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    Highlights—April 1, 2006

 

Open Letter to U.S. House Leader John Boehner: The Biggest Pension Heist in History
The following ad ran Tuesday, March 28 in the Hamilton, Ohio Journal-News. A major thrust of the text was to show that cash balance is theft. The writer drew on facts that were posted and confirmed on Yahoo!'s ibmpension message board.
To: The Honorable John Boehner, House Majority Leader
From: 40 Ordinary People Whose Pensions Will Be Cut in Half
Congratulations on your ascent to Majority Leader, and the best of luck to you. Please allow us the honor of a friendly debate about pension reform. We are an informal group of ordinary people who chipped in to buy this ad. We are terrified of losing 50% of our pensions, due to your amendment to the Pension Protection Act.
Mr. Boehner, you've stated that pension reform is a top priority. We are very afraid of what's being sold as reform. You talk about tightening rules to ensure companies save enough money to honor their financial obligations to employees. Yet, your amendment makes it unnecessary for companies to honor their financial obligations to employees.
People can lose pensions when the company goes bankrupt. But now, for the first time in history, we can lose retirement benefits already earned, even when our company is racking up huge profits. Earned pension monies protected by law will no longer be protected if the Boehner amendment to HR2830 is allowed to stand.
Mr. Boehner, how many of your constituents' families will be made poorer because of your terrible law? We don't believe a pension freeze is theft. But when Congress passes a law letting corporations default on the debt they've already incurred to us – that's just robbery with a fountain pen. If we pay you enough in campaign contributions, could you pass a law letting us pay only 50% of our mortgage to the bank? Speaking of campaign cash, Bloomberg reported March 20 that "UPS Uses Political Clout to Press for Cuts in Pension Benefits". The Center for Responsive Politics reports that you took $76,700 from UPS – you are the fifth-largest recipient of UPS campaign donations, out of 535 U.S. lawmakers.
To us, this looks like you're selling us out: On lines 18 to 23 of page 179 of your amendment, the language cashes out our pension at 50 cents on the dollar. The remaining 50% goes right to the corporate bottom line, fattening the bonuses of corporate managers – who just gave you $76,700. Please understand this has the appearance of more than coincidence.
Mr. Boehner, the lobbyists' interests are well-represented, with all that money. Please take the time to listen to some ordinary people. Don't give us that tired old argument – "We either have to cut some earned pensions in half, or we can't pay anybody." That logic is the classic fallacy of the false dilemma – claiming there are only two options, when in fact there is a third option: Profitable companies can pay what they owe to their workers.
Mr. Boehner, we're frightened that your amendment will ruin us, especially when coupled with the provision allowing diversion of pension funds to other purposes – this opens a clear path for companies to steal our pension. We don't have $76,000 to give you. We are unable to give you a good deal on a place to live, like the Washington apartment you rent from lobbyists. Yet we implore you - please listen to us, and withdraw your larcenous amendment:
Do not legalize pension cash-outs at 50 cents on the dollar. Do not retroactively legalize illegal cash balance conversions.
Until we can change your mind, we must be wary of what's sold as reform – This Trojan horse could hide the biggest pension heist in history.
Respectfully, 40 Ordinary People Whose Pensions Will Be Cut in Half
Conference Committee Update from the Pension Rights Center
Negotiations on the pension bills have stalled and sources tell us that the process of reconciling the two bills (S. 1783 and H.R. 2830) may not be completed until late May. Yesterday's Wall Street Journal article, Pension-Overhaul Talks Stall, Raising Concern Over Firms' Cost, describes the situation. Staff on the Hill tell us that while the final bill is likely to be delayed, there is always the off-chance that the Conference Committee can reach agreement sooner. This means we need to stay vigilant and continue contacting members of the Conference Committee!
We need to keep up the pressure on the conferees - both Republicans and Democrats. Some offices have told us they haven't heard from many employees at all on cash balance issues and they wonder why! So keep up your phone calls, e-mails, faxes and letters to make sure lawmakers don't forget your concerns. Keep in mind that business lobbyists will use this delay to continue lobbying Congress.
We need to keep up the pressure on the conferees - both Republicans and Democrats. Some offices have told us they haven't heard from many employees at all on cash balance issues and they wonder why! So keep up your phone calls, e-mails, faxes and letters to make sure lawmakers don't forget your concerns. Keep in mind that business lobbyists will use this delay to continue lobbying Congress.
Brief descriptions of several key issues under consideration by the Conference Committee are available here [PDF--28 KB]. You can use these if you would like to mention any of these issues in your correspondence to the Conference Committee. The key is to continue to hit home on IMPORTANT provisions including cash balance provisions, the Red Zone amendment and cut-backs in worker protections.
