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    Highlights—February 18, 2006

  • Yahoo! message board post by Kathi Cooper (of Cooper v. IBM): Oral arguments - Cooper v. IBM. Full excerpt: As you know, oral arguments on IBM's appeal of Cooper v. IBM will be held at 10:00 tomorrow morning at the Everett McKinley Dirksen US Federal Courthouse, Chicago. I flew to Chicago this afternoon and met up with our attorneys. We dined at Volare's and shared fine wine. The hotel is walking distance from the courthouse which is where we will meet up at 9:00 tomorrow. The lead attorney that will be arguing FOR us is Lee Freeman. Doug Sprong, William Carr, Robert Hill, John Evans, and myself will be present. I assume Jeff Huvelle will argue IBM's position, not sure. We will not know who will constitute the panel of judges until 9:00 tomorrow. I can think of a few that we don't want and also a few that we would want. In the end, it is only the decision that matters. The oral arguments will be taped and will be available on the Net (at their site) several hours after our case has been heard.
    This is an extremely critical step in righting only a part of what IBM has done to us. IBM has hurt us in other ways too, most notably, the freezing of our defined benefit pension, the breakage of our retiree medical promises, and outsourcing our jobs overseas.
    A greater threat to us is taking place in Congress. Boehner (who took DeLay's chair) is undoing all that we have worked for to protect our hard earned benefits in Congress. Boehner is actively pushing his colleagues to pass a law that makes what IBM did to us legal and to make it legal retroactive to the 1990's. He is doing that just in case we win in court tomorrow. How insane is that!
    I won't be able to post until I get back home tomorrow night. Watch the site for recorded oral arguments. http://www.ca7.uscourts.gov/. Look for case number 05-3588.
  • Yahoo! message board post by Kathi Cooper. Full excerpt: I just got home from the Seventh Circuit Federal Court of Appeals in Chicago. We got to the courthouse at 9:00am this morning and asked about the panel we would have. They were Judge Bauer, Judge Easterbrook, and Judge Manion. There were two cases before us, both concerning United Airlines and the breakage of leases due to their bankruptcy filings. When they announced Cooper v. IBM, Jeff Huvelle (representing IBM) came up first and presented his argument. Next, Lee Freeman presented ours. Lastly, Jeff Huvelle had the final word, as is always is the process. The room was packed. Awesome courtroom. In addition to all of IBM's attorneys and our attorneys being present, there were many attorneys from other corporations (yes, companies with CB plans), as well as Richard Shey, and Donald Rosenberg, Vice President and Assistant General Counsel for Litigation for IBM.
    You can listen to the oral arguments on their site. We had little time afterwards to discuss our opinions of how things went because of the threatening weather. We scattered rather quickly to find flights to get us home. Bad weather made the trip home a nightmare (both in Chicago and St Louis).
    As far as my opinion, I haven't been able to formulate one. Realize, this is the first time I have seen this so I am in awe and really couldn't call it. As I said in my first note, the only call that matters is the final written decision. It is time for us to wait again, and I think we have that down very well. Love Chicago but glad to be home... Kathi Cooper
  • Yahoo! message board post by Janet Krueger. Full excerpt: Did you know that one of the clauses in the proposed Pension Reform Act of 2005 that is currently waiting to be assigned to a conference committee is a change that allows companies more leeway over the lump sum distribution calculations, thus making it possible for them to cash out employees for lower amounts?
    And did you know that the termination rules currently in ERISA do NOT require the company to cash out vested employees but allows them to purchase age 65 annuities on their behalf that cannot be accessed any earlier than age 65?
    If you haven't written to your representative and senators in Washington yet, please do it this week. There is a list of talking points on the home page of this site: http://finance.groups.yahoo.com/group/ibmpension/ as well as in a document on the FILES area of this site. Every talking point is there for a good reason.
  • Yahoo!: IBM stock insider trading. The following are trades listed thus far in 2006. (Editor's note: Note the acquisition costs).

    Date Insider Shares Type Transaction Value*
    13-Feb-06 DORMANN, JUERGEN
    Director
    4,000 Direct Option Exercise at $27.015 per share. $108,060
    13-Feb-06 DORMANN, JUERGEN
    Director
    4,000 Direct Sale at $80.7365 per share. $322,946
    9-Feb-06 KNIGHT, CHARLES F.
    Director
    12,000 Direct Option Exercise at $27.015 - $58.22 per share. N/A
    1-Feb-06 O'DONNELL, DANIEL E.
    Secretary
    1,196 Direct Disposition (Non Open Market) at $81.445 per share. $97,408
    1-Feb-06 O'DONNELL, DANIEL E.
    Secretary
    3,386 Direct Acquisition (Non Open Market) at $0 per share. N/A
    1-Feb-06 MILLS, STEVEN A.
    Senior Vice President
    5,000 Direct Disposition (Non Open Market) at $81.445 per share. $407,224
    1-Feb-06 MILLS, STEVEN A.
    Senior Vice President
    14,142 Direct Acquisition (Non Open Market) at $0 per share. N/A
    1-Feb-06 MACDONALD, J. RANDALL
    Senior Vice President
    4,102 Direct Disposition (Non Open Market) at $81.445 per share. $334,087
    1-Feb-06 MACDONALD, J. RANDALL
    Senior Vice President
    12,014 Direct Acquisition (Non Open Market) at $0 per share. N/A
    1-Feb-06 LOUGHRIDGE, MARK
    Chief Financial Officer
    2,439 Direct Disposition (Non Open Market) at $81.445 per share. $198,644
    1-Feb-06 LOUGHRIDGE, MARK
    Chief Financial Officer
    7,117 Direct Acquisition (Non Open Market) at $0 per share. N/A
    1-Feb-06 KELLY, JOHN E. III
    Senior Vice President
    4,753 Direct Disposition (Non Open Market) at $81.445 per share. $387,108
    1-Feb-06 KELLY, JOHN E. III
    Senior Vice President
    13,567 Direct Acquisition (Non Open Market) at $0 per share. N/A
    1-Feb-06 HORN, PAUL M.
    Senior Vice President
    2,528 Direct Disposition (Non Open Market) at $81.445 per share. $205,892
    1-Feb-06 HORN, PAUL M.
    Senior Vice President
    6,143 Direct Acquisition (Non Open Market) at $0 per share. N/A
    1-Feb-06 DANIELS, MICHAEL E.
    Senior Vice President
    2,929 Direct Disposition (Non Open Market) at $81.445 per share. $238,552
    1-Feb-06 DANIELS, MICHAEL E.
