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    Highlights—April 22, 2006
  • Yahoo! message board post by Kathi Cooper (of Cooper v. IBM). Excerpt: I have just uploaded the heavily redacted document issued by the Office of Inspector General with their report on how IBM used the US Treasury Seal against the Cooper v. IBM pension case.
    IT WILL MAKE YOUR BLOOD PRESSURE RISE.
    I had to upload it in two parts because of its size.
  • Yahoo! message board post by Kathi Cooper. Full excerpt: Let's fill in some of those redactions:
    • William Sweetnam - Fired US Treasury employee that was an attorney in charge of Tax Policy, now a lobbyist with the Groom Group http://www.groom.com/_attorneys/sweetnam.html
    • Richard Shea - Attorney for Covington and Burling - was assigned to the Cooper case but taken off the case (at least visually) when this blew up in his face - did show up to the appeal hearing in Chicago - why he was not fired is beyond me. http://www.cov.com/lawyers/rshea/biography.html
    • Susan Seisimowski (sp) - Fired lobbyist from IBM that partied with the above and help orchestrate the action - now a lobbyist for the frozen food sector, aka, The Frozen Food Queen.
    • Covington & Burling - The law firm hired by IBM to defend Cooper v. IBM and also to lobby congress to make our pension reductions legal. When busted with this fiasco. IBM fired C&B as their lobbyist (can you spell conflict-of-interest), and replaced them with Milliman to do their lobbying. http://www.cov.com/index.html and http://www.milliman.com/
    • Bernie Sanders - The stand-alone congressional hero, doing all he can do to beat these monsters at their greed. http://bernie.house.gov/
    Like I said before, I am very angry with America. If we win this case, it won't be because of mom, apple pie, justice, and the American way. Considering they have the deck stacked in their favor (regardless of the law), I'm not so sure we will see the 1.7B. If that happens, anger won't even begin to describe my emotions.
    Would others out there like to join in with other uncovered redactions?
  • Public Broadcasting System (PBS) Nightly Business Report: Pensions Today, Health Care Tomorrow? By Scott Gurvey. Excerpts: I'm not going to repeat the gory details here; they have been well documented elsewhere. GM is a company on shaky financial footing, currently losing billions a quarter, and maintains it can no longer afford to promise retirees a guaranteed pension benefit. Similar arguments have been made by bankrupt companies like UAL. But it has also been made by companies with seemingly strong balance sheets like IBM. Size doesn't seem to matter either. Giants like Verizon and Motorola, solid, profitable companies, have frozen their plans in recent years. But so too have some small companies like the Community Television Foundation of South Florida, producer of Nightly Business Report. So trust me, if you're going through this trauma with your employer, I feel your pain. [...]
    The irony here is that Congress, in creating the 401(k) program, intended these accounts to supplement standard pension plans, not replace them. But the companies clearly want out of the pension business. An Analysis of Frozen Defined Benefit Plans, a report by the Pension Benefit Guaranty Corporation, says nearly one out of ten of the plans it covers had been frozen as of the end of 2003 and that the number almost certainly increased in the past two years.
    And now there is anecdotal evidence that company paid health programs may be the next benefit to go. Already companies have responded to the explosive increase in health care costs by raising employee contributions to insurance plans, raising co-pay and deductibles and encouraging employee participation in managed care. Some have decided to offer employees only Health Savings Accounts.
  • Slate: The $104 Billion Refund. The most absurd corporate tax giveaway of 2005. By Michelle Leder. Excerpt: Feeling flush because you're getting a nice tax refund this year? You're not alone. Some of America's largest corporations—a virtual who's who of the Fortune 100—have been reporting their own hefty tax windfalls, thanks to an absurd provision of a law designed to create jobs.
    IBM, for example, is banking a $2.8 billion refund—well, better to call it a "tax savings"—because instead of paying the normal corporate tax rate of 35 percent on $9.5 billion in profits it earned overseas, the company paid only 5.25 percent. That's the magic of the American Jobs Creation Act, a piece of legislation that passed with comfortable margins in both the House and the Senate and was signed into law by President Bush just two weeks before the 2004 elections.
