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    Highlights—September 9, 2006

  • OpEdNews.com: Re: Addendum On The IBM Pension Case. By Lawrence Velvel. Excerpts: I wish to briefly bring you further up to date, as it were, about events discussed in the posting on the IBM pension case.
    That posting explained how the opinion written by The Reactionary Easterbrook allowed older American workers to get screwed over by a dishonest and unfair change in their pensions (a dishonest, unfair change away from the type of pensions that federal judges like The Reactionary Easterbrook have.) The blog also fit the dishonest change into the broader picture of how American workers, who suffer loss of jobs and loss of pensions, have been getting screwed over by big business, while high executives who run their companies into disaster, even bankruptcy, get rewarded by huge salaries, stock options, golden parachutes and the like.
    Recently, The Wall Street Journal -- not exactly a fount of left wing liberalism or socialism, as one repeatedly points out -- carried an article showing that the change in pensions exemplified in the IBM case is even worse than one realized. The change, which screws over persons who have worked for a company for 20 or 30 years, is adopted, of course, to lower companies' costs at the expense of the workers. According to the Journal, researchers at Cornell, Colorado and the University of California at Irvine have found that, in the years when pensions were changed and employees screwed over, "incentive compensation for the chief executive officers" of the culprit companies jumped dramatically. [...]
    On "average incentive compensation for the chief executive officers jumped to about four times salary in the year of the pension cut, from about three times salary the year before. Companies that didn't change their pensions saw little change." [...]
    So what we have goes even beyond what was discussed in the prior blog. What we have, indeed, is a situation in which the pensions desperately needed and relied on by average workers are cut dramatically so that highly paid executives can make even more money -- can make millions more -- and Congress (as well as the Seventh Circuit) has approved this. It's another example of the rich getting richer on the backs of the middle class and the poor, while the Congressional hacks who are paid off, bought and sold by big business (as if this were the Gilded Age -- well, maybe it is) approve this monstrous result.
  • MarketWatch: IBM pension case may go to Supreme Court. By Jilian Mincer. Full excerpt: Plaintiffs expect to appeal to the U.S. Supreme Court a high-profile case that had exonerated International Business Machine Corp.'s (IBM) cash-balance pension plan. On Sept. 1, a federal appeals court in Chicago refused to reconsider the case. The court denied a petition "en banc," which had asked all 11 active judges on the bench to review the opinion. Three of the appellate court judges had ruled earlier in August that the IBM plan does not discriminate against older workers.
    In a statement Tuesday, IBM said it is gratified by the appeals court decision not to grant en banc. "The court's refusal to reconsider the decision of August 7 further underscores IBM's position that its pension plan formula is both lawful and age-neutral, and that neither IBM's plan or cash balance plans in general discriminate on the basis of age," IBM said.
    In its decision, the Seventh Circuit Court of Appeals in Chicago reversed a lower court decision that said IBM's cash-balance pension discriminated against older workers. The case has been closely watched because a number of companies had been concerned about the legality of their plans. As of 2003, about 1,200 companies in the U.S. offered hybrid pensions covering about seven million workers.
  • Poughkeepsie Journal: IBM group to appeal to top court. Excerpts: The class-action suit affects about 140,000 people, several thousand of them present or former Hudson Valley residents. If plaintiffs appeal to the Supreme Court, it may or may not decide to take up the case, noted Janet Krueger, an organizer of the effort to start the suit. Krueger said only about 5 percent of appeals to the nation's top court are selected. One point in favor: "This case impacts a whole lot of people in a whole lot of different companies."
  • Poughkeepsie Journal: Big Blue to 'redeploy' local workers. 123 will be moved to other jobs. By Craig Wolf. Excerpts: The prospect of disappearing jobs at IBM Corp. has emerged anew in the Systems and Technology Group, that includes Poughkeepsie and East Fishkill. It's got a new wrinkle, this time. The nationwide action is not called a "resource action," which is IBM lingo for permanent layoffs, but rather a "notified redeployment," a directive to look for a new job elsewhere in IBM. No guarantees have been mentioned. [...]
    According to Lee Conrad, national coordinator for the Alliance@IBM, an employee group that is part of the Communications Workers of America, "We've been hearing 500 to 700 consistently for the last couple weeks." "It's a long, drawn-out job cut," Conrad said of the re-deployment approach. "The employees are trying to do their job, which is taking up a lot of their time. Now they have to scramble and find a job in a shrinking pool of jobs. There's still some controversy — if whether you are marked for a resource action or a redeployment whether you are acceptable at another job." [...]
    The Rochester, Minn., Post-Bulletin reported online Friday that 80 employees were being redeployed there, and 50 in Tucson, Ariz. Other sites involved, according to Conrad, are Burlington, Endicott in Broome County and San Jose, Calif. Job-cutting has been a recurring phenomenon at IBM for years. Top company executives have often told investors of their desire to cut costs.
  • Rochester (MN) Post-Bulletin: 80 at IBM get 'redeployment' notices. By Jeff Kiger. Excerpts: IBM Rochester told 80 employees in the Systems and Technology Group this week that they need to find new jobs.
    It is not a layoff, according to IBM. This move is a "notified redeployment."
    "The employees were notified they need to move out of their current jobs," said Lorie Luedke, an IBM spokeswoman.
    This is not a layoff or "resource action," she said. The 80 employees are being given the opportunity to find new jobs within IBM, though they are not being given any time frame for when they need to have a new job. She described the process as "open-ended."
    "Their job is now to get another job ... they will also continue to do their current jobs," Luedke said. "They will be given resources and time by their managers to do that." As for layoffs, she said, "there aren't any plans for a resource actions at this time." [...]
    The organization that is promoting the unionization of IBM employees, Alliance@IBM, views the "redeployment" a little differently. It is just a drawn-out job-cutting process," said Lee Conrad. who is the national coordinator for the Alliance and a former IBM employee.
    "I believe a lot of people will get frustrated and quit. And that's what IBM wants," he said. IBM disputes that.
  • Yahoo! message board post: "Here's some basic information on retirement estimates and ERISA" by "bewarethebottomline". Full excerpt: All, I've been doing some research on basic retirement issues related to the IBM calculators and here's what I've found. My apologies if this information is already known to many of you.
