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Highlights—July 21, 2007

  • New York Times: Profit at I.B.M. Rises 12% on Strength of Its Software. By Laurie J. Flynn. Excerpts: I.B.M. reported quarterly earnings and revenue yesterday that surpassed Wall Street estimates, with profit rising 12 percent on strong growth in software and services and renewed vigor in the American market. [...]

    “This was a really strong quarter, close to firing on all cylinders,” Mark Loughridge, I.B.M.’s chief financial officer, told analysts in a conference call. [...]

    I.B.M. software’s revenue showed the biggest gain, growing 13 percent, to $4.8 billion, in the second quarter, while revenue in the hardware division rose 2 percent, to $5.1 billion. “Software is now the largest provider of I.B.M. profit, and our most stable source of growth,” Mr. Loughridge said.

    Services revenue booked during the quarter increased 10 percent, to $8.76 billion. New service contracts, which are generally seen as good indicators of future growth, also showed marked improvement. I.B.M.’s services division signed $11.7 billion in contracts during the second quarter, up from $9.6 billion a year ago.

  • New York Times: I.B.M. Showing That Giants Can Be Nimble. By Steve Lohr. Excerpts: Two years ago, I.B.M. was stumbling. Its financial performance in the first quarter of 2005 was well below expectations and the culprit was its big technology services unit, a business under increasing pressure from lower-cost Indian outsourcing companies.

    “It wasn’t just the miss, it was that revenues were slowing in services,” Samuel J. Palmisano, I.B.M.’s chief executive, recalled in an interview.

    Since then, I.B.M. has made impressive progress. It has increasingly moved up the ladder to offer higher value corporate packages of research, software and services. This is also higher-margin business, where specialized skills matter more than price. [...]

    The financial performance of the services business has been improved partly with old-fashioned cost-cutting. After the bad quarter in 2005, I.B.M. eliminated nearly 15,000 jobs, with the biggest cuts from the services business in Europe. In the second quarter of this year, 3,500 I.B.M. workers were told their jobs were being eliminated, with sharp cuts in the services business in America. A third of the displaced employees typically find jobs elsewhere in the company.

  • Yahoo! message board post: "Re: Retirees -- old medical plan and FHA and those on Medicare" by "ibmaccountant". Full excerpt: I wonder how many 2nd choicers who gave up the older plan to embrace the cash balance plan in 1999 realize how much they gave up? I wonder how many 3rd non-choicer types realize they've been had? How many realize that the pension heist was minor compared to the medical heist? Heck there might have been even 1st choicers who took up the offer for a lump sum without doing proper financial diligence.

    The reason for the mafia raids on the teamster retirement plans in the 60's and the CEO raids on US corporate pension funds in the 80's and 90's were so successful was because we Americans as a whole are an optimistic and trusting lot to perceived proper authority and many of us can't put our arms around complex actuarial calculations. This fellow who thinks the PPA is a formal retirement is an example of a sheep that's been shorn but doesn't even realize it yet, after so many years.

    The folks at Watson-Wyatt and the employer based retirement "enhancement" coalitions were right. You can steal millions from a bank with a great set of expert thieves and get caught likely, but with the right pro-large business Supreme Court and the right political backing, all you need is some MBAs conspiring with the actuarial profession to steal billions from the American people and get away with it.

    Insolvency of the IBM Pension Fund aside, even if you know you are going to die the day after you retire with a DB plan, in only some very specific legal and financial combinatorial circumstances does the actuarial value of the annuity overcome the lump sum, especially in low interest environments at time of retirement.

    If some dissenting organization wanted to really foment a revolution that could topple the current US political system and maybe even the Government, all they need to do is easily explain to the average Joe and Mary working in large old US multinational corporations how they've been robbed "legally". There's be thousands at the gates of the White House, the Congress and the Supreme Court demanding restitution and change.

    Except for Social Security, the employee retirement protective net set up by the New Deal and the labor movements of the early 1900's have been effectively wiped out in this country. "Bait and Switch" has replaced the "Grapes of Wrath".