    The AJCA, which was pushed through during the last fit of panic about outsourcing, was ostensibly designed to encourage companies to add jobs here. It gave a small tax deduction to American manufacturers, and it offered a one-time tax holiday in 2005 when corporations could repatriate their foreign income at a massively reduced tax rate. This repatriation, the theory went, would encourage R & D and capital investment in the United States, leading to new positions down the road. But, like President Bush's creatively named Clear Skies initiative and Healthy Forest Restoration Act, the American Jobs Creation Act has not lived up to its title.
    Take IBM. According to its annual report for 2005, the company added fewer than 400 jobs worldwide last year to its workforce of 329,000 people. At the same time, IBM shed 5 million square feet of space in the United States, making it highly unlikely that any of those jobs were added in the U.S. Indeed, numerous news reports, including this Business Week article, put IBM's head count in India at close to 40,000 at the end of 2005, more than a fourfold increase over the 9,000 reported at the end of 2003.
  • USA Today: IBM earnings show comeback from weakness. By Michelle Kessler. Excerpt: CFO Mark Loughridge said much of IBM's growth — and future hiring — will come from developing markets. "We're shifting our resources to use highly skilled talent in competitive countries," he said on a conference call with analysts. IBM is demonstrating its commitment to India by hosting its annual analysts' conference in Bangalore, India, instead of New York this June. IBM has 45,000 employees, or about 14% of its workforce, in India and China.
  • The NewStandard: White-collar Workers Defend Benefits. By Michelle Chen. Excerpts: Though recent bankruptcies in the troubled airline and auto industries have shown that pensions are prime targets for cuts when companies are in decline, not all retirement cutbacks have been in response to the threat of financial collapse. Increasingly, healthy companies, including information-industry giants like Verizon, Sprint and IBM, are restructuring the retirement plans of salaried workers just to buoy profits.
    For IBM, which once touted some of the most generous benefits in corporate America, dismantling its multi-billion-dollar pension system is more a matter of growth strategy than economic survival. [...]
    But those who have watched their earned benefits evaporate over the years express little sympathy for the financial concerns of the corporation, which posted a net income of $7.9 billion at the end of 2005.
    "If they hadn’t have robbed us of everything we thought we’d planned for, I’d still be there," said Lynda French, a 55-year-old former IBM software analyst in Austin, Texas. She said the company’s overhaul of its retirement programs forced her to rearrange her life in ways she never imagined when she joined IBM in 1977 – lured by the generous benefits offered at the time.
    French said she "was forced to retire early," because in addition to scaling back pension earnings, IBM was converting its retiree health plan from a long-term coverage program to a lump-sum account. The new plan, she calculated, would cost her and her husband, also an IBM employee, several hundred dollars more in monthly insurance costs. She worried that if she did not pull out before the new plan kicked in, she would be unable to afford adequate medical care for her family.
    French noted that the company is rolling back benefits while its executives enjoy compensation packages in the millions. "If they really cared about cutting costs," she said, "I think they should be cutting theirs a tad. … They leave with a golden parachute, you know, and the employees don’t." [...]
    Bill McGreevy, a 49-year-old information-technology specialist in Wingdale, New York who caught the tail end of the cash-balance switch, estimates that when he retires, he will be supporting his two children on a pension worth $15,000 a year, or about half of his entitlements under the old plan. Compounding the loss is the soaring cost of IBM’s healthcare coverage, which McGreevy predicts will pose an even heavier burden in retirement.
  • Seattle Post-Intelligencer: Lawmakers never faced with losing benefits. By Jim Abrams. Excerpts: Members of Congress occasionally lose elections, but they never lose retirement and health benefits that most Americans can only envy. A lawmaker who retires at 60 after just 12 years in office can count on receiving an immediate pension of $25,000 a year and lifetime benefits that could total more than $800,000.
    That doesn't include 401(k) benefits. And any member who lasts five years in office also can get taxpayer-subsidized health care until he or she reaches Medicare age. [...]
