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    Highlights—September 16, 2006

  • Wall Street Journal: Majoring in IBM. Dissatisfied With Graduates, Companies Design and Fund Curricula at Universities. By Anne Marie Chaker. Excerpts: When graduate students at North Carolina State University took their seats on the first day of a class called Services Management, the kickoff lecture wasn't delivered by a professor. Instead, it was given by a manager from International Business Machines Corp. The company, in fact, helped develop the curriculum and awarded grants to the school with the expectation that the course would be taught -- all with the aim of producing graduates better prepared to work for IBM. The guest speaker, a regional manager, began his lecture by saying, "My name is Craig Nygard, and I am a services professional," later adding, "You have started thinking about tackling big problems and turning them into revenue opportunities." [...]
    None have approached IBM's breadth of involvement in helping to create and promote a new discipline. In the past two years, IBM has been drilling its priorities into graduate and professional schools to help ease its transformation from a manufacturer of hardware and software to a provider of what it calls "solutions" and "services," including consulting and support services. The Armonk, N.Y., company has even developed a new academic field: "Service Sciences, Management and Engineering," or SSME. [...]
    Now, though, critics worry about the implications of companies tailoring classes for their benefit, as IBM is doing. "This is a breach of academic integrity," says Jennifer Washburn, a fellow at the New America Foundation and author of "University Inc.," a 2005 book critical of corporate influence on education. She says such influence has mushroomed as universities face cutbacks in federal and state support, and as companies increasingly seek out the best talent. The upshot: "More and more universities are allowing companies to have a greater say...even when it compromises their own academic independence."
  • Reuters, courtesy of the Washington Post: Bush wants to renew Social Security push after vote. Excerpts: President George W. Bush hopes to revive his plan to overhaul the U.S. Social Security retirement program if his Republican party keeps control of the Congress in the November midterm elections, the Wall Street Journal reported on Saturday. [...] Bush was forced to abandoned his 2005 push to add private accounts to the retirement program, in part because of concerns among Republicans that the unpopular plan would jeopardize their chances in this year's elections.
  • Yahoo! message board post by "rlu_ca_us": Should I or should I not join IBM Business Global Services. Full excerpt: Dear IBMers, I'm at a point where I'm trying to decide whether or not to join IBM. My old high school teach as well as some of my college professors and ex-manager were from IBM and I always had a great impression about the company. I currently have other offers on the table and IBM is not the high bidder, but I thought I should join because of the reputation of the company and what others had told me. However, after doing a research on the web and also reading this forum, I started to have doubts. The benefits are standard and comparable to other companies, but nothing extraordinary. I have a friend who works at IBM storage and hated his job and he doesn't know anything about IBM BGS. I would like to open this question out to the IBMers in BGS for your input about your experiences and share some of your thoughts. I really appreciate your input!!!
  • Yahoo! message board post by "jonatha1". Full excerpt: I'm in IBM Global Services (not BGS, I think, although they keep changing the organization names every 3 months so it's hard to be certain...)
    If they're not the high bidder, why consider them? When I joined 20+ years ago, the answer was "benefits and job security." You've already learned the benefits are nothing special. The job security is gone too...
    Unless you see yourself rising to mid- to upper-level management, or unless the position is sales-related rather than technical (in which case I believe there are all kinds of goodies you are eligible for if you deliver revenue), I'd go with the top $$$.
    It's not like you'll be staying with whomever you first sign up with all that long anyway.
  • Yahoo! message board post by "thekanck". Full excerpt: Without overly negative, I suspect that the input your mentors are giving you is ....<ehem>.... somewhat dated. This is not their fault, when THEY worked for IBM some years back (I'm guessing) it was as great a company. Alas, in the opinion of most of those that have been with IBM long enough to have witnessed the changes of the last 5 - 10 years, I think the consensus opinion is that IBM has gone downhill quite a bit.
    If I were you, I would evaluate my offers carefully, getting as much detailed information as possible regarding your specific employment conditions / expectations / co-workers / customers / ... as possible from each offer. Talk to as many of the people you would be working with & around as possible and get their input. Most non-mgmt employees at any company will be more truthful regarding the conditions and prospects than the team that is trying to hire you in ;-)
  • Yahoo! message board post by "rlu_ca_us". Full excerpt: Wow, great explanation. Really appreciate your feedback on the Band Level. How's the raises been over the years at IBM? I read an article that IBM has an internal policy that tightly control the percentage of raises given out and keep the employee's salary low. From your own experience, is this a "true" case in the last few years? Thanks again!
  • Yahoo! message board post by Bob Sutton. Full excerpt: My daughter in finance/acct spent 6 months with IBM. She was given a quote on a starting salary that was later reduced at the offer stage because "they would not approve it" but she accepted it due to the "brand".
    The turnover in her area was extreme and she left in 6 months and went to PWC where she now loves her job and has one promotion under her belt already.
    IBM has a revolving door USA HR policy complemented with an overarching global labor arbitrage one using cheap labor countries in eastern euro, India, and China.
    Although the employees in those cheap labor countries maybe on a high now they too will be subject to this exploitive labor practice and will in my opinion "ditch IBM" at the first available opportunity.
    The key strategic bet IBM is placing here is to try to maintain positive long term customer relations with a constantly churning short term labor force...I don't think they will succeed and their "dead in the water" financial performance says it all to me...in high tech you either move up or down...and down includes not growing with the industry even factoring in their size.
  • New York Times: Look Who Got a Raise. Excerpts: Fearing inflation, investors were spooked recently by a government report showing that companies have spent a lot of money of late on their employees. Annual labor costs were up in the second quarter by 4.9 percent, nearly a point higher than initially estimated. That came on top of a much bigger than expected increase in the first quarter.
    Compensation is business’s biggest expense, so rising labor costs — if passed on to consumers — could certainly push up prices. But so far, there are no clear signs of that happening. Instead, today’s rising labor costs seem to reflect a different economic phenomenon: growing income inequality.