You can use AARP's web site: http://www.aarp.org/issues/advocacy/pensions_in_jeopardy.html to send a letter directly to your conferees on cash balance provisions in the bill.
Activism Across the Globe on Pensions: You are part of a large international movement of grassroots activism on pension issues! This past week, we've seen activism across the world as thousands of workers in the U.K. and Greece went on strike in efforts to preserve their pensions. In France younger workers are protesting a law that would undermine their rights and in Israel the newly formed Pensioners Party won more seats than anyone expected. Even in Connecticut thousands of teachers are rallying for their pensions. And maybe most interesting is that flight attendants protested cutbacks that were made to the United Airlines pension plan by stripping down to pose for a calendar.
We should follow these examples to keep the pressure on legislators here also! We need to make sure to let Members of Congress know it's NOT OK to cut pensions!
Send a Letter to the Editor on Cash Balance Plans: One way to make your voice heard is by sending a letter to your local paper. Letters to the editor have the best chance of being accepted when they are written by those who live in the newspaper's coverage area. This is particularly important if you live in an area represented by one of the conferees.
Below is a sample letter on cash balance plans you can customize. To make it easy, we've uploaded Sample_Letter_to_the_Editor.doc to the FILES area for you to use as a start. The letter addresses the cash balance issue. If you have other issues you'd like to include, feel free to add them in, but be mindful that newspapers usually have strict guidelines regarding the length of submissions. Below the letter is a list of things to consider when you write your letter.
To the Editor:
Here in [state], tens of thousands of employees have lost significant pension benefits when their companies switched from a traditional pension plan to an inferior cash balance plan. Congress now has a chance to either protect older employees or abandon them to a future of retirement insecurity. Workers need to know what is at stake.
Back in the 1990s, companies like AT&T and Duke Energy converted to cash balance plans, which reduced older employees' expected benefits by as much as 50 percent [I lost X dollars when my employer converted]. This practice has been very controversial and declared age discriminatory by at least one federal court.
As it considers pension reform legislation, Congress has an opportunity to make sure that companies keep their promises to workers. The Senate bill, the Pension Security and Transparency Act of 2005 (S.1783), has provisions that protect older employees. The House bill, deceptively named the Pension Protection Act of 2005 (H.R. 2830), does nothing of the kind. It will simply legalize age-discriminatory cash balance plans without protecting middle-aged workers who gave their lives to these companies. Even worse, there is a push to legalize these plans retroactively - which could undermine the rights of employees who have lawsuits against their companies.
As Congress works on the pension bills over the next two weeks, I hope they will protect older employees by choosing the Senate provisions on cash balance plans.
Sincerely, [Your name]
Tips to Consider when Writing a Letter to the Editor:
  • The letter we provide is just a sample. We have left a few places where you can localize and personalize the letter to describe your own situation. Feel free to adapt the letter to your particular writing style.
  • The fastest and easiest way to get a letter to the editor is to e-mail it.
  • Contact information where letters to the editor should be sent is usually listed on the "Letters to the Editor" page of the newspaper and on the newspaper's web site.
  • Once on the paper's site, look for a link that says "Contact us," "Send a letter to the editor" or something like that. You can also go to the "Letters to the Editor" section (which may also be called "Opinion," "Commentary" or "Feedback") of the web site to see if contact information is listed there.
  • Most papers have an e-mail address where letters to the editor can be sent, but sometimes a newspaper's web site will have an on-line form to fill out instead.
  • Be sure to follow any guidelines listed for letters to the editor. This most often includes length and contact information that must be provided in order to get a letter to the editor published.
Write to us to let us know of any successes you've had. Keep up your hard work and we'll continue to keep you informed!
Best,
Joellen Leavelle, Communications Coordinator and Logistics Manager
Pension Rights Center
1350 Connecticut Avenue, NW, Suite 206
Washington, DC 20036
Phone: (202) 296-3776
www.pensionrights.org
  • Poughkeepsie Journal: Many consider options with frozen pensions. Some retire early to take buyout. By Brian Tumulty. Excerpts: Unlike pension plan terminations of the past, when companies such as Bethlehem Steel and United Airlines were in bankruptcy and struggling for survival, many of the recent freezes are occurring at profitable companies looking to save money and be more competitive. "Every corporate office in America has it on the table," said Lynn Dudley, vice president for retirement policy at the American Benefits Council. "They have to. One reason is globalization. Europe has gone to this." Dudley, whose trade group represents large employers with pension plans, thinks Congress could slow the trend with legislation giving employers incentives to keep their plans. But the major pension legislation likely to emerge from Congress this spring doesn't include those incentives. Instead, the major goal of the legislation that could be signed into law by Memorial Day is to shore up the finances of the federal Pension Benefit Guaranty Corp. that insures private pension plans.
