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    Highlights—November 18, 2006

  • Information Week Weblog: Why IBM Stands for India Beijing Machines. By Paul McDougall. Excerpts: If there were any doubts left about IBM no longer considering itself a U.S. company that operates internationally, but rather an international company that happens to operate in the U.S., those doubts should have been erased over the past couple of weeks.
    November's not yet half over, but already the month has seen a flurry of announcements from IBM with more international flair than the cafeteria at the UN. Specifically, IBM is focused like a laser on Asia. Based on news out of IBM this month and in recent quarters, it's not far fetched to speculate that in several years the company's combined presence across India and China will dwarf its American operations. [...]
    All of this might not be great news for IBM's U.S. employees--check out the griping over at AllianceIBM.org. Many of the company's American workers are worried about their jobs, and probably with good reason.
  • Motley Fool: The Problem Your Grandparents Never Faced. By Hope Nelson-Pope. Excerpts: They went through the Great Depression, a dozen presidents, and a couple of world wars. They endured hard times, celebrated the baby boom, and with any luck lived -- or are living -- to a ripe old age. We may have it easier in many ways here in the Digital Age, but in other ways we're shouldering one burden our grandparents didn't have to face.
    We're on our own when it comes to retirement.
  • Yahoo! message board post by "bits_bytes_and_bugs". Excerpts: In Server Group, the vast majority of those being cut are those older employees just short of the magic age 55 benchmark for the FHA. Most contractors were cut months ago.
    Manufacturing is now almost entirely staffed by on-demand supplementals - most permanent employees have been layed off.
    I have a report from one manager who stated HR selected the older employee they had to let go. The manager also mentioned that the fired employee was their best, but when the manager challenged HR, HR responding by threatening the manager's job.
    Of course, as reported elsewhere, IGS operations, application development and technical services jobs are moving offshore as fast as possible regardless of whether the global resources can perform the responsibilities. meet productivity requirements or meet quality standards.
    Whether it is true or not, executives see virtually ALL of us US employees as fungible resources - easily replaced by lower cost, global sourced, cheaper, less experienced resources. All that matters to execs is the apparent cost, not to be confused with the real cost. Skills do not matter, nor does experience or individual productivity.
    Life sucks at IBM in the US and it will get worse
  • Associated Press, courtesy of Forbes: Report: IBM Joins Citi in China Bank Bid. IBM Corp. is joining Citigroup Inc. in a bid to take a majority stake in China's Guangdong Development Bank, a news report said Monday. The reported deal would mark the first time a major U.S. technology company has taken a stake in a Chinese bank before it goes public. Chinese lenders have been popular targets for other foreign investors, such as Goldman Sachs Group Inc., American Express Co. and Allianz AG of Germany.
  • Associated Press, courtesy of Forbes: IBM Launches China Initiative. Excerpt: International Business Machines Inc. said late Monday it plans to work with China's government to help the country develop its service industry, including working with its education ministry to introduce a services science curriculum in universities.
  • CNET News: IBM's chief steps into 'Second Life' for incubator launch. Excerpts: IBM's chief executive, Sam Palmisano, is set to launch a $100 million investment to incubate new businesses--and he will make the announcement in both the physical and virtual worlds.
    Palmisano is scheduled to host a "town hall" meeting in Beijing and in the Second Life virtual world on Tuesday to tell IBM employees about the investment, which will be spread over two years. [...]
    Palmisano plans to give details of the 10 initiatives that came out of the InnovationJam in Beijing, a move that underscores IBM's commitment to working in China. Meanwhile, Palmisano's avatar will discuss the announcement in Second Life's Forbidden City, a space created in the virtual environment by IBM and the Chinese government, an IBM representative said.