    The big jump in labor costs in the first quarter appears to be driven by fat bonuses and stock options — not hefty increases in wages and salaries, the financial lifeblood of most Americans. One-off shots of income do not portend higher inflation because they reflect activity that already happened. And they don’t translate into more money for most people. According to David A. Rosenberg, an economist for Merrill Lynch, the huge upward revision in first-quarter labor costs worked out to some $80 billion on an annual basis that flowed to “a lot of well-heeled folks cashing in their stocks.” [...]
    When statisticians talk about “labor costs” and economists — and politicians — talk about “compensation,” they mean all forms of earned income, like wages, salaries, bonuses and stock options, plus benefits, like insurance and pensions. Measured that way, employees don’t look too terribly squeezed. But for most workers, increases in wages or salaries, if any, have been steadily eroded by inflation while health insurance, if any, costs more and covers less.
  • Yahoo! message board post by "ctman1452". Full excerpt: We just received an update that provides several very positive inducements to those who might be interested in joining this lawsuit. They include:
    • Reduction of attorney's fee from from 1/3 to 1/4
    • Elimination of the $500 entry fee for all prospective (future) clients
    • Affiliation with a leading worker rights law firm in California http://www.gdblegal.com/whoweare.php
    • -Future Financing to be supplied by subject law firms
    I think the last item of future law firm financial support demonstrates a whole new level of confidence in the perceived future success of this lawsuit and the elimination of any entry fees for new clients removes the most significant financial inhibitor many people had.
    Again the timeframe of those impacted by IBM applicable for this lawsuit are from 7/7/2001 to 5/4/2005. Contact Information: OutofBlue@... 1-800-482-0958.
  • Yahoo! message board post: "IBM 'redeployment:' as the latest resource announcement" by "sby_willie". Full excerpt: "Redeployment": this is just another IBM play on words. If you think this is a redeployment then what is IBM HR actually helping to do redeploy employees to suitable available jobs? Not much, if anything.
    It's ALL UP TO THE EMPLOYEE to find another job.
    What does IBM HR actually DO these days for US IBM employees? For that matter, what does IBM HR do PERIOD for the good of the IBM employee?
    The odds of a "notified redeployed" employee finding another job position in IBM has got to be no more than 10%: "notified redeployment" is just a long, drawn out layoff. If it was a real redeployment then almost everyone affected should be deployed in another job within the corporation.
    So if you are "notified redeployed" you can "place your bets" and hope that "lucky number" comes up. If it doesn't come up eventually IBM has found another way for YOU to give them all the reason, no matter what your skills or performance is, to let you go: basically your toast. Hit the street. Find a (better) job.
    But rest assured, your IBM position being phased out just gives them a little more money to use for the next stock buyback. And do you know who that will benefit? It's time to THINK TWICE!
  • In a Yahoo! message board post titled "Pension Choice: Lump Sum or Annuity?", Janet Krueger answers several questions from another message board participant. Full excerpt: Q: I too would like to know exactly how the annuity is funded. A: The pension fund is a separate trust fund. IBM has to file a form 5500 once a year which lists down to the last dollar how that money is invested and what expenses have been taken out of the fund. Each beneficiary of the fund has a right to request a free copy of that report once a year from the IBM Pension Trust fund administrator.
    Q: Has anyone ever asked IBM Benefits that question and gotten a straight answer? A: Because the pension fund is regulated by federal law (ERISA) and monitored by the Department of Labor (DOL) that is the one question you don't have to ask IBM Benefits. To request your copy of the form 5500, simply write a letter requesting it to:
    Office of the Plan Administrator
    IBM Employee Services Center
    5411 Page Road
    Durham, NC 27703
    Include your full name, a postal mailing address, and your employee number (or your spouse's employee number if you are asking as a dependent). Note that IBM doesn't have to file information about 2005 until October 31, 2006; if you wait until then, and ask explicitly for the report with 2005 data, you'll get the most current information available.
    Q: I had the impression (just that, no facts) they were "self funded", i.e. they managed their own insurance-company-like annuity fund with all the bells and whistles required by law. (Or perhaps more accurately, have someone manage it for them.) Moreover, I thought I read somewhere that the money to support folks actually receiving pensions was somehow segregated from that earmarked for future commitments (but that just might be wishful thinking...)
    A: You are probably confusing information about health care coverage with pension information. IBM is "self insured" for health care coverage for both employees and retirees. The pay health insurance companies to manage the 'policies' but they pay the actual expenses out of the operating fund. There is no trust fund to pay future health care costs for either retirees or employees. There *IS* a separate trust fund, heavily regulated, for employee pensions. There is NOT a separate trust fund for promised executive pensions -- that is an undocumented future obligation that comes straight out of operating expenses. Most international pension obligations are also unfunded, although that varies based on the law of each country.
    Q: As for how IBM might be making money on these "life annuities" I have one possibility - Annuities are funded based on the age of the recipient and expected interest rates. Actuarial tables (life expectancy) are then used to estimate how long payment will need to be made - on average - to an individual. If your retiree pool has - on average - shorter life expectancies than the standard actuary table mandated by law, you win (paying out less than you expected you would have to). I have heard that IBMers as a group live less long than the general public, but have no source or verifiable data on that. IBM would, of course. Utter speculation on my part, but is is possible.
    A: IBM makes money in several ways off the pension fund. First and foremost, they get a huge federal tax break when they put money in. Secondly, they can manipulate the assumptions used to forecast annuity obligations and future fund growth to generate virtual income or expense, as needed, which then allows them to more closely match reported income to Wall Street expectations. Virtual income from the pension fund is also used to calculate executive bonuses, putting money directly into executive pockets. Please note; I am NOT speculating, but basing my statements on factual information that has been exposed on this board and reported in numerous publications over the last 7 years....