  • New York Times: Pension Reform Politics. Excerpts: The pension reform bill now being worked on by a House-Senate conference is teetering on the verge of being worse than worthless. The nation cannot afford to miss this opportunity to protect workers who count on company retirement plans to see them through their old age. There is still time to rescue this critical legislation — if key lawmakers give up political horse-trading and put public good above corporate interests. [...]
    This is not just a matter of better or worse ways to improve the shaky status quo. As Mary Williams Walsh recently reported in The Times, a study from the federal pension insurance agency shows that the current House and Senate bills would actually weaken the pension system by sharply reducing corporate pension contributions over the next few years. Corporations — and lawmakers in their thrall — routinely dismiss the agency's calculations as flawed. But an analysis of the bills released by Congress's own Joint Committee on Taxation also shows lower contributions through 2010. [...]
    In the year that it has taken to get this far on reform, more pension plans have defaulted or have become in danger of default. Healthy companies are increasingly freezing pensions for current employees and closing them to new hires. The point of reform should be to avoid accelerating the decline by ensuring that companies with pension obligations keep their promises, in that way protecting employees and taxpayers. Real pension reform would deliver 100 percent pension funding and the use of uniform market-sensitive calculations. Instead of focusing on those goals, the House and Senate have been stuffing the legislation with opportunistic attempts to please corporate campaign contributors. But in this case, less is definitely more.
    • "fhawontcutit" comments. Full excerpt: How "interesting" that there is no mention of cash balance legalization. Both the House and Senate bills legalize cash balance prospectively, although the Senate bill contains some protections for older workers. See how this works? We have to shore up the PBGC by allowing cash balance conversions, stripping out early retirement subsidies, improving the funding status for plans. I really think that is the "plan".
  • Yahoo! message board post by "ibmmike2006". Excerpts: I know a few who worked for Sperry then Unisys. They were a good company. It is amazing how our "Corporate Congress" can allow pension freezes to be legal. The Corporations were "incentivized" to establish pensions as far back as the 40's and now that "babyboomers" are getting ready to collect, suddenly all those tax breaks are not significant.
    I think the leadership should pass a bill that says, yes, Mr CEO, you and your board can "freeze" and renege on your long term defined benefit pension commitment to your older employees. The IRS will be contacting your Corporate Treasurer to set up a "pay back schedule" of the tax breaks you have received for the last 6 decades from the defined benefit pensions of your older employees. The "tax deferred tax breaks" will be deposited in a fund to help those older workers who have lost their ability to make up the time to save for retirement with the conventional defined contribution plans.
    Hey, I can dream can't I? But maybe, just maybe, there is someone in Congress that are not "Corporate Congressmen" who might be willing to recover all those deferred Corporate tax breaks.
  • Yahoo! message board post by "bits_bytes_and_bugs". Excerpts: It used to be that if you performed at a band level, you would get promoted to that level based on merit. If you did the job at that level, you got the promotion. It is not that way now and hasn't been for a long time. There are now tight, restrictive quotas meaning that even if you perform at a higher band level, even for years, you may not get promoted. When managers can only promote 8% or so of their employees, deserving people are denied promotions and the rewards that accompany them.
    We used to have variable pay objectives that in a good year, we could meet and even achieve. That's been gone for the better part of a decade, having been replaced by objectives that aren't even remotely achievable.
    For a while there were stock options given to selected regular employees. Of course those had strike prices in the 120-130s, so they were and still are worthless except for the execs who got special options the rest didn't get.
    Money for raises has also been severely restricted, some organizations more than others. The majority of people in my organization do not get raises every year - some good performers have not had raises for several consecutive years.
    These examples were intended to motivate without actually having to pay something out to you. The picture that comes to my mind is the Our Gang movies with the donkey cart where the donkey can't ever quite reach the carrot dangling in front. This is the IBM way - manipulate the employee through propaganda, but provide as little tangible payout as they can get away with.
  • Yahoo! finance board post by "idoubtitagain". Full excerpt: Looks like someone at least, is getting some sort of return on IBM stock. Stock options are a form of how to get rich on other people's money, without trying. Hell, I wish that other people would give me their money and would reward me in the multimillion dollar range for missing a internal divisional target. Maybe on one side of their mouth they indicated that they set the bar higher and "we" missed the target, sorry variable pay ratios are lower, and on the other side they indicated they actually met the target and "I" deserve a godzillion shareholder dollars worth of stock options grants. Interesting paradox isn't it?