    Cost-of-living adjustments, a shield against inflation, "haven't been slightly common since the 1980s" in the private sector, said John Ehrhardt, an expert in corporate retirement programs at the Seattle-based consulting and actuarial firm Milliman. He said COLAs could add 25 percent to the value of a congressional plan over its lifetime. [...]
    Former House Majority Leader Tom DeLay, R-Texas, who is resigning after 22 years, will qualify for an initial pension of $56,000. DeLay could get pension payments of nearly $2 million over his expected lifetime, according to the National Taxpayers Union, which tracks congressional pension issues. [...]
    Rep. Bernard Sanders of I-Vt., is a critic of the cash balance plans that the House bill would encourage. In 2003 he asked the Congressional Research Service to see what would happen to lawmakers' benefits under such an approach. "The result would have been huge cutbacks for some members," Sanders said in a recent interview. For example, say a representative retired at 56 at the end of 2002 with 18 years of service. At 62 he or she would have a defined benefit plan worth $608,000. A comparable cash balance plan would be worth $251,000.
  • Times of India: IT companies show CV fakers the door. By Sujit John & Mini Joseph Tejaswi. Excerpts: Wipro has just fired some employees for faking their CVs. It has also filed police complaints against several recruitment agencies for helping these employees falsify CV information. While it's yet not certain how many employees were shown the door, this is perhaps the first instance of Wipro's rigorous defence system against such malpractice being so seriously breached. Manipulation of resumes, often in active collaboration with recruitment agencies and sometimes with the knowledge of recruitment personnel of IT companies, is assuming alarming proportions.
    IBM India recently sacked many employees for the same reason. Some are said to have worked there for nearly two years. TCS, also facing this problem, has from this year outsourced the entire process of CV verification to a specialised agency.
  • Los Angeles Times: Taxes Flatten but Deep Pockets Still Bulge. By Joel Havemann. Excerpts: A decade ago, when publishing magnate Steve Forbes ran for president, he vowed to deliver a new era of prosperity with a simple change in the federal income tax: Instead of people with more money paying higher rates, all would pay the same "flat" tax rate — unleashing "the fantastic growth waiting to burst forth in our economy."
    Forbes' flat-tax plan was dismissed as simplistic by many mainstream economists and viewed with horror by the legions of special interests that benefit from the deductions and loopholes that flat-tax advocates would eliminate.
    But as millions of Americans face the deadline for filing their federal tax returns, they are operating in something very close to the world Forbes and other flat-tax visionaries proposed. Without any fanfare or philosophical debate, millionaires and middle-class Americans now pay taxes at almost the same rates.
    So what about the "fantastic growth waiting to burst forth"? Has leveling out federal income tax rates produced a cornucopia of financial benefits?
    The answer is probably yes — if you're a millionaire. And probably no — if you're almost anyone else. Flattened, and thus lower, tax rates have contributed to huge increases in the wealth of the wealthy, but so far most people haven't seen significant economic improvement.
  • Communications Workers of America (CWA): Cingular Wireless Honored for Respecting Workers' Rights. Excerpt: Cingular Wireless was honored for its resolve to treat workers with respect. Teresa Joyce and Deborah Casey, two CWA members who work at the Cingular Wireless customer service center in Lebanon, Va., participated in the event, and Joyce told the gathering that they experienced a real difference in management attitude when Cingular took over from AT&T Wireless.
  • Yahoo! finance board post by "stocksage49". Excerpt: Maybe you should start asking yourself why a company that beat EPS estimates 4 straight quarters is watching its stock sink instead of rise. Could it be that the market no longer values companies that can't grow their business and only make earnings by cutting internal costs? Or that the veneer associated with stock buybacks is starting to wear away and reveal what it really is...a financial shell game to mitigate dilution associated with executive stock options?
  • Los Angeles Times: Wombs for Rent, Cheap. Surrogate mothers in India are a bargain for foreigners, and the women reap a bonanza. But some observers say they pay a price. By Henry Chu. Excerpts: As temp jobs go, Saroj Mehli has landed what she feels is a pretty sweet deal. It's a nine-month gig, no special skills needed, and the only real labor comes at the end — when she gives birth. If everything goes according to plan, Mehli, 32, will deliver a healthy baby early next year. But rather than join her other three children, the newborn will be handed over to an American couple who are unable to bear a child on their own and are hiring Mehli to do it for them.