    Q: I would think that IBM would rather NOT distribute the money as a lump sum for the same reason a bank likes to keep you money for you -- they plan to make more money off it by investing than they give back to you. Annuities have a built in advantage for the provider in that they are benefited by inflation - the dollars they provide for you in the future are worth less than the dollars they must give you today. The associated math and assumptions and estimates involved can become quite complex, and there are smart folks who spend their working hours doing just those calculations and sell the results to companies like IBM. These factors could explain why the annuity from IBM appears to look better than the annuity you can buy with your lump sum.
    A: It may be counter-intuitive, but IBM executives benefit greatly every time they trick another new retiree into taking the lump sum rather than an annuity, specifically because the transaction gives them an immediate virtual income boost. Between their use of an unfair interest rate to calculate the lump sum and the elimination of early retirement subsidies, they end up with the retiree walking away with far less than s/he was entitled to. Don't kid yourselves; that is a good thing for IBM!
    Q: On a very Machiavellian note, lump sum payouts deplete the retirement fund while annuities would not necessarily (could still count as assets) and hence make things look better for Wall Street. (OK -- that is out in black-helicopter-conspiracy-theory territory...)
    A: Again, you're arguing from intuition, not from fact. The lump sum distributions are what boost the bottom line for both Wall Street and the IBM executives. If you want to see Machiavellian conniving, you'll see a lot more of it if you scrutinize what IBM is doing with health care benefits and lay-offs. Just dig a little...
  • Yahoo! message board post by "abouthadit". Full excerpt: Bozeman, I was 63 when I retired. I checked the value of the lump sum on the open market and it did not even come close to buying an equivalent annuity even though I was near 65.
    The explanation isn't that there's a profit for the selling company or that IBM has a bigger pile and can afford the larger annuity etc.
    The explanation is that IBM screws you by calculating the lump sum equivalent using the highest interest rate afforded them under the law.
    Rule of thumb: If it's good for you, IBM won't do it.
  • Yahoo! message board post by "bozemansmith". Full excerpt: IBMers in the early retirement window (55 to 65) need to remember that the annuity INCLUDES an early retirement subsidy that the lump sum DOES NOT. You should take the value of the lump sum offered and go to one of the insurance company websites that offer online annuity calculators (Berkshire Hathaway, for example)and see just what monthly annuity your lump sum would buy. My experience is that it will be considerably less than the IBM offered annuity. Of course, YMMV and I am NOT a pension consultant. If this is confusing to you, please consult with a professional advisor.
  • New York Times: Progress or Regress? By Paul Krugman. Excerpts: Is the typical American family better off than it was a generation ago? That’s the subject of an intense debate these days, as commentators try to understand the sour mood of the American public.
    But it’s the wrong debate. For one thing, there probably isn’t a right answer. Most Americans are better off in some ways, worse off in others, than they were in the early 1970’s. It’s a subjective judgment whether the good outweighs the bad. And as I’ll explain, that ambiguity is actually the real message.
    Here’s what the numbers say. From the end of World War II until 1973, when the first oil crisis brought an end to the postwar boom, the U.S. economy delivered a huge, broad-based rise in living standards: family income adjusted for inflation roughly doubled for the poor, the middle class, and the elite alike. Nobody debated whether families were better off than they had been a generation ago; it was obvious that they were, by any measure.
    Since 1973, however, the picture has been mixed. Real median household income — the income of the household in the middle of the income distribution, adjusted for inflation — rose a modest 16 percent between 1973 and 2005. But even this small rise didn’t reflect clear gains across the board. The typical full-time male worker saw his wages, adjusted for inflation, actually fall; the typical household’s real income was up only because women’s wages rose (although by far less than everyone’s wages rose during the postwar boom) and because more women were working. [...]
    The United States economy is far richer and more productive than it was a generation ago. Statistics on economic growth aside, think of all the technological advances that have made workers more productive over the past generation. In 1973, there were no personal computers, let alone the Internet. Even fax machines were rare, expensive items, and there were no bar-code scanners at checkout counters. Freight containerization was still uncommon. The list goes on and on.
    Yet in spite of all this technological progress, which has allowed the average American worker to produce much more, we’re not sure whether there was any rise in the typical worker’s pay. Only those at the upper end of the income distribution saw clear gains — gains that were enormous for the lucky few at the very top.
    That’s why the debate over whether the middle class is a bit better off or a bit worse off now than a generation ago misses the point. What we should be debating is why technological and economic progress has done so little for most Americans, and what changes in government policies would spread the benefits of progress more widely. An effort to shore up middle-class health insurance, paid for by a rollback of recent tax cuts for the wealthiest Americans — something like the plan proposed by John Kerry two years ago, but more ambitious — would be a good place to start.
    Instead, the people running our government are fixated on cutting tax rates for the wealthy even further. And their solution to Americans’ justified economic anxiety is a public relations campaign, an effort to convince middle-class families that their problems are a figment of their imagination.
  • Humor from dack.com: Web Economy Bullshit Generator
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Investment News Daily: Health costs pose biggest retirement hurdle. By Lisa Shidler. Excerpt: The panel of advisers said that one of the biggest worries their clients face is skyrocketing costs of healthcare. Because of those steep costs, members of the panel said they're urging their clients to sign up for long term care insurance once they turn 50 or 55.
  • Reuters, courtesy of Yahoo! News: Most forgo buying own U.S. health insurance: study. By Kim Dixon. Excerpts: Nine out of 10 Americans who tried to buy their own health insurance failed, either because the price was too steep or because they were denied coverage due to a current medical problem, a study said on Thursday.
    The findings by the nonprofit research group Commonwealth Fund come as more U.S. employers have stopped offering workers health insurance -- with runaway medical costs the most frequently cited reason. [...]
    "People are being squeezed as employer coverage is either not available or contains very high out-of-pocket costs," said Karen Davis, president of the Commonwealth Fund. "The alternative of last resort -- to seek individual health insurance -- is not a safe haven," she told Reuters. For those who need to get health insurance on their own, the high cost is a significant barrier, Commonwealth found. [...]