  • Pension & Benefits Week: Cash balance controversy rages on as courts disagree over whether plans are discriminatory. Excerpt: Just when the heated debate over age discrimination and cash balance plans appeared to have settled down with the Seventh Circuit's Cooper decision, and the 2006 Pension Protection Act's "legalization" of cash balance plans, along comes a pair of cases from the Southern District of New York proving that nothing is so unsettled as "settled" law. While one New York court was finding that the PriceWaterhouseCoopers' cash balance plan was not age discriminatory (Laurent v. PriceWaterhouseCoopers LLP (2006, SDNY) 2006 WL 2546805), another court held that a similar plan sponsored by J.P. Morgan Chase did discriminate against older workers. (In re J.P. Morgan Chase Cash Balance Litigation, (2006, SDNY) 2006 WL 3063424)
  • Wall Street Journal: Offer for Delta Raises Questions on Some Pensions. By Mary Williams Walsh. Excerpts: US Airways’ bid for Delta Air Lines has cast new uncertainty over the pensions of roughly 90,000 Delta employees and retirees, just months after a new law was supposed to have assured their future. [...]
    In his memo to the employees, Mr. Grinstein said Delta would “continue to fund the defined benefit plan,” and cited the reduced rate allowed under the relief measure. But Delta must still secure financing to emerge from bankruptcy, and a Delta Air Lines without the pension plan might be more attractive to prospective suitors than a Delta with the plan — even with the funding relief. Few companies may appreciate that as well as Delta’s current, unwelcome suitor, US Airways. [...]
    It tried to secure a 30-year relief package for its own pension plans in 2002, but was rebuffed, first by the federal pension guarantor, which said it had no legal authority to give pension relief, and again by Congress, which let a bill specifically to help US Airways die. Faced then with having to pay the pension contributions it owed under law, US Airways defaulted on all of its plans. In the painful process, it became a much more attractive merger candidate to America West. The two airlines completed a merger in 2005.
  • Point of Law: How a lawsuit almost strangled pensions. By Alvin Lurie. Excerpts: In August the 7th Circuit Court of Appeals reversed a lower court decision which for three years had cast a long shadow of uncertainty on the employee-benefits sector of the economy. The appeals court upheld the design of IBM’s pension plan as not unlawfully discriminatory against older workers. The episode demonstrates how much damage a single lawsuit can inflict, even one that proves unsuccessful in the end. [...]
    IBM, of course, appealed. And yet the looming threat of liability was enough to play havoc with the world of pension administration. Many employers terminated or froze their plans, and many others which had been on the verge of adopting such plans pulled back. An alarmed business community began pressing for legislation to correct the judge’s reading of the law. That measure, which was included in a more general pension reform bill in Congress, was endangered for a while as both parties insisted on loading it up with extraneous provisions disliked by the other side (estate tax repeal for the Republicans), a minimum wage boost for Democrats). At last, this August 3, a clean bill received final Congressional approval. Since members had declined to give it retroactive effect, it could only safeguard plans with respect to actions they took following the new law’s effective date (and then only if they complied with certain preconditions). IBM and other plan sponsors would still face ruinous liability based on actions taken before then.
  • CNET News: Tech asks departing Republicans for favors. By Anne Broache. Excerpts: As Republican politicians return this week to Washington for the waning days of their rule of Capitol Hill, technology lobbyists are frantically pressing for last-minute legislation before Democrats take over next year.
    At issue are proposals including renewing a popular tax credit for research and development expenses and expanding the number of H1-B visas, which are temporary visas designed for skilled foreign workers. Many spending bills to fund the federal government through the next year have yet to be considered, and the final versions could include antipiracy measures and Web censorship requirements. [...]
    On Monday, more than 200 companies, universities and organizations circulated a letter supporting further action on a Senate proposal to boost the quota for H1-B visas, which proponents argue are necessary to fill gaps in their operations where qualified Americans aren't available. They said the need for action sooner than later is especially urgent because U.S. companies exceeded the H-1B quota for the next fiscal year scarcely two months after the application window opened.
  • Denver Post: Qwest gives its retirees a motive to die. By Al Lewis. Excerpts: If you are a US West/Qwest retiree and wish to collect full life-insurance benefits, you must die within seven weeks. On Jan. 1, the phone company will slash retiree life-insurance benefits from as much as a full year's pay to $10,000. This economic incentive to croak by year-end was not lost on Don Mitchell, 85, of Murray, Utah, who worked 38 years as a lineman, cable splicer and district manager.
    "On Wednesday, I was in the emergency room suffering from a perforated bowel," Mitchell wrote in an Oct. 26 e-mail to Qwest CEO Dick Notebaert. "I actually considered not having the recommended life-saving surgery. At least if I died before the end of the year, my family would receive the full life insurance that I had counted on for them!" [...]
