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    Highlights—July 22, 2006

  • Yahoo! message board post concerning Congress and the Pension Bill, by Janet Krueger. Excerpt: At this point, they (Congress) have heard all the words; the critical thing they need to know is that ordinary workers and retirees are still paying attention; giving in to corporate donations becomes significantly less tempting if they know voters are watching who will still remember on election day... Number 1 is the most critical, so when you call your senators and representative just tell them you are a Cooper class member, and that the final legislation must NOT be retroactive!!!
  • Wall Street Journal: Pension Bill to Include Tax Cuts And Permanent Savings Provisions. By David Rogers. Excerpts: Pension legislation being finalized in Congress is expected to carry with it a substantial tax-cut package, including possible provisions to permanently extend savings and retirement-related tax breaks enacted in 2001. [...]
    Attention will turn more to the tax provisions. "We've talked in terms of making the 2001 savings provisions permanent law," said Senate Finance Committee Chairman Charles Grassley (R., Iowa). "There's no dispute on the policy, but the question is how big the whole pot can be and not run into bipartisan trouble getting it passed." Senate Republican leaders have waited for this moment to try to press their case for adding an estate-tax relief bill, long frustrated by filibusters. The huge cost -- about $280 billion over 10 years -- makes this very difficult politically, and many of the top negotiators in the pension deal fear it would jeopardize the package. [...]
    The decision is important both from a policy and political standpoint. This would be the first time any major portion of the 2001 tax cuts would be made permanent, a major goal for Republicans. Democrats could be nervous about this precedent and total cost, in excess of $75 billion. Yet many of their members, such as Montana Sen. Max Baucus, the ranking Democrat on the Finance panel, played a major role in drafting the savings provisions as part of the 2001 tax bill.
  • National Retiree Legislative Network (NRLN): Write To Congress On Cash Balance Plan Issue. By Jim Norby, NRLN President. Excerpts: You may have read the articles linked on the NRLN website or in your newspaper that have quoted members of the Pension Reform Conference Committee saying they are "on the verge" of completing their work on the bill and sending it to the U.S. Senate and House for a vote. The NRLN's team members in Washington have learned that the Conference Committee is headed in the direction of supporting the House bill on Cash Balance Plans.
    The language in the House bill on Cash Balance does not protect older workers. Its language is too broad, open-ended and the vagueness leaves open the potential for age discrimination and abuse by employers. Because of these and other weakness in the House bill, I'm calling once again on NRLN Grassroots Members to write to conferees and other members of Congress.
    Therefore, please take the time to immediately send to your U.S. Senators and Representative the sample letter(s) posted at http://capwiz.com/abtr/home with the headline: PROTECT OLDER WORKERS - OPPOSE HOUSE BILL ON CASH BALANCE PLANS. After you click on the "CLICK HERE" below the headline, you will be requested to type in your zip code. Your zip code will identify whether any of your legislators are conferees. If so, you'll be presented a "targeted" letter for conferees. A "general" letter will also be available for all other members of the House and Senate.
  • Pension Rights Center: Conference Report Expected Tomorrow. By Joellen Leavelle Communications Coordinator and Logistics Manager. Full excerpt: The news in Washington is that the Conference Committee has agreed on almost all of the key points of the pension legislation and may release the final bill as early as tomorrow -- this means there could be a vote next week before Congress leaves for the August recess. This article -- http://www.usatoday.com/news/washington/2006-07-20-pensions_x.htm --provides details about what to expect in the final legislation.
    It's critical to act fast to put pressure on members of the Conference Committee and your Members of Congress to let them know your concerns on the legislation.
    What You Can Do:
    • Tell the Conference Committee members to keep worker protections in the bill, especially with regard to the cash balance and Red Zone provisions.
    • Tell them that the final legislation should include the Senate cash balance provisions and should not include the Red Zone 'anti-cutback' provisions, both of which are described below.
    Cash Balance Provisions: The Conferees are using the damaging House language as the basis for the final bill. We need to make sure that the conferees adopt the good provisions of the Senate bill and eliminate the age-discriminatory language of the House bill. Tell the Conferees that, by adopting the House cash balance provisions, they are ignoring the House-passed 'Motion to Instruct' that passed on April 7th by a vote of 248-178. The Motion directed the Conferees to adopt the Senate bill's provisions on cash balance plans.
    Message Points:
    • The House cash balance provisions legalize age discrimination by allowing companies to pay younger workers more than older workers. The Senate provisions on cash balance plans provide critical protections to older workers and should be included in the Conference Report that is reported out of the committee.
    • The House bill provides NO transition protections for older employees in cash balance conversions. This means that older employees could lose expected benefits in future cash balance conversions. Tell the conferees and your Members of Congress that any cash balance legislation must include transition benefits for older employees.
    • The House bill allows for the practice of 'wearaway,' which allows companies that convert to cash balance plans to effectively freeze the benefits of older employees so they stop earning new benefits while younger workers are allowed to continue accumulating retirement benefits. Tell the conferees and your own Members of Congress that wearaway must be prohibited.