  • BusinessWeek: The Supreme Court: Open For Business. The Roberts Court is showing a willingness to referee corporate concerns. Excerpts: With controversial rulings on abortion and campaign finance, the current U.S. Supreme Court has waded into some of the most explosive issues in American politics. Under the leadership of new Chief Justice John G. Roberts, the high court appears to be on the verge of rewriting vast tracts of settled Constitutional law. But there's another important emerging feature of the Roberts Court that has not drawn nearly as much attention: its sympathy to business.

    Consider this: Out of 15 cases in which the U.S. Chamber of Commerce filed friend-of-the-court briefs, presenting the views of its corporate members, the chamber won 13—the chamber's highest winning percentage in its 30-year history. Indeed, the court's 2006-07 term, drawing to a close this month, has been a banner year for business, with important victories in areas ranging from antitrust and banking to shareholder suits and punitive damages. [...]

    The results in most of the Supreme Court's rulings have left business pleased. A common theme running through a number of the court's rulings, observers say, is an interest in closing the courthouse door to claims from the very start. In a case known as Credit Suisse v. Billing, for example, the court shut down a major avenue of potential litigation for plaintiffs. Other rulings raised the bar for claimants to move their cases forward. "The justices have really written opinions that say not just that businesses should ultimately win, but that these cases should go nowhere from the very beginning," says Thomas C. Goldstein, an attorney at Akin Gump.

  • CNN/Money: Dow Chemical Moves Away From Traditional Pension Plan. Excerpts: Dow Chemical Co. (DOW) on Tuesday became the latest large company to move away from a traditional pension plan. Starting in January, Dow will not offer new salaried hires its traditional pension plan. Instead, they will get a so-called cash balance account. Dow will contribute 5% of their pay, plus interest, to the account, which will vest after three years. [...]

    Active participation in traditional defined-benefit pension plans, which guarantee workers a fixed amount of income in retirement, fell to 21 million in 2005 from 29 million people in 1985, according to a Government Accountability Office report issued earlier this year.

    At the same time, active participation in defined-contribution plans, such as 401(k) plans, rose to 55 million in 2005 from 33 million in 1985 as employers increased their offerings of these plans, according to the GAO.

    "What you're doing with that change is you are shifting that risk and responsibility for retirement savings from employer to employee," said David Certner, legislative policy director at AARP. [...]

    While roughly 25% of Fortune 100 companies have similar cash balance plans, few new companies have switched to the plans since 1999, when the Internal Revenue Service stopped issuing letters that effectively approved conversions from traditional plans to cash balance ones. The agency stopped issuing the letters while it studied the effects of the conversions, including their impact on older workers, according to an IRS news release at the time. The concern then was that older workers suffered when plans changed, as the cash balance plans often gave them less retirement income than they would have received under a traditional plan. [...]

    A group of International Business Machines Corp. (IBM) workers sued the company over its 1999 switch to a cash balance plan, claiming age discrimination. Last summer, a federal appeals court reversed a lower court's finding that IBM's cash balance pension plan discriminated against older workers. The Supreme Court in January refused to review the case, which was a victory for the company and the plans.

  • Yahoo! message board post by "chz_whiz". Full excerpt: This sounds like a reasonable way to change Dow's retirement plan. Existing employees retain the plan they've worked for, and new employees will have a CB plan. Had IBM used this approach, they would have avoided breaking long standing promises, legal costs, adverse PR, and employee distrust and animosity.
  • Computerworld: Software development, eh? Canada seeks foreign tech workers Microsoft's plan to set up facility in Vancouver aids effort to fill high-tech jobs. By Patrick Thibodeau. Excerpts: O, Canada, indeed. No H-1B visa cap. An immigration system that favors tech workers. An exchange rate that puts the Canadian dollar almost at parity with its U.S. counterpart. And now an endorsement from Microsoft Corp. as a place to develop software. For Colin Hansen, minister of economic development in British Columbia, Microsoft's decision last week to open a software development center in Vancouver was proof that Canada's strategy to grow its economy is working. And it's a strategy that is very dependent on foreign workers. [...]

    One thing that's helping Canada retain jobs and create new ones is the fact that the Canadian dollar now is trading at about 96 cents to the U.S. dollar -- much higher than in years past. "When the Canadian dollar was low, frankly, the U.S. was this giant vacuum cleaner" taking technology jobs out of Canada, O'Grady said. With the two currencies at near parity, "that flow has stopped," he said. Meanwhile, wages for high-tech workers can be as much as 20% lower than what U.S. workers are paid.