  • Los Angeles Times: Corporate Cuts Hurt Only the Employees. Full excerpt: Reports about IBM, Northwest Airlines and Delta Air Lines and the American auto industry declaring the sky is falling while demanding concessions in salary, healthcare benefits and pensions from their employees are a powerful indication by any measure of a dangerous paradigm shift for America's economic engine and the state of the middle class.
    The Dow Jones industrial average just reached a 4 1/2 -year high because, according to government analysts, the business community was able to keep a lid on wages, which translates into lower inflation figures, which is apparently good news for a giddy Wall Street. Not so for beleaguered Main Street, that barometer for working Americans.
    The corporate spin tells us that those concessions will keep everyone's boat afloat. It certainly works for those executive negotiators who pocket piles of bonus bucks on the deal. But the employees will likely forgo any retirement plans and learn to adjust to the rising costs of housing, food and healthcare on far less income.
    Wall Street has transmogrified from the retirement nest-egg vehicle of the middle class to the driver of extreme wealth for a craven group of investors and executives with golden parachutes at the expense of everyone below.
  • Columbus, SC Ledger-Enquirer: Pension security fading in S.C. Number of state’s residents covered by plans dwindling. By Noelle Phillips. Excerpts: More than 30 S.C.-based companies have frozen their pensions. At least 16 pension plans have failed in the state. The national spotlight has been on General Motors, Verizon, IBM and airlines that are phasing out or turning their pensions over to the federal government. But those giant companies only are going down a path many S.C. companies took years ago. In South Carolina, 471,000 workers are covered by private pensions. But that number is dwindling, largely because of the textile industry’s financial woes. Last week, for instance, hundreds of former West Point Stevens workers gathered at Clemson University to learn how the federal government was taking over their failed pension.
  • Wall Street Journal: Lucent Retirees Seek to Protect Pensions in Alcatel Merger Talks. By Sara Silver. Excerpts: Retirees of Lucent Technologies Inc. are threatening to ask the U.S. government to block its potential merger with Alcatel SA of France unless the combined entity agrees to protect their pensions and benefits. The Lucent Retiree Organization is demanding that any merged entity guarantee that their pensions and benefits "will be carried forward and their pension plans will always be fully funded." It is also threatening to ask government regulators not to approve any merger unless the pension plan has fiduciaries independent of both companies.
    At the heart of the dispute is the company's $34 billion pension plan, which covers 20,000 U.S. employees and 120,000 U.S. retirees. With $2.7 billion more in assets than liabilities, the pension plan is an important resource to Lucent because the assets contribute accounting income that boosts quarterly profits, and because part of its assets legally can be used to pay for retiree medical benefits.
    "No one should want a foreign company to own a $34 billion pension fund -- worth more than twice Lucent's market value -- unless safeguards are in place to protect the pension and benefits of 235,000 retirees and their dependents," said Ken Raschke, president of the retiree group. The current value of Lucent's stock is $13.8 billion.
  • Benefits Canada: Over 1 million workers strike in Britain over pensions. By Chandra Price. Excerpts: More than one million public service workers have gone on strike today across Britain in an effort to protect their pensions. It is said to be the biggest strike in over 80 years, bringing transit to a halt and forcing hundreds of schools and public buildings to close. Unions are protesting government plans to get rid of a rule allowing council employees to retire at age 60 with full pension rights if their age and years of service adds up to 85 years. Now they are told they cannot take their full pensions until age 65, or they'd have to take a worse pension. The largest union involved, Unison, said in a published report that the government stance on the pensions of council workers was "immoral."
  • New York Times: Retraining Laid-Off Workers, but for What? By Louis Uchitelle. Excerpts: Layoffs have disrupted the lives of millions of Americans over the last 25 years. The cure that these displaced workers are offered — retraining and more education — is heralded as a sure path to new and better-paying careers. But often that policy prescription does not work, as this book excerpt explains. It is adapted from "The Disposable American: Layoffs and Their Consequences" by Louis Uchitelle, an economics writer for The New York Times. Knopf will publish the book on Tuesday. [...]
    The presumption — promoted by economists, educators, business executives and nearly all of the nation's political leaders, Democrats and Republicans alike — holds that in America's vibrant and flexible economy there is work, at good pay, for the educated and skilled. The unemployed need only to get themselves educated and skilled and the work will materialize. Education and training create the jobs, according to this way of thinking. Or, put another way, an appropriate job at decent pay materializes for every trained or educated worker.