    The Pension Rights Center, the National Committee to Preserve Social Security and Medicare and the National Retiree Legislative Network sent a joint letter to members of the Conference Committee on the cash balance provisions in the legislation. You can use this letter for additional message points on cash balance plans: http://www.pensionrights.org/PRC%20NCPSSM%20NRLN%20Letter%20to%20Conferees.pdf
    Red Zone 'Anti-Cutback' Provisions: Despite the efforts of activists across the country, the Red Zone 'anti-cutback' provisions are likely to be contained in the final bill that comes out of the Conference Committee. These unfair provisions will dramatically reduce the already-earned subsidized early retirement benefits that have been earned by truck drivers, brick layers, construction workers and others who are covered by certain multiemployer plans. The Pension Rights Center has drafted a fact sheet on these harmful provisions: http://www.pensionrights.org/pubs/facts/red_zone.html
    Members to Focus On: It is important to focus on the following members of the Conference Committee when calling about the cash balance and Red Zone 'anti-cutback' provisions: Rep. John A. Boehner (R OH-8), Senator Mike DeWine (R-OH), Senator Charles E. Grassley (R-IA), Senator Olympia J. Snowe (R-ME), Senator Max S. Baucus (D-MT) and (R-OH) and Senator Rick Santorum (R-PA).
    It's very important that you contact your own Member of Congress, in addition to the conferees, to tell them that if your concerns are not met, they should vote against the final bill. You can find their contact information by visiting http://www.pensionrights.org/policy/legislation/alerts/conference_committee.html\.
    Other Provisions in the Legislation: The Pension Rights Center has prepared message points on several other key provisions in the legislation: http://www.pensionrights.org/action/message_points.html. You can use these as you draft your message to members of the Conference Committee.
  • The Hill: A pension catastrophe is coming. By Rep. Major Owens (D-N.Y.). Excerpts: For working families and the poor, any subsidy or benefit is deemed too much. But for the rich and the powerful, unlimited amounts of taxpayer dollars are routinely made available for bailouts. In the arena of private-sector defined-benefit pension plans, a huge conspiracy has been set in motion with a profitable bailout at the end for corporations.
    Yet even the luckiest workers will get no more than half of the pension benefits they worked hard to earn. And of course any large-scale eradication of private-sector pension plans will establish the necessary precedents for legislating similar cuts for public-sector employees.
    An ugly model has already been established for this blatant misuse of public institutions to enrich corporate coffers, i.e. the savings-and-loan bailout. Although deliberately obscured, the total taxpayer cost of the bailout was no less than $1 trillion, according to informed estimates. This colossal historic swindle required financing by 30-year floating bonds that carry enormously high interest costs. On the dark horizon looms another monstrous swindle awaiting a U.S. taxpayer bailout. [...]
    The quality of American life will be further poisoned by a greater degree of economic uncertainty for working families. While subsidies to agricultural corporations remain untouched and the military accounts of the Pentagon remain too scrambled to audit, worker pensions are being rushed to the chopping block. The marketplace moguls will not be satisfied until the average American working family is reduced to a level commensurate with the global subsistence standard being set by Chinese laborers.
  • Crooks and Liars: Video: We called those people criminals. Here we call them legislators. By Congressman George Miller (D-CA). Excerpts: George Miller (D-CA): It’s a devastating picture when you meet your constituents who have lost their retirement, who have lost big chunks of their retirement and they come and talk to you at the shopping center, they talk to you in the grocery store, they talk to you in a town hall and they tell you what it means to their plans.
    We were all stunned as a nation when pensioners got their plans wiped out and devastated by Enron. We called those people criminals. Here we call them legislators. Because people are getting — people are going to get a devastating hit on their pensions, and we’re going to say it’s the law. There we said it was a crime. We said it was a crime.
  • Workers World: Pension crisis—another corporate swindle. By Milt Neidenberg. Excerpts: You walk into your bank to withdraw cash. The teller says: “You have nothing in your account.” You thought you had money in there. But you don’t. The bank took your money to invest or to pay debts. Or they just wanted it for themselves. That’s what is happening to millions of workers who won pensions (deferred wages), sometimes in contract negotiations, many times through hard struggle on the picket lines and hard times on strikes. [...]
    A headline on the cover of the Oct. 31, 2005, Time magazine read: “The Great Retirement Ripoff.” Subheads said: “Millions of Americans who think they will retire with benefits are in for a nasty surprise. How corporations are picking people’s pockets with the help of Congress.” The Time article was a major exposé that related heartbreaking stories of workers and retirees who lost their pensions. “From 2001 to 2004,” it said, “nearly 200 corporations in the Fortune 1000 killed or froze their defined-benefit plans and since 1985 over 5 million workers are no longer covered in the private sector.” [...]
    The capitalist government was supposed to guarantee these benefits, which were won by the blood and sweat of workers who created the value and profits of the giant corporations. In 1974, following corporate abuses of workers’ pensions in the 1960s and 1970s, Congress passed the Employee Retirement Income Security Act (ERISA). Coupled with the formation of the Pension Benefit Guaranty Corp. (PBGC), a quasi-governmental agency, ERISA was supposed to provide oversight as well as assurance to the millions of diverse workers here that their retirement pensions would be secure.