    She'll be paid about $5,000 for acting as a surrogate mother, a bonanza that would take her more than six years to earn on her salary as a schoolteacher in a village near here. "I might renovate or add to the house, or spend it on my kids' education or my daughter's wedding," Mehli said. [...]
    Driven by many of the same factors that have led Western businesses to outsource some of their operations to India in recent years, an increasing number of infertile couples from abroad are coming here in search of women such as Mehli who are willing, in effect, to rent out their wombs.

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Yahoo! message board post by Andy Hopper. Full excerpt: I didn't read the article (Consumer Reports article), but one doesn't need to read Consumer Reports Magazine to have a valid view of HSAa. HSAs are intrinsically a "good thing" because they put the consumer in charge of his own health care decisions, including the budgeting. As long as Americans see paying for health care as somebody's responsibility (i.e., "free"), costs will continue to spin out of control. Now, if the argument is about the terms of the current HSA program, that's more constructive.
  • Yahoo! message board post by Skip Bogard. Full excerpt: Save up then. Me and my wife went through $1.7 million dollars of total expenditures to treat her blood cancer for three years, which was diagnosed in Dec 2001. About $60,000 was spent out of my own pocket for co-pays and other out of pocket expenses.
    She sadly passed May 2005. It's almost been a year since she left 3 daughters & me. http://www.newsobserver.com/cgi-bin/nao/obits/show_details.cgi? id=95642
    Looking back at some of the costs, three days in the ICU costs about $70,000. We probably had to use it 4-5 times.
    One CT scan is about $3500...you get to pay 20% or $700. We probably had 15-20 of those over her brief 3 years of treatment.
    Well, I could go on. Let me just say...without insurance, she most likely would have only lived 3-6 months. 3 months vs. 3 years? 0.7 % of her lifetime vs. 7% of her lifetime?
    How would that happen you might wonder? Well, care to manage the cancer marching on wouldn't be managed in the ER. The ER just gives blood packs or treats the occasional infections caused by a weakened immune system...emergency stabilization treatment. Then, you'd get discharged with no cancer specialist meeting for your particular cancer. Now, if you're really lucky you might leave with a prescription from the oncologist on-call for your "chemo on a budget" treatment. But most oncologists-on-call would tell you just to come back & schedule a regular hours appointment.
    Assuming you saw either the ER/hospital oncologist-on-call or an oncologist during normal hours...the "Budget" cut-rate chemo treatments for a blood cancer most likely would have simply been $3.00/day worth of Dexamethasone, consisting of ten 4 mg tablets per day.
    These ten tablets are called "Dex pulses". They manage the inflammation caused by blood cancer in your bone marrow or swollen lymph nodes...and kill a few cancer cells in the process (the oldest cancer cells in her case would only get killed, but not the newest ones growing.).
    Instead, she received the "gold" standard of care. For example, she received a 3 agent chemotherapy (the standard of care for most all cancers is to use 2-3 drugs in a cocktail) called VAD. The "A" in VAD is a $12,000 drug that you need 4 times a month that can kill the newest cancer cells. The "D" in VAD is those $3.00 per day Dex pills...for about 20 days out of the month. A better treatment that allows most people to live much longer.
    It's your choice for your wife then if she should get the same cancer my wife got: the $60 treatment if you're on a HSA budget or the $12,060 treatment.
    Oh, btw...that $12,000 is for one month...you need 4 months worth.
    And then you get to have a $300,000 stem cell transplant after that. The transplant is the next step in the standard of care. But that's another story. Need to skip it? Well...pop some more Dex pills then...cause that's what you'll get! Until it stops working for you. Most all blood cancers eventually become resistant to treatments. And then you succumb.
    I have a lot of stories from spending 3 years attending to my beautiful wife and spending time with her at UNC & Duke hospitals.