    In lieu of dropping health coverage altogether, some employers are offering new higher-deductible plans, which are typically paired with tax-favored savings accounts created specifically to pay health expenses. Proponents call this approach "consumer-directed," because patients have more responsibility for paying costs and have incentives to exert more control over their care. But the study found that patients with these plans are nearly twice as likely to skip prescriptions or fail to follow up with their doctors than those with traditional insurance.
  • New York Times: For Insurance, Adult Children Ride Piggyback. By Jennifer B. Lee. Excerpts: Not only are children moving back home after college and asking Mom and Dad for monthly subsidies, but in a growing number of states children can now stay on their parents’ health insurance plans well into their 20’s. Call it another example of adultescence. With 18- to 34-year-olds the fastest growing group of uninsured, states are extending the time that children can be a dependent for insurance purposes. [...]
    About 30 percent of adults ages 18 to 24, and more than one-quarter of adults 25 to 34, are uninsured, though the average for all age groups is 16 percent, according to figures released by the Census Bureau in late August. [...]
    The rise of uninsured young adults results from two main economic forces, analysts say. Changes in the workplace mean that fewer jobs now have full benefits, which disproportionately affects the newest workers. In addition, the rising cost of premiums, whether shared with an employer or paid individually, makes insurance less attractive to a relatively healthy population.
  • The Commonwealth Fund: Squeezed: Why Rising Exposure to Health Care Costs Threatens the Health and Financial Well-Being of American Families. Excerpts: Employer-sponsored health insurance is the main source of coverage for working adults. Recently, there has been an erosion in both the proportion of workers covered under employer plans and the adequacy of such coverage, as rising health care costs have made it increasingly difficult for employers to continue offering comprehensive coverage.
    Most workers who lose access to employer health insurance have few coverage options. Many turn to the individual insurance market, where coverage is often unaffordable—and sometimes unavailable—to older adults or people with health problems. For those families who continue to have employer coverage, ever-rising deductibles and other cost-sharing are consuming larger and larger shares of family income, particularly among families with low or moderate incomes.
    The consequences are serious. According to this analysis of the Commonwealth Fund Biennial Health Insurance Survey, most adults who seek to purchase insurance coverage through the individual market never end up buying a plan, finding it either very difficult or impossible to find one that met their needs or is affordable. Compared with adults with employer coverage, adults with individual market insurance give their health plans much lower ratings, pay more out-of pocket for their premiums, face much higher deductibles, and spend a greater percentage of their income on health insurance premiums and health care expenses. Eight percent of adults ages 19 to 64 who are privately insured all year, or 8.5 million people, are covered through the individual insurance market. Only a third (34%), however, rate their coverage as excellent or very good, compared with over half (54%) of those enrolled in employer plans.


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 09/11/06: In our small group in Beaverton, Oregon, 9/7/06 was the day 7 people received their Notice of Redeployment, 5 in a test team (leaving 4 in the group and 1 was re-organized -- that is 50% ouch). We have unspecified amount of time to look for other jobs within IBM. -Anonymous-
    • Comments 09/11/06: I was given my redeployment notification today. Here's my story. 21 year IBMer, female, technical lead in a development engineering group and in a technical discipline where women are definitely a minority. I am the only one in my department not co-located with the rest of my group (but on a site where a significant portion of the work originates). I was told it was purely an "affordability statement". I asked about timeline and was told it was open ended. I was to continue to do my job but to look elsewhere within the company in the meantime. My manager could not tell me what the deadline was to find another position or what would be required to keep my current one, although if the product portfolio were to change there was the possibility I would then be needed. I was specifically told it was not a performance issue (I have always had top appraisals), and that this "redeployment" was IBM going "above and beyond" to try to find a place for top performers to be of most benefit to the company. -Anonymous-
    • Comments 09/11/06: STG is to start layoffs in RTP within the next 30 days according to my manager. He said 25% of my team will be gone in 60 days -Anonymous-
    • Comments 09/11/06: Two more teams of Indian engineers (at least two) just arrived in Fishkill, they aren't here for a sight seeing tour people, they are here for your jobs!!!!! When are ibm'ers (even you smart engineers!) going to wake up!?! ibm (and the rest of corporate USA) is selling you out and selling out America and the ONLY thing that can stop or slow them down is a union contract along with political pressure (which is only going to matter if it has money behind it) to take away the incentives for off shoring. As American citizens we have the right to decide what comes and goes across our borders and if a company wants to do business here then we citizens should decide the rules, only if we have some understanding of what we want and what the concerns are can we take action. Do any Americans want millions of jobs leaving our shores just to save a few pennies down at commie-mart? We need more people contacting their reps to tell them about the jobs leaving and how that will effect workers not to mention the tax revenue shortfall and social costs. Wake up America while you still have the chance or your children will live and die as financial slaves to offshore interests!!!! -Anonymous-
    • Comments 09/11/06: There is some speculation that ibm is trying to avoid triggering the "warn act" by giving these non specific 'redeployed' notices. The warn act states companies most give public notice if: "Mass Layoff: A covered employer must give notice if there is to be a mass layoff which does not result from a plant closing, but which will result in an employment loss at the employment site during any 30-day period for 500 or more employees"
      So they may be trying to lay off no more than 499 employees during any 30 day period of the next several months while getting rid of substantially more overall. As long as they only get rid of no more than 16 per day on average they can lay off continually and only give max 13 week packages instead of the 26 week variety and never have to notify anyone as would be required via the warn act. It’s just speculation and rumor but something the Alliance might want to have the media question ibm about. -Anonymous-
      Alliance reply: We always contact the media when job cuts happen, no matter how small. The problem is that the media usually (except for a few reporters) only reports cuts of over 1000 employees. That is why IBM plays this game. The media, by the way, are aware of what IBM is doing. We also need employees to keep us informed of cuts as well.