    President Gerald Ford, who signed the legislation on Labor Day 1974, promised, “This legislation will alleviate the fears and the anxiety of people who are on the production lines or in the mines or elsewhere, in that they now know that their investment in private pension funds will be better protected.”
  • Expedia: Vacation Deprivation, 2006 Survey Facts. Excerpts: Are you one of the almost one-third of U.S. adults who gives up time on your hands for time on the clock? See how we rate compared with the rest of the world – according to the 6th annual Vacation Deprivation™survey by Expedia.com. [...] European holidays: France wins the distinction of being the vacation champions, with each employed adult receiving an average of 39 days off per year, and 45% of those taking at least one 3 to 4 week vacation.
  • Newhouse News Service: The itty bitty nest egg blues. By nearly every expert's forecast, half to three-fourths of the next few generations of retirees will live on the edge financially or in desolate poverty. By Teresa Dixon Murray. Excerpts: By nearly every expert's forecast, half to three-fourths of the next few generations of retirees will live on the edge financially or in desolate poverty. Today's children and most of today's workers almost certainly will pay steeply higher taxes to cover promises to retirees. Taxes will rise while workers are told they need to save more and work into their 70s to avoid the plight. [...]
    Study after study shows roughly the same bleak outlook. A recent analysis by the Center for Retirement Research at Boston College found that, under the best assumptions, 43 percent of households will have trouble making it in retirement. That assumed people worked until at least 65 and lived partly off the value of their homes. And it didn't add healthcare costs, which researchers said were too unpredictable to even estimate. "Unless Americans change their ways, many will struggle in retirement," said Alicia Munnell, director of the study. [...]
    Pension plans, which about 40 percent of today's retirees rely on, are crumbling. Although about the same percentage of people are covered by some kind of work-related retirement plan today as in years past, the type of coverage has changed. Only 25 years ago, 80 percent of private-sector workers in retirement plans had pensions. Today, that's only one in three, with most of the rest instead given the chance to save in an individual investment plan. [...]
    More people overall are saving money than a decade ago. Among workers of all ages, the percentage who have something saved for retirement has increased from 57 percent in 1994 to 70 percent in 2006. A fat lot of good that saving did for some people. Just when the first baby boomers were within 10 years of retirement, the stock market tanked. Not only did most investors suffer 30 percent to 50 percent declines (which they haven't fully recovered since), but economists and financial planners were spurred to rethink projections. For stock investments, they used to forecast annual returns of 10 percent to 12 percent a year. Now, most project 7 percent to 9 percent, said economist LeRoy Brooks of John Carroll University. "That's a huge difference," he said. This is bad for pensions and individual investments. [...]
    Brooks calculates that a 30-year-old could invest $840 a year at 12 percent and have an income of $50,000 a year in retirement. But if the return is only 8 percent, she'd have to invest $2,700 a year to get that same income. [...]
    Mark Iwry, a senior fellow at the Brookings Institution in Washington, said shutdowns or freezes are rare and most pensions are going along OK. What worries him, though, is that the freezes -- in which workers no longer accumulate pension benefits, though they may be instead given the chance to save in a 401(k) -- have spread from sick companies to healthy ones.
  • SiliconIndia: The Beginning, Not the End. IBM chief Sam Palmisano came, he saw and conquered by announcing a $6B investment in India. Excerpts: In the biggest move yet so far, the world’s largest computer software services company, said it would invest $6 billion in India over the next three years building on India’s reputation as the world’s IT superpower. IBM chairman and chief executive Sam Palmisano, who addressed the company’s 10,000 employees in Bangalore in early May 2006, said the Indian investment would become the cornerstone in the global operations of the Armonk, New York based company. Palmisano said the investment would be used to build service delivery centers in Bangalore, (the epicenter of the Indian IT industry,) and create a telecommunications research and innovation hub for IBM clients around the world.
    The proposed investments would also mean IBM would hire more people in India. In the past three years, IBM has invested more than $2 billion, and hired more than 30,000 people in India, taking its staff in the country from 9,000 to 42,000 today. About half of that workforce is employed in IBM’s BPO division, IBM Daksh. Its workforce in India is the firm’s largest outside the U.S.
  • IBM Daksh (India): We are "U" centric. Excerpts: At IBM Daksh, we don't offer you a job! We offer you a career. Because at IBM Daksh, it's 'you' who are the foundation of company's success. Small wonder then, that here, the focus is on your professional and career needs and on building a long term working relationship with 'you'.
    So, if you are young, dynamic, career oriented, motivated and are looking for challenges plus the fun and excitement that comes along with all this, then IBM Daksh is your final destination. (Editor's note: There must not be age discrimination laws in India!)