  • Washington Post: Most See Visa Program as Severely Flawed. By S. Mitra Kalita. Excerpts: Somewhere in the debate over immigration and the future of illegal workers, another, less-publicized fight is being waged over those who toil in air-conditioned offices, earn up to six-figure salaries and spend their days programming and punching code. They are foreign workers who arrive on H-1B visas, mostly young men from India and China tapped for skilled jobs such as software engineers and systems analysts. Unlike seasonal guest workers who stay for about 10 months, H-1B workers stay as long as six years. By then, they must obtain a green card or go back home.
    Yesterday, the House Judiciary Committee heard testimony for and against expanding the H-1B program. This week, the Senate Judiciary Committee approved legislation that would increase the H-1B cap to 115,000 from 65,000 and allow some foreign students to bypass the program altogether and immediately get sponsored for green cards, which allow immigrants to be permanent residents, free to live and work in the United States. [...]
    At the House committee hearing yesterday, Stuart Anderson, executive director of the National Foundation for American Policy, a nonprofit research group, spoke in favor of raising the cap. Still, he said in an interview, the H-1B visa is far from ideal. "What you want to have is a system where people can get hired directly on green cards in 30 to 60 days," he said. [...]
    The Institute of Electrical and Electronics Engineers-USA says H-1B salaries are lower. "Those who are here on H-1B visas are being worked as indentured servants. They are being paid $13,000 less in the engineering and science worlds," said Ralph W. Wyndrum Jr., president of the advocacy group for technical professionals, which favors green-card-based immigration, but only for exceptional candidates.
    Wyndrum said the current system allows foreign skilled workers to "take jobs away from equally good American engineers and scientists." He based his statements about salary disparities on a December report by John Miano, a software engineer, who favors tighter immigration controls. Miano spoke at the House hearing and cited figures from the Occupational Employment Statistics program that show U.S. computer programmers earn an average $65,000 a year, compared with $52,000 for H-1B programmers.
  • WashTech: Q & A with Marcus Courtney on H1-B visas. By Jeff Nachtigal. Excerpts: WashTech News: What was it like to be talking about the H1-B visa issue at the same time as Bill Gates? Courtney: I think that Bill Gates spends a lot more time working this issue and others than people realize. What was interesting was how visible he was lobbying on this issue: the full-court press with interviews, meetings, talking with David Broder of the Washington Post, and Rep. Nancy Pelosi’s staff (D-CA). Everyone was talking about Bill Gates’ visit, and he had a single-minded focus on this issue. The timing for us was incredible, to be there to give a counterweight to what Gates is saying. We were there saying, ‘This is our position on the issue, and he’s off the mark, the shortage is not backed up by what’s really happening in the labor market.’ And people really listened. [...]
    Courtney: This was the first time in a number of years that representatives and staff were engaged with us and followed up on our concerns. I see this as a real opportunity in the election year, as politicians know that Bill Gates is only one vote. If their constituents email and communicate with Congress right now, we can defeat corporate attempts to have unlimited access to workers everywhere. The actual balance of power right now is with the workers and not the employers because it’s an election year. This is why the industry is trying to do a full-court press now. They read polls, they know American workers are concerned about job security, and people fundamentally know H1-B undermines workers. Not only U.S. workers, but also guest workers, because there are only so many high-tech jobs that are being created.
  • Los Angeles Times: Chief's Pay Rises as Gap Struggles. Paul Pressler is awarded stock options valued at $15.2 million despite missing key targets. By Leslie Earnest. Excerpt: Gap Inc. Chief Executive Paul Pressler last year failed key performance measures set by the apparel chain's board. So how did directors respond? By awarding him stock options worth $15.2 million — nearly triple the amount he got the year before — and maintaining his $1.5-million annual salary.
  • Los Angeles Times: Masters of discrimination. Excerpts: The Georgia dogwoods are dripping with dew. The azaleas are exploding with color. The staff is trimming impeccable greens and fairways and making pimento cheese sandwiches. The Masters is coming. All of which begs the question: Does IBM Corp. really consider it OK to discriminate against women but not against blacks? We called the company, which advertises its ability to help customers answer any inquiry, but a spokesman politely declined to answer.
    The question arises from the company's sponsorship of the 70th Masters golf tournament at the Augusta National Golf Club, which starts April 6. In 1990, IBM — lauded as a diversity leader for more than 50 years — famously pulled its advertising from the PGA Championship at Shoal Creek, a private club in Alabama that did not admit blacks, on the grounds that "supporting even indirectly activities which are exclusionary is against IBM's practices and policies." [...]