    • Comments 09/12/06: Yep. Same story here. Large chunk of employees here in Austin received their packets. Myself included. I heard that one of our 2nd line managers lost 30 of 80 employees. Very sad -austinite-
    • Comments 09/12/06: to the 9/11/06 female techie...look, your redeployment is a camouflage for what is about to happen to you in 2 months...SEEK employment elsewhere at IBM quickly, their redeployment to save their top performers is a JOKE, far from the truth...prep up, the inevitable is around the corner. They talk big now about "don't worry, we're here to help you find a job" won't be the same story you are going to hear in 2 months. -Anonymous-
    • Comments 09/13/06: A financial advisor on a TV talk show made this recommendation: if you think that you are at risk for a layoff, you might consider applying for a home equity line of credit while you are still employed. You will not be considered for the loan if you are unemployed. -austin-
    • Comments 09/14/06: Isn't this just ridiculous??? First it was layoffs, then skills rebalancing, then globalization, now redeployment. What will they call it next time? I'm sure I've even missed a few names for being fired, but that's what it is. I've watched it on this site for many years. My building is full of kids I don't know and kids that don't know what's going on. This will continue forever. I'm sorry but that's the truth. I am a member of Alliance but if you are and you get laid off are you still on this site fighting for your job? You find another job and move on right? Well find another job and get on with your life. It's the best thing we can all do. I've read about these layoffs for years and nothing has or will ever change. Sorry but I'm tired like so many others. -anonofcourse-
    • Comments 09/14/06: I am in Dallas with IBM, been with the company 24 + years, 3 weeks ago we had a meeting where the manager said that we all need to come up with ideas on how we can 'move' at least 25% of our job functions to India. " Everyone needs to contribute something as this will be good for us all. ".. Three weeks later, I am being let go from IBM after 25 years of dedicated service.. Their excuse is that I am not "performing well recently" what a load of bull !... talked to 2nd 3rd line and HR.. obviously they all said " hey, too bad we all agree with your manager ".
      What a shame.. they told us in the meeting that IBM Exec's are focusing on the stock price .. obviously this is one way to cut cost.. use and abuse people for 25 years and throw them away .. while the CEO's make millions for doing a lousy job.. I went to a Labor Attorney, he charged $200 for 30 mins, said that IBM is too big to sue and he can send a few letters to them.. but first he will need 10,000 ( yes ten thousand) dollars up front and his fee is 275.00 an hour !.. so once again the evil corporation wins... Screw IBM and you all should tell your friends and family never to work for them and work for a small company instead! -IBM SUCKS!-
      Alliance reply: We are seeing situations like this way to often. IBM employees should refuse to participate in their own job terminations. Don't train your replacements. Make a stand. If you want fairness, rights and a real grievance system in IBM--Organize!
    • Comments 09/14/06: I was resourced in in June of last year after 38 years with IBM. I naturally waved the 30 days to look for a job because I knew it was all a joke. The worst part is that the A.. Kissers in my department knew I was leaving before I received the phone call from my manager. Luckily I got 6 months pay, 6 months unemployment and was then able to take early Social Security.
      In reading some of the stories many of them are familiar. I and others in my department were told to come up with 10% of our work that could be given to the Indian contingent in Bangalore. Some of them were happily complying thinking they could get rid of all the tiresome stuff they didn't like to do and that IBM couldn't do without them. Needless to say the chickens or in this case cows came home to roost because then management played the consolidation game.
      The big problem with many IBM workers is that they are afraid to say anything and naively believe they are important to the company when in reality the only thing the IBM cares about is the stock price. Understandably they have mortgages, kids in college, etc. but what they don't seem to realize is that trying to keep your head down and not be noticed won't save them. I personally was outspoken which probably hastened my exit but the way I figure it you have only one life and to live it in fear of losing a job with a company that doesn't even care about you wasn't worth the supposed security.
      I check this site frequently and plan to join but as far as IBM is concerned it's good riddance. Also got rid of their non-performing stock in my 401K. If you rely on that you're be selling pencils when you retire. -Anonymous-
    • Comments 09/15/06: As a former IBM Endicott, NY, employee that was sold off to a local business cartel in 2002, now called EI, I was recently glad to know my IBM misfortunes, could be used to cheer up others recently unemployed. Maybe, other IBMers could do the same and help spread the good cheer! For you new IBMers, IBM Endicott was the birth place of IBM, which did not matter when IBM decided to discard its manufacturing operations here. The other day as I walked our dogs, my neighbor came up to me and was crying.
      She explained that the large stock brokerage firm she had worked for let her go today, after nearly 20 years. She explained that in 6 months she would have locked in her retirement medical coverage. She complained that the severance pay she received sucked! They only gave her $25,000 in severance, after nearly 20 years! She was devastated! She complained that her company offered to keep her on, if she’d take a $250.00 per week pay cut. Then maybe she could make 6 months and lock in her life long medical coverage, but no guarantee was made. She declined the offer, feeling they’d work her just long enough, to keep the medical out of her grasp!
      I consoled her and said she’d be fine. Big companies, these days, are always betraying older workers, like your company did and IBM does. My neighbor knew I was a former IBMer, sold off and then laid off by IBM’s business partner EI.
      However, we never discussed the gruesome details. I asked her, “What severance do you think that IBM gave me after 23 years, when they sold us off? What do you think the severance deal was that they gave us IBMers sold off to EI, five years ago?” She thought about it an said, “Being IBM I imagined that the severance would be fantastic, she said! You must have made out much better that I did!”
      I told her, “I received no severance, none of us did.” She commented, “Oh my God, IBM is terrible! I never realized, I always assumed that IBM always treated employees decently!”
      I explained that IBM had changed for the worse, once Watson Jr. died and a non-IBMer became CEO, that didn’t care a lick about the old IBM basic beliefs. Not only did IBM sell us out here in Endicott with EI deal; those within days and weeks of 30 years of IBM service, were not allowed to bridge an extra second, to lock in their full pensions and medical coverage….even after 29 years and 364 days and 23 hours of service, they lost up to 40% of their pension benefit, they worked decades towards!