    Focused on 'you', our progressive HR practices include an employee referral scheme, which contributes one-third of our employees. Sports teams, bands, library committees, picnic teams, parties and cultural events involving families are an integral part of the IBM Daksh culture. A regular career development program allows you to grow laterally (e.g. from operations to quality or training) and vertically (through accelerated promotion programs based on merit). Besides, IBM Daksh provides an open culture where the senior management is always accessible through walk-ins and planned forums like the quarterly open house sessions. In addition to all this, infrastructure support through transport, cafeterias, recreation rooms come as a part and parcel of the IBM Daksh lifestyle.
  • eWeek: Is India Losing Its Wage Edge? By Stan Gibson. Excerpts: For Indian outsourcers it's the problem that just won't go away: wage inflation. Widely acknowledged by the outsourcers themselves and until now kept at bay by strong growth, the continual increase in salaries at top Indian firms like Wipro, Infosys and TCS (Tata Consultancy Services) is changing from mere annoyance to a present danger. When Wipro, based in Bangalore, India, on July 18 reported first fiscal quarter net income of $134 million, up 44 percent from a year ago in 2005, it saw its stock drop 5 percent because investors were concerned about the problem. [...]
    A key contributor to the high attrition rate of the Indian outsourcers is job-hopping, in which workers with valuable skills skip from one job to another at a higher wage. This practice adds fuel to the wage inflation flames and keeps the need to train new hires at the forefront for the Indian firms. [...]
    But if Kana's experience is any indication, Indian companies will have to increase their value proposition well before Indian wages catch up with those in the United States. "I'm a firm believer in globalization and outsourcing, but in the case of Kana, it was the wrong choice. We weren't saving much money at all. For every five to 10 engineers in India, they needed a program manager there who would spend time in India to drive the process. There were communications and duplication of equipment costs," Fields said.
  • CNET News: Perspective: High-tech jobs recovery? Don't believe the hype. WashTech/CWA's Marcus Courtney says the tech sector is suffering from the longest jobless recovery since World War II. By Marcus Courtney. Excerpts: Ask IT leaders about the high-tech economy these days, and they'll no doubt tell you about the dramatic nationwide recovery, the rapid growth of jobs and the subsequent rise in technology employment levels. Many have even said they can't hire skilled workers fast enough, despite an abundance of available jobs.
    These assessments stand in stark contrast to the Bureau of Labor Statistics' latest national employment figures, however, which showed far fewer jobs added in June than economists or business leaders had projected. The tech sector, most notably, is suffering from the longest jobless recovery since World War II, having lost more than 400,000 jobs since the start of the March 2001 recession. The recession "officially" ended in November that same year, but for thousands of American tech workers, such claims of a full-blown IT rebound are vastly exaggerated.
    According to a recent study prepared by the University of Illinois at Chicago's Center for Urban Economic Development (click here for a PDF of the full report), only 76,300 new IT jobs were created nationwide during the last three years. That's less than one quarter of the number of tech jobs lost earlier in the decade.
  • Bloomberg News: IBM's Profit May Rise as Shifting Jobs to India Reduces Costs. Excerpts: International Business Machines Corp., the world's biggest computer-services provider, may say second-quarter earnings rose after the company reduced expenses by shifting workers to India from Europe. [...]
    Chief Executive Officer Sam Palmisano cut 14,500 jobs in the past 14 months, mainly in Europe. One in eight IBM employees is now in India, where salaries are about 12 percent of those in the West. That helped the company's operating profit margin widen to 13 percent from 11.6 percent, Reitzes estimates. "IBM appears to have everything in place in the India transformation," said Michael Holland, who oversees $4 billion, including IBM shares, at Holland & Co. in New York. "The results so far have been promising." [...]
    Palmisano, 54, received a 2005 salary of $1.68 million, a bonus of $5.18 million, long-term pay of $4.24 million and other income of $309,000 last year, IBM said in a March 9 regulatory filing. He also received $9.26 million in stock options, based on Bloomberg calculations.
  • CNET News: Perspective: Scratching the 25-year PC itch. By Charles Cooper. Excerpts: I was never particularly big on anniversaries. But in a couple of weeks, the computer industry will mark a milestone that deserves a moment of quiet celebration. On Aug. 12, 1981, the IBM Corporation debuted the PC. It's hardly hyperbole to suggest that this single announcement did more to change the world of technology than anything ever since--including the invention of the World Wide Web.

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • The Hill: With legislation in limbo, CMS launches HSA demo. By Jeffrey Young. Excerpts: Congress has yet to make progress this year on legislation to promote further adoption of health savings accounts (HSAs), a darling of conservatives, but the Bush administration is taking steps on its own to integrate new health-insurance products into the Medicare program. This week, the Centers for Medicare and Medicaid Services (CMS) unveiled a demonstration project that would allow health-insurance companies to offer products similar to HSAs to Medicare beneficiaries.
    The administration has aggressively campaigned for the wide use of health savings accounts in the private sector. The accounts allow for tax-free saving and spending of money for medical costs and must be paired with high-deductible insurance plans to cover catastrophic expenses. Conservative champions of HSAs and other so-called consumer-directed health plans also view the vehicles are part of a broader agenda to sever the ties between health coverage and employment or government entitlement programs.