    1. The new IBM retirement calculator forces you to enter a single date for when you separate and when you start taking your annuity. You CANNOT enter one date for separation and a second date for when you want to start taking the annuity.
    2. It IS possible to actually receive your annuity on a later date than when you separate. In fact, if you don't explicitly accept your annuity within 45 days of separation, you will start receiving the annuity at the next retirement milestone (i.e. age 55, then 65). So, if you're, say 51, and you don't take the immediate annuity you'll have to wait till age 55 to take it.
    3. IBM says they don't know if the Retirement Calculator will be enhanced to allow for estimates based on separate separation and annuity acceptance dates. They're willing to manually calculate an estimate for you but NOT UNTIL you separate. Go figure.
    4. The Netbenefits calculator WILL allow you to specify different separation and annuity acceptance dates, BUT the information is only accurate for separations prior to Jan 1 2008. Otherwise, there's a big, fat disclaimer saying the information is inaccurate.
    5. One thing the Netbenefits calculator IS good for is finding out you current ERISA protected benefit as of today. You can't do that on the Retirement Calculator where the first available retirement date is December 31, 2007.
    6. As most of you know, the conversion factors used in annuity calculation still reflect age and years of service (but not pay and points). So, there's still a benefit (albeit a greatly reduced one) to sticking around from an annuity point of view. At whatever age you decide to separate you have ERISA protection for that annuity amount.
    7. If IBM decides to convert PCF participants (and possibly others) to a cash balance plan, I expect they will take the age 65 annuity (the one the IBM Retirement tool won't give you) and discount it to present dollars at the maximum interest rate they can get away with. At that point, everyone should be prepared to make a very quick comparison between what annuity that cash balance can buy (go to Vanguard or Berkeshire-Hathaway annuity sites) versus their protected, ERISA annuity. I would then calculate the present value of the loss.
    If, for example, your loss is $500/month and you expect to live another 35 years, and taking a discount rate of 6% year, your loss in present dollars would be approximately $87,000. That's how much money you've lost if you elect to stay with IBM post-conversion. On the other hand, the older you get the tougher jobs can be to find.
    This is all speculation at this point. There's no reason to think a conversion to a cash balance plan is imminent. But it could happen and we should be prepared to understand the price of staying with IBM post-conversion.
    The above information is my current understanding of some basic issues. If I've made errors of commission or omission, I apologize and stand ready to be corrected. -Beware
  • ContraCosta Times: 'Missing Man' lost in global economy. By Robert Batterson. Excerpts: LOOK AROUND. Odds are you probably know -- or may be -- a man between the ages of 30 and 54 who does not work. Today, more than one out of every eight men in this age group in the United States does not work. He is the "missing man" in today's global economy, and what's worse, he has pretty much given up looking for a job.
    In a recent article in the New York Times, this man out of work and largely discouraged worker looking for a job was dubbed the "Missing Man." Missing, because if you add him to the official unemployment statistics -- that is, men in this age group currently on the unemployment rolls actively looking for work -- it raises their unemployment rate substantially; to more than 13 percent of men not working in this group, up from about 5 percent since the 1960s, representing millions of men who have simply dropped out of the economy. [...]
    Wages and salaries now represent the lowest percentage of gross domestic product since 1947. Meanwhile, corporate profits have jumped to all-time highs. [...]
    Typically, this missing man gets some kind of severance package when he is discharged. This, along with any savings, retirement investments and home equity he has managed to accrue represent his nest-egg, which he lives on and gradually depletes while he searches for a "decent" job; one that offers the same kind of wages and benefits that he became accustomed to and believes that he is entitled to, based on his years of work.
    But unfortunately, despite a growing economy the last few years, this missing man has largely been disposed of due to the very golden era of productivity he contributed to during his years of hard work and service. [...]
    Corporate culture has a lot to do with it. What's the quickest way for a corporation or organization to increase the bottom-line? Why, cut those "high" wages, salaries and benefits, of course. That, unfair as it is, disproportionately hurts the 40- and 50-somethings who have paid their dues to help all those corporate CEOs earn 400 times the average wage and eventually bail out with golden-fleece parachutes floating up in the stratosphere.
    In the process, the value of human capital -- all that experience, education and training that gets flushed down the toilet -- goes largely ignored as the quality of products and services declines. This makes it even easier for a tough global competitor to capture a domestic firm's market share with lower prices driven by a workforce who is ironically experiencing a dramatic increase in their standard of living compared with the American worker.
  • Washington Post: The Employees' 2006 Bill of Slights. By Amy Joyce. Excerpts: "Three years ago, workers told us they felt overworked, but they were patient. They realized the economy was getting better and they would share in the wealth ultimately," said Stuart Itkin, vice president of marketing for Kronos Inc., a workforce management company that did a study about workers' feelings this Labor Day. "Last year, the work improved, but they are mad as hell. Their paychecks are no better."
    According to the Kronos survey, conducted by Harris Interactive as an online poll without using a random sample, 61 percent of employed adults say they are not experiencing the benefits of an improved economy in their work lives, a four-percentage-point increase from last year's survey.
    In a separate report, almost all (97 percent) of the 23,000 or so female workers who chose to respond to an online survey said they were most concerned about not being able to afford health care, according to "Ask a Working Woman," a survey by the AFL-CIO and Working America, its affiliate.
    Many think chief executive pay should be limited when workers are losing benefits or being laid off (48 percent), and nine out of 10 participants said they were more worried and concerned about the future of young people going into the workforce than they were hopeful and confident. [...]
    The reason so many are unhappy with health coverage is because, as is the case with Jeronimo, it has become unaffordable for many. Premiums increased an average of 9.2 percent in 2005, down from the 11.2 percent average in 2004, according to the Kaiser Family Foundation. The 2005 increase ended four consecutive years of double-digit increases, but the rate of growth is still more than three times the growth in workers' earnings (2.7 percent), the report said. Since 2000, premiums have gone up 73 percent.
  • Yahoo! message board post: "IBM Club Web Site for Retirees" by Rod Cordell. Excerpts: In the past, in order to access the IBM Club web site, you had to be an IBM employee. Retirees could not access the site. Recently, IBM has made an IBM Club web site available for IBM retirees. It is a global web site containing information about IBM Clubs all over the world.