    Senior Vice President
    8,915 Direct Acquisition (Non Open Market) at $0 per share. N/A
    1-Feb-06 ROMETTY, VIRGINIA M
    Senior Vice President
    2,413 Direct Disposition (Non Open Market) at $81.445 per share. $196,526
    1-Feb-06 ROMETTY, VIRGINIA M
    Senior Vice President
    7,240 Direct Acquisition (Non Open Market) at $0 per share. N/A
    1-Feb-06 HARRELD, J. BRUCE
    Senior Vice President
    3,732 Direct Disposition (Non Open Market) at $81.445 per share. $303,952
    1-Feb-06 HARRELD, J. BRUCE
    Senior Vice President
    10,957 Direct Acquisition (Non Open Market) at $0 per share. N/A
    1-Feb-06 MOFFAT, ROBERT W. JR
    Senior Vice President
    3,247 Direct Disposition (Non Open Market) at $81.445 per share. $264,451
    1-Feb-06 MOFFAT, ROBERT W. JR
    Senior Vice President
    9,674 Direct Acquisition (Non Open Market) at $0 per share. N/A
    1-Feb-06 IWATA, JON C.
    Senior Vice President
    2,351 Direct Disposition (Non Open Market) at $81.445 per share. $191,477
    1-Feb-06 IWATA, JON C.
    Senior Vice President
    6,806 Direct Acquisition (Non Open Market) at $0 per share. N/A
    1-Feb-06 ELIX, DOUGLAS T.
    Senior Vice President
    6,070 Direct Disposition (Non Open Market) at $81.445 per share. $494,371
    1-Feb-06 ELIX, DOUGLAS T.
    Senior Vice President
    16,876 Direct Acquisition (Non Open Market) at $0 per share. N/A
    1-Feb-06 DONOFRIO, NICHOLAS M.
    Executive Vice President
    5,004 Direct Disposition (Non Open Market) at $81.445 per share. $407,550
    1-Feb-06 DONOFRIO, NICHOLAS M.
    Executive Vice President
    14,525 Direct Acquisition (Non Open Market) at $0 per share. N/A
    1-Feb-06 ZEITLER, WILLIAM M.
    Senior Vice President
    4,445 Direct Disposition (Non Open Market) at $81.445 per share. $362,023
    1-Feb-06 ZEITLER, WILLIAM M.
    Senior Vice President
    10,824 Direct Acquisition (Non Open Market) at $0 per share. N/A
    1-Feb-06 SANFORD, LINDA S.
    Senior Vice President
    4,369 Direct Disposition (Non Open Market) at $81.445 per share. $355,833
    1-Feb-06 SANFORD, LINDA S.
    Senior Vice President
    12,681 Direct Acquisition (Non Open Market) at $0 per share. N/A
    1-Feb-06 ROSENBERG, DONALD J.
    Senior Vice President
    1,192 Direct Disposition (Non Open Market) at $81.445 per share. $97,082
    1-Feb-06 ROSENBERG, DONALD J.
    Senior Vice President
    3,386 Direct Acquisition (Non Open Market) at $0 per share. N/A
    31-Jan-06 KELLY, JOHN E. III
    Senior Vice President
    2,000 Direct Disposition (Non Open Market) at $0 per share. N/A
    27-Jan-06 HORN, PAUL M.
    Senior Vice President
    19,228 Direct Option Exercise at $36.0625 per share. $693,409
    27-Jan-06 HORN, PAUL M.
    Senior Vice President
    19,228 Direct Sale at $81.1073 per share. $1,559,531
    26-Jan-06 HARRELD, J. BRUCE
    Senior Vice President
    1,508 Direct Option Exercise at $31.6725 per share. $47,762
    26-Jan-06 HARRELD, J. BRUCE
    Senior Vice President
    1,508 Direct Sale at $81.456 per share. $122,835
    23-Jan-06 NOTO, LUCIO A.
    Director
    1,000 Direct Option Exercise at $27.015 per share. $27,015
    19-Jan-06 ZEITLER, WILLIAM M.
    Senior Vice President
    165 Direct Disposition (Non Open Market) at $0 per share. N/A
    19-Jan-06 ZEITLER, WILLIAM M.
    Senior Vice President
    16,044 Direct Option Exercise at $31.6725 per share. $508,153
    19-Jan-06 ZEITLER, WILLIAM M.
    Senior Vice President
    16,044 Direct Sale at $83.4534 per share. $1,338,926
    16-Jan-06 WEBER, ROBERT C.
    Senior Vice President
    220 Direct Statement of Ownership N/A
    1-Jan-06 ROSENBERG, DONALD J.
    Senior Vice President
    8,308 Direct Statement of Ownership N/A

  • New York Times: Everybody's Business; New Front: Protecting America's Investors. By Ben Stein. Excerpts: Several people sent clippings describing how UAL provided Glenn F. Tilton, who was living in San Francisco when it hired him as chairman and chief executive, with a suite in a luxury hotel when he spent time at its headquarters in Chicago. UAL was paying for the suite -- which cost $18,000 a month, according to The San Francisco Chronicle -- while it was reorganizing its finances under bankruptcy court protection and telling tens of thousands of workers that their jobs had been eliminated, their pay cut, their pensions terminated or all of the above because the company was broke.
    Some of the letter writers recalled how UAL spent an average of $10 million a month on lawyers, accountants and investment bankers for 37 months while UAL was in bankruptcy, and yet was unable to pay its employees their pensions.
    Now UAL has emerged from bankruptcy with a mighty flourish, and an allowance of hundreds of millions of dollars for its top executives. Some letters pointed out that one of UAL's board members is none other than our old friend Robert S. Miller, chief executive of Delphi, the auto parts maker. Delphi also recently entered bankruptcy -- but proposed to the bankruptcy court a payment of well over $100 million to its top executives to keep them happy while it was in bankruptcy. Mr. Miller, who goes by Steve, a version of his middle name (not the one who sings ''Fly Like an Eagle,'' but an artist of sorts nonetheless), has told Delphi's workers that they will have to take pay cuts of roughly two-thirds in order to save the business. [...]
    Long ago, my pop was pals with Harlow H. Curtice, the president of General Motors in its glory days in the 1950's. Mr. Curtice presided over a spectacularly powerful and profitable G.M. For that, in his peak year as I recall from my youth, he was paid about $400,000 plus a special superbonus of $400,000, which made him one of the highest-paid executives in America. At that time, a line worker with overtime might have made $10,000 a year. In those days, that differential was considered very large -- very roughly 40 times the assembly line worker's pay, without bonus; very roughly 80 times with bonus. A differential of more like 10 to 20 times was more the norm.