    Like the story about the husband at UNC hospital who slept in the ICU waiting room for 7 months waiting for his wife to wake up out of a coma. The kind guy scrounged me up a pillow for the night while I waited for my wife to get out of the ICU. I got out of there after only 2 nights. Honestly, I don't know if he's still there...but he could be.
    He lost his job in month #4...and it was now month #7, so it didn't matter to him if he left the hospital. There was no where else he wanted to be except with his wife when she woke up. And continuation of his employer's insurance was out of the question. He could have tried to get other work & get on a group policy, but I don't think he was in the frame of mind to pursue it.
    Good luck then with your HSA. Every man & woman for himself or herself then...unless you're a couple that happens to stay together...

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:
  • "Communication targets" by "Dose of reality". Excerpts: I don't think it is a matter of conceit. The reason that this board (Vault) gets attention is that the standard for IBM marketing and consistency of propaganda is extremely high. There is a well staffed PR department that works as much, if not more so, on defense as offense. Any chink in the armor is a risk.
    The impact that we have is much less on the thinking of decision makers, and much more so on the following constituents:
    1. Prospective job applicants. While there will always be a stratum in the pool that will inevitably look up at IBM, due to their lesser talent level, skills, and job search capabilities, there is no question that the discerning, as well as the marginally "otherwise employable" applicants are getting the message and staying away.
    2. Current staff. Some have been awakened to the fact that this is not the way it should be, and many others have been jolted out of inertia to start their job search.
    3. Clients. It is not unusual for clients to search public domain information sources to try to peek under the veneer of marketing and proposal facades. This is real and palpable; glossy Powerpoint presentations aren’t.
    I have no fantasies about the dolts in Armonk coming to their senses based on ideas presented here. Their “handicap” has less to do with knowing what is wrong, and much more to do with the fact that the problems are too institutionalized for anyone to do anything about it, and their motivations do not go beyond personal and mutually beneficial greed. As long as IBM corporate governance is what it is, and as long as their vested interest in the status quo is as high as it is, change will never come from within.

New on the Alliance@IBM Site:
  • Detroit News: Don't revel in misfortunes of unions. Organized labor helps all workers; its hard luck damages middle class. Excerpts: The rash of wage cuts, plant closings and work concessions has been met with schadenfreude, a German word for taking malicious satisfaction in the misfortune of others. It comes from right-wing columnists, middle managers and even, unfortunately, some union members. They say blue-collar union workers are finally getting what they deserve. These sentiments are short-sighted. The loss of good middle-class jobs in Michigan's economy is a tragedy. And it can be seen in Gary, Ind., or Pittsburgh, where outsourcing also has damaged the backbone and financial underpinning of communities. [...]
    Many purveyors of schadenfreude seem to be younger, college-educated, nonunion, white-collar workers. Often they are the sons or daughters of union members who went to college because of the wages they now complain about. These workers often have or make less than union workers. There's a reason for this. As nonunion workers, they don't have an effective way to get better wages, benefits and working conditions. They opt to go it alone out of an ideological affinity that is detrimental to their own interests. Union workers can negotiate and create respect on the job and have a democratic voice in the workplace. These are American values. Don't complain because others have a union; complain because you don't.