    Opponents, mostly on the Democratic side, maintain that HSAs — like the Social Security private accounts proposed by President Bush — are nothing more than part of what they view as the GOP’s goal of eliminating social-insurance programs. “This is yet another attack on Medicare by this administration,” Sen. Edward Kennedy (D-Mass.) said in a written statement. “The Bush administration tried to replace the guarantee of Social Security with chancy private accounts, and now they’re attempting the same thing with Medicare. These private accounts are a tax giveaway to the wealthy that will leave millions of seniors behind.”
  • New York Times: A Windfall From Shifts to Medicare. By Milt Freudenheim. Excerpts: The pharmaceutical industry is beginning to reap a windfall from a surprisingly lucrative niche market: drugs for poor people. And analysts expect the benefits to show up in many of the quarterly financial results that drug makers will begin posting this week. The windfall, which by some estimates could be $2 billion or more this year, is a result of the transfer of millions of low-income people into the new Medicare Part D drug program that went into effect in January. Under that program, as it turns out, the prices paid by insurers, and eventually the taxpayer, for the medications given to those transferred are likely to be higher than what was paid under the federal-state Medicaid programs for the poor. [...]
    Drugs tend to be cheaper under the Medicaid programs because the states are the buyers and by law they receive the lowest available prices for drugs. But in creating the federal Part D program, Congress — in what critics saw as a sop to the drug industry — barred the government from having a negotiating role. Instead, prices are worked out between drug makers and the dozens of large and small Part D drug plans run by commercial insurers. Since Part D went into effect, the pharmaceutical industry has raised the wholesale prices of its brand-name drugs an average of 3.6 percent. Although the actual amount spent depends on what each insurer negotiates, in many cases the drugs for those 6.5 million people who used to receive their medicines through Medicaid will cost more now.
  • New York Times: Bush Administration Plans Medicare Changes. By Robert Pear. Excerpts: The Bush administration says it plans sweeping changes in Medicare payments to hospitals that could cut payments by 20 percent to 30 percent for many complex treatments and new technologies.
  • Associated Press, courtesy of the New York Times: San Francisco Moves Closer on Health Plan. Excerpts: San Francisco moved closer Tuesday to becoming the nation's first city to provide health care coverage for all its residents. The city's Board of Supervisors unanimously approved a plan that would give adults access to medical services regardless of immigration or employment status. The plan's estimated cost is $200 million a year. Financed by local government, mandatory contributions from employers and income-adjusted premiums, the universal care plan would cover the cost of everything from checkups, prescription drugs and X-rays to ambulance rides, blood tests and operations.

New on the Alliance@IBM Site:
  • ThinkTwice for Summer 2006 [PDF]. Articles in this edition include:
    • Employees fight force-outs due to medical conditions
    • IBM to invest $6 billion in India. Where is your job going?
    • Study Reveals “Jobless Recovery” in Tech Labor Market, Despite Industry’s Contrary Claims
    • SSR’s Sold Out to Qualxserv
  • Communications Workers of America: NLRB Cases Put Millions at Risk of Losing Union Rights. Excerpts: Union members turned out in force across the country this week to draw attention to three pending National Labor Relations Board cases that could leave millions of workers without union rights by redefining who can be labeled a "supervisor" in a workplace. In Washington, D.C., area CWA members were among hundreds of union activists who rallied Thursday in front of NLRB headquarters. Rallies also took place this week in Nashville, Portland, Ore., Phoenix, Chicago, Milwaukee, Albuquerque and other locations. The NLRB cases, known collectively as the "Kentucky River" cases, began with groups of nurses trying to organize in Kentucky. Management has tried to claim they are supervisors and therefore ineligible for union rights. [...]
    "Skilled and experienced workers such as registered nurses, who give instructions to co-workers about how and when to perform certain tasks, are particularly vulnerable to reclassification as supervisors under this push for a broader reinterpretation of the term," EPI says. "For example, nurses who tell orderlies or nurse aides to do certain things for particular patients are at high risk of reclassification, as are journeymen construction workers who guide other workers on a crew."
  • American Rights at Work: Stephen Colbert Satirizes Anti-Union Assault. Excerpts: The Bush-appointed National Labor Relations Board is poised to issue decisions that could strip millions of workers of their right to have a union at work—all without holding public hearings. On July 18, Comedy Central's "The Colbert Report"—a show satirizing Fox News' "The O'Reilly Factor"—host Stephen Colbert took on the National Labor Relations Board and the potentially disastrous impact its rulings could have on workers. Watch this hilarious clip below. Just click the "Play" button in the middle of the image.
  • Building employee power in IBM. Excerpts: One of the most common questions asked of the Alliance@IBM by IBM employees is "When are we going to have a union and when is the vote?". Many IBM employees have the misconception that all we have to do is call someone up and schedule a vote. Unfortunately it isn't that easy and the process to getting to the vote is difficult.