    In order to access this web site, you must first register. Then you can subscribe to whatever IBM Club is closest to where you live or to multiple IBM Clubs. Our local club is the Silicon Valley IBM Club. The address of the web site: www.ibm.com/ibm/ibmclub Once you get there you will need to give an e-mail address and a password in order to register. You must also specify which IBM Club you are interested in.
    Another site that I was surprised that some retirees I know did not about: http://www-1.ibm.com/afteribm/us/. (Editor's note: One of the sites linked to by the "After IBM" site is the "Advantages from YouDecide" site, a" free service available to IBM Retiree Program employees that saves time and money when shopping for insurance and other valuable products.")
  • San Francisco Chronicle: On America Working. The war on workers. By David Sirota. Excerpts: U.S. Education Secretary Rod Paige labeled one "a terrorist organization." Former House Majority Leader Tom DeLay, R-Texas, called them "a clear and present danger to the security of the United States." And U.S. Rep. Charles Norwood, R-Ga., claimed they employ "tyranny that Americans are fighting and dying to defeat in Iraq and Afghanistan" and are thus "enemies of freedom and democracy," who show "why we still need the Second Amendment" to defend ourselves with firearms.
    Who are these supposed threats to America? No, not Osama bin Laden followers, but labor unions made up of millions of workers -- janitors, teachers, firefighters, police officers, you name it. [...]
    The hostility, while disgusting, is unsurprising. Unions wield power for workers, meaning they present an obstacle to Republican corporate donors, who want to put profit-making over other societal priorities. [...]
    The more corporations and politicians crush unions, the more all workers suffer. It is no coincidence that as union membership and power has declined under withering anti-union attacks, workers have seen their wages stagnate, pensions slashed, and share of national income hit a 60-year low. As Council on Foreign Relations scholars put it, the decline in unions "is correlated with the early and sharp widening of the U.S. wage gap."
  • In a Yahoo! message board post, "dave49_98" gives advice to an employee of a company recently acquired by IBM. Full excerpt: Keeping an open mind would be a disaster for you. You will hear all the talk about how important you are, how IBM loves you, and how people are our business. We were told we aren't going to fire you, people are our most important resource and where would we find 4000 replacement for the AT&T account. I will tell you where they found them - India.
    "Keep focused on building your technical skills." And be prepared to pay for this out of your pocket. All our professional memberships were cancelled. Every November you had to go through this crap of a career path and pick your training. Every January, for the 3 years we were they they cancelled training, no money.
    All you need to know about separate run subsidiary is that up the street from you by Perimeter Mall, used to be Lotus WordPro. Those folks were fired and Ray Ozzie, works for Microsoft. There is no need for an open mind on this. IBM has a system that includes Ireland, Brazil, Canada, Eastern Europe, and India. Your skills are irrelevant at IBM, it is your cost that counts.
  • New York Times: Wal-Mart Finds an Ally in Conservatives. By Michael Barbaro and Stephanie Strom. Excerpts: As Wal-Mart Stores struggles to rebut criticism from unions and Democratic leaders, the company has discovered a reliable ally: prominent conservative research groups like the American Enterprise Institute, the Heritage Foundation and the Manhattan Institute. Top policy analysts at these groups have written newspaper opinion pieces around the country supporting Wal-Mart, defended the company in interviews with reporters and testified on its behalf before government committees in Washington.
    But the groups — and their employees — have consistently failed to disclose a tie to the giant discount retailer: financing from the Walton Family Foundation, which is run by the Wal-Mart founder Sam Walton’s three children, who have a controlling stake in the company.
  • New York Times: Whining Over Discontent. By Paul Krugman. Excerpts: We are, finally, having a national discussion about inequality, and right-wing commentators are in full panic mode. Statistics, most of them irrelevant or misleading, are flying; straw men are under furious attack. It’s all very confusing — deliberately so. So let me offer a few clarifying comments. First, why are we suddenly talking so much about inequality? Not because a few economists decided to make inequality an issue. It’s the public — not progressive pundits — that has been telling pollsters the economy is “only fair” or “poor,” even though the overall growth rate is O.K. by historical standards. [...]
    More broadly, right-wing commentators would like you to believe that the economy’s winners are a large group, like college graduates or people with agreeable personalities. But the winners’ circle is actually very small. Even households at the 95th percentile — that is, households richer than 19 out of 20 Americans — have seen their real income rise less than 1 percent a year since the late 1970’s. But the income of the richest 1 percent has roughly doubled, and the income of the top 0.01 percent — people with incomes of more than $5 million in 2004 — has risen by a factor of 5.
    Finally, while we can have an interesting discussion about questions like the role of unions in wage inequality, or the role of lax regulation in exploding C.E.O. pay, there is no question that the policies of the current majority party — a party that has held a much-needed increase in the minimum wage hostage to large tax cuts for giant estates — have relentlessly favored the interests of a tiny, wealthy minority against everyone else.
    According to new estimates by Thomas Piketty and Emmanuel Saez, the leading experts on long-term trends in inequality, the effective federal tax rate on the richest 0.01 percent has fallen from about 60 percent in 1980 to about 34 percent today. Meanwhile, the U.S. government — unlike any other government in the advanced world — does nothing as more and more working families find themselves unable to obtain health insurance.
  • Information Week: Time Is Running Out For H-1B Visa Cap To Be Raised--Or Is It? Because the Senate and House don't agree on many immigration issues, it's unlikely they'll pass a comprehensive immigration reform bill anytime soon. But tech employers are lobbying to raise the H-1B cap, and programmers are worried. [...]
    At Microsoft, "We have a couple thousand open technology positions that we're not able to fill," including development positions, says Krumholtz. "It's getting harder and harder to find people," he says. "There's increasing pressure to look for other avenues," including doing work outside the United States if talent can't be found here, he says. And despite recent layoffs in the tech industry--including Intel's announcement this week that it's eliminating 10,500 jobs--the specific talent Microsoft is looking for is "apples and oranges" compared to jobs being shed, Krumholtz says. "The jobs we're looking to fill are not just IT engineers," although Microsoft might call them that or "developers" internally, he says. Microsoft is seeking "top computer scientists" with advanced degrees and the "latest training and skill sets," he says.