      After this revelation about IBM, the lady began to feel sorrier for me than her. She stated, “I guess I’m getting a better deal than I realized! You poor IBMers were screwed!” The lady was visibly happier as she turned and went back into her home. I realized that as IBMers we can cheer up those being terminated! Because what IBM does to employees, is likely much worse, making their companies layoff seem like a deal…. Current and former IBMers ….. Spread the good cheer to those recently unemployed or fearing it. Tell your IBM story to them. Your IBM misfortunes could uplift others! -Poor IBMer-
    • Comments 09/15/06: IBM is now using the Separation Agreement as a means to get rid of employees who speak up. If you complain to IBM management about work conditions: abusive team lead, team mates not pulling their load, things not getting done--IBM management will silence you by getting rid of you. A pattern has been developing within this company nation-wide where you will be served with a Separation Agreement with the claim that you are not a performer or team player. The truth is there is nothing wrong with your performance or your teaming skills. IBM wants to punish you for becoming a thorn in their side. IBM wants to cover up poor management skills by removing those who mention the need for change. Beware...the brow beating begins. -IBM Victims-
    • Comments 09/16/06: The idea of this 'redeployment' as being a way of trying to keep the 'best' employees is absurd. If these people were really valued by management as 'the best' they would find them jobs, not tell them to go find their own jobs! -Ex-Beamer-
    • Comments 09/16/06: Here is the sequence of what happened to me (this is Canada). Remember not to answer any employee surveys, this is big brother, do you really believe they don't know who you are?
      1. No increases for 5 years (although got big bonuses because they could not argue that I won so many big deals)
      2. Hints that you're doing more than your current job description ("don't do so much because others will expect it from your peers") leading to
      3. Hints that you should consider another role based on your "extensive skill set"
      4. Giving you engagements with a high probability of failure while keeping the successful/easy ones for those who are brown-nosing the manager (in Canada it's inviting the boss to your cottage up north)
      5. Doing everything possible to set you up for failure
      6. Telling you it's okay NOT to put in a day's leave for personal errands ("you can work it in") and then nailing you for low utilisation
      7. Not inviting you to meetings where your peers hear about the future strategy of IBM (not that they have one)
      8. Then your manager will set up a career planning session with you to discuss your IDP; at this meeting he will tell you you're fired, you're locked out of the system, you must give back your access cards immediately plus your laptop, you get a few white bags to go get your things from your cubicle, you're not allowed to say goodbye to friends and colleagues (and they never get told about the layoff, they get to assume you resigned voluntarily), then they accompany you out of the building after you meet with a "career counselor" because your manager is too weak to face your anger. With your layoff package you need to process reams of paperwork, during which any calls to HR and your ex-manager are ignored). They don't treat you like you died, they treat you like you have the most infectious disease in the universe!
      9. You will get no references from your manager and your peers, but other senior management and your client VPs will be really shocked. However to protect their own behinds because they still work there, they will not help you find another job.
      10. You will go home and cry because you've given up your family and friends for the company, and now you have no income to pay for your mortgage and to feed your children
      11. You read about Sam's salary and you want to vomit because you realize there's no justice
      12. You can't sell your worthless IBM shares because they're continually losing value (I still got mine)
      One or two years later, you will be thankful that:
      1. You have a wonderful relationship with your spouse and children
      2. You have friends again (some gone because they didn't want to know you when you lost your job, some new, and the old faithfuls who held your hand through your trauma)
      3. Your chronic stress related illnesses have disappeared, and you have lots of energy and time to devote to your hobbies and play your favourite sport
      4. You sleep well at night because you don't fear layoff anymore (hey you survived one, you can survive another)
      5. You have your priorities in the right order, you work 40-50 hours a week instead of 70-90,
      6. You realize that you're not the dummy you were told you are, but that you have lots to contribute in the marketplace,
      7. Some find their true vocation in serving their divine Creator or in other humanitarian areas which brings healing to their soul,
      8. You're in a powerful position where IT sales reps call you daily to buy their hardware/software/services, and guess which company you will reject?
    • Comments 09/16/06: Is anybody that's being REDEPLOYED, hear how much severance we're getting? I have 29 years and was told I'd get the bridge but my manager was iffy about how much severance was involved. Did anybody get a manager to commit to the severance package? -Anonymous-
  • From the General Visitor's Comment page:
    • Comment 9/12/06: What? Sam makes 96k per week? For what? Destroying US jobs, ripping off stock holders, robbing the US treasury? What the hell is this world doing? The priorities all all SCREWED UP. This guy's rightful place is IN JAIL WITH LEG IRONS AND BUBBA. -Anonymous-
    • Comment 9/12/06: Judge Taylor forgot about our CEO, and hundreds of CEOs and executives like them when she said there are no Hereditary Kings. These CEO-Kings place themselves above the law, surrounded by their chosen lords and ladies, they have made us their serfs: they take our money, our houses, our health, our jobs, our pensions and our futures. Our families live at their whim. If we need more, our jobs are threatened with replacement by foreigners. And should we try and fight, the “Sheriff of Nottingham” is there to support their power. All the while these king live in ever-growing luxury and power. It is too bad Judge Taylor’s ruling did not include these greatest threats to our well being. -Anonymous-
    • Comment 9/14/06: Another IBM false promise! I was told by my previous managerial team that since obtaining a band 4 job classification I was on the upper salary scale grid. And the only way for me and other IBM personnel to obtain a salary increase and or promotion was to further your education and obtain a 4 year Bachelor’s Degree. After 10 years I finally received that college degree only to be told that it didn’t warrant a job advancement or salary increase.Talk about a communication breakdown!