    Canadians also hope that the country's quality of life adds appeal. Taxes may be higher that they are in the U.S., but Canada offers national health insurance, a good university system and much lower crime levels. For instance, there were 70 homicides last year in Toronto, which has a population of about 2.5 million. In Chicago, with about 2.9 million people, there were 452 homicides.

  • Washington Post: Disclosing Perks May Lead to Scaling Back. Firms Struggle to Defend Fringe Benefits. By Cecilia Kang. Excerpts: Gone perhaps are the days when a corporate tycoon could put a $6,000 shower curtain on the company tab. But being an executive in the Washington area last year still had its fringe benefits. From personal use of the company jet to spa treatments to chauffeurs, local business leaders last year were awarded a wide range of extras to lure them to the top ranks of their companies and to keep them.
  • HR Policy Association: Harkin Bill Links Executive Pay to Employee Pensions. Full excerpt: Building upon the inequality theme in the current Congress, Sen. Tom Harkin (D-IA) has introduced legislation that would virtually prohibit nonqualified deferred compensation plans for companies that do not maintain at least one defined benefit plan. The Restoring Pension Promises to Workers Act (S. 1725) would subject all nonqualified deferred compensation to a 20 percent excise tax, interest and penalties if the employer does not maintain at least a qualified DB plan subject to minimum participation, vesting, and benefit requirements specified in the bill. According to Sen. Harkin: “As corporate profits have soared in recent years, executives have been lavished with generous — and often excessive — benefits. Meanwhile, rank-and-file workers are having their pensions reduced or eliminated altogether."
  • Network World: Emoticon turning 25: Thank this guy :-) … or not :-( By Paul McNamara, Excerpts: When the emoticon — known by some as the “smiley face” — turns 25 years old on Sept. 19, the man recognized as having typed the first one intends to mark the occasion with a cookie.
  • California Job Wire: On the Job Front. Excerpt: Nearly two-thirds of employers that offer traditional pensions have closed their plans to new hires or frozen them for all employees, or will do so in the next two years. That’s the finding of a nationwide report by the industry-supported Employee Benefit Research Institute. A Temple University pension specialist called the report a watershed event. "There has been a steady decline in traditional pensions for two decades, but the trend is really accelerating and it’s going to accelerate even more" ...

    Most working moms prefer part-time employment, according to a survey by the Pew Research Center. Sixty percent of moms surveyed wanted to work part time, while only 21 percent said full-time work was preferable...

    Speaking before a recent IBM conference addressing IT worker stress, William Cross, CIO of Seminole Electric Cooperative, noted that IT workers endure long hours and much isolation, often for low pay. "After sacrificing time with family to build a product that may make millions for a company, many IT workers feel betrayed but are afraid to confront their employers for fear of losing their perfect job." His recommendation? A better work-life balance and 40-hour weeks.

  • The Detroit News: Powerless, retirees fear losing benefits. They remind workers, who will vote on deal, of sacrifices. By Louis Aguilar. Excerpts: Retirees are typically fiercely proud of their auto careers and staunch defenders of the United Auto Workers union. But they are growing increasingly concerned about the fate of their health care coverage and pensions during upcoming contract talks. They will have no vote on a contract that could dramatically overhaul their benefits, known as automakers' legacy costs. And many current workers say they expect to approve a deal in which everyone, including retirees, will have to make sacrifices.
  • Jim Hightower: Litigious Corporations. Excerpt: Corporate executives are always whining to congress, the courts, the media, and anyone else who'll listen that they are besieged with lawsuits, and they constantly demand laws to prevent people from suing them. But guess what group does more suing than anyone else? Corporations!
  • Jim Hightower: The Billionaires' War. Full excerpt: Massive armies are being deployed, high-powered artillery is being arrayed, initial skirmishes are already being fought, and an all-out war is a dead certainty for later this year.