  • New York Times: A Different Strategy on Pensions. By Mary Williams Walsh. Excerpts: Most corporate pension funds sat tight, warning that if the government got too tough, they would be forced to freeze their plans. But one large company, International Paper, decided to strike out in an entirely different direction. Today, International Paper’s $7 billion pension fund, which covers 175,000 people, is three years into a broad revamping, one that the company believes will protect it from the forces that wreaked havoc in the last few years.
    When the changes to its investment strategy are complete, said Robert Hunkeler, the company’s vice president for investments, “we will have protected the company and the plan — and therefore the plan participants — from the worst effects of interest rate moves.” The ability to shelter the plan from financial storms has allowed International Paper to keep it going, even as a number of other large companies, like I.B.M., Tenneco and DuPont, have frozen theirs.
    Freezing a plan halts the growth of benefits, and even though most companies sweeten the pill by expanding their 401(k) programs, the move often dashes the hopes of older workers. That is because in traditional pensions, which provide a predictable monthly income in retirement, workers typically build the biggest part of their benefit in their last few years of service.
  • Washington Post: Provide Protections From Retirement's Pitfalls. By Richard W. Johnson. Excerpts: With Americans living longer and healthier than ever before, many aging baby boomers have rallied behind the cliché that 60 is the new 40. Some act as if they've discovered a fountain of youth that will extend their robust health and steady employment indefinitely.
    But as earlier generations discovered, many things can go wrong as people approach retirement. Health fails. Spouses take sick or die. Marriages end. Investments sour. People lose their jobs. And these shocks exact a high price -- out-of-pocket medical bills, reduced earnings, disrupted saving -- that often forces people to prematurely tap into their retirement nest eggs. Policymakers need to be mindful of some sobering statistics on personal setbacks as they consider ways to reform Social Security, Medicare, and Medicaid, which threaten to bankrupt the federal government as the population ages.
    My research colleagues Gordon Mermin and Cori Uccello and I recently gathered hard facts on the boomer school of hard knocks. We found that more than 4 in 10 adults age 51 to 61 in 1992 were diagnosed with major new medical conditions -- including heart disease, cancer, serious lung ailments, diabetes, strokes, and psychiatric problems -- between 1992 and 2002. About one-third developed health problems so severe that they had to cut back on work or retire early. About 10 percent of married people became widowed; another 3 percent divorced. [...]
    Combining all of these shocks, we found that about 7 in 10 adults age 51 to 61 in 1992 developed a health problem, lost a spouse to death or divorce, or became unemployed during the 10 years ending in 2002.
News and Opinion Concerning the Pension Reform Bill
  • Dayton Daily News: Other Voices: Retirement reforms could worsen plight of older women. By Teresa Heinz Kerry and Jeffrey R. Lewis. Excerpts: Today, one in five of America's retired single women and widows lives in poverty — and millions more may be just one tragedy or illness away from sharing that fate. But the Bush administration continues to explore Social Security and Medicare "reforms" that are likely to make the status of retired women even more unstable. [...]
    A number of recent trends have made retirement more secure for aging women, including requirements that wives must consent if survivor benefits are to be waived under their husbands' pension plans, shorter vesting requirements for pensions, improvements in asset exclusions under Medicaid, and the greater number of women who have earned Social Security benefits in their own right.
    But these positive developments may soon be offset by two more dangerous trends. The first is the movement away from retirement plans that pay a guaranteed amount every month, toward plans like 401(k)s, which require employee contributions and offer no guarantees. With more time out of the work force and lower disposable incomes to contribute when they are employed, women can look forward to a significantly smaller nest egg at the end of their rainbow than men.
    But, since they live longer, women at age 65 actually need to have saved an additional 15 percent merely to maintain whatever income level they had in their early retirement years. And the harsh lesson learned after the Internet bubble bust was that defined contribution plans can lose huge amounts of value in a relatively short time.
  • Boston Globe: Playing roulette with retirement. By Teresa Heinz Kerry and Jeffrey R. Lewis. Excerpts: Not everyone is upset that defined-benefit pensions are rapidly becoming a mirage. In the corner offices occupied by senior corporate executives, this latest retreat from company loyalty is considered good business -- another way to pump up profits. Among middle-class families, the reception should be less joyous, as it means a less secure retirement for millions of people. [...]
    But for employees, defined-benefits plans have one important advantage: They put most of the burden on the party with the greater resources, stability, and expertise -- the employer. Contributions to the plans, the cost of administering them, and the rising premiums paid to the Pension Benefit Guarantee Corporation -- the government entity that insures private pensions -- all come out of companies' bottom lines. [...]
    But in the end, the elimination of traditional pension plans is just one more way in which corporations are forcing the risks inherent in a dynamic economy onto the backs of middle-income workers, while insulating senior management from those risks. For those CEOs and CFOs, the retreat from defined-benefit plans has little effect. They can look toward handsome severance (excuse me, "retirement") packages and will depend very little on the performance of their 401(k)s.
    In recent years, there has been a tendency to view the US economy purely in terms of numbers -- quarterly earnings, stock prices, and so on. The shift toward defined-contribution retirement plans may make those numbers look a little better. But putting retirement planning in the hands of workers with no financial training and staking retirement funds on a game of Wall Street roulette makes retirement look a lot worse for real people . Companies, and the federal government, should be looking for ways to rationalize the payment of defined-benefit plans so that it takes into account both the needs of companies -- and the need for workers to have a determined income stream.
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • San Jose Mercury-News: California Assembly passes bill to provide universal health care. By Robin Hindery. Excerpts: The Assembly narrowly approved a bill Monday that would provide health insurance to all residents, a move that would make California the only state to offer government-operated universal health care. The bill, which passed the 80-member house on a largely party-line vote of 43-30, received strong Democratic backing. But supporters say pressure from the insurance industry and Republican lawmakers is likely to doom the measure when it reaches Gov. Arnold Schwarzenegger. The governor's office has declined to take a position on the bill, but Schwarzenegger in the past has voiced his opposition to single-payer systems. [...]
    The bill passed the Senate by a straight party-line vote of 25-15 in May 2005. Monday's action in the Assembly returns it to the Senate for a final vote on amendments. The bill is expected to reach Schwarzenegger's desk by Sept. 1. During an appearance in July at San Francisco's Commonwealth Club, Schwarzenegger said, "I don't believe in universal health care. "I don't believe that government should be getting in there and should start running a health care system that is kind of done and worked on by government," he said. [...]