    Now C.E.O.'s routinely take home hundreds of times what the average worker is paid, whether or not the company is doing well. The graph for the pay of C.E.O.'s is a vertical line in the last five years. The graph for workers' pay is a flat line -- in every sense. [...]
    Government, meanwhile, does nothing, or next to nothing. Courts, especially bankruptcy courts, do nothing. And the employees and stockholders and the whole society are looted. Maybe it's not looting in the legal sense, but something basic is removed from the society. In the capitalist society, the most basic foundation is trust. But in today's world, trust is abused, mocked, drained of meaning. [...]
    Now, we are engaged in a war. More than 100,000 Americans are fighting far from home. Many don't come back. Many come home crippled. They are fighting for a vision of a just and decent society back home in glorious, shining, blessed America. And back home, meanwhile, the looters are running wild, taking the meaning out of that vision of America, taking some -- by no means all -- of the beauty out of America as a land of justice and fairness. [...]
    One of my correspondents wrote that she, a flight attendant at United Airlines, had played by the rules, believed what her bosses told her, trusted that the laws would protect her, believed that fairness would triumph in the end because it's America. ''I guess that makes me a fool in today's world,'' she said, because now she is broke, with no job, barely any pension and no faith. While the soldiers are fighting to protect us from the terrorists with bombs, too few are at home protecting us from the terrorists with briefcases. There aren't a lot of such terrorists, but they do a lot of damage.
  • Yahoo! message board post by "ibmmike2006". Full excerpt: I have been asked, How can a guy like Sam spend that much money in a day....$10,000 or $22,000? Well, Sam could buy a brand new car every day for the rest of his life with that much retirement. A Ford Taurus or some other midsized car or a Geo if he is on the low end or a SUV if on the high end.
    Remember Gerstner, the "elephant man"? The man who saved IBM and gave himself 10,000,000 shares of IBM stock June 30, 1998. You will never know when Lou cashes these shares in as he is no longer an officer of IBM so the SEC says he can exercise the options with stealth like a thief in the night. They should be about $53 a share option price that he has until June 30, 2008 to exercise. This will be a nice addition to his $600,000,000 net worth (before he came to IBM Lou was worth $54 million).
    The Supplemental Executive Retirement Plan (SERP) top amount was about $2,000,000 prior to 1999 and not the $8,125,000 it is today. Gerstner changed the scale of the SERP table. I think, the reason was that Gerstner knew he had to leave at age 60, like all good IBM CEO's and he had been with IBM for 9 years. His IBM retirement, using the old scale would have been about $250,000 a year. Having personal goals of greed that Lou thrived on, Lou probably set a goal of having, instead of $250,000 a year, his goal was $1,000,000 a year retirement. In order to meet his goal, he needed to increase the scale of the SERP from the high end of $2,000,000 for 35 years of IBM service to $8,125,000. That way, he could get his $1,000,000 a year or $2,739 a day pension for life with 9 years at IBM.
    Unfortunately IBM has erased the old SERP table showing the $2,000,000 SERP top end prior to July 1999 from its website and you have to look at the old proxies prior to 1999 you received with your IBM annual report. Do you think the SERP increase and the cash balance conversion in July 1999 was a Co-incidence? I think not. Just part of the evolution of transfer of IBM pension Trust money to the IBM executives. See Page 30 of 1999 Annual report to see the write up on the SERP change.
    Pull out one of your 1999 IBM proxies to see the SERP table that increases from $2 million to $8.125 million. The regular employees pensions decreased by 40% to 50% with the cash balance conversion in 1999 and the IBM Executives increased their SERP 400% in 1999? There are about 3,000 executives in the SERP as near as I can tell. I think if you look at the ratio: 3,000 executives increased their pension 400% and 300,000 regular IBMers decreased pension by the executives 40% is probably where the new SERP money is coming from. Lou left IBM with the executives smiling without founding or inventing anything.
    That guy Bouchard in 1999 I think said in a hearing at a congressional inquiry, "there just was not enough money in the IBM trust fund if IBM did not do the cash balance conversion." And now Randy McDonald is singing the same song, but has fixed it with the IBM Pension Trust fund freeze. The IBM executives must be making an adjustment to what they calculated in 1999. The next one will be in 2011 or 2012 if IBM is still in business.
    What both of these guys, Bouchard and McDonald forgot to say, "not enough money for who" The IBM executives SERP plan, of course. Now you know, "the rest of the story". Hey, the money has to come from somewhere. Where else but the reductions of the IBM Pension Trust fund pay outs for retirees and higher health care costs for retirees and employees.
  • Wall Street Journal: Revenge of the Retirees May Cut Pay at Lucent. By Sara Silver. Excerpts: In recent years, Lucent Technologies Inc.'s retirees have seen many of their benefits cut. Now they are fighting back -- proposing to rein in the compensation of the executives doing the cutting. Lucent's shareholders today are voting on a proposal to restrict the pay of the top brass. The proxy proposal, which was put forward by retirees, would make 75% of executive stock grants dependent on the telecom-equipment maker's performance. It is partly a reaction to last year's sharp increase in the bonus of Lucent's chief executive, Patricia F. Russo.
    It isn't just happening at Lucent. Retirees from a range of companies including Verizon Communications Inc., General Electric Co., International Business Machines Corp., Prudential Financial Inc. and Qwest Communications International Inc. are presenting proposals to restrict executive compensation. [...]
    "In these years of corporate tumult, which has seen many great companies turn into shells of their former selves, one thing has remained constant -- ever-rising levels of executive and board compensation," said Joanne Raschke, who filed the Lucent proposal. She holds 6,200 shares of stock in Lucent, a legacy of her husband Ken's 36 years with its predecessor companies. [...]
    U.S. companies have been retreating from their decades-long practice of offering a well-funded retirement for long-time employees. Scores of companies have cut health benefits for retirees, and in recent months, General Motors Corp., IBM and Verizon have joined a wave of companies freezing the level of pension benefits for certain employees. But even as retiree benefits are being cut, compensation for executives has risen: The median compensation for a chief executive officer in a Standard & Poor's 500 company was $6 million in 2004, up more than 13% from 2003, according to the Corporate Library.
    While unions were among the first groups to take to shareholder activism, the retiree groups are largely run by former managers and technical staff, smarting at their diminished voice and the company's often adversarial stance to retiree questions. "We built the company and have been cooperative with them, and we want the dialogue and some answers," said Dick Ciocca, president of the Philadelphia-based National Association of Prudential Retirees. "Executive compensation was where we could get their attention." [...]