    Mimi Hull, president of the Association of US West Retirees, says she's spoken with other retirees who are weighing medical treatments versus quiet deaths. "They're considering these medical remedies and going, 'Do I want to do this, or do I want to leave life insurance for my family?"' Hull said. [...]
    Meanwhile, corporate executives now make hundreds of times more than their average employees. And they are rarely in danger of losing their own benefits. Notebaert earned nearly $15 million in compensation last year. He recently sold $18 million worth of stock options - his first sale since joining Qwest - but says he's giving the proceeds to charity.
    On Nov. 5, Pam Barncastle of Albuquerque wrote Notebaert on behalf of her husband, Rudy, who retired in 1990 after 33 years of service. He now suffers from Alzheimer's and can't replace the insurance benefits he will lose. "He is unable to speak, bathe or dress himself," Barncastle wrote. "He ... is not aware of the changes you have made to the contract your company negotiated with the retirees back almost 17 years ago. ... Once you have the death sentence of a disabling disease like Alzheimer's, it is financially impossible ... to obtain ... additional life insurance."
  • Deloitte's Washington Bulletin, courtesy of BenefitsLink: What Will the New Congress Mean for Employee Benefits? Excerpts: One of the easier predictions to make at this point is that health policy issues will return to prominence in the 110th Congress. Specific priorities may include extending health coverage to the approximately 42 million uninsured Americans, with a renewed emphasis on implementing a universal health insurance system and/or employer mandates. Additionally, Medicare Part D could return to the spotlight. On the campaign trail Democrats talked about giving Medicare the authority to negotiate drug prices with pharmaceutical companies and using the savings to close the oft-maligned "doughnut hole" in current Part D coverage. If Congress re-opens Part D, other changes might be considered - including the 28 percent retiree drug subsidy for employers. [...]
    With the leading edge of the baby boom generation approaching retirement age, retirement policy undoubtedly will be a concern for the 110th Congress. However, the chances for comprehensive legislation relating to employer-sponsored retirement plans during the next two years are slim due to the recent enactment of the Pension Protection Act (PPA) of 2006 (P.L. 109-280), which addresses a wide range of issues relating to defined benefit and defined contribution plans. Technical corrections to the PPA are needed, and that task may be left to the 110th Congress. It is possible the 109th Congress will take up a technical corrections bill during a lame-duck session in November or December, but unlikely.
  • SmartMoney: 10 Things Your 401(k) Provider Won't Tell You. Excerpts: We're making a mint on your 401(k) — even if you're not." [...] "You're buying wholesale, but we're charging you retail."
  • PlanSponsor: Support for Family Members Alters Retirement Plans. Excerpts: A survey conducted for Putnam Investments found 15 million workers age 45 or over are providing financial support for an aging parent or adult child, and that is altering their retirement plans. [...]
    Of those providing support for grown children, 43% said they expect it will force them back to work after retirement; 38% said they expect to save less; and 29% anticipate delaying retirement. Seventy percent of respondents providing support for adult children said they did not consider that in their financial planning.
  • IndexUniverse: 25 Years of Mediocrity. By Jim Wiandt. Excerpts: I recently came across a rather glib press release trumpeting the 25th anniversary of the 401(k) plan. It noted that 47 million Americans now actively participate in 401(k) plans, compared to the 21 million who now participate in traditional defined benefit plans. Essentially, we are well on our way to a wholesale shift of risk from large entities to the individual ... the magical ownership society. And *presto poof* we kill (or maim at least) three birds with one stone: 1) nettlesome pension deficits; 2) 1,000 points of ownership light blink on; and, 3) the financial middlemen enjoy an unprecedented boon.
    Call me a skeptic, but I’ve met a lot of individual investors and financial advisors in my travels, and the level of knowledge, even among those who are paying any attention, is, well, appalling. In the 401(k) business, you end up with a potent cocktail of this investor cluelessness paired with a generally horror-show lineup of investment options in the plans. It adds up to an old joke I remember from when I was growing up in rural Ohio: “He may be small, but he sure is slow.” [...]