    All told, the state would save nearly $8 billion in the first year, according to an analysis by the independent Lewin Group that was commissioned by the bill's supporters. The report found that consolidating the health care system into a single plan would significantly reduce administrative costs, a finding the bill's proponents seized upon when arguing in its favor.
    Under the measure, "the billions of dollars now wasted on insurance middlemen, CEO pay, record corporate profits, overhead and advertising will be used to provide good, affordable care for all who need it," said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights, a consumer advocacy group based in Santa Monica.
  • Yahoo! message board post: "IBM FHA $$'s for newly retired employee" by "ibmfha". Full excerpt: I retired last year with 30 years of IBM Service and had COBRA insurance for 12 months. My former medical costs was $235/month. I just got my new FHA bill (for my wife, son, and me) and the costs is $1,450/month.
    That is utterly ridiculous and takes a huge bite of my monthly pension. Younger IBM'ers, be aware that the new FHA really hurts you in every way possible. I will be forced to find another job soon to cover my raising medical bills. This sure doesn't seem right for a long time IBM'er who was part of an older IBM generation that was 'promised' IBM medical benefits for life. Any other IBM'ers in the same position, please share your comments with this group. Also, any and all advice on where I can go to get lower medical expenses would greatly be appreciated. Thanks for listening.
    • "ibmaccountant" comments. Full excerpt: Typical big blue pig promise. You were promised the benefit for life, but only in the fine print do you find out it never was going to be free (from a Gerstner point of view).
      What the younger generation should take from this is NEVER to take management statements at face value and never trust their "good" intentions.
      The brand and HR propaganda machine keeps the suckers still coming and getting fleeced in their youth.
  • Kaiser Family Foundation: Bush Administration, Republicans 'Refuse' To Acknowledge Success of VA Health System, Opinion Piece Says. Full excerpt: The Department of Veterans Affairs health care system "is a stunning success -- but the [Bush] administration and the Republicans in Congress refuse to build on that success because it doesn't reflect their conservative agenda," columnist Paul Krugman writes in a New York Times opinion piece. According to Krugman, the "key to the VA's success is its long-term relationship with its clients," which "means that the VA can easily keep track of a patient's medical history, allowing it to make much better use of information technology than other health care providers." He adds, "Unlike all but a few doctors in the private sector, VA doctors have instant access to patients' medical records via a system wide network, which reduces both costs and medical errors." In addition, he writes, the "long-term relationship with patients ... lets the VA save money by investing heavily in preventive medicine, an area which the private sector ... has shown little interest." However, the Bush administration, rather than allow Medicare beneficiaries to participate in the VA health care system, has limited access "to poor vets or those with service-related injuries" and is "pursuing a failed idea from the 1990s: channeling Medicare recipients into private HMOs" through Medicare Advantage, Krugman writes. The "administration and its allies in Congress oppose expanding the best health care system in America, even though that expansion would save taxpayer dollars, because they're afraid that allowing a successful government program to expand would undermine their anti-government crusade and displease powerful business lobbies," and their "ideology and fealty to interest groups make them willing to waste billions subsidizing private HMOs," according to Krugman (Krugman, New York Times, 9/4).


New on the Alliance@IBM Site:
  • IBM Pension Lawsuit FAQ about Cooper v IBM (Updated 8/8/06)
  • From the Job Cuts Status & Comments page
    • Comments 09/02/06: On 8/30, our manager came and asked about the rumors going on about job cuts. And, then announces about 5% cuts in STG. Then ends by saying our organization is healthy and mostly will see minimal cuts. Left such a bad taste in my mouth. I mean if we are cutting people off their livelihood why are we spending $10 billion last year in stock buyback, which boosted the price $2 in the short term but in the end the stock fell by $3. The end result in any book, is that $10 billion is vanished in thin smoke. It could have been put to good use investing in people. Another point, if the management is interested in running the company using stock holder value, I think we need a more activist board. In the last six year IBM stock price has moved diddly, where as the S&P index has appreciated 30%. I think few top people, where the buck stops should pay as opposed to.... -Anonymous-
    • Comments 09/04/06: Don't know whether email from Atkin is work of a genius or an act of an Idiot, 6 weeks has gone by and still no word on what is going on in STG, that has created utter confusion among entire STG resulting in tremendous loss of productivity. Sending that disastrous email without even consulting or taking into consideration the top line management is utterly disrespectful and sending signals of loss in trust. To me it seems he got slammed by Bill Z and he just vented his steam by sending that email and caught entire line of management command clueless and that's the reason why he is taking so long to decide who will be let go. The reason is the mid mgmt is struggling to implement what he said "NOT WHAT WAS REQUIRED" to rejuvenate the STG. -Anonymous-
    • Comments 09/06/06: Job cut rumors continue in Poughkeepsie... Discussions ongoing among employees on whether Atkins meant 10 days or 10 'BUSINESS' days before details announced. Very unpleasant atmosphere, everybody's waiting for the axe to fall. -Anonymous-
    • Comments 09/06/06: I was informed last week Wednesday that there would be no layoffs for my department that week or next week. In fact, I was told my fourth line manager was asking for MORE people.
      Today, the same manager informed me that the previous Friday (two days after being reassured that all is well) that there was an emergency meeting and plans had changed.
      When asked if the news was good or bad there was no reply. When asked if we could be cut or not the reply was "we will find out Thursday or Friday".
      This is total insanity. After walking on edge for six weeks I am ready to throw in the towel and not look back at this rotten company. My career has sunk anyway so it's time for me to swim out of this mess on my own and live for better days rather than bitter days at IBM. -Disillusioned-
    • Comments 09/07/06: Some big announcement suppose to happen today for STG in Tucson. Different dept across the site are having "Mandatory" meeting today. Some managers require his/her employee who's working remotely from Phoenix to come to Tucson for this meeting.
      From what one manager told me last week, the names for ppl who are being laid off were done last week. 75%, yes, 75% of those employee are either over 40 or African-American. HR was afraid of a lawsuit so they had to go back and redo their list. I guess we'll know today, finally. -Anonymous-
    • Comments 09/07/06: Today is the day. I have confirmed several managers have scheduled one-on-one with department employees. We will know by the end of today how deep the cuts are. -secret-
    • Comments 09/07/06: I work(ed) in STG, in Rochester, MN. Today I got my "Notified Redeployment Information for Employees" packet. It basically implies I'm laid off if I don't find another job, but is careful only to say "You need to find another job" and says little about what happens if I don't. My manager implied a 30-day period to find a job, then a 2nd 30-day period prior to dismissal.