    Other retiree groups are seeking better disclosure of executive pay. Janet Krueger, a 52-year-old software consultant who quit IBM after 23 years, will resubmit her proposal from last year requiring IBM to fully disclose what executives are paid, including the value of their pensions, retiree benefits and deferred compensation. Although IBM hasn't yet published its proxy proposals for this year, last year it opposed the resolution, saying the company complied with Securities and Exchange Commission requirements.
  • Los Angeles Times: United Airlines Workers Seek Answers on Pensions. By Kathy M. Kristof. Excerpts: Just before Christmas, retired United Airlines worker Jerry Formulak saw his pension check shrink by $500 a month. On Tuesday, he had a chance to ask how it could happen. "At one point, they [United] were spending money hand over fist," he said. "How could they get away with not putting enough money in the pension?" [...]
    Alternately hugging and commiserating with other flight attendants, Barbara Brockie-Smaldino said it wouldn't be so bad to lose benefits if the loss was shared by everyone. Instead, she noted, it was recently announced that hundreds of United executives would receive bonuses for having successfully steered the company out of bankruptcy protection. "We took pay cuts," said Brockie-Smaldino. "They took no cuts. They were rewarded for sticking it to everyone else."
  • Pension and Benefits Week: Retirees' medical benefits were vested for life, says Sixth Circuit. Excerpts: A SIXTH Circuit panel has upheld an earlier district court injunction that forced restoration of lifetime medical benefits for retirees on the grounds that, despite intervening corporate reorganizations, those health benefits were vested under the terms of their labor contract. (Yolton v. El Paso Tennessee Pipeline Co. (2006, CA6) 2006 WL 89152). [...]
    Over the years, the employees had been provided with booklets explaining the group health plan that included language to the effect that, "it is hoped that the Group Policies will be continued indefinitely through the years, but your employer necessarily reserves the right, subject to the applicable provisions of the Labor Agreement [CBAs], to terminate or change the Plan in the future."
  • The Social Security Network, A Century Foundation Project: Apart at the Seams: The Collapse of Private Pension and Health Care Protections. Excerpt: Throughout most of the past century America, uniquely among industrial countries, assumed that private businesses would take primary responsibility for providing retirement security and health insurance to working-age people and their families—an arrangement that became known as American "welfare capitalism." That assumption has been put to the test by the fierce competitive onslaught on almost every major American industry that began in the 1970s and 1980s. In today's world of global competition old traditions of employer-employee loyalties are a distant memory and companies have been shedding benefit commitments as rapidly as possible.
    "Apart at the Seams" explores how this collapse of private sector retirement and health benefits came about and how it has affected the landscape of American social insurance. Morris examines the forthcoming strain on government benefit programs, the critical trends in American incomes and savings patterns, and the special features of the American health care system that make policy changes such a pressing concern. He argues that the question is not whether the American social insurance system must be fundamentally restructured—that has been going on, willy-nilly, for the past few decades—but rather, whether there are reasonable paths to closing the gaping holes in the existing system without doing violence to the long-standing American disposition toward mixed-enterprise solutions.
  • Yahoo! message board post by "Mike". Full excerpt: I happened to go to CNN Money this morning and there was an article listing the best 100 companies to work for. You will never guess. IBM is not even on the radar. I remember when it was consistently number 1. This really tells you something, and it is truly sad.
    Did you also happen to notice this: Fourteen companies on this year's list pay 100% of their employees' health-care premiums:
    • Boston Consulting Group (ranked #11)
    • Granite Construction (ranked #91)
    • Kimley-Horn & Associates (ranked #20)
    • Microsoft (ranked #42)
    • Morrison & Foerster (ranked #88)
    • Nugget Markets (ranked #33)
    • Perkins Coie (ranked #48)
    • Qualcomm (ranked #23)
    • Recreational Equipment (REI) (ranked #9)
    • Russell Investment Group (ranked #63)
    • SAS Institute (ranked #30)
    • Valero Energy (ranked #3)
    • Whole Foods Market (ranked #15)
    • Worthington Industries (ranked #84)
    And IBM would have us believe that IBM can't compete in the market because our insurance cost are to high...something in my gut tells me that the problems in IBM are much deeper than the cost of our health insurance benefits
  • New York Times: Outsourcing Is Climbing Skills Ladder. By Steve Lohr. Excerpts: The globalization of work tends to start from the bottom up. The first jobs to be moved abroad are typically simple assembly tasks, followed by manufacturing, and later, skilled work like computer programming. At the end of this progression is the work done by scientists and engineers in research and development laboratories.
    A new study that will be presented today to the National Academies, the nation's leading advisory groups on science and technology, suggests that more and more research work at corporations will be sent to fast-growing economies with strong education systems, like China and India. [...]
    "We go with the flow, to find the best minds we can anywhere in the world," said Nicholas M. Donofrio, executive vice president for technology and innovation at I.B.M., which first set up research labs in India and China in the 1990's. The company is announcing today that it is opening a software and services lab in Bangalore, India.
  • Wall Street Journal: Avoiding the Next Enron: Today's Crop of Soon-to-Be Grads Seeks Job Security. By Sue Shellenbarger. Excerpts: You might think college students aren't looking much further into the future than next week's exam, or Friday's beer bash. You would be wrong. This year, college grads are contemplating something quite different, say campus recruiters and researchers: their future 401(k)s. As companies begin their next round of campus visits to recruit the undergraduate class of 2006, recruiters say it's clear that the bad news of the past few years -- from Sept. 11 and the tech crash to Enron, layoffs and worries about Social Security's demise -- have shaken this new crop of grads. More than any recruits in memory, they're asking employers for assurances of security, so they don't wind up at the next Enron. And in many cases, amid rising competition for educated workers and declining unemployment, they're getting it: Employers are tailoring pitches and programs to suit them, say recruiters at a dozen big companies, including Boeing, General Electric, Avaya and Intel.
    Asked what they expect in their compensation packages, recent grads at 123 universities came up with the most detailed list of long-term benefits in the 11-year history of the poll, from retirement plans to health insurance for dependents -- even though most undergrads don't even have dependents. Claudia Tattanelli, CEO of Universum, the research and consulting firm that conducted the survey of 29,046 undergrads in all fields of study, says: "This generation is really trying to take their future in their own hands, and do something about it," she says. Asked what elements of compensation they value most, college seniors gave health insurance and retirement plans higher priority than vacations, bonuses and stock options. [...]
    Grads are showing a preference for stable, diversified companies, helping propel such giants as Lockheed Martin and Johnson & Johnson sharply higher in Universum's ratings of grads' "ideal employers" among big corporations in all fields, from consulting and finance to manufacturing and retailing. Martin Slevin, manager, retail recruitment, for Walgreen Co., says campus recruits are far more interested in his company's 105-year history and 31 straight years of record profits than they were in the past.