    A private club can admit or exclude whomever it wants. But what IBM, AT&T and Exxon Mobil (not to mention CBS, which has broadcast the Masters for more than 50 years) are doing — essentially forcing their employees and shareholders to support discrimination — is another matter. All three claim to have robust policies encouraging full participation of women and minorities in business activities. They should all amend these policies if they continue sponsoring the Masters. And IBM's management needs to explain to its employees and shareholders why the company doesn't consider gender discrimination as big a deal as racial discrimination.
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Washington Times: Health-care reform: Be patient. By Alex Gerber. Excerpts: Our health-care system is in deep trouble and, according to some pundits, threatened with a "meltdown." Soaring costs now account for 16 percent of the U.S. annual gross domestic product (GDP) and are slated to climb to 20 percent by 2015. This is deemed "unsustainable" without severely effecting our national economy. Equally serious are the millions of Americans with limited access to our health-care system due to lack of medical insurance.
    Unique among Western industrialized societies, we do not provide coverage for all our citizens through either private or public insurance. This national disgrace has aroused relatively little concern from an administration that has seen the world's only "superpower" increase its medically uninsured from 41 million to 46 million (rising 100,000 monthly) since Mr. Bush took office. [...]
    Nor has any health-care proposal been advanced by the administration that calls for ending our anachronistic employer-based, multipayer private health insurance system, a holdover from World War II. At that time, employers picked up the entire health insurance tab to lure workers whose wages were frozen by the War Labor Board. Thus, some 25 percent of current total health care costs are eaten up by the insurance industry's overhead expenses -- marketing, advertising, competition, stockholder dividends and huge executive salaries -- none of which cure a single patient.
    The answer to our health care dilemmas is single-payer, government-sponsored universal health insurance (UHI) -- Medicare, with an overhead of less than 5 percent, for all age groups. Evolved and improved over the last 25 years, Canada has such a UHI system that provides one standard of care for rich and poor alike, with no additional costs (copayments or deductibles) so economic considerations are not paramount at the time of accident or disease.
    A recent ABC News poll indicated that, 2-1, Americans would prefer government-sponsored UHI over our current employer-based health insurance. Moreover, in a Harris Interactive poll among Western democracies of patient satisfaction with their health-care systems, Canada ranked first and the U.S. last.
    Because of its advanced technology, Canada spends one-tenth as much as U.S. insurance providers spend for overhead. Indeed, more people are needed to administer Blue Cross Blue Shield in Massachusetts than to administer the entire health-care system of Canada.
    Of further significance, Canada's health-care system functions at almost one-half the cost of ours yet boasts lower infant and maternal mortality and longer life expectancy than the U.S.
    There is not the slightest chance the Bush administration will consider changing to the Canadian health-care system. Our president is more oriented toward the corporate than the public good. This was well shown when he rammed a prescription drug benefit bill through Congress that disallowed any drug-price negotiation (Canada has negotiated these prices for 16 years).

Vault Message Board Posts
Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. Some sample posts follow:
  • "Travel Arrangements" by "eteeple". Full excerpt: When traveling with IBM, are you put in Business class? Do you stay at nice hotels? Do you get your own room or share, I´m guessing IBM makes all the arrangements. Is there a certain level or band where consultants fly on a private jet. Thanks!
  • "Please allow me" by "pork". Full excerpt: Although Dose and Ey_ore would be much more sarcastic and provide insightful analogies I will give it to you straight.
    1. There is no corporate jet.
    2. No one flies business class unless you use your own miles or (have) status to upgrade.
    3. You will never fly the most convenient route, you will always fly the cheapest, regardless of the number of stop-overs.
    4. You are forced to use the IBM travel system so it is almost impossible to circumvent the "rules"
    5. Even if you find a cheaper flight than the travel system you will be forced to use a preferred carrier regardless of price. In summary traveling for IBM is a nightmare on the best day.
  • "Come on guys.....geezzzz....tell him the truth." by "deep_eye". Full excerpt:
    1. You actually travel first class but only if your utilization levels are above 98.5% for the 12 months immediately preceding your flight or the project start date
    2. If you would rather not travel at all, just alert your pm or the partner on the project, they will be extremely helpful in rescheduling the project launch to better suit your personal requirements.
    3. The day of the flight, you will be gently awakened by a Sir John Gilgud look alike, who will serve you kippered snacks, blueberry marmalade, muffins, tea and fresh squeezed orange juice in your own bed. He will also personally drive you to the flight, argue with the boarding staff, load your luggage in the overhead bin and pour you a single malt scotch.