    In short, a system where most -- not just many -- investors don’t even have options with expense ratios under 1 percent, and where investors generally pay chunky built-in maintenance fees on top of that, is a broken system, and the recent reforms to the system are unfortunately too little, too late. We have worked ourselves into a morass of increasingly well funded interests that are essentially writing the laws governing retirement savings. Much like a medical system of unsustainably spiraling costs, there needs to be some vision and leadership in what should be a complete overhaul of the existing system.
  • BusinessWeek: Secrets, Lies, And Sweatshops. American importers have long answered criticism of conditions at their Chinese suppliers with labor rules and inspections. But many factories have just gotten better at concealing abuses.
  • Washington Post: Organized Labor Pushes Pro-Worker Agenda. By Will Lester. Excerpts: Organized labor will press for an increase in the minimum wage _ the most likely item on labor's wish list to be passed because President Bush may go along with it if certain benefits are included for small businesses.
    Labor also wants:
    • Changes in the Medicare prescription drug program to introduce price negotiations with pharmaceutical companies.
    • Changes in bankruptcy laws that allow companies to abandon pension and health care commitments to workers.
    • Trade agreements that protect workers' rights.
    • Improved mining safety laws.
    • Increased retirement protections.
    • Expanded health care.
    "One of the best ways we can address stagnating wages and lost pensions and health care is to restore the bargaining power of workers," Samuel said. The most effective way to restore that bargaining power, he said, is passage of the Employee Free Choice Act, which would allow formation of a union once there is majority support, and increase penalties for management violations of efforts to organize. Current procedures that call for an election can be drawn out by managers to allow time to campaign aggressively against formation of a union, he said.
  • BusinessWeek: HP Poised to Unseat IBM. In its fourth quarter, Hewlett-Packard's business divisions pulled together to deliver solid revenue and profit growth. Watch out, Big Blue. By Peter Burrows. Excerpt: Hewlett-Packard (HPQ) has taken a big step toward laying official claim to the title of world's biggest tech company. On Nov. 16 the Palo Alto (Calif.) company reported fourth-quarter earnings that, thanks to all its business units performing well, exceed the annual sales IBM is expected to post in its fourth quarter, which ends Dec. 31. "This has been a defining year for HP," a buoyant Chief Executive Mark Hurd told reporters during a conference call. And no, he wasn't referring to the pretexting scandal that dominated headlines earlier this fall.
  • BBC News: Computer industry 'faces crisis'. Excerpts: The computer industry faces a skills crisis, the president of the British Computer Society has told BBC News. Unless steps are taken now, there will not be enough qualified graduates to meet the demands of UK industry, warned Professor Nigel Shadbolt.
    Prof Shadbolt said there was increasing demand but decreasing supply of graduates in computer science. "If we're not careful, the UK is going to lose its pre-eminent position as a knowledge-based economy," he said. In his first major interview since taking charge this month, Professor Shadbolt warned that UK was in danger of no longer being a provider of "really major insights in the information age".
  • The Dilbert Newsletter, "The Official Newsletter of Dogbert's New Ruling Class". Issue 64.
  • Kolkata Newsletter (India): IT majors ‘alert, but not worried’ By Indranil Chakraborty. Excerpts: DON’T worry — but be wary. That seemed to be the mood among representatives of information technology (IT) majors operating in Kolkata as they gathered here today to discuss the sector-specific union being set up by CITU, the CPI(M)’s labour wing.
    After a marathon meeting this evening, the 60-odd representatives of companies ranging from IBM to Globsyn, found that this was possibly the first time they were all meeting together. While nobody was ready to come on record about the proceedings, sources said the decision that emerged was a non-confrontational stand with the “union”.
    Among the IT majors which were represented at today’s meeting were IBM, Tata Consultancy Services (TCS), and Cognizant Technology Solutions. Then there were smaller US-based players like Acclaris and Databazaar, homegrown Descon and Globsyn. These firms have activities ranging from software services to BPOs.
  • Indlaw Communications Pvt. Limited (India): First IT employees union launched. Excerpts: In what could have far reaching consequences, an employees union in the Information Technology sector was launched for the first time in the country here today. The formal announcement of the launch of West Bengal Information Technology Services Association (WBITS), the CITU-affiliated new entity, was made at a function at Salt Lake sector five, the state's IT hub. [...]