    Ever since IBM started taking away benefits that were promised to people when they were hired, the Alliance@IBM has strived to undo the injustices that IBM perpetrates in the name of short-term gain. Members of the Alliance have taken and continue to take actions such as writing letters to Politicians and newspapers, launching workplace e-mail campaigns, organizing and attending large rallies and smaller meetings, introducing stockholder resolutions and holding stockholder actions, circulating newsletters and e-mails in the workplace and community, and starting our own TV show on cable access and streaming video on our web site. The Alliance also works closely with IBM unions around the world and participates in joint actions and dialogue.
  • AFL-CIO Weblog: Executive Excess: Final CEO Pay Numbers Reveal Jaw-Dropping Retirement Packages. Excerpts: and it looks like the 21st century Gilded Age for Corporate Titans, according to Daniel Pedrotty from the AFL-CIO Office of Investment, who reports that the numbers stack up big time for U.S. CEOs. The final 2005 CEO compensation numbers are in, and the results are truly jaw-dropping. Leading the pack is Exxon Mobil Corp. CEO Lee Raymond, who stands to collect more than $8 million a year in retirement. According to The New York Times, Raymond collected more than $686 million from 1993 to 2005 ($144,573 for each day he headed the company).
    But wait—Raymond’s retirement package is even more outrageous because of all the biggest U.S. corporations, ExxonMobil has the largest funding deficit in its employee pension, according to BusinessWeek. ExxonMobil’s assets are $11.2 billion short of its projected obligations, according to company figures as of Dec. 31. ExxonMobil, with $27 billion in its coffers, could write a check for its underfunding this afternoon. Meanwhile, Raymond’s total compensation package was short just $49 million.
    ExxonMobil could top off the tank for its employees but chooses not to. Nor does the company seem to care that its CEO gets the cushiest retirement while its employee pension plan is the most underfunded. Says media relations adviser Dave Gardner on ExxonMobil’s decision not to fully fund its employee pensions
    We basically chose not to. That’s not an investment we want to put more into at this point.
    ExxonMobil isn’t alone among companies that put golden CEO retirements before their workers’ retirement well-being. As companies freeze or eliminate pensions for workers, their executives are building up even bigger pensions, causing their financial obligations to balloon. Among the top 25 companies in the AFL-CIO PayWatch, executive pension obligations include $3.5 billion at General Electric Co., $1.8 billion at AT&T, $1.3 billion at IBM and ExxonMobil and $1.1 billion at Pfizer Inc. and Bank of America, according to The Wall Street Journal.
  • From the Job Cuts Status & Comments page
    • Comment 7/16/06: IBM Southbury is going to close/mothball the Southbury (CT) "A" building. If you have been recently laid off, or have been given a layoff or "redeployment" notice and are currently in the "A" building and you feel you have not been given a fair chance to be consolidated into another building in Southbury, please let the Alliance know. -sby_willie-
    • Comment 7/17/06: From an IBM executive--"We're not taking jobs from the U.S. and shifting them to India. Over the years, we've tended to spread out what we do in different parts of the world, and we've decided to spend our R&D globally. We are investing heavily in China, and have been for many areas. We have growing investments in Brazil and the Czech Republic. We will continue to make such investments and keep looking for new areas; it's a portfolio management exercise." Really?! Then why are IBMers training their Indian replacements and then losing their jobs! How can you tell when an IBM executive is lying? His/her lips are moving. -Anonymous-
    • Comment 7/20/06: From Austin, The software we built has been "transferred" to IBM Mexico to a team in Guadalajara. IBM Director plugins Capacity Manager, System Availability, System Rejuvenation. Division 7T, Dept. 0RTA. -Anonymous
  • From the General Visitor's Comment page:
    • Comment 7/16/06: My manager is giving out impossible unachievable project deadlines one atop another. When you cannot meet the deadlines even if you work 10+ hours, you get into trouble, ultimately it becomes a reason to get a "3". Very disturbing of late is that highly qualified people with solid and needed skills are being forced out in this way. They present packages to them (an offer you cannot refuse) and then either people leave willingly or leave without making a fuss. IBM is a terrible company to work for now, you need to watch your back all the time and cannot trust anyone in management.
      When I hear of certain people being forced out that are key to the company I just feel like it is no use even trying anymore. I believe that they want the ibm of the future to be that services and sales are fronted by people in Brazil and USA, but that the technical work is going to be done in China or India. Does this sound familiar? Look at your shirt, your shoes, chances are that they were not made in America. Problem with this model is that they are draining the company of talent that takes years and years to build and they think that giving people who are new in China and India some training then it will fill the void.
      The execs will be able to leave with their golden parachutes, and pensions intact. An additional thing going on is that marginal or substandard people (junior managers) are being promoted to increasing levels of management and thus they become the lackeys of the high execs and willingly destroy what is left of IBM technical staff. They assume though that this will protect them, but it will not. So if you are a manager, and you are told to do something unethical, questionable, or something that in your gut you know will hurt someone who does not deserve it, just know that it will come back to you, because you are going to be next.
      Other companies know what is going on and they will take advantage of the business that IBM loses because of this behavior. The ultimate death of IBM will be the failure to execute on just about anything because they are cutting off the life blood of what made this company great. If you are an employee(non manager) and you see that your coworkers are being unfairly treated or abused, and if you do nothing, then it's your fault too. Do not think you can go along and just hope that things will not touch you either.