      It starts: "Until further notice, the Notified Redeployment process will supplement your efforts to find a new job opportunity within IBM. You should participate in the Internal Redeployment process and work with your manager to actively pursue internal job opportunities that match your skills". In Q&A part, it says:
      Q: does this mean I'm part of a resource action?
      A: A resource action affecting you has not been announced
      Q: Does this mean that I will be part of a resource action in the future?
      A: As a matter of prudent business planning"...blah..."may be necessary to address existing business conditions, including resource actions. Unless and until a resource action is formally announced by the company, however, no one is authorized by IBM to speculate about whether a resource action will be announced".
      My favorite non-answer is:
      Q: What if I haven't found a new position during the Notified Redeployment process?
      A: Throughout the Notified Redeployment process, management will be continually evaluating progress and impact on the business issues being addressed. You will be advised by your manager of any changes. -Anonymous-
    • Comments 09/07/06: I was redeployed today from Endicott STG. Only me and another guy whose manager is out of Pok we're involved that I know of so far. I'm supposed to look for another job for 30 days but I checked the Endicott listing for band level 7 and below. There was 4 jobs all financing related. I did find 26 in Pok but they weren't in my job skill that I saw. I have 29 years and change so if I can't find anything I can bridge, which I'm hoping for anyhow. I guess I could be called one of the lucky ones but it's still 29 years of history I'm ending. It will be nice not having to look over my shoulders wondering when my time will come anyhow. Signed: WORN OUT trying keeping my job. -Anonymous-
    • Comments 09/07/06: This afternoon (9/7/06) Vermont Public Radio had a story quoting Jeff Couture, spokesman for the Essex Jct, Vermont plant. He announced that IBM plans to reduce STD headcount by 5% at BTV. He made a point of these being “redeployment” from design and development groups, with no actual jobs lost. -Anonymous-
    • Comments 09/08/06: Yesterday, I received my redeployment notice. I asked my manager for a time frame and he wasn't able to give one. Does anyone know how long I have? 30 days? 2 weeks? Also, I've heard that if I'm not able to find another position within IBM and that if I'm "let go," I won't be able to collect unemployment. Is this true? I was looking to get out of high-tech again, since this is the 2nd large high-tech company I've worked for and have been layed off from in the last decade. Perhaps it's time to thank my lucky stars! No more 60+ hours a week. -Anonymous-
    • Comments 09/08/06: Yeah, it happened today. Sad to say, but I must say it. Some departments in Tucson are now "White Only" departments. What do you expect from the state, Arizona, home of the Minuteman project. -secret-
    • Comments 09/08/06: In San Jose STG, as far as I know, five people received the so call redeployment notice packet. I am one of them. I think the whole purpose of this notice is forcing people leave IBM with least amount of lay off package. Why? look at last sentence of page five, "You should engage this process as a SUPPLEMENT to your other job search activities". -SJ-
    • Comments 09/08/06: This story sounds so familiar. When IBM did this to me, I was given a list of about 30 managers who were hiring. I called them all. Amazingly, they were all on vacation or off on personal leave. None were to return until the time lapsed I was given to find another position.
      Also, I recently heard about IBM getting rid of anyone sick or thought to be sick. About 3 months before I was laid off, I was off sick with a terrible case of bronchitis. I had a temporary manager at the time and when I called him, he told me to keep quiet about it and not tell anyone. Just take the time and he would cover for me. I found this very odd until all of this started being made public. I thank him now for being one of the few decent human beings in management at IBM.
      One last thing no one seems to be talking about. Although the numbers of individuals laid off seems to vary in age from young to my age (51 at the time) and I know this makes the numbers look more balanced to the government but why hasn't anyone asked the question...how quickly were the young ones hired back as contractors after they were laid off? My 30ish boss was hired back the next day at a very large pay increase...just no benefits. He's been working everyday since. Funny isn't it?
      For those of you wondering if you'll be able to find another job within IBM during your "redeploymnet" phase. Think again...you're out.
      Last item...the Monday after 1,000 of us in Global Services were laid off...1,000 new hires came in. All young and totally oblivious to what they were walking into. One question I have is....if everyone at IBM left the same day and walked away with all the relationships, contacts, business knowledge and talent, where would that leave the bloodsuckers then? They couldn't even afford to pay their attorneys to sue us.