    "In light of all the corporate scandals like Enron and Worldcom, where people lost all their savings, I wanted to seek out companies that are stable" and will "live up to" benefits promises, says Tiffany Samuels, a recruit from Xavier University, Cincinnati, who turned down two other offers to sign on with Staples. Catharine Jennings, a senior Staples recruiter, says one recruit "asked me so many questions about 401(k) and savings plans that I had to refer him to a benefits manager. That's how in-depth the questions were." She adds, "When I got out of college 10 years ago, I was not concerned about my 401(k)."
  • New York Times: Debt and Denial. By Paul Krugman. Excerpts: Last year America spent 57 percent more than it earned on world markets. That is, our imports were 57 percent larger than our exports. How did we manage to live so far beyond our means? By running up debts to Japan, China and Middle Eastern oil producers. We're as addicted to imported money as we are to imported oil.
  • CounterPunch: "Even Jobs at McDonald's Aren't Safe". Their Own Economic Reality. By Paul Craig Roberts. Note: Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions.He can be reached at: paulcraigroberts@yahoo.com
    Excerpts: Who can forget the neocons’ claim that under their leadership America creates its own reality? Remember the neocons’ Iraq reality--a “cakewalk” war? After three years of combat, thousands of casualties, and cost estimated at over $1 trillion, real reality must still compete with the White House spin machine. One might think that the Iraq experience would restore sober judgment to policymakers. Alas, neocon reality has spread everywhere. It has infected the media and the new Federal Reserve Chairman, Ben Bernanke, who just gave Congress an upbeat report on the economy. The robust economy, he declared, could soon lead to inflation and higher interest rates. [...]
    How can the upbeat views be reconciled with the Bureau of Labor Statistics’ payroll jobs data, the extraordinary red ink, and exploding trade deficit? Perhaps the answer is that every economic development, no matter how detrimental, is spun as if it were good news. For example, the worsening US trade deficit is spun as evidence of the fast growth of the US economy: the economy is growing so fast it can’t meet its needs and must rely on imports. Declining household income is spun as an inflation fighter that keeps mortgage interest rates low. Federal budget deficits are spun as letting taxpayers keep and spend more of their own money. Massive layoffs are spun as evidence that change is so rapid that the work force must constantly upgrade skills and re-educate itself. The denial of economic reality has become an art form. Except for Lou Dobbs, no accurate economic reporting is available in the “mainstream media.” [...]
    US industry is still investing in R&D after all; it is just not hiring Americans to do the R&D. US manufacturers still make things, only less and less in America with American labor. US manufacturers still hire engineers, only they are foreign ones, not American ones. In other words, everything is fine for US manufacturers. It is just their former American work force that is in the doldrums. As these Americans happen to be customers for US manufacturers, US brand names will gradually lose their US market. US household median income has fallen for the past five years. Consumer demand has been kept alive by consumers’ spending their savings and home equity and going deeper into debt. It is not possible for debt to forever rise faster than income. [...]
    When manufacturing moves abroad, engineering follows. R&D follows engineering, and innovation follows R&D. The entire economy drains away. This is why the “new economy” has not materialized to take the place of the lost “old economy.” The latest technologies go into the newest plants, and those plants are abroad. Innovations take place in new plants as new processes are developed to optimize the efficiency of the new technologies. The skills required to operate new processes call forth investment in education and training. As US manufacturing and R&D move abroad, Indian and Chinese engineering enrollments rise, and US enrollments decline.
    The process is a unified whole. It is not possible for a country to lose parts of the process and hold on to other parts. That is why the “new economy” was a hoax from the beginning. As Popkin and Kobe note, new technologies, new manufacturing processes, and new designs take place where things are made. The notion that the US can lose everything else but hold on to innovation is absurd. [...]
    Many ask me how economists can be so blind to reality. Here is my answer: Many economists are bought and paid for by outsourcers. Most of the studies claiming to prove that Americans benefit from outsourcing are done by economic consulting firms hired by outsourcers. Or they are done by think tanks or university professors dependent on corporate donors. Or they reflect the ideology of “free market economists” who are committed to the belief that “freedom” is good and always produces good results. Since outsourcing is merely the freedom of property to act in its interest, and since this self-interest is always guided by an invisible hand to the greater welfare of everyone, outsourcing, ipso facto, is good for America. Anyone who doesn’t think so is a fascist who wants to take away the rights of property. Seriously, this is what passes for analysis among “free market economists.” Economists’ commitment to their “reality” is destroying the ladders of upward mobility that made America the land of opportunity. It is just as destructive as the neocons’ commitment to their “reality” that is driving the US deeper into war in the Middle East.
  • InformationWeek: Invented In India. India isn't just for outsourcing. It's fast becoming a center of strategic R&D and a growing market for tech products. Third of three parts in the Inside India series. By Aaron Ricadela. Excerpts: One day in the not-too-distant future, calls will route to your landline or cell phone, depending on whether you're home or on the road. You'll share an address book between your wired and wireless phones. And you'll be able to use one service to download TV shows to your cable box or mobile device. Very likely, you'll have Motorola researchers in Bangalore, India, to thank. There, a group of 30 engineers and computer scientists are inventing these sorts of networking technologies, along with super-sharp displays that use nanotechnology and new software for business cell phones. [...]
    Already known for providing low-cost engineering services to U.S. and European IT organizations and tech vendors, India is ramping up original research and product development. IBM, Microsoft, and Oracle are developing technologies at their Indian subsidiaries, while at the same time outsourcing the development of ancillary products and features to Infosys Technologies, Tata Consultancy Services, Wipro Technologies, and others. Researchers in Microsoft's Bangalore lab, for example, work on cryptography problems, applying their strong mathematics skills, says Rick Rashid, a Microsoft Research senior VP. Hewlett-Packard, IBM, Microsoft, and others also are developing new technologies that can be sold in India to the country's expanding commercial sector and consumer class. And startups are incorporating Indian development teams into their plans from the outset. [...]
    IBM's innovation strategy in India is a mix of product development for worldwide sales and research into technology tailored for India. IBM's Bangalore software lab employs 2,100 developers who work on IBM's operating systems and its Lotus, DB2, WebSphere, Rational, and Tivoli product lines. IBM also has an RFID team in India that's developing systems for Nestlé, Metro Group, and other customers. In November, IBM signed a deal with HCL Technologies establishing an outsourced design center in Chennai for its Power architecture chips, the first such center outside IBM's corporate control.