      Where’s the incentive to continue your education ?? Now I’m finding out that there are several band 8’s without a single college credit. Also, new employees are being hired with similar education profiles as advisor engineers and no working experience. While seasoned employees are not being recognized for their established working accomplishments.If you think obtaining that college degree at IBM will advance your career . Think again! Take that college degree and run! -Anonymous-
    • Comment 9/14/06: Qualxserv never gives any raises. If anything expect a pay cut from them. The Mileage Reimbursement is nil. They ride us techs for every little thing. I received one bonus when I hired for taking extra Dell certs but since then they are non-existent. They don't seem to mind sending you 180 miles round trip at $32 a call and only reimburse you for maybe 15 miles of it. There plan is: anything over 35 is reimbursable at currently $.41/mile. So you can drive 3 calls at 180 miles round trip and make $6.00 in gas money.??? I plan to quit asap after nearly 2 years with them. I couldn't really care less if they read this and fired me. I have been bitten by a dog, wrecked my car and taken calls for other techs on a constant basis yet it wouldn't matter to them if I died out there. It would just mean MAYBE mailing my family a card and opening a new req. Just as long as the call gets closed. They don't care about their workforce period. It seems to me that QualxServ is all about union busting. That is why they are here in the first place. -Anonymous-
    • Comment 9/14/06: If IBM employees in Canada wish to organize or share information please contact: allianceibm@tngcanada.org -Anonymous-
    • Comment 9/14/06: For the first time ever in Denmark, IBM has signed a collective agreement with HK (Danish Union) covering its employees. After many years of struggle, HK succeeded in persuading IBM to sign a general collective agreement for IBM's Danish employees. The collective agreement will be valid from 1st October 2006.
      With the new collective agreement the employees of IBM are covered by one single collective agreement. During the last few years, IBM has been a part of multiple takeovers and mergers in the IT business. Some enterprises have been covered by HK's collective agreements and some have not been covered. According to IBM's HR Manager it is crucial for IBM to secure a "working conditions framework in order to provide good and equal career opportunities for all employees."
      The new collective agreement means that IBM's employees now have a shop steward, better agreements on wage during maternity leave and access to further training/education. As a part of the collective agreement IBM has also agreed that no employee will experience a deterioration of their individual working conditions on the whole as a result of the collective agreement. -Anonymous-
    • Comment 9/14/06: What is wrong with IBM management? Doesn't Sammy get it? Poor management leads to poor performance. Don't blame the loyal IBMer at the bottom of the totem pole doing his job. Don't screw him/her by this "relocate" or "resourcing" action. That is just a layoff in disguise. Fire Sammy. He is a no good for nothing leach. Get rid of this jerk. He should be cut from the IBM team for poor performance. -Sammy should be fired-
    • Comment 9/14/06: Hooray for the Danish IBMers!!! As an American IBMer I am just a bit envious... At least the Danes are more on the ball and on the level than the typical dumb ass American who thinks or has been brain washed in thinking that collective bargaining are evil words! -Anonymous-
  • Pension Comments page
    • Comments 09/11/06 by Janet Krueger: The Supreme Court only has enough capacity to review a little less than 5% of the cases appealed to them. If they choose not to review the appellate decision in Cooper v IBM it will be because they felt other cases in their incoming docket are in even more need of a review than we are. We do have some substantial numbers on our side -- with over 250,000 class members and a $1.4 billion settlement at stake, they certainly cannot claim the case is insignificant!
      The payout will not occur until the final appeal is closed. If the Supreme Court turns down the case, then payout will occur 3-6 months later -- note that the official request for a Supreme Court review won't be filed until November 2006 (our legal team has 90 days from the day the 7th circuit denied the 'en banc' review request, and they intend to use that time to pull together the best appeal possible). If they turn it down, it will be at least December 2006, and more likely mid 2007, so the earliest pay out date at this point is the end of 2007. If the Supreme Court agrees to hear the case, that probably won't happen until 2008 or 2009.
      So what is significant about November 2006? At the time the settlement agreement was reached, the legal teams calculated the fastest possible scenario for closing out possible appeals -- this would have happened if the 7th Circuit Court had issued their ruling within a month from when oral arguments were heard last February. For every month between November 2006 and the payout date, IBM has to add interest credits to the settlement pot -- so when payout finally does occur, we'll share more money than we would have if payout had occurred earlier.
      We could get the payout sooner, if the Cooper legal team were to give up and not ask the Supreme Court for a review. However, this would completely close out the possibility of dividing that extra $1.4 billion. The law is clearly on the side of the IBM employees; *IF* the Supreme Court agrees to review the case, we have a really good chance of winning. That is why we are not giving up now. Hope that helps! -Janet Krueger-
    • Comments 09/13/06: At the end of old plan 2007 my pension will be about 25K per year. My husband who is a public school teacher, his pension is at 31K and continues to grow. We got our Social Security report! I make $3.00 more per month than he will make at our golden age. I am employee with 28 years. How can this be? -How Can This Be- Alliance reply: Because your husband probably has a union contract where pension value increased every negotiation. IBM employees, with no union contract, have had pension value cut repeatedly over the years.
    • Comments 09/14/06: I hope the employee who is looking forward to IBM implementing the new 401K plan in 2008 also has experience in managing stock portfolios. The Pension freeze at the end of 2007 essentially puts all the risk of your retirement in your hands. Similar to the jokesters that push to privatize Social Security. The average American does not have the knowledge to invest wisely. Pensions were to be a secure income as promised deferred compensation. Offering a poor substitute will not secure your retirement income. Speaking of the 'new' 401K as a perk, is like jumping up and down excitedly that annual medical benefit cutbacks and increased work hours for the same pay could be a lot worse. Hoooray! -Anonymous-
    • Comments 09/14/06: You think Randy and Sammy would be content if their retirement benefits went down just as all IBM employees retirement benefits are going down? The promises made to executives are kept and even enhanced. Those made to ordinary employees are continually and habitually broken! -Anonymous-
  • IBM employees on employee raises
    • Comment 9/12/06: Lets see. Last year...no pay raise. This year I got 4%....and at the same time my retirement is being changed for the 3rd time. How is that right? What irks me is that if I leave IBM for 2 years I have to pay back my education for my degree IBM can break their verbal contract with me and change my retirement and rip me off by 2% in the new 401k....Meanwhile our IBM boss - who loves India....gets a huge pay raise...and during a time where our stock is in the tank. -Mike-
    • Comment 9/12/06: The explanation for poor raises, no raises, and reduction in salary reclassifications is the result of IBM readjusting the above market salaries that IBMers receive according to my manager. My manager said that IBMers have been historically overpaid compared to the rest of the job market and IBM is in the process of adjusting employees down to market rates for the job that they perform. -Anonymous- Alliance reply: So why haven't the bloated salaries of the executives been reduced?