      Or, everyone sell their stock on the same day and watch the big boys lose their shirts or buy on the same day and vote Sam and the board out. These little law suits being filed against them are a minor nuisance to them. The difference between IBM and us is we try to play fair. Wake up people, they laugh at us, the laws and the lawmakers. If the Justice Department couldn't touch them years ago what makes you think they are concerned about them now. I say hit them where it hurts. Let Sam and the board be outsourced to India. Better yet, bankrupt them. -Anonymous-
    • Comments 09/09/06: Folks, back in April, I was given the redeployment package, and yes, was given the same CROCK you are all being told..."there is no talk of resource action, this is redeployment", 2 months later, walla, it turned into resource action and then, walla, adios, I received my severance and walked. I worked very hard to find another job at IBM but am very glad I wasn't able to locate employment, life is good AWAY from IBM, sad sad place to work. If you were given a redeployment package, your days are numbered, work HARD to locate another job if you want to stay, don't work as hard with the daily stuff, your long term commitment should be first. I wish you all the best of luck, but, if you get let go, trust me, there are better places to work for at this time - IBM is soon to be another Enron, give it time. RTP/NSSO, lock and load your resume, from the pattern I have watched last couple years, layoffs kickstart up north and work their way down, apparently the north and west were recently hit, so prep up, your redeployment"LAYOFF" is coming around, again... -Anonymous-
    • Comments 09/09/06: I received my notice of redeployment back in July because the contract was cancelled by United Healthcare. It is open ended because United keeps extending the contract end date. Officially I have 30 days from the last extension date. I have looked in "Job Opportunities" and see only Sales, Websphere, and Project Management type positions all over the US. My coworkers had to send resume's directly to managers they knew to get positions. I have sent my resume' internally to several first and second level managers and got no reply, possibly due to discrimination because I am African-American. -Edog-
    • Comments 09/10/06: I'm in Poughkeepsie, and I received my package on Thursday, 9/7. This is the third year in a row I've had to find a new job. I'm a solid performer, but somehow, I'm always expendable. I'm getting tired of it. Oh, and my spouse is also losing a job. These are such fun time -Anonymous-
    • Comments 09/10/06: Interesting how IBM is handling this layoff. In the past you had a two month time period to find another job. The problem is, even if the hiring manager wants you, it needs to be approved at a director level. You must have exactly the skills needed for the job and be able to jump in immediately since you are now competing in an open job market for that job. Usually less than 5% of those targeted for "resource" or "redeployment" (same thing, different word) are able to successfully land another job in these scams. My advice? Tell your management you won't play the game and leave. There are plenty of other jobs out there in much more respected companies. IBM has lost all respect for the individual. -been there done that-
    • Comments 09/11/06: I was given my "notification of redeployment" on my 28th anniversary of being hired by IBM. I'm 55 and work out of a home office within an STG engineering development organization primarily based in EFK. Out of a 270 person org, 23 were "redeployed". My manager sounded as though he was reading from a script. He wouldn't give me any details, like numbers or timeline. I feel as though management has been especially duplicitous since in the two weeks leading up to the notification, both my manager and my second line gave me additional assignments. When the rumors started flying a few weeks ago, I asked my manager whether I needed to be concerned and he said no. I wish that he'd been more forthcoming so that I could have been working on my resume. That's one lesson I've learned - always keep your resume up to date. -Anonymous-
  • From the General Visitor's Comment page:
    • Comment 9/04/06: Retired in 1989 after almost 35 years. Instead of a raise I got the additional cost of medical insurance shoved up my ^&*^*(%$ I can only hope that Sam will get his some day, and I wish I could be there to watch. -Anonymous-
    • Comment 9/07/06: Hey all, I'm a current IBM employee and recently returned to school for an MBA. Its sad to see that I am the only person in my class that has not received support from the company for tuition reimbursement of any kind. The reasoning I was given is that business is 'not my area'. My argument, neither is business the 'area' of most of my classmates (all engineers). The trend for investing in employees seems to be similar to investing in building products...to buy companies instead of investing the money in developing products these companies can provide and hiring employees with higher education vs. investing in its current employees to succeed and return the investment to the company by means of applying newly acquired knowledge to the business we're in. -Anonymous-
    • Comment 9/08/06: To the MBA student. I was in the same situation a couple years ago. IBM did not reimburse me for my MBA coursework either, even though 95% of the other students were getting reimbursement or full funding from their companies. You should know, IBM does not provide pay raises for employees who obtain advanced degrees. If you are still willing to pay for your advanced degree out of pocket, I would strongly urge you to take advantage of your school's career placement office and find yourself a career at another company. You will not recover your investment if you stay at IBM. Best of luck. -Anonymous-
  • Pension Comments page
    • Comments 09/05/06: On Friday 09/01/06, the 7th Circuit Court denied the petition for an "en banc" review of the Cooper ruling. BUMMER! The Cooper legal team now has 90 days to file for certiorari by the US Supreme Court. This will be our last shot at overturning a BAD decision... Wish them luck! -Janet Krueger-
    • Comments 09/06/06: Another obnoxious, in-your-face e-mail from RMAC (Randy MacDonald) hit the Notes in box of US IBMers this evening....another reminder from IBM management that they don't give a flying #$!* about IBMer pensions and will fight the US government tooth and nail to ensure IBMers stayed screwed. We love you too, Randy, you despicable, slithering slime. -Anonymous-
    • Comments 09/07/06: I too, am getting sick and tired of Randy Macdonald and his lovely emails. I am also extremely disappointed that we still don't have a proper retirement planning tool available to us to see the real impact on the pension changes. In the meantime Randy and all the fat cats in Armonk are raping the snot out of this company. -Anonymous-
    • Comments 09/08/06: To: getting sick of Macdonald. I agree with you but don't show your anger, that's just what he and HR want. They are purposely trying to antagonize the employees. Don't let them. Do your job to the minimum and cut quality to the bone. That keeps everyone happy, apparently even customers. -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:
  • "Counter-intelligence" by "Old_Paradigm". Full excerpt: How may I be helping you today? http://newsinitiative.org/story/2006/07/28/the_outsourcing_of_u_s_intelligence. To a degree never before witnessed in American history, many core functions of the U.S. intelligence community are being outsourced to the private sector. Outsourcing has taken place in almost every aspect of intelligence work -- collection, counterintelligence, covert operations –- but nowhere has the recent trend been more dramatic than in the analysis that informs what the President receives on his desk every morning. "The outsourced analysis piece, particularly since 9/11, is a significant portion of the analysis that's done," said John Gannon, a former CIA Deputy Director for Intelligence and now head of BAE Systems' Global Analysis Group. "And it's growing."
  • "Very Natural and Logical" by "ancientblueconsultant". Full excerpt: I will put forth the hypothesis that the political regime currently in power is solely dedicated to the preservation of the status quo of market dominance by big multinational businesses (not American small business) and the well-being of a very select few and not the preservation and improving life and well being of majority of Americans.
    So if you are part of a government defending big business interests at the cost of everything else, why not delegate and put big business in charge of the process of finding out what could possibly hurt it? Makes a lot of sense.
    Orwell was right. We'll joyfully accept Big Brother in exchange for a few crumbs delivered by a well funded propaganda machine.
    Abraham Lincoln and other warned us about confusing dissent and doubts in circumspection for treachery. That only a few steps away from the seeds of of sedition and revolution and a change in power.
    Tell that to the poor soldiers maimed and the families of those killed because the Pentagon and DOD saved money by reducing rear guard protection troops and military police so they left Saddam's captured arsenals abandoned and ready to be pilfered by bands of nomadic anarchists that we now call insurgents.
  • "As you said Part I" by "Wok N Off". Full excerpt: You are newbie. Sadly, your optimism will wane quickly when you experience the reality of the travel logistics in the context of our working environment (one that already destroys creativity, but that's another thread entirely). Let's go through an example.