    The formation of WBITS, which had already created ripples in the state, especially among employers in the IT sector, who held a meeting among themselves last week to discuss strategies in the event of any strike in the 24-hour service sector. IT big names, including Wipro, Congnizant, Tata Consultancy, IBM and Globsyn, have their units in sector five.
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Los Angeles Times: How last century's money wars may lead to healthcare, pension reform. The boom, busts and tension between the private and public sectors that led to the modern Federal Reserve could provide a blueprint for today's reforms. By H.W. Brands. Excerpts: The secret of the Federal Reserve Act — and of the subsequent success of the Fed — was the willingness, born of exhaustion, of the two opposing camps to turn the money question over to a partly capitalist, partly democratic agency — and thereafter to keep their hands off. It's a model that works and that might be applied to other vexing problems. The healthcare and pension questions, for example, have defied solution in much the way the money question did during the 19th century. On healthcare and pensions, both the private and public sectors have strong interests in the outcome — so strong as to prevent, thus far, any outcome besides a muddled extension of the status quo.
  • New York Times: Administration Opposes Democrats’ Plan for Negotiating Medicare Drug Prices. By Robert Pear. Excerpts: The Bush administration said on Sunday that it would strenuously oppose one of the Democrats’ top priorities for the new Congress: legislation authorizing the government to negotiate with drug companies to secure lower drug prices for Medicare beneficiaries. In an interview, Michael O. Leavitt, the secretary of health and human services, said he saw no prospect of compromise on the issue. [...]
    Representative Nancy Pelosi, the California Democrat who is in line to become the House speaker, has said the House will take up legislation to repeal that ban in its first 100 hours under Democratic control. Senate Democrats have expressed a similar desire. The eight Democrats newly elected to the Senate all say Medicare should have the power to negotiate with drug makers. “The government negotiates big discounts for the prices of drugs for our veterans,” said Senator-elect Amy Klobuchar of Minnesota. “But the drug companies got Congress to make it illegal to negotiate for lower prices under Medicare.” Secretary Leavitt said he did not want the power to negotiate drug prices. “I don’t believe I can do a better job than an efficient market,” he said. [...]
    The approach that Mr. Leavitt described as unacceptable is already used in other government programs. Under federal law, drug makers must provide a discount, or rebate, equal to at least 15 percent of the average manufacturer price for most brand-name drugs covered by Medicaid, the program for low-income people. Federal law also guarantees discounts for the Department of Veterans Affairs, which negotiates with drug makers to secure discounts on top of those guaranteed by law.
  • Boston Business Journal: Light fines may hamper new health law. By Todd Wallack and Mark HollmerJournal. Excerpts: Under the state's new health insurance law, Bay State officials hope 95 percent of uninsured individuals will sign up for health insurance within three years. Whether that will happen is anything but certain.
    Experts say the penalties are so slight that relatively few additional Bay State companies will start offering health insurance. Similarly, thousands of individuals could refuse to sign up for health insurance, figuring they either can't afford the premiums or that it's cheaper to pay the fines. [...]
    Michael Ash, an economist with the University of Massachusetts-Amherst, said he thought many businesses, especially those with low-wage workers, will likely just pay the $295 fee because it's a "relatively cheap penalty" compared to the cost of offering health insurance. Ash says the $295 fine could encourage some firms to start offering health care plans and cut wages by a similar amount.