    This is not in Iraq... but Washington, D.C. The warriors being assembled are not brave young soldiers, but $600-an-hour lobbyists. The fight is not on some moral high ground, but on the low, low, ground of Wall Street billionaires trying to dodge paying taxes.

    In recent years, a handful of speculators and deal makers have gotten unimaginably rich by amassing investor dollars in such arcane financial entities as hedge funds and private equity firms. Using loopholes in the tax laws, they pay less than half of the corporate tax rate and even escape paying their share into America's Medicare health system. Many renege almost entirely on their tax obligation to our society by funneling their loot into such tax-avoidance havens as the Cayman Islands.

    Now, however, congress is moving to seal off some of these loopholes – and the billionaires are squawking like a bunch of startled roosters. With a battle cry of "Save the Rich," such notorious outfits as Carlyle Group and Blackstone are assembling an army of lobbyists including former Democratic Congressman Vic Fazio, Bush's former White House political director Ken Mehlman, and former Newt Gingrich aide Leonard Swinehart.

    Billionaire tax dodgers are an embarrassment to themselves. And, at a time when America has real soldiers facing death in a war that is draining our public treasury, it is a moral disgrace for these Wall Street elites to be lobbying for nothing more noble than their own greed. Rep. Sandy Levin has introduced H.R. 2834 to make such shameless hustlers pay their fair share of America's tax needs To learn more, call his office at 888-810-3880.

  • Jim Hightower: Roping in CEO Pay. Excerpts: Among rank and file workers of major corporations, "CEO" is a four-letter word. That might not surprise you, but how about this: "CEO" has also become a four-letter word among corporate shareholders.

    The top dogs routinely lift their legs on employees – knocking down wages, taking back health care and pension benefits, and offshoring jobs, even as the workers have dramatically increased productivity. Less known, however, is that the top dogs are also lifting their legs on the shareholders who own the corporations. What's going on is that CEO's have been fattening their own paychecks, which are paid by the shareholders, even when they deliver mediocre to miserable financial results.

    Angry shareholder groups have been demanding more say over these ridiculous executive pay packages. CEO's have given a curt "no" to this demand, so Congress is now considering a very modest bill to give shareholders a voice. It would allow those who own the corporation to take a non-binding vote each year to express their approval or disapproval of the amount of their money that the top executives are taking in pay. Is that too much to ask?

    "Yes!" shrieked the pampered CEO class. Owners should be seen, not heard, they insisted. The head of the lobbying front for executives of the biggest corporations rushed to Capital Hill to tell Congress that, "Corporations were never designed to be democracies." He wailed that, "While shareholders own a corporation, they don't run it."

  • CNN/Money: Turning our backs on tech. Corporate America has to make IT jobs sexy again, or suffer the consequences, says Fortune's Geoff Colvin. Excerpts: In the global battle for infotech supremacy, is America surrendering? Recent evidence suggests that the U.S. is at least thinking about giving up. I'm talking not just about America's ability to produce the fastest chip or most popular software but also about something potentially even more serious: the ability of all businesses to be world-class users of information technology.

    "As a nation we need scientists and engineers if we're going to be successful," says Microsoft research chief Rick Rashid. "All the new businesses are built around that." The trouble is that U.S. companies haven't developed nearly enough qualified chief information officers. And at the talent pipeline's beginning, America's kids have concluded that infotech is a dead-end field for nerd losers, and they're avoiding it like last month's ringtone. [...]

    The more worrisome problem is what's happening with the kids. Moving herdlike, as usual, they've decided that IT is excruciatingly uncool. Of course it was the coolest thing on the planet just seven years ago, when interest in computer science as an undergraduate major hit a 20-year high. But then a lot of things happened. The dot-com boom went bust at just the time companies stopped hiring staff to fix Y2K problems. More important, the pop culture image of infotech workers flipped from dot-com billionaires in Gulfstreams to Dilbertesque drones writing code in cubicles and Third World masses working for pennies an hour. [...]

    But is it really a problem? After all, if Indians, Chinese, Filipinos, and others can do our infotech work for less, why shouldn't they? The answer is "Yes, it's a problem," because most people don't understand the reality of today's infotech work. "A lot of IT jobs in the future will deal with face-to-face interaction," says Stephen Pickett, CIO of Penske Corp. and past president of SIM. "You can't do a process analysis over the phone. You can't understand the inner workings of a corporation over the phone. You have to understand how a user wants to use software. Those are face-to-face jobs, feeling the good times and bad times, knowing enough about the company."