    If you travel on Monday, you will wake up at 3am to get ready for your 4am departure to the airport. Why? Because your Partner said you had to be onsite first thing in the morning (till Friday evening) and never had a second thought for work/life balance that is touted here, but always readily ignored. However, as luck would have it, you will have the option to travel Sunday, which means you'll miss a good part of the football season-I digress.
    On the way to the airport, you will try to catch some zzz's because you are still trying to recover from last week. You probably worked over the weekend on something the pm told you to do because the client freaked out over something you will never know about. and your pm frantically came up with something to shut them up. (clients commonly freak out with us to do more because it works with us-here at IBM, scope means nothing-we do just about everything they want, just like a ...). Anyway, on the way to the airport, the taxi driver will bore you with stupid questions to boost his tip, and you will get no zzz's to fuel the creativity that remains elusive here.
    When you get your butt out of the taxi, it might be around 5 or so and if you are lucky, it will take you 30-60 minutes to check in and get through security depending on volume and how cranky the rent-a-cop is that day.
    Its about 6-6:30 now and your flight leaves in an hour, but you gotta get something to eat. After you whoof down a $15 bagel that just took half your meal allowance, you might sit down and finish the latest ad hoc request from your pm, but by the time you boot up, its time to board (which is another 30 min).
    After sitting on the tarmac for 30 minutes because there are 10 planes in front of you, you are now flying. You are still working on whatever (non-value-add, of course), and I guarantee it ain't on the super duper creative thoughts. You wish someone would just listen to you someday because your ideas are really good and if someone would just do it, their profit margins will soar. Alas - no one cares. So you will just do what you are told, because you are not a bs’er with a grand title (re: PM and above). Ok worker bee?
  • "As you said Part II" by "Wok N Off". Full excerpt: As far as layovers go, subtract an hour (for the time you de board, find the right gate and re board) from the total layover time (You can also take into account additional risk of flight and tarmac delays due to each connection). That's your creativity time, but as I said before, you will not create, because you will be fat, tired, unmotivated and exhausted. If you are going to be creative, it will be for you (like working on your updated resume, hitting on the stewardess, etc).
    You will reach your destination, wait for checked luggage (if applicable), share a rental car (which means you may have to wait for their flight to get in), and go directly to the client site, where the client will promptly look at you (cross-eyed, even) and wonder why you didn't get your lazy, overpaid butt to the site sooner.
    You will work a full 10 hour day, then go to dinner with your team (peer pressure, conformity-more ding on your creativity efforts). Now its about 9-10pm and you gotta check-in to a lousy, dirty (bring slippers, don’t even think of walking on the carpeted floors-also, a uv light will tell you how much action your comforter has seen over the year), noisy hotel you were forced to use because it was on the "list". When you finally get up to your room, your pm is already calling you on the cell to make sure that you understand exactly what to say at tomorrow's meeting at 8am. The pm will do this because you do not have creative thoughts, you are a robot-you are an idiot, and he doesn't want you to embarrass IBM or risk the add-on deal he's already dreaming up with the Partner before the first week is even complete.
    You will wake up at 6am the next day...snooze button until 6:30, shower (or not-depends on how much you dislike your team), and get your butt downstairs to meet with the carpool. Yes-a carpool. You are not going to embarrass IBM by jacking up expenses-only Partners can do that.
    You will iterate until Friday because the Partner/PM said we have to look like we are working in front of the client, even though most people get more done at home or in the hotel. So...its late Friday, you don't get home until Friday nite/Sat morning. You finally go to sleep and all is at peace.
    You will repeat this cycle until we burn you out. We do not need your creativity-we have done a couple of similar things that the client wants, so we will copy and paste that project and repackage it as Innovation. Cool trick, huh? You would think that we have plenty of time on our hands since we are doing this, however, we spend more time rejigging the old stuff than creating new stuff that truly addresses our clients’ issues.
    Look, my point is simply that you will not have the energy over time to be creative. The travel policy exacerbates these issues and, as are all policies here, is designed to save us money, not to reward you with personal comforts. You are going to pay part of that price-in your own personal time. You will learn to guard that time as much as possible. Even with the best intentions, you will find that the working environment here doesn't care about your ideas and we will de-motivate you from producing more. It truly sucks, but its been my experience that this is the case more often than not.
  • "Thanks" by "Dose of reality". Full excerpt: Good of you to take the time to put that chronicle together. It is a painfully accurate description of most assignments here, and really illustrates the problems that come from having a vendor-preferenced travel policy.
  • "Independent rational thought..." by "gradyg". Full excerpt: ...is not constrained by conformance to reasonable expectations for conducting the company's business in a businesslike manner. In fact, I suggest that the folks who whine about pre-negotiated airline and hotel arrangements should rejoice in the time that this frees up for their creativity on behalf of the client.
  • "You are in for quite a surprise" by "Dose of reality". Full excerpt: Tell me how much time is freed up when your pre-negotiated airline fare takes you from Atlanta to a 2 hour stopover in Kansas City on your way to Philadelphia.
    Then tell me how creative you will be able to be after tossing and turning all night at the I-95 Holiday Inn with the paper thin walls and the shaking walls from the hourly patrons and the hearing impaired DJ.
    Our travel deals have only one purpose. We take all the capacity that the vendors can't sell elsewhere in return for hefty kickbacks that we never credit back to clients. It is a pure profit center that is carried on the backs of the front line consultants.
    We put the same draconian limitations on those front line consultants with their client-compensated travel expenses and 85% out of town schedule that we apply to the back office staff accountant that travels once or twice a year at IBM expense. The economics are different, and the intensity of the inconvenience is an order of magnitude higher, but we treat them all the same way. It is classic IBM “businesslike reasonable expectations.”
  • "Apprentice" by "Mister_E". Full excerpt: Anybody remember the girl on the apprentice from Big Blue. She was an internal supply chain consultant. i.e. negotiated with vendors for paper clips or travel, whatever. She couldn't handle two other contestants that were real world griping at each other. She had never seen such a thing. I suspect she travelled once a month or two to some internal meeting.
    The people that make these travel deals are like that. They have no idea what weekly travel to a site is like. What knowing the hours of the hotel people better than your kids school schedule is like. What knowing the names of airline gate people in a connecting city is like.
    Understanding that the client is paying for travel for us and that the savings they proclaim aren't real for anyone but themselves!

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