New on the Alliance@IBM Site:
  • From the Job Cuts Status & Comments page
    • Comments 11/12/06: Just heard of an engineer in Hudson Valley NY missing his 30yr window and age 55 medial by less than 30 days in a recent 're-deploy' layoff scam! He had a sick child and was racking up medical costs so out the door he went. Seems he was so caught up in family personal medical problems he didn't have the will to fight so he got cut out of hundreds of thousands in long term benefits! This company has become cruel beyond measure; the executives are now wickedly greedy in taking advantage of workers like this. It time to start calling many of our new legislators, passing these stories on and saying, remove all incentives to offshore American workers now, while there's still a small slice of middle class yet to save. And of course, keep organizing folks; wake the sheep up before the trip to the shearing tent becomes a trip to the slaughter house!!!!!!! -ibm-shame-has-no-bounds-
    • Comments 11/13/06: To: ibm-shame-has-no-bounds, they did a similar thing to me. I will never forget or forgive my manager. The company has no mercy when an employee is down and overwhelmed. To do things over again, I would have taken a leave of absence. Don't worry, what they do to others will come around back to them someday. -Anonymous-
    • Comments 11/16/06: Global Administration announced that approx. 40 people will be part of a notified redeployment, effective immediately. No "end" date was given. Anyone know how long before you go from redeployed to a resource action? What the real benefit to having a redeployment action as opposed to a good old fashioned resource action? I know IBM isn't doing this to help or benefit the employees. -Anonymous-
  • From the General Visitor's Comment page:
    • Comment 11/09/06: Heard a strong rumor that PSD has been sold to Ricoh ...announcement in late Nov./Dec...anybody else hear rumblings ? -Anonymous- Alliance reply: The alliance office has heard the same thing from Endicott workers.
  • From the Pension Comments page:
    • Comment 11/10/06: Its amazing that we still don't have a proper tool for financial planning the impact of the move of our pension to this lovely new 401K plan. How can I do proper planning and estimating without a real tool. I guess this tells me for sure I am screwed probably even worse than the almost 20K less a year I will receive. How the hell do you make up that kinda money when you are only 5 or so years from retirement??? -Anonymous-
    • Comment 11/16/06: For those 65+ retirees, Medicare advantage programs provide better medical coverage than IBM and the rates are less. My coverage is $65 per month for medical plus Part D prescription drug coverage. -Retired IBMer-
    • Comment 11/16/06: "For those 65+ retirees, Medicare advantage programs provide better medical coverage than IBM and the rates are less. My coverage is $65 per month for medical plus Part D prescription drug coverage. -Retired IBMer-" So much for IBM providing medical coverage. What a worthless slime ball company IBM has become. It is run by a bunch of arrogant managers that want to weasel out of all commitments. -Anonymous-
  • IBM employees on employee raises
    • Comment 11/10/06: Salary = 96000; Band Level = 8; Job Title = Advisory Software Engineer; Years Service = 9; Hours/Week = 50; Div Name = STG; Location = west coast; Message = Not great for this area of country, probably about 10% below market. 6% raise last year, but many in group got none. Solid 2+ performer -Anonymous-
    • Comment 11/10/06: Salary = $103K; Band Level = 9; Job Title = Sr Program Manager; Years Service = 6; Hours/Week = 40; Div Name = STG; Message = Pay was $16,000 more in 2002 and steadily downward despite 2+ rating 3 years running. I haven't had a raise in 3 years and I have an advanced degree and 18 years of experience. I used to work 65 hours per week but realized it didn't make a difference so I stopped. I am paid at least $35K under market rates for similar positions in my immediate local area. Yes, I'm looking for a job outside of IBM. Worst managed company I have ever seen. -Anonymous-
    • Comment 11/10/06: Salary = 130K; Band Level = 9; Job Title = Software Architect; Years Service = 24; Hours/Week = 40+; Location = RTP; Message = I got a decent pay rise last time but that was because I had a manager who was actually interested in his people...but he gave up and left IBM. Back to a new manager who doesn't give a damn apart from looking after his own neck. -Anonymous-
    • Comment 11/11/06: Salary = $140K; Band Level = Not at IBM; Job Title = Director; Years Service = 18 at IBM in the past; Hours/Week = 60; Div Name = None; Location = South; Message = +25% bonus, 40,000 options all valued above strike price! No Layoffs. On the way from IBM to Independence! -Anonymous-
    • Comment 11/12/06: Salary = 98k; Band Level = 8; Job Title = advisory software engineer; Years Service = 24; Hours/Week = 40; Div Name = stg; Location = pok; Message = No raise in 5 years except for the year almost everyone got a raise. -sad about what IBM has become-