    4. You will only be permitted to stay at Michelin four star rated hotels and per IBM policy, can only have access to the presidential suites and above. You will, however, be limited to a $750/day meal and alcohol allowance. As you can imagine, in such higher end hotels, it is quite easy to exceed this limit - exercise caution!!
    5. You will not have access to the fleet of IBM personal jets until you have sold your first 10M project - this should probably happen in your 2nd or 3rd month of employment.
  • "Everything is relative..." by "ey_ore". Excerpts: Dear Samsanjheeb: You can expect to travel and stay First Class, relatively speaking. For instance, no more open air bus sitting next to the guy with a box full of live chickens. Instead you will get your very own center aisle seat where you will be nestled snuggly between a very overweight faucet salesman from Peoria and tattooed teenager with a pierced nose and an iPod stuck in his ears. Here's the really cool thing, you will get to change planes! Fresh new seats and companions at least two times even if you're only flying from NY to Detroit. In this way, you get to see more of America.
    As for hotel accommodations--strictly 5 star all the way, relatively speaking. No more dirt floors and dung stoves. You will get a lovely room with green shag carpet and green/orange matching bed spreads on the TWO, not one, twin beds. And the freshly vacuumed smell of Carpet Fresh. And get this, there will be only four of you per room. Forget this nonsense about having eight to a room like home. Amazing, don't you think?
    The only disappointing thing may be regarding the private jet. This is reserved for the elite who sell outsourcing so they can conveniently travel back to your homeland. Being from there, you'll probably have to take the tramp steamer. Sorry, we're working on a better alternative. But then, you're not interested in going back there any time soon.
    Hope this helps. Good luck and may your curry always smell like your brother. Welcome to the big time, Punjab.
  • "Travel for the consultant" by "reality_works". Full excerpt: IBM's travel policy is consistent with industry standards. That being said, it's bad... really bad... Like all company travel policies, the point is to learn the system and then work the system. Stop overs v. using preferred carrier... I've heard people whine about it, but never encountered it myself. Even in my old company we had the same policy and never encountered the problem of having to take connecting flights to save a buck.
    Hotels... IBM wants you to stay in their preferred hotels. In addition, they have this "negotiated" rate for most cities which is really low and limits you to one hotel option for that city. However, if you are working on a client engagement and for some reason the project doesn't want you staying at the IBM preferred hotel, you can stay elsewhere. You just have to explain when filling out expenses.
    The key thing is that as a consultant all of your expenses are billed to the client, so as long as the client doesn't have a problem, IBM shouldn't have a problem. Some project managers are hawks about expenses, but I've never had a problem.
  • "Welcome to fahntassy eyeland" by "Dose of reality". Full excerpt: Tattoo: Da Plane! Da Plane! I can hear the belly laughs all over Armonk as surfers read the predecessor post from really_weak.
    The system here is set up for one reason and one reason only. That is to steer staff to carriers and other vendors that we have negotiated kickbacks from. It doesn't matter how much the fare costs, or how inconvenient the itinerary. In fact, the options that come up in the system are inevitably the combinations that the airlines have the most trouble filling and consequently dump on us to fill seats and rooms. Yet they still charge us the “negotiated” rate regardless of the underlying supply and demand.
    IBM doesn’t care if we pay another 20 or 30%, since it is passed on to the client. There is no lost productivity to the company, since you travel on your own time and are expected to make up the lost time due to stopovers and indirect flights. All we care about is collecting and pocketing the “rebates” from the carriers who not only get inflated prices, but are filling seats and rooms that they would have trouble filling otherwise. The rebates are in effect a profit center for IBM that clients and staff ultimately pay for with no benefit to themselves.
    Go to Expedia or Orbitz, and I guarantee that 90% of the time you could find options that are significantly cheaper, more convenient, and with higher quality lodging than you get from the travel center. What does that tell you about the reasons behind our business practices?!
    Getting around the system is about as easy as running a decathlon, and takes about the same amount of time. Sometimes if clients have a mandated vendor, it can be done. However, that is not what drives the need in most cases – it is cost and convenience, and those are NOT grounds for out of policy choices! PM’s are not the problem – travel administration is.
  • "Right on, as always" by "IGS_Consultant". Full excerpt: Dose, You're right on as usual. I live close to Denver, which is dominated by United Airlines. IBM does not like United...in fact, I don't know if it's still there but at one time there were words on the W3 travel site that employees should avoid using United airlines...the only airline that was selected for this unique distinction.