  • Chicago Sun-Times: Government acts to avoid hitting debt. Excerpt: The Bush administration told Congress on Thursday it had begun to use a government pension fund to keep from hitting the $8 trillion debt limit. [...] As of Tuesday, the government's borrowing subject to the limit stood $38.8 billion below the current debt limit of $8.184 trillion. In his letter, Snow said Treasury would begin taking investments out of a $65.3 billion government employee pension fund called the G-fund.
  • Computerworld: Q&A: A lost interview with ENIAC co-inventor J. Presper Eckert. On the the 60th anniversary of the unveiling of ENIAC, a newly discovered interview with "Pres" Eckert explodes some ENIAC myths.
News and Opinion Concerning Health Savings Accounts
  • Seattle Times: Code Red on health savings accounts. By Froma Harrop, Providence Journal. Excerpts: Heads up, Americans. The Bush administration is now greasing the skids for employers to drop your health coverage. This is a biggie. Radical change was not the headline when the president unfurled his latest proposals for health savings accounts. It was presented mainly as a sensible-sounding way for people without medical insurance to buy it with pre-tax dollars, the same way companies do.
    George Bush's new HSA is actually a rocket-powered tax shelter dressed up as a sweet little program to help the uninsured. It would also undermine the traditional health coverage now offered by employers. (More on that in a minute.) And in case anyone still cares about deficits, it would cost the Treasury $156 billion in lost tax revenues over 10 years — more than wiping out any savings Bush hopes to achieve with his cuts in projected Medicare spending. [...]
    Demonically, the Bush proposal gives employers new reasons not to offer traditional health coverage, or any medical benefits at all. Indeed, the new health savings accounts could do to the traditional health plan what the 401(k) plan did to the traditional pension: Kill it off. Like 401(k)s, the proposed HSAs could save money for employers while transferring the cost and risk of providing what was once an expected benefit onto the workers. The move from traditional pensions to 401(k) plans has already amounted to a major hidden pay cut for millions of American workers. [...]
    Health savings accounts would be most attractive to the healthy and wealthy, drawing this group out of traditional coverage. That would leave the sick and poor in the higher-cost insurance plans, which would then sink.
    So the Bush proposal would actually cause more Americans to lose coverage than to gain it. In 2004, MIT economist Jonathan Gruber computed the numbers on the basis of a health-savings-account proposal that was far more modest than Bush's. He figured that adding a tax deduction for buying high-deductible health insurance to the tax-advantaged HSA would result in 1.1 million currently uninsured people obtaining coverage. These would be mostly the richer folks who are uninsured for some reason and who make enough money to fully enjoy the tax breaks. But the changes would lead to 1.4 million people losing their employer coverage. Guess who they would be.
  • Washington Post: Ownership Society Redux. New Name, Same Policy. By Sebastian Mallaby. Excerpts: Health savings accounts are ostensibly supposed to fix the health system. Right now, tax rules subsidize company-provided health insurance, but they're less generous toward out-of-pocket medical payments; as a result, company health plans pay most bills and patients have no incentive to shop around for the best bargain. Health savings accounts end this tax bias. Anyone who buys an insurance policy with a deductible of $1,050 or more can open an account and save $5,250 a year toward out-of-pocket health costs, tax-free. This will shift control of medical spending into the hands of consumers, who will discipline overpriced hospitals and clinics.
    Or so goes the theory. In practice, probably less than half of all health spending outside Medicaid and Medicare would be affected by the new consumer-driven discipline. Many hospital stays cost more than any deductible, so consumers would have no incentive to bargain; emergency-room patients aren't in a fit state to negotiate prices with their doctors. But consider an even more basic question: Is the ostensible reason for health savings accounts the real one?
    f the administration's goal were merely to remove the tax bias against out-of-pocket health payments, it could simply make these tax-deductible. No need for health savings accounts to accomplish that -- just tell people to count out-of-pocket payments against taxable income. [...]
    In sum, health savings accounts are not just about ending the tax bias in favor of traditional company health plans. The administration is proposing a new kind of 401(k), and using it as an inducement to quit low-deductible insurance. Rich people, who gain most from the tax breaks on saving, will be first to sign on; healthy people, who subsidize sicker people in company health plans, will be right behind them. Their exit may force traditional health plans into a death spiral. The loss of the subsidy from healthy workers will drive premiums up, which will drive more healthy people into health savings accounts, which will drive premiums up further. [...]
    A rerun of last year's debate would show that health savings accounts are harder to defend than personal retirement ones. They are shockingly regressive: Furman's study shows how a poor family might get a subsidy of $150 while a rich one might get more than $4,000. They have not just a transition cost but a real cost: The tax breaks could widen the deficit by at least $132 billion over 10 years and a lot more after that. And health savings accounts pose a more formidable threat to traditional corporate health plans than personal accounts posed to Social Security. Market forces are already dislodging company health plans; an extra shove could cause an avalanche.
  • Workforce Management: Proposed Tax Break May Spur Companies to Discontinue Benefits. President Bush’s proposal to give individuals tax breaks for the purchase of high-deductible health plans through HSAs could prompt younger, healthier employees to drop their employer-sponsored coverage, some experts say. Excerpts: If you went to the kitchen during the State of the Union address, you may have missed President Bush’s proposals to reform health savings accounts. They only took up two lines of a 70-paragraph speech. In this case, brevity may be the soul of profound policy changes that affect whether and how employers offer health benefits. Bush wants to give individuals tax breaks for the purchase of high-deductible health insurance plans, which provide catastrophic coverage that can be augmented with health savings accounts. [...]
    Democrats, who assert that HSAs do nothing to help low-income people obtain health insurance, will resist. “What we’ve got is devolution of our health care system, where everyone is out there on their own,” says a House Democratic health policy staffer who cannot speak for attribution. “If the president gets what he wants, health care will be like pensions.”
  • Des Moines Register: Reforming health care — to benefit banks? Health Savings Accounts could provide windfall to financial institutions. Excerpts: But it’s hard to imagine how these accounts will do anything to control health-care costs when the vast majority of health spending is for chronic illness and end-of-life care — not elective trips to the clinic for a sore throat. And how can people shop for better health deals when information on prices and quality isn’t readily available? Where do you go for the best deal on a mole removal or an EKG? [...]
    It’s doubtful many people overuse health care anyway. Going to the doctor isn’t fun. Many of those without health insurance can’t afford drugs or visits to the clinic. Rising co-payments discourage even those with insurance from seeking care and medications. So if these accounts aren’t going to control costs of health care, why is the president pushing them? Sure, they’re in keeping with his beliefs in the benefits of ownership and personal responsibility. But are they really good for anyone?