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:
  • "American and Delta" by "IGS_Consultant". Full excerpt: The deals IBM's made with America and Delta are great if you live in Dallas, Chicago, Atlanta, Cincinnati, Salt Lake City, or another American or Delta hub. They're hell if you live in Denver, Minneapolis, or other city where other major airlines hub. There's nothing like being offered a connecting flight through Dallas that involves 8 hours of door-to-door travel when your "local" airline can get you there with a direct flight in 3 hours. And, it's funny how even though direct flights are "in policy", they somehow don't even appear as a choice in OTR.
    IBM's "preferred airlines" policy is just another example of sweetheart deals with travel vendors (probably with kickbacks from the airlines) are made without any regard to the customer-facing, travel all the time consultant.
  • "Actually" by "pork". Full excerpt: Did you actually say "probably kickbacks from the airlines" that is the single reason for having a preferred airline. Why else would you have one? The reduced rates only benefit the client so you need some incentive if you are IBM. The kickbacks are the incentive.
  • "Yes your (sic) right" by "gabbana2000". Full excerpt: I used to work in corporate travel...we termed them "overrides" but yes they are kickbacks and if a company is smart they negotiate them into their contract with an airline.
  • "Your (sic) welcome" by "Wok N Off". Full excerpt: Least I could do to add to the body of information the regulars have posted for quite some time. Frankly, it was very therapeutic. Although just the tip of the iceberg of issues here, the travel policy (subject to multiple interpretations due to lack of clarity and often miscommunicated by pm's) is one of the major thorns in my side due to the effort expended and required to comply. The requirements to comply with the entire package including airline, hotel, ground transportation, and meal allowances are extensive and time-consuming.
    You spend more time (personal time of course, like weekends) justifying the what, when, and why than working on the client's issues. Very frustrating. God help you if you have an exception.
  • "The business of IBM" by "Dose of reality". Full excerpt: On the services side, IBM is no longer a technology company, and it would even be a stretch to call us a marketing company. IBM is simply in the business of labor arbitrage, and there are two main ploys.
    The first is the one typified in this thread. We sell outsourcing services to companies whose IT leadership is too lazy or incompetent to fine-tune their internal capabilities to be competitive. We sell the package with a promise of lower cost and better service. Clients may be a bit skeptical, so they expect lower cost with a hope for equal service. Then we replace a group of generally dedicated, talented, versatile, and customer-oriented American born IT employees with a group of just-graduated, mediocre, one-dimensional tech-heads. We put a legalistic, contentious program manager in charge, limit resource capacity, and put the whole deal under the umbrella of a ticky-tacky scope limiting contract, backed by an army of attorneys.
    In the meantime, we suck the knowledge and life out of the acquired employees to ease the transition for the ultimate customers. In the end, the client ends up having to invest money and time to transition to a model that has a modest cost savings, a significant drop-off in service levels, and a virtual elimination of flexibility. We get upside from change requests, and the ability to dictate their technology choices. Welcome to the world of outsourcing.
    The other angle is what we are seeing in the project service business – e.g. “consulting”. The dynamic is similar, and also relies on deception, albeit with shorter cycles. We market ourselves as a blue chip, business-savvy firm, with ready made solution sets, and functional expertise to apply them to any client requirement to improve operations. What we deliver is a hodgepodge of B-player PM’s, industry application-user retreads that we recruit by giving them a slight premium to their current middle of the road salary baseline, and an army of business-ignorant tech-heads from a country noted for communication and customer service deficiencies. This is the “Other IBM” that we have been touting.
    On a side note, I had a good laugh when I saw the latest IBM ad campaign during the football game on Sunday. The commercial showed several different interspersed audiences that were eagerly anticipating some sort of unveiling. Each scene ended with a cloth being pulled off of some object, but the object was never allowed to be seen from the camera angle. What’s up with that?! I came away thinking – Does IBM even know what it’s trying to be, or what it’s trying to sell?!
  • "as revealed by Dilbert" by "Frank_Reality". Full excerpt: Check out today's Dilbert. He leaks IBM services' profitability strategy.
    Dilbert has been charged with making a profit on a job where the sales guy (Lying John) grossly underbid. Kind of like how IBM underbids a services contract to get the business.
    Dogbert recommends that Dilbert blame the customer for underspecifying the features, then charge them through the nose for change orders. Sounds a lot like IBM services "out of scope" mantra.
    In the last panel, Dilbert approaches the customer with a 3 million dollar charge for an electrical plug, saying the base model uses a potato battery. The old bait and switcheroo.
    Sounds very familiar, doesn't it.
  • "Agreed!" by "Wok N Off". Full excerpt: We under price to get our foot in the door. We staff with the cheapest, greenest resources we can find. We piss off the client that can see through the charade, due to item #2. We offer to do more for nothing (with the same resources or new people with no more talent than the previous set of resources)
    At this stage, the client doesn't trust signing anything else with us unless we have them by the b*lls and the partners are stroking the client hard. If we ever get them to this point, we might sell that big implementation deal - I would rather play the lottery, though. The whole strategy is kinda like a death spiraling, loss leader combination that never gets traction.

"The test of our progress is not whether we add more to the abundance of those who have too much; it is whether we provide enough for those who have too little." — Franklin D. Roosevelt
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