  • From the Job Cuts Status & Comments page:
    • Comment 4/16/06: I was contracted to IBM Global Services in Tucson, AZ for just over 5 years (ending in Dec 2005). After the first year I was motivated by talk of hiring me on as a regular employee... that never happened - instead I lost my paid holidays. After that my hourly rate was reduced 4 times in the following 3 years. I was making 20+% less when I left IBM than I did when I started. I slowly began to see the morale around me decline. I saw people that have been with the company for 20+ years lose their jobs (and retirement) because of 'downsizing'. In 2005 I was required to take 4+ weeks off without pay - "mandatory furlough". I guess that was IBM's way of saving money without actually reducing my pay for a 5th time. Thankfully, after 2 years of looking for work, I found a job where I am respected and treated well. There is life after IBM. I just can't believe I wasted 5 years of mine there. -Anonymous-
    • Comment 4/18/06: The Viewpointe Account offshored it's Windows support to Argentina in November 2005. Last month, in response to a question from an employee at a staff meeting, the PE for Viewpointe stated that the "future" direction of this account is to move into "Global Resource" alignment. He stated he did not have specific details what additional functions would be offshored, but that it WOULD be happening. He stated that it would probably happen in 2007. -Anonymous-
    • Comment 4/19/06: "GLOBAL RESOURCE" is the latest term to get rid of us. Our manager used that term at least 10 times today in the weekly meeting. Basically he said it's coming, your jobs are going, start looking. I hope when we all find new jobs that IBM goes down the drain! Global resourcing means they are sending your jobs to the other side of the globe. All of you listen to me, start looking now and leave as soon as possible. It would be nice if we could get a union in IBM but unfortunately too many people are looking for a job to do anything about our current job. Everybody has bills. IBM is a lost cause. Get out now. -Anonymous-
    • Comment 4/20/06: Without breaking a confidence lets just say this. During this conversation Qualxserv was mentioned before it was announced to the rest of team. The words that were used after this point were "With your skills, I strongly urge you to find another job, and as quickly as possible". Think very seriously about the next few points. Look what's already on the table in front of you, and put the pieces together. Your mileage has been cut. FT's (full timers) have been removed from field work and assigned steady state DSS work. Expenses have been slashed to the point of pain, no education money even though they make you fill out a plan every year an tell you its there. Education cannot be outside of your normal job function (limiting your career growth opportunities). No raises for the most part in the past 4 years. Dinged on stupid stuff for PBC ratings in 2006. Changing PBC rating criteria and not telling you what affects your ratings.
      Question: How many of you are sent a template for your PBC and expected to use it??? If so, did you ever take the time to read it? You are a drone and will cost less in the long run to be sold off to a contract firm, than to be paid by IBM for your benefits and salary and they know it. They can still charge the customer the same bill rate for you, while paying flat rate to Qualxserv. This lets them pocket the cost difference in your health insurance premiums and salary savings. I have been told also that an FT doing field work is a walking target. Qualxserv does the same thing we do, only for a flat, fixed rate. I hate to say this as I am tagging myself also, but DSS techs are not employees they are commodities. Think about how many techs you work with now that came as rebadges.
      With technology getting more and more efficient, fewer and fewer techs are needing to support it, let alone the Y2K paranoia that ran thru the business in the late 90's. Day to day tech operations will never be where it was....especially with all the pocket lining going on in corporate America as well as in our current political environment. IBM has already done this once before, and regretted it. Anyone remember TSS? However, I am afraid there will not be anything left to bring back this time. -Anonymous-
  • From the General Visitor's Comment page:
    • Comment 4/16/06: I recently spent time talking to an engineer with over 25 years with the company and nearly two dozen patents to his credit. He was given back to back 3 year appraisals by his manager and sent packing! His manager was a citizen for only about a year according to the exiting doctorate engineer! This engineer was at the peak of his pension accrual period and had a son with expensive medical treatment requirements. He was in absolute shock and disbelief that an engineer with his record of accomplishments and length of time with the company could be treated so completely unfairly. If someone with a doctorate in engineering, multiple invention plateaus and numerous patents can still be considered an ‘unsatisfactory’ contributor, what does that say about the futures of the average employee without an extensive patent portfolio?
      Was the fact that he was in the peak years of his pension accrual period a factor? Was the medical costs of his son the deciding factor? What ever happened to this company that claims to be ‘sensitive’ to the needs of the community? If you work at IBM and don’t recognize that we need to organize and fight for justice, then what will it take? Wake up Ibm'ers! Bill Costine, East Fishkill, NY
    • Comment 4/18/06: Correction to my post: My IBM stock lost 20% of its value 4 years ago and has not recovered since. Sam Palmisano made $19,000,000 last year. Sam, you are not worth one dollar of the $19,000,000 (count em, 6 zeros)the stockholders paid you last year. Sam, go to HE%%. I hope you get booed off the stage at the stockholders meeting. You deserve it. Sam, you are an A$$. -Anonymous-
  • Pension Comments page

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