    Well, yes.
    After a little digging, we think we’ve figured out who: those wealthy enough to pack away the bucks; insurance companies that now have a new product to sell; and financial institutions positioning themselves to manage these accounts. Especially the financial institutions.
    According to a report by DiamondCluster International, a management-consulting firm, Americans will have saved $75 billion in HSAs by 2010. The report estimates financial institutions can capture $3.5 billion in account and management fees over the next five years, and payment processors can capture $2.3 billion in transaction fees. Wow. Billions of health-care dollars landing in the pockets of financial institutions.
  • Yahoo! message board post by Ed Hayden. Full excerpt: Mr. Bush says that he believes low wage earners have the sense to set aside money for health care. He may be correct for some of those folks but the majority are not financially savvy, don't have the discretionary income and frankly do not have long term views. They essentially live paycheck to paycheck and any discretionary income they may happen to have they are likely to spend on toys or a good time; which they deserve like everyone else. Let's face it; their lives don't generally have a lot of bright spots.
    I've got a better idea. Pay everyone a decent wage and provide health care to everyone. If we have to stop the presidents buddies from stuffing everything they can get their hands on into their pockets well, boo-hoo. What's so hard about realizing that overwhelming greed is not a good thing and that it causes major problems.
    This is so basically simple. All the president and his ilk are doing is trying to make something that smells bad and tastes bad and which will ultimately be the undoing of the social fabric of our society palatable.
  • BenefitNews: Say HSAhhhhhhhhhhhhhhhh. By Richard D. Quinn. Excerpts: The Health Savings Account (HSA) has been elevated to a regular State of the Union feature, which may cause many people to conclude that the high-deductible health plan is the salvation for our health care cost problems. That’s a pity. Common sense must tell us that merely shifting costs to patients is not the answer, and that even if every person with an HSA was a prudent buyer, it would have little impact on overall health care costs. The bulk of costs are incurred well beyond deciding whether to seek an office visit, visit the emergency room or take a generic drug. Our problems are far more complex than that.
    I doubt that anyone knows what the appropriate price should be for health care. My wife had some foot surgery a few months back, she was in an outpatient facility for a total of four hours; the bill for use of the facility was $6,000. Is that reasonable? Is that what all users of that facility would pay?
  • The Kaiser Family Foundation: Bush Economic Adviser Attributes Rising Health Care Costs to 'Perception' Care Is Free. Excerpt: Allan Hubbard, director of the National Economic Council, on Tuesday said that the largest factor behind increased health care costs is the public "perception that health care is free," CQ HealthBeat reports. At a breakfast with reporters, Hubbard said that U.S. residents overuse health care services because health insurance covers most of the cost. He added that a proposal by President Bush to expand health savings accounts, which seek to make individuals more responsible for their health care spending, would help reduce costs. Hubbard did not estimate the amount of the savings that would result from the proposal, which would cost $29 billion over five years, but said, "We'll know its working when growth starts to slow."
  • Yahoo! message board post by "bugbert_99". Full excerpt: How long does an hsa last if you do not have medical insurance (hmo, Blue cross, company sponsored, etc.) and you end up in intensive care for a week, or two, or three. Intensive care easily will cost $10,000 a day. A three week stay is usually about $250,000. Hope your HSA has that much in it if you don't have that medical insurance. And getting private insurance is very iffy if you have any pre-existing condition. You could easily be without any insurance when that intensive care stay arrives at your doorstep. Quite a few people I know don't/can't save anything into a 401k as they are a median American family of 4 with that median $40,000 a year gross income. There is no extra money to stuff into a 401k or an HSA. People without any pension or income will not be having an HSA.

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.
  • "Stranger than fiction" by "Dose of reality". Full excerpt: The case interview here is really pretty straightforward. It concerns an aging technology industry icon, that has been poorly managed for more than a decade. It is characterized by an incredibly bureaucratic structure, a religious dedication to cost cutting, an overstaffed and unimaginative R&D organization, a strategy that was passe on the day it was created, and an HR department that has forgotten what the "H" stands for.
    Now, depending on which discipline you work in, the case solution has to include the following recommendations:
    • Finance: Cut salary of all of the front line resources, make the bonuses unattainable, and find $1 billion of accounting gimmicks every 6 months. Pensions, income taxes, and acquisition/disposition-related adjustments & stories will all get full credit. If you recommend increasing revenue through internal investments, you will undoubtedly fail. Extra credit if you recommend stock buybacks.
    • HR: Eliminate any differentiation in compensation and reward for above average performers, increase utilization targets to above 100%, cut medical contributions, and eliminate the pension plan. Extra credit if you can come up with a way to take some of the latter directly to the bottom line. This will show you to be an extension of the bean-counting groups - a terrific fit with our overall HR recruiting strategy.
    • Technology: outsource all of the service groups to countries where people can barely speak the language, have no functional understanding of business processes, and have a feigned humility that doesn't come close to covering up their true arrogance and self-importance. If you can include Websphere, Lotus, and DB2 in the solution, you are golden. Make sure you don't let on that you understand general business or any industry solutions - your recruiters are sure to feel threatened and you will be out on your @$$.
    • Functional: Only one key point here - I LOVE PACKAGE IMPLEMENTATIONS! Be willing to abandon everything you ever learned about your functional area, and only focus on configuring applications, building interfaces, creating reports, and doing data conversion. Show that you are a closet technologist, and you're in.
    Now as satirical as that may sound, it is all true, and it is a real company. That's the best input that any real "good samaritan" will offer you on this or any other uncontrolled IBM information source. Good Luck!
  • "No It's Not" by "ancientblueconsultant". Full excerpt: I hear that internally in the kickoffs for 2006, the BCS folk are "being encouraged" to hug a brand guy. The Dennie Welsh idea of IGS being "vendor agnostic" is being thrown into the trash heap after 10 years and everyone is being encouraged to look internally before looking elsewhere for a solution. The Gross versus Net problem has come around and bitten the Blue Pig big time.
  • "Upcoming tests of Dose's Theory" by "wonderaboutibm". Full excerpt: Behold everyone, Dose now exposes himself to the acid test -- confirmation of his theory!! And my scientific opinion is that he will pass with flying colors. To wit, "bonus season" is upon us soon. The "scorecard" numbers are out, and of course they are as meaningless as ever. Doubtless they will be twisted to reduce bonuses. I don't understand the bonus logic and I never will, but no matter: my guess is that they will be no better than last year. Further confirmation of Dose's Theory will come later in the year when the benefit cutbacks continue for 2007. You poor slobs that claim that Dose and I and some of the other posters are too negative: Read St. John -- "The truth shall set you free."