    • Comment 11/12/06: Salary = $152k; Band Level = 9; Job Title = Research Staff Member; Years Service = 9; Hours/Week = 55; Div Name = Research; Location = Watson; Message = Not a manager. -Anonymous-
    • Comment 11/13/06: Salary = $70,000; Band Level = 7; Job Title = Technical Consultant (IT Specialist); Years Service = 5.5; Hours/Week = 70; Div Name = SWG; Location = UK; Message = Spent 5 years in IBM (I've been mugged) and saw 1 raise of 2% - despite scoring 2+ every year. Worked my ass off and got screwed while the ass kissers got raises and promotions. I left and immediately got a $30,000 uplift - just goes to show how underpaid people are in IBM. -Anonymous-
    • Comment 11/14/06: Salary = 93000; Band Level = 7; Job Title = Staff Software Engineer; Years Service = 5; Hours/Week = 50; Location = San Jose; Message = Joined fresh out of college 5 yrs ago. Is 93K good? -Anonymous-
    • Comment 11/16/06: Salary = $58K; Band Level = 7; Job Title = Project Office Manager; Years Service = 8; Hours/Week = 2; Div Name = I don't even know; Location = Work from home; Message = Even with all of this salary disclosure, I still have not seen a more poorly paid band 7, let alone Project Office Manager. It's funny to see people making 6 figures complaining about their low salary—all a matter of perspective, I suppose. The 2 hours a week isn't a typo. In my last 6 months at IBM (I finally left in June), I was so bitter about my pay that I spent my days playing online poker to earn supplemental income while doing the bare minimum at my job to not get fired. I was in the PSO organization (Project Support Office) which is essentially IBM's internal temp agency for Project Offices, and the Executive running the account I was assigned to had to pay PSO over $100K a year for me while I remained in the bottom 1% of band 7 salaries earning a paltry $58K. The worst part about PSO is that they would constantly send us emails asking if we had "extra cycles" to earn extra money for PSO by working an additional 10-20 hours/week on other accounts. PSO would have us charge hours to those accounts but not pay us anything for our extra efforts—a sleazier operation I have never seen. -Anonymous-
    • Comment 11/16/06: Salary = $114,000; Band Level = 9; Job Title = Bid Management; Years Service = 29; Hours/Week = 60; Div Name = ISC; Message = Band 9 for 9 years. Not happy. -Anonymous-
    • Comment 11/17/06: Salary = $305,000 (when i left); Band Level = C; Job Title = VP Development; Years Service = 20 years when I quit because I couldn't stand it anymore; Hours/Week = 40; Div Name = STG; Location = West of the Mississippi; Message = Don't whine, go find better jobs. They are out there! If you don't, you deserve what you get. -ExIBMer-
    • Comment 11/17/06: Salary = 92000; Band Level = 8; Job Title = Advisory Engineer; Years Service = 6; Hours/Week = 60-80; Message = 1 rating -Anonymous-

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:
  • "Answers to your questions" by "Dose of reality". Excerpts: Remember what I said about the way we set and use the salary offer level. We set the price point really low and just take the first X number of applicants that we need, while setting the minimum skill requirements at a similarly low level. The dynamic is about the same as it would be at a Burger King franchise. Cost preempts quality.
    On your second question, did you mean to say "conditions two and three from your previous post are NOT met"? The bottom line is it doesn't matter if you have another offer or not - you have to represent that you do have one. If you just say "I think I am worth more because of blah blah blah, you won't get any material movement. Even if you do tell them you have a competing offer for 88k, chances are that there are too many applicants that are willing to accept less. Remember the second half of the pricing rule from the previous paragraph - we set the skill requirement much lower than it should be in order to cast the widest possible net. There will be lots of less experienced, undergraduate degreed only folks that will be happy with 78k, and your recruiter won't give a rat's @$$ about the fact that you bring more to the table. They are just trying to fill seats with anyone they can at the lowest cost, because that's what we tell them to do.
    Don't be the one prized fish that gets reeled in with that wide net along with all the other barely qualified applicants. Tell them you have an offer for upper 80's and then just go find one. Consulting companies, including IBM, will bill you out at the annual equivalent of well over $300k. There is plenty of money on the table for you to get close to six figures - just not here, because we are the Walmart of professional service firms.
  • "Ask, and ye shall receive" by "Wok N Off". Full excerpt:
    • #10. Grabbing my ankles, bending over, and yelling, "Thank you sir, may I have another" is my favorite activity.
    • #9. Fulfilling career development opportunities to manage offshore resources in my native language 'round the clock abound.
    • #8. My people manager cares about me as a human being...really.