    A few years ago I was traveling regularly to Kansas City, which is less than 500 miles away and just over an hour's flight. United had several flights a day to MCI, and they were very cheap (around $200).
    So, what did OTR offer? How about American Airlines through Dallas? Or, an America West flight through Las Vegas? That one was actually a red-eye...six hours total time instead of just over an hour.
    The United flights didn't appear in OTR, even as an exception. And, the United flights (visible on united.com, Travelocity, and Orbitz) were half the price of the connecting flights. I'm not making this up. I've encountered similar situations in traveling to other cities, and have talked to colleagues that have experienced it with other airlines on other routes.
  • "OTR" by "huffty". Full excerpt: I live in a city well served by American Airlines. OTR now attempts to put me on the discount airlines, or United. AA does not even show up anymore! I can't believe IBM's travel policy is as screwed up as it is.
  • "Learned the hard way" by "David Banner". Full excerpt: Amen, same experience here...it's been a few years since I last travelled for business, and I discovered that the online tool has changed - not for the better. I found that when booking online, what should be a 2.5 hour direct flight was instead transformed into 6+ hour with a connecting flight that was a complete detour, nowhere along the flight path, from a 3rd rate carrier. After an hour of fruitless attempts to modify the date/time in order to get a direct flight, I researched flights on the major carrier sites, and found all sorts of flight times at reasonable rates, that were not even listed in the tool. Next time, I plan to research flight possibilities on the Internet first, then call into the AmEx travel line to reserve. Screw the online tool - my time is worth something too!
  • "How true" by "wonderaboutibm". Full excerpt: I do hope the message is getting out on the BCS utilization nonsense. Once the utilization cant was embittering, then it was amusing, now it is numbing. I once was annoyed by the monthly and quarterly begging from the management to pump up utilization numbers -- you know, all those Lotus notes flying about. Now I don't even bother to consider the message, except to examine the latest literary style or feel perhaps a little pity for the poor suckers who have to beg. But with our pool of saps, maybe all this begging still has some effect. There were some rumors earlier in the year that utilization targets would be changed, but guess what? Nothing has changed, nothing will change as our dumbing down continues.
  • "A classic story pt 2" by "Dose of reality". Let’s bring this back to your question. There is a very good reason for the mass departures. BCS represents itself as a top tier management consulting organization with interesting work, a generous salary and bonus trajectory, and an employee-friendly culture. Once inside, you will discover that we are a commodity IT service body shop, with stagnant salary, “sorry we didn’t meet our targets so here are a few crumbs in lieu of a bonus”, a culture of ridiculously high utilization, a mentality of “take this project or else”, and an administrative nightmare, all backed up by cost-cutting and business-ignorant HR and finance functions.
    That’s why we have so much churn. It is always higher this time of year, since we just completed another pay cycle and most of the staff are upset about the results. I hope that helps give you some perspective. Look at IBM as a place to come if you have no other options and are in desperate need of a paycheck.

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.
  • Job Cuts Status & Comments page
  • From the General Visitor's Comment page:
    • Comment 3/30/06: I'd like to share my experience as a recently terminated IBM professional. A 2+ performer throughout my time there, having trained my India replacements and going through the charade of trying to find another position in that company, it was clear to me in the end that I was dealing with an evil so profound and calculating I am convinced that their demise is inevitable. Their shortsightedness has been well documented. Their desperation in trying to save this dying dog of a company is vintage "keystone cops" material. BTO and BCS are the final attempts at resuscitation and all indications are that the dog is not responding. Why? Because they can't get enough experienced, qualified IBM professionals to sign up for these jobs, that are not only temporary in nature, but will destroy your family in the process. (Goodbye work/life balance). Apparently, more and more people (myself included) are saying "Why prolong the agony. Why would I put myself and my family through that hell just to end up in the same position I am now? Unemployed" BTO positions, as stated to me, are 6 month to 2 year "assignments" after which you are either placed in another BTO job (could be anywhere in the U.S.) or you would have 30 days to find another job. (Already have been there. Good luck in making that happen.)
      As for IBM's stated "values"; This transparent attempt at getting IBMers and customers to believe that this company has any connection to the once great IBM company is not only laughable, it is pathetic. The signs are everywhere that point to the end for this dog. From an evil, immoral and incredibly greedy leadership team to a, rightfully so, unmotivated, disloyal and fed up workforce. God has been good to me and my family. Getting me out of that hell hole is just the latest example of that. Best of luck to all of you that are still there. -Anonymous-
  • Pension Comments page

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