      Their goal is go get all technical work done cheaply overseas. Services and sales will become small,and only really a brand in the end. There are so many ways to fix this company properly that I do not see why we let this happen. Do the execs really need all that cash or are they so afraid that they will also lose that they keep quiet? I am sick over this company. -Anonymous-
    • Comment 7/16/06: What I really want to know is how come the property manager in Poughkeepsie, Grubb and Ellis still has the same head count as years ago when they were managing twice the space. Who are they paying off? -Anonymous-
    • Comment 7/17/06: Everyone needs to accept that IBM is just a job and not a career anymore. Start looking at your salary and any benefits that you get as temporary and start stashing something away now for a rainy day and looking for other opportunities wherever. Don't kill yourself by working 70 hours a week, degrading your health, and impacting your family and personal lives for a lost cause. Spend that time instead brushing up your skills and your resume and looking at the job market. You might find a better job or more likely have to work for less, but there is life after IBM.
      I know. I was in a RA early last year. I'm doing OK, but I wish I'd spent more time preparing for the inevitable instead of thinking if I worked harder, I could keep my job a while longer. When your number is up, it's up. It won't matter how good a job you did. If your job is targeted for a RA, the cuts will happen.
      Also, doing a lousy job training your replacement will not affect your ability to get another job. IBM doesn't give details for references anyway, and you just might even get a call to come back as a contractor after IBM gets in trouble because your replacement can't do the job. -Anonymous-
    • Comment 7/19/06: Have been reading some of the comments below. Have any of you heard the phrase "setting someone up for failure"? I joined a new dept in Aug of last yr, I walked into a disaster. In the month of Sept I worked 80% OT was starting at 5 am quitting at 2 am the next day, after two months of this I suffered a herniated disk when getting up from my chair, i laid on the floor and worked for months because i could not sit, my mgr's comments were, do what you have to do to take care of yourself but we have deadlines to meet and you have a job to do. I am currently going to phys therapy trying to avoid back surgery, had my mid term pbc review yesterday, now SHE is using all this against me, Dr appointments, my PASSION for my work is lacking, in order to justify giving me a 3 at the end of the year. I just concluded my 7th yr at IBM, this place has got to be one of the most demoralizing unrewarding places to work I have ever been a part of. You are given an impossible workload!
      So you will fail, then they can use this to their advantage, I wish they would go ahead and offshore my job, give me my package and I will be on my way... It is managers like the one that I currently have that are a piece of garbage, she has a god complex and thinks she has to micromanage every little aspect of my job, I honestly think they are trying to make everyone so miserable they will quit... -mad as hell-
    • Comment 7/19/06: Fear not, time is on our side. Many years ago I started my career at a team that is now in India. It was a highly technical group and our customers appreciated the good quality support we provided. Recently I had to deal with the Indian team a lot and learned first hand that they are utterly useless. We are trying different ways to somehow get around those guys because as long as they are in the loop, absolutely nothing gets done. Apparently their idea of technical support is to act compassionate and the communication gap is striking. In the old days the client received good service. Nowadays, they receive crappy service for just a little less because they still have to pay for the outrageous bonuses of greedy IBM CEOs. Sooner or later it will dawn on them that they are better off with a local IT team. -Anonymous-
    • Comment 7/19/06: Palmisano's comments about 2nd quarter 2006 performance.... "IBM has taken many strategic actions in recent years to reposition the company. Our focus on higher-value segments of the marketplace continues to deliver good results to shareholders, our cash position improved significantly year over year, and we remain committed to investing in our business and driving business performance to generate strong returns for investors. IBM has returned more than $5.8 billion to shareholders in the first half of the year." WHAT KIND OF NONSENSE IS THIS?