    • #7. I love the travel policy, which is flexible and affords me the most luxurious travel accommodations, be it hotel, auto, and daily living allowances. I appreciate being able to stay at five star hotels, renting a lincoln, eating surf-n-turf at every meal.
    • #6. I am often reminded by caring executives that I should be grateful to have a job here at the greatest technology company that ever existed.
    • #5. I enjoy the freedom and opportunity to innovate, share my creativity, and have my ideas pilfered by any of several willing hyenas.
    • #4. Culture, culture, culture!!! My masochistic tendencies are a perfect fit for my sadomasochistic colleagues, who are diverse, tolerant, and welcoming, thus assuring an appropriate fit for all, whatever your preference (i.e., sado, maso, or anywhere in between...or at the extremes come to think of it). We even reimburse for the leather accessories!!!
    • #3. I am assured of work/life balance cause that's what the policy says.
    • #2. I really enjoy the overhead of IDPs, PBCs, PAs, PDFAs, PDs, PCBs, LSDs, GEDs - did I miss any?
    • And the number one reason I spent more than a few weeks at IBM... the money, the fame, and ultimately-the chicks!
  • "Starting to regret taking IBM offer" by "ghosty06". Full excerpt: Just accepted an offer from IBM GBS over ACN and have already started hearing stories. I've heard the the division 7? or else the Supply Chain Management section is laying off a number of positions by Christmas. I incidentally am starting in January in the same section. I still do not have an orientation date and this has me worried. I'm trying to get in touch with my HR to fig out what is going on and am weary about the position now.
    Questions, My friend who started 5 months ago is close to jumping bands. Is this possible? He tells me also tells me if your on the bench for more than 2 weeks you will be fired. What area should I specialize in or join? SAP? I want stability and am afraid of being in an area where there is low demand. Am I just freaking out or is this what I should be expecting out of a consulting firm?
  • "Some perspective" by "Dose of reality". Full excerpt: If you have spent any time reading this board, you will know my opinion on IBM as an employment opportunity. That being said, let me offer you some perspective.
    1. We push people out all the time, based on performance, attitude, a need to right size the roster in particular skill sets, etc. At the same time we bring people into the same practice. Our hiring standards are so low, that we hire a lot of losers that just can't cut it.
    2. . If we have a surplus in your area, your start date could get delayed, depending on how your offer compares to others in your class. We will take the cheapest.
    3. Jumping bands after 5 months would only happen in the case that he was under banded to begin with. Promotions on achievement take at least 3+ years for those who were banded properly to begin with.
    4. SAP will never go out of style, and if you are good you should be able to remain chargeable. A better way to ask the question is what functional or technical areas are you interested in. The function that you consult in is much more important to long term career prospects than the tool you use. Do you just want to install SAP for your entire career, or do you want to be a supply chain or Finance functional expert? The former will limit your opportunities.
    5. IBM is not a consulting firm - we are a poorly-managed technology services firm. It is what you should expect from us.
    Let me guess – you decided to choose IBM over ACN because the base salary was a little higher, the recruiter seemed friendly, and there were more internal options available – right? None of that means anything to an entry level job, if the culture of the company sucks. Salary trajectory and bonus are more important than initial base, you will never see the snake-oil salesman recruiter again, and jumping from one position in an unfavorable corporate culture to another position will not help you develop.
    OK, hopefully, I have gotten you attention. Here’s what you do. Ramp up your job search again as a back-up plan. If you do remain on the IBM path, don’t spend any more than a couple of years here, and don’t kill yourself trying to meet performance objectives that will be meaningless. Develop some skills that you can sell and move out. Look on the experience as an extension of college. I wouldn’t call the recruiter – you will just get a bland party line.
  • "Stay or join IBM" by "sty0rgo". Full excerpt: I received an offer from IBM for a Sr. Managing Consultant position, Band 9 with a 150k annual base + 10k sign-on bonus. I am currently heading up the ERP practice for a small firm. I have 10 years managing delivery teams and small/large ERP projects but would like to get into a CIO position someday. I am only in my 30s and was thinking I should have experience working for a global IT consulting firm in a senior position to boost my credentials. Would it then make sense to join IBM or just stay in my current role?

 



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