  • The Register (United Kingdom): The IBM ThinkPad: 15 years old today. By Tony Smith. Excerpts: The ThinkPad is 15 today. Sort of. Launched by IBM and now made by Lenovo, the black-clad laptop family quickly established itself as an icon, in many ways re-establishing Big Blue's reputation as a PC maker after years in the shadow of the clone manufacturers.

    The first two clamshell-styled ThinkPads, the 700 and the 700C, were launched on 5 October 1992. Some people claim they were announced at Comdex Fall, but that took place more than a month later, on 16-20 November. Still, the new notebooks would have had their first full public outing at the show.

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
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  • New York Times, courtesy of Welcome to Pottersville: The Waiting Game, by Paul Krugman. Full excerpt: Being without health insurance is no big deal. Just ask President Bush. “I mean, people have access to health care in America,” he said last week. “After all, you just go to an emergency room.”

    This is what you might call callousness with consequences. The White House has announced that Mr. Bush will veto a bipartisan plan that would extend health insurance, and with it such essentials as regular checkups and preventive medical care, to an estimated 4.1 million currently uninsured children. After all, it’s not as if those kids really need insurance — they can just go to emergency rooms, right?

    O.K., it’s not news that Mr. Bush has no empathy for people less fortunate than himself. But his willful ignorance here is part of a larger picture: by and large, opponents of universal health care paint a glowing portrait of the American system that bears as little resemblance to reality as the scare stories they tell about health care in France, Britain, and Canada.

    The claim that the uninsured can get all the care they need in emergency rooms is just the beginning. Beyond that is the myth that Americans who are lucky enough to have insurance never face long waits for medical care.

    Actually, the persistence of that myth puzzles me. I can understand how people like Mr. Bush or Fred Thompson, who declared recently that “the poorest Americans are getting far better service” than Canadians or the British, can wave away the desperation of uninsured Americans, who are often poor and voiceless. But how can they get away with pretending that insured Americans always get prompt care, when most of us can testify otherwise?

    A recent article in Business Week put it bluntly: “In reality, both data and anecdotes show that the American people are already waiting as long or longer than patients living with universal health-care systems.”

    A cross-national survey conducted by the Commonwealth Fund found that America ranks near the bottom among advanced countries in terms of how hard it is to get medical attention on short notice (although Canada was slightly worse), and that America is the worst place in the advanced world if you need care after hours or on a weekend.

    We look better when it comes to seeing a specialist or receiving elective surgery. But Germany outperforms us even on those measures — and I suspect that France, which wasn’t included in the study, matches Germany’s performance.

    Besides, not all medical delays are created equal. In Canada and Britain, delays are caused by doctors trying to devote limited medical resources to the most urgent cases. In the United States, they’re often caused by insurance companies trying to save money.

    This can lead to ordeals like the one recently described by Mark Kleiman, a professor at U.C.L.A., who nearly died of cancer because his insurer kept delaying approval for a necessary biopsy. “It was only later,” writes Mr. Kleiman on his blog, “that I discovered why the insurance company was stalling; I had an option, which I didn’t know I had, to avoid all the approvals by going to ‘Tier II,’ which would have meant higher co-payments.”

    To be fair, Mr. Kleiman is only surmising that his insurance company risked his life in an attempt to get him to pay more of his treatment costs. But there’s no question that some Americans who seemingly have good insurance nonetheless die because insurers are trying to hold down their “medical losses” — the industry term for actually having to pay for care.

    On the other hand, it’s true that Americans get hip replacements faster than Canadians. But there’s a funny thing about that example, which is used constantly as an argument for the superiority of private health insurance over a government-run system: the large majority of hip replacements in the United States are paid for by, um, Medicare.

    That’s right: the hip-replacement gap is actually a comparison of two government health insurance systems. American Medicare has shorter waits than Canadian Medicare (yes, that’s what they call their system) because it has more lavish funding — end of story. The alleged virtues of private insurance have nothing to do with it.

    The bottom line is that the opponents of universal health care appear to have run out of honest arguments. All they have left are fantasies: horror fiction about health care in other countries, and fairy tales about health care here in America.

  • Economic Policy Institute: Employer-provided health coverage declining for college grads in entry-level jobs. By Liana Fox and Elise Gould. Excerpt: A college degree is no guarantee of receiving health insurance on the job. Over the recent recession and recovery, college graduates in entry-level jobs (defined as employed college graduates between 23 and 27 years old) have become increasingly less likely to receive employer-provided health insurance coverage.1 The Chart below illustrates the recent trends in employer-provided health insurance for this group. Their incidence of employment-based insurance has fallen roughly nine percentage points from 1999-2000 to 2004-05, from 69.6% to 60.5%.
  • Physicians for a National Health Care Program: Upgrading To National Health Insurance (Medicare 2.0). The Case For Eliminating Obsolete Private Health Insurance. By Leonard Rodberg & Don McCanne. Excerpts: Private health insurance was an idea that worked during part of the last century; it will not succeed through the 21st Century. With jobs increasingly service-based and short-term, the large employment-based risk pools that made this insurance system possible no longer exist. Medical care has become more effective and more essential to the ordinary person, but also more costly and capital-intensive. The multiple private insurance carriers that emerged during the last century can no longer provide a sound basis for financing our modern health care system.

    Alone among the nations of the world, the U.S. has relied upon private insurance to cover the majority of its population. In the mid-20th Century, when medical care accounted for barely 1% of our gross national product, medical technology was limited, and jobs lasted for a lifetime, health care could be financed through such employment-based, premium-financed health insurance. But the time for private insurance has passed.

    Health care has now become a major part of our national expenditures. The premium for an individual now averages more than $4,000 per year, while a good family policy averages more than $10,000 per year, comparable to the minimum wage and nearly one-fourth of the median family income. As a consequence, though the US spends far more on health care than any other nation, we leave millions of our people without any coverage at all. And those who do have coverage increasingly find that their plans are inadequate, exposing them to financial hardship and even bankruptcy when illness strikes. [...]

    Supporters of insurance companies claim that they create efficiency through competition. However, the truth is that insurance industry is increasingly concentrated, with three national firms, United Health, Wellpoint, and Aetna, dominating the industry. And the high and rising cost of health care shows that whatever competition there was in the past has not worked to hold down costs.

    Supporters of private insurance also claim that it expands consumer choice. However, the choice of plans that these companies offer is not what consumers want; it is the choice of their physician and hospital, exactly the choice that private insurance plans, in the guise of managed care, increasingly deny us. [...]

    In sum, we will not be able to control health care costs until we reform our method of financing health care. We simply have to give up the fantasy that the private insurance industry can provide us with comprehensive coverage when this requires premiums that average-income individuals cannot afford. Instead, the U.S. already has a successful program that covers more than forty million people, gives free choice of doctors and hospitals, and has only three percent administrative expense. It is Medicare, and an expanded and improved Medicare for All (Medicare 2.0) program would cover everyone comprehensively within our current expenditures and eliminate the need for private insurance. This is the direction we must go.

  • U.S. House of Representatives Committee on Education and Labor Press Release: Reps. Courtney, Miller Introduce Legislation to Boost Healthcare Coverage for Workers with Chronic Illnesses. Bill Would Increase Access to Comprehensive Health Care for 94 Million Americans. Excerpts: U.S. Rep. Joe Courtney (D-CT), joined by U.S. Rep. George Miller (D-CA), unveiled new legislation today that would protect workers with chronic illnesses and pre-existing medical conditions from losing health care coverage when they switch jobs. The bill, H.R. 2833, would end loopholes in current law that allow employers to refuse to provide critical health care coverage for new employees – increasing access to comprehensive health care for the 94 million American workers who suffer from chronic illnesses.

    “Americans who go to work every day to earn a living should be able to get the care they need to live their lives in the healthiest, most productive way they can,” said Miller, the chairman of the House Education and Labor Committee. “This legislation would correct a glaring injustice by ensuring that workers don’t lose health care coverage for their chronic illnesses, like diabetes and high blood pressure, when they switