving universal coverage would be a fiscal black hole. A recent report (PDF) from the National Coalition on Healthcare estimated that comprehensive reforms of different kinds, different models, would run up some $75 billion, roughly, in initial costs. But by year ten of these reforms, $125 billion to over $180 billion could be saved, largely through increased administrative efficiency.
  • New York Times: The Binge Continues. Excerpt: When a country buys more from foreigners than it sells to them - as the United States does - the result is a trade gap that must be plugged by selling off American assets, mostly corporate and government bonds. We've seen that system, for lack of a better word, function swimmingly in the past few days. [...]
    More disturbing still, the trade gap itself is likely to grow substantially and require ever greater foreign financing. The deficit in June was measured before the price of oil rose in July and August. Factoring in higher energy costs, future deficits are likely to be higher than June's by tens of billions of dollars every month for the near future, if not for a long time to come. Even before the recent spikes in oil prices, the United States was on track for a trade deficit this year of more than $700 billion, easily twice the size that most economists consider sustainable.
    The United States will always manage to finance its deficits. The question is how high the interest rates will have to go. The answer depends in large part on getting the fundamental weaknesses under control. Unfortunately, the Bush administration is crowing about long-term budget deficit targets it cannot reach under any set of reasonable assumptions, while Congress's response to the trade deficit is to blame China. In the meantime, the interest on the bonds that are financing Americans' insatiable appetite for everything from gasoline to toys is piling up, to be paid by the children and grandchildren of today's consumers.
  • Yahoo! message board post by "bozemansmith". Full excerpt: H-1B Visa's actually HURT American workers. They are another device to increase supply so that wages and wage growth are suppressed. They also provide a pool of workers to "backfill" workers who quit because of a company's policies or benefits, making it more painless for a company and thus reducing an employee's negotiating strength. Finally, many of these workers use US employment to build skills to ensure good job placement when they repatriate to their home countries, taking the outsourced jobs with them. Just the thing for a company looking to outsource: trained on your business, comfortable with US and home country language and customs, already on the payroll!
    Given the significant outsourcing of high tech jobs that has occurred so far and is continuing, does anyone really believe that there is actually a shortage of qualified American workers? There is perhaps a shortage of qualified workers who will accept employment for low wages and no benefits, of course.
    Yes, fewer American students are pursuing college majors in the high tech arena. Why? If you ask them they will tell you: too many layoffs, too much offshore outsourcing, and too low a return on a very difficult and time intensive education. How does increasing H1-b levels help turn THAT around?
    There are many reasons for bright and capable people to want to emigrate to the US; if they want to make it their new home they can use the front door like everyone else, not the side door of an H1-b. It is also not clear that folks who lose their H1-b status for whatever reason automatically depart the US, given the overall shambles our immigration control system is in. It would appear that AeA is "not our friend".
  • Fortune: Can Americans Compete? Is America the World's 97-lb. Weakling? In the relentless, global, tech-driven, cost-cutting struggle for business, America isn’t ready—here’s what to do about it. By Geoffrey Colvin. Excerpts: It’s a crisis of confidence unlike anything America has felt in a generation. Residents of tiny Newton, Iowa, wake up to the distressing news that a Chinese firm—What’s it called? Haier? That’s Chinese?—wants to buy their biggest employer, the famed but foundering Maytag appliance company. Two days later, out of nowhere, a massive, government-owned Chinese oil company muscles into the bidding for America’s Unocal. The very next day a ship in Xinsha, China, loads the first Chinese-made cars bound for the West, where they’ll compete with the products of Detroit’s struggling old giants. All in one week. And only two months earlier a Chinese company most Americans had never heard of took over the personal computer business formerly owned—and mismanaged into billions of dollars of losses—by the great IBM. [...]
    The result is that many Americans who thought outsourcing only threatened factory workers and call-center operators are about to learn otherwise. That is a giant development, because information-based services are the heart of the U.S. economy. With 76% of its jobs in services, America’s economy is the most service-intensive of any major country’s. Of course many of those jobs can’t be shipped abroad: Chefs, barbers, utility and NFL linemen, and many others know they can’t be replaced by even the smartest person in Bangalore.
    But growing numbers of other service jobs are not safe. Everyone has heard about the insurance-claims processors, accountants, and medical transcriptionists in India and elsewhere who’ve taken away U.S. jobs by doing the same work for much less money. More alarming is that the value of outsourced jobs is steadily rising. Morgan Stanley is hiring Indian bond analysts, fearsome quants who can make or cost a company millions. Texas Instruments is conducting critical parts of its next-generation chip development—extraordinarily complex work on which the company is betting its future—in India. American computer programmers who made $100,000 a year or more are getting fired because Indians and Chinese do the same work for one-fifth the cost or less.
    The big question is how far all this will go. A massive new study from the McKinsey Global Institute predicts that some industries could be changed beyond recognition. In packaged software worldwide, 49% of jobs could in theory be outsourced to low-wage countries; in infotech services, 44%. In other industries the potential job shifts are smaller but still so large they’d create major dislocations: Some 25% of worldwide banking jobs could be sent offshore, 19% of insurance jobs, 13% of pharmaceutical jobs. Looking at occupations rather than industries, some fields will never be the same. McKinsey figures that 52% of engineering jobs are amenable to offshoring, as are 31% of accounting jobs.
  • Physicians for a National Health Program: Taking away choice. Pick and Lose. By Jonathan Cohn. The New Republic. Excerpts: Has any word done more to cloak the modern conservative agenda than “choice”? …what conservatives in this country never mention is that giving us these new choices also means taking something away—typically, programs that make us more secure. Health care… may be the most vivid example of this. And a new bill quietly moving through Congress this summer shows why. It is called—what else?—the Health Care Choice Act. Sponsored by Representative John Shadegg of Arizona and endorsed by everybody from The Wall Street Journal editorial page to the Cato Institute, it was voted out of committee late last month. With both Speaker Dennis Hastert and Bush now embracing it, it seems destined for approval by the full House soon, though its fate in the Senate remains uncertain. [...]
    But the best way to fix this isn’t to gut existing regulations. It’s to create one big pool of beneficiaries through some kind of universal health insurance system—whether it’s one that allows people to pick from among well-regulated private health plans (like President Clinton once proposed) or one that simply bypasses insurance companies altogether, giving consumers direct, affordable access to the doctors and hospitals they like best (like many European nations already do). Those aren’t the kind of choices that conservatives want to give Americans, since they happen to require expanding government. But they’re the kind of choices Americans would appreciate most.
  • MarketWatch: Time to overhaul HSAs. Health accounts no panacea for retirement. By Robert Powell. Excerpts: Hailed as an IRA for current and future health-care expenses, researchers now say HSAs may not be the greatest thing since electric toothbrushes. HSAs will help retirees pay for just a fraction of future health-care expenses. And those expenses are expected to be huge, according to recent research from the Employee Benefits Research Institute, a Washington-based nonpartisan group. Consider: a person retiring at age 65 in 2015 might need somewhere between $160,000 and $687,000 to pay for health-care expenses during retirement. Or put another way, EBRI says health-care expenses are likely to be higher than most individuals anticipate and could add 20% or more to the amount of preretirement income that workers will need to replace in retirement.
  • Seattle Post-Intelligencer: Corporate Pay: Executive sweets. Excerpts: We learned earlier this month that 33-year-old Lachlan Murdoch, son of Australian media mogul Rupert, will probably get the equivalent of his 2005 salary and $7 million bonus (total: $18 million) after quitting as operating officer of his daddy's company, News Corp. Having spent three whole months at Morgan Stanley, Stephen S. Crawford walked away with a $32 million payout. After 14 months at Disney, Michael Ovitz received a $140 million pay package. [...]
    The second stab is that chances are that most hard-working, talented people who devote 30 years to a company will never see that kind of cash -- heck, they might not even see their pensions. Executives at companies such as Boeing, Ford Motors and IBM continue to receive staggering paychecks, payouts and bonuses even as employee pension plans are underfunded by billions of dollars. United Airlines flat out defaulted on the pensions of 120,000 employees, while CEO Glenn Tilton's $4.5 million pension remained untouched. Talk about a demoralizing blow to the American work ethic.
  • EE Times: IBM opens research center in Bangalore. Excerpt: IBM Corp. today opened a new research center here that will focus on developing innovative technologies and solutions, acting as an extension of IBM’s India Research Lab (IRL) in New Delhi. The IRL is one of eight such labs the corporation has worldwide. The new center here will have on its rolls researchers from distributed computing, software engineering and knowledge management and will be headed by Guruduth Banavar. [...] IBM already has several software development centers in India, employing over 20,000 engineers and is now in the process of scaling up these centers.
  • Bloomberg: IBM to Double Number of Employees in Brazil by Yearend 2006. Excerpt: International Business Machines Corp., the world's No. 2 software maker, plans to double its number of employees in Brazil by the end of next year. IBM started the year with 4,000 workers in Brazil and plans to increase that amount to 8,000 by the end of 2006, said Juan Fernandez Oliva, the company's president for Latin America.
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. The following is an example post from the Vault message board.
  • "A military analogy" by "Dose of Reality". Excerpt: It doesn't matter how many great captains, majors and colonels you have if the generals and field marshall (or in this case queen) are starving the troops. Most of the great wars have been lost due to deterioration in supply lines and logistics, not due to bad operational tactics. You can't fight if you have no weapons and troop morale sucks. There is no question that we have legacy IBM managers in that upper rear echelon. I have been living in their Waterloo disaster for several years now.
  • "Are they worth giving up my current work/life balance?" by "ILBoy23". Full excerpt: Will I be staying at Holiday Inns or Sheratons? Will I be able to fly American whenever and wherever I want? Do you guys have a per diem or a limit to the amount one can spend on meals? Any honest answer to how many "perks" there may be at IBM BCS would be appreciated. Thanks in Advance!
  • "Great perks! Here they are..." by "IGS_Consultant". Full excerpt: You will be able to stay at a Holiday Inn or Sheraton if there happens to be a particularly worn out property in a given city. The same is true of Marriott, Hilton, or any other hotel chain. Only those properties that have trouble attracting "normal" business travelers will agree to IBM's ridiculously low negotiated rates. At this time I'm working in a midwestern city that is roughly the size of Atlanta. There are two IBM hotels in this city, neither of which are downtown. The hotel limit in this city is less than $70 a night, so even the Hampton Inns are too expensive to meet IBM's rate limits. The Hilton in this city has a corporate room rate of $129. The Sheraton has a rate of $109. The Hampton Inn is $95. There is not a Holiday Inn in this city, although I believe there is a Crowne Plaza.
    The meal limit in this city is $31 a day, which you must stretch to pay for three meals, including tax and tips. Forget about room service...you'll blow it in one meal.
    Employees are "encouraged" to share rental cars.
    You may have good luck staying on American Airlines as IBM has negotiated rates with them and it is a "favored" airline. You may want to move to Chicago or Dallas or another American hub.
    On the other hand, if you are a Northwest or United flyer, good luck. IBM's "patent pending" online travel reservation tool will likely not offer you flights on "scorned" airlines, even though those flights are non-stop and cheaper.
    Perks? A three-year old laptop. Depending on your band level, IBM may pay for your cell phone...or it may not, but expect you to use your personal cell phone for business calls. Utilization targets above 90%, calculated on 2080 hours a year...no subtracting vacation, sickness, or holidays!
    Other perks? The ability to take on-line training courses offered by the IBM Global Campus on your evenings and weekends! Forget about classroom training, or ever attending a professional conference.
  • "IBM is still behind the pack" by "Dose of reality". Full excerpt: While travel in this industry is not what it was 5 years ago, IBM is still much worse than the competition. The difference between the IBM approach to expense reimbursement and the competition is that firms like Accenture and the old PwC were willing to be flexible with BOTH choice of hotel/airline vendor and budget to suit the needs and demands of the client.
    At IBM, the standards are all driven down to the lowest common denominator - the typical non-reimbursed traveler that is on the road one or two weeks a year. We are all subject to the same draconian limitations that he is, despite the fact that we travel >80% (so the cumulative burden is much higher), and our expenses are reimbursed (so the favorable impact to IBM of more room in client contract bidding is much lower than the direct hard dollar savings we realize from the non-reimbursed traveler).
    Treating all travelers the same is bad business, but we do it because at IBM Standardization is King. BTW, I don't think we can blame the evil diabolical blonde bimbo for this. This is a finance driven initiative - let's blame JJ, since he was in charge there and he “isn't here any more”.
  • "Congratulations!" by "Dose of repetition". Full excerpt: Important things need to be repeated. I need to repeat what I say at least a couple of times to make sure you understand what I am saying. Do you understand what I am saying? Things need to be repeated. Once is never enough. This is the only place where you can get an unbiased, unfiltered perspective on BCS. Only anonymous posters on vault message boards can feel free to tell the truth. IBM management will insure that the propaganda machine drowns out the truth everywhere except for here on this board. Only this board is effective in avoiding the affects of the IBM propaganda machine. This is the only place one can read the truth. This is the only place where real research can be done.
    Congratulations veryblue on finding a reason to leave IBM. It really doesn't matter why you leave as long as you leave. More people need to leave. We need more people to leave so that the current IBM management regime will fail. We need them to fail so that the whole regime can be dismantled and then allow us to start over. If we can't get more people to leave and convince more people to stop accepting job offers at IBM, the current regime may not fail. If they don't fail, we can't get a regime change. We must have a regime change. That is the only solution to IBM's problems. Congratulations on leaving. Take some more people with you. Thanks for doing your part to help with the regime change.

New on the Alliance@IBM Site:
  • Job Cuts at Sprint Account, IBM Kansas City. Name : Anonymous From-Kansas-City. Comments: I just got notice of my layoff from IBM on the Sprint account. I'm supposed to be working, now, a "month-to-month" contract with IBM on their AT&T account. The lady writing my specs, after nine years as an AT&T person-rebadged-to-IBM, told me she was just two days away from buying & closing on a new house when she got word that she was to train her replacement from India. However, he was to learn her nine-year job in six weeks. He ended up too overwhelmed after just a few weeks; such that he took a job with another company in Cleveland! I have had two people, from IBM's division of India, waiting for my cubicle in my last position at Sprint!
  • 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 6-21-05. 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.
  • 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 08/15/05: I am still here. Many good people, valuable assets are not. Projects important to moving the company forward are falling down in all directions. Serious quality issues go unattended as fear and paranoia drive project groups to "show measures of success". Quality has gone out of software group products. I am not even proud anymore to promote IBM software and services because I've lost my belief that they really care about quality.
      SWG transformation is undergoing changes (and change is good; but not in this case). The buzz word we hear is "componentization". What this means really is the identification and modularization of software products and redesign into units. Then these units can be pasted together to form "business solutions". While this seems reasonable in theory, it will not work the way they are doing it and ultimately our competitors will win and here's why. The trouble is in the pasting-together part. You need people with narrow and deep skills, business experience, business acumen, and perseverance, to help industries migrate or integrate systems with composite parts. This means you need people with lots of TIME and EXPERIENCE, not kids out of college.
      It is sad to see the slow demise of quality within IBM software group. I am still employed, and wishing every day that they cared about quality again. I work probably 60 plus hours per week, though not because I am thanked for it, I am one of those people who think a good job is worth doing well. However, I am starting to believe that my employer doesn't care about core business at all, and this I do not understand. IBM may still have the seeds to turn this around, but myopically they are focused instead on cutting cutting cutting. They are killing SWG. -waiting for the next shoe to drop-
    • Comment 08/15/05: IBM SWG is frantically transforming their business. The idea is that the way to succeed with so many software products is to componentize them. The theory is that whole is greater than the sum of it's parts. So - they believe that you can take the "heart" of Lotus and the "lungs" of Tivoli and the "brain" of Websphere, and because they have value -- you can simply knit them together into "business solutions". There is even a campaign to promote Business Services - "...The other IBM". Theory is good, but years from now we will see that it failed because of a few things.
      1. The whole is NOT greater than the sum of it's parts.
      2. To succeed with this you need robust, solidly-reliable processes that form the connections between the parts
      3. You need people with the business knowledge and process experience/industry savvy to articulate, design, and build solutions based on this. By killing the aging workforce (layoffs) you are sending a message that business knowledge doesn't matter. Kids just out of college and people who are not well-versed in how systems work will not be able to take this cookie-cutter approach and build solid systems for enterprise use.
      The demise of SWG will come at a dear cost, I don't even know if IBM will be able to survive the bad press they are going to get. Dependable, quality, systems will not be the norm anymore. Little by little other software companies will find exploitable niches (they already have) while the executives scratch their heads, stuck in analyzing just WHY this is all happening. So they will respond by throwing out more business knowledge (people) to lean down the business and keep the stock prices up. -sad to see a good company go-
    • Comment 08/18/05: I work for IBM BS which is Part of SO-Business in Germany. In the beginning of March 2005 Johannes Nagel came to tell us that IBM BS GmbH in Hannover and Schweinfurt will be closed for 100% on 2005-09-30. Transfers to different location or parts of IBM will not be possible. This affects about 600 persons in sum over both locations. We were told that the jobs will go to Czech or China. Interestingly even Managers in first or some of the second row are affected. Jobs previously available on www.ibm.com were suddenly removed. Also interesting is, that these locations do not have workers from the Deutsche Bank deal. Less than a week after that day we all found an example of an offer for leaving IBM. A month later the original arrived. A major part of us have signed, since the amount was possibly not too bad. -Anonymous-

"The test of our progress is not whether we add more to the abundance of those who have too much; it is whether we provide enough for those who have too little." — Franklin D. Roosevelt
This site is designed to allow IBM Employees to communicate and share methods of protecting their rights through the establishment of an IBM Employees Labor Union. Section 8(a)(1) of the National Labor Relations Act states it is a violation for Employers to spy on union gatherings, or pretend to spy. For the purpose of the National Labor Relations Act, notice is given that this site and all of its content, messages, communications, or other content is considered to be a union gathering.