New on the Alliance@IBM Site:
  • 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.
  • To IBM Canada employees: Concerned about pension changes, declining benefits and working conditions? Please contact the e-mail below to find out how to get involved in working for a better future for IBM Canada employees. allianceibm@tngcanada.org
  • PBC's and two "3"'s equal stealth job cuts. IBM employees are once again being forced out the door. If you are being forced out please contact the Alliance: endicottalliance@stny.rr.com from your home computer. Let us know your location, name, age and time of service. Information will be held in strict confidence. We will put you in contact with someone that can give you advice on challenging your force out.
  • IBM Germany union flyer.
  • From the Job Cuts Status & Comments page:
    • Comment 2/15/06: If any employee has questions about severance packages, please email me. The Alliance@IBM is still collecting data on the number of employees who get appraised with two 3's in a row. We can also discuss this. If you get a formal termination package, please appeal your selection to the Plan Administrator. There is no format for this process, so use the process defined under the Internal Appeals Program. I can also assist you with this process. If we stop fighting now, our cause will never be realized. IBM'ers banded together for the current and to establish a positive memory for those who have left IBM. Please consider becoming a dues paying member of the Alliance@IBM. It's only $120.00 per year, and may be completely tax deductible. I have around 46 days left of IBM employment, the best time to fight IBM is while we are in the walls that Thomas Watson built. -Steve Bergeron Alliance@IBM-
    • Comment 2/17/06: I found out that the manager who laid me off left IBM recently. I was an “older” employee. My separation agreement says I can’t sue IBM or its managers, but what about once a manger has left? I was in meetings where this manager discussed laying off one person who was part time because of disability and two others because of age. Does the union have a network to match ex-managers, employees that they have terminated illegally and others who could testify against a manager who fired someone illegally? Obviously none of the ex-employees would be union members, but helping others go after these managers would certainly put a chill in their desire to participate in such actions. -Anonymous- Alliance reply: Please send your contact information to endicottalliance@stny.rr.com
  • From the General Visitor's Comment page:
    • Comments 02/12/06: I just retired from IBM at exactly 30 years. I was in sales and was so disappointed with the way management was running the business I left at the first opportunity. What I wanted to comment on was two fold: First--as a user of procurement services--last year I started having to deal with India--they were clueless. I always ended up getting bounced back to someone in the U.S. or Canada to get my questions answered. Not a good sign. Second, for those leaving IBM, make sure you maximize your earnings on your way out the door. How do you do this? 1. If you're leaving early in the year, take all your optional holidays--they won't pay for them like vacation, but you don't have to work those last 6 days. Also if you leave early in the year, roll last year's vacation (only you know how many days you actually took). So if you roll three weeks from last year, you'll get paid three weeks when you leave (unless current year earned vacation is greater).
      I see these comments wondering about IBM in 5 years, with all the older people bailing. It will be interesting. I watched my replacement for 3 weeks and she'll be lucky if she turns the same numbers I did. -Anonymous-
    • Comments 02/14/06: I recently quit my job after 5 years in ISV & Developer Relations to go work for one of IBM's largest competitors. I became increasingly unimpressed with IBM's top heavy management structure and complete disregard for employees well being. The unfortunate truth is that all of IBM's talent is leaving for one reason or another and looking for challenges elsewhere. IBM has moved away from innovation and its values of the past for a future of dull, hum-drum corporate existence where nothing matters but affording some clueless manager the next detail for their car. I once shared the idealistic views of others on this board but have come to realize that IBM is too big to change and that we Americans don't give a crap about anything until it hits our paycheck. The average IBMer is too comfortable to take any risks like joining a union. Do yourself a favor and jump ship while the economy is good, opportunities are out there for you. IBM would have you believe that IBM is THE ONLY place to work... Don't believe it. Job satisfaction and more $$$ is out there. Put your resume together and and start looking, you will be shocked at how quickly IBM's competition will call you. Good luck! -Anonymous-
    • Comments 02/17/06: I am a recovering IBM workaholic. I used to work hard, take many courses, get new certifications and walk the extra mile. The past few years I noticed that my efforts weren't appreciated anymore. My annual income is steadily declining and I am not getting any respect. After my best year so far I got a bad PBC rating for no good reason and decided to change my attitude. In order to be in synch with my declining compensation, I now make regular cuts to my contribution. Come 5 o'clock I get my coat and don't care what I was doing a minute ago. I developed a whole new strategy to look like I am working hard while doing rats ass and am developing valuable skills in some computer games. My inspiration comes from Wally in the Dilbert cartoons. Surprisingly enough, last year I got a great PBC rating again. I am finally convinced that at IBM the more you work the less they you are worth. Next year I'll push for my best PBC rating ever by not showing up at work at regular intervals, to see how far I get. Don't be surprised if I make it to management. Finally I am getting a hang of this success thing. -Anonymous-
  • Pension Comments page
    • Comments 02/15/06: Just a little piece of history...from PressConnects.com on June 8, 2003:
      In July 1994, IBM's director of total compensation advised Gerstner that a new pension plan -- what employees were told later that year was a new pension credit formula -- might produce $117 million in savings the first year and $2 billion over 10 years. A further reduction in the company's retirement expenses occurred in July 1999 when a cash balance pension plan was created. Employees younger than 40 with less than 10 years of service were automatically put into this plan The estimated savings from the second round of changes turned out to be larger than those the earlier round had garnered. In February 2000, seven months after the conversion, future savings were calculated at $140 million in 2000 and $3 billion over 10 years.
      The 1994 memo to Gerstner, who had joined the company in April 1993, pointed out that Big Blue had no separate retirement plan for executives. Company expenses for retirement benefits could be cut even if the employee match for the 401(k) plan were increased from 1.5 percent to 3 percent of pay and the executives' retirement package were boosted with two new plans. IBM executives earning more than $150,000 annually would be able to put up to 12 percent of their annual pay into a so-called "top hat" plan, a type of 401(k) not available to other employees that would provide a 3 percent company match.
      And a supplemental executive retirement plan was designed to "meet the income replacement objectives" of executives because of their worry about cuts in their pensions. A 1999 company document made public in the lawsuit shows that 1,186 top executives were eligible for participation in the supplemental executive retirement plan (SERP). Court documents reviewed by Gannett News Service didn't indicate how many executives were eligible for the top hat plan. The employee 401(k) was improved in 1995. Full article at http://www.pressconnects.com/special/ibmpensions/stories/story6097.shtml

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