      On 01/02/2003, IBM closed at $80.57. Today, 07/19/2006, it is up 2 and change to $76 and change. This is 3 and 1/2 years, and he has the gall to say "strong returns for investors" and "continues to deliver good results to shareholders". Compare IBM with HPQ over the last 2-3 years and see where you should be putting your money. You don't make any money on stock buybacks but the execs are getting really fat wallets. -Anonymous-
    • Comment 7/19/06: Unless we stand up and do something it'll get worse. At least join the Alliance and have a chance to take away some of the currently unlimited IBM Executive power. Get out on the sidewalk and protest if you want to do more and really get the big dogs concerned. -Anonymous-
    • Comment 7/20/06: IGS is losing contracts because of the cost and inefficiency of offshoring. -Anonymous-
    • Comment 7/20/06: Dividend return on share price of 76 is 1.78% annually. I think this is the "strong return" he means. With a CD you can get 5 to 6% currently. -Anonymous-
    • Comment 7/20/06: I don't know how many of you are in the same boat as me. I just wanted to let people know. I was at IBM for 5 years; working 50 hours a week. I didn't have time for my wife and son at home because I was so tired from working so many hours. My health was getting really bad. So much so that my doctor was telling me my job is taking years away from my life if I continue. I'm only 25 had high blood pressure, ulcer issues cuz of stress from job. I left early 2005. I am happy to say all my test results are back to normal and my ulcer issue is totally gone. Moral of the story being we all need jobs; but the IT market if u got the right skills is great. I used to get measly 4% bonuses or less at IBM with a 2 rating. My company just handed me a 17% bonus in my first year. Go out and seek another job. To hell with IBM. Don't waste your time there. -Anonymous-
    • Comment 7/20/06: My team recently received an email from management asking for volunteers to help on a Disaster Recovery test for an account that has been outsourced to India. The reason? The Indian team doesn't have the "tools" to accomplish the test. In the real world this means they've had the account for months and still can't handle it. That's why we have permanent "advisory" staff attached to these accounts to cover up for the lack of ability of the foreign staff. -Anonymous-
  • From the Pension Comments page
    • Comments 07/19/06: I have retired in 1991 and since then I have received one 3% increase in my retirement pay but that was wiped out by a significant increase in the medical insurance. I am now one small step above a poverty level and when I use my last of the CD, I certainly will be there. It is shame that I have believed my managers for 35 years of my employment. -Anonymous-
  • IBM employees on employee raises

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:
  • "We are really all over the map" by "wonderaboutibm". Full excerpt: Did you say low price/low cost? A low cost mentality prevails, definitely, but the low cost efforts extend only to front line staff. The bloated overhead, all those blue dollars floating around ... no attempt or interest in controlling them. So the low-cost mantra is laughable.
    LOW PRICE??? Not really, but I will concede there are exceptions. SO will price so low as to virtually guarantee losses. But GBS is at heart a premium pricer ... never forget the real context under all that chatter about "value propositions." In its greed, what IBM really wants is high prices and low costs. Then the margins are better and so are the mucky-muck bonuses. Greed prevails. But the execution of this flawed high price, low cost model just compounds the mess -- and Wall Street is noticing.
    What I think you are advocating is a high price, high cost mode. Both the price and the cost are "premium." That would be a really solid strategy with the promise of good margins, but as we have discussed on other posts, it does not suit the interests of current management.
  • "Official HR Estimates" by "BCS-SA". Excerpts: The new pension modeler and the new pay plan data should give you an idea. The pension modeler that emphasizes the new 401(k) offerings for 2008 uses 2.5% over the length of your career. Based on comments from a lot of the more senior people in my team, that's pretty optimistic, but probably accurate.
    Your pay raises are highly dependent and affected by where your tax jurisdiction is located. There are high pay areas, par areas and below par areas. If it's high, you may eventually over 5 years or so get up to 5% more than those in par areas and 10% than those in below par areas. Don't think metro and MSA's. For example, all of Florida is below par. Atlanta is just par, I think. Te very few above par areas are concentrated in Westchester County, NY, NYC and SFO/Silicon Valley. Chicago is par. Ask the recruiter, HR or hiring manager where your location is relative to the IBM pay plan.
  • "Sounds like your wife may be right" by "deep_eye". Full excerpt: My best advice to anyone who is getting a "package" - always have a labor attorney review the particulars - believe me, it is money well spent. Even if it is a mutually agreed upon decision to go - a good attorney can usually negotiate a better overall package for you. The pig has absolutely no interest whatsoever in being fair or equitable - unfortunately, that's why we need courts and attorneys. Once you sign the documents and move on, even if you determine later that they pulled a fast one on you, it can be quite difficult to successfully prevail in court.
    I saw someone decline a project due to his wife's illness and the burden his travelling would place on the marriage, his concern for her health and being alone, etc., etc. The pig got cute and starting dropping hints around "performance," "not a team player," etc., long story short, they started to make his life miserable - he returned the favor by initiating an action and they settled out of court. Like any bully, they fold when aggressively challenged, they are counting on people to tuck their tails between their legs and run away. Check the internet (or your phone book)for labor or employment attorneys who specialize in employee related work issues - unfair/unjust termination, hostile workplace (my personal favorite), performance reviews, etc.
  • "Definition of Global Delivery" by "Dose of reality". Full excerpt: The kind of global delivery that clients want is to have resources available in local markets to be able to address multi-country project needs in an efficient, and coordinated manner, and with resources that understand the nuances of each country that we are DELIVERING SERVICES TO. Global delivery does not mean having a concentrated hub of a team that has to deliver services across multiple country lines. Even if the resources were capable, the chain letter effect across the disjunct members of the project team wreaks havoc on development. If anything, the hub development center model is diametrically opposed to global delivery objectives.
  • "So, how long will they keep us in suspense?" by "kindaoldibmer". Full excerpt: From GR's (Ginny Rometty's) latest epistle ... "We've got a focused and clear growth strategy around Deeper Client Relationships, Differentiated Solutions and Services, and Global Delivery, and our third-quarter actions will be communicated in detail in the context of that strategy by your local leadership teams." This looks like management-speak code-words for "we're gonna accelerate the layoffs of xx,000 US IBMers and move the work to India as part of our Global Delivery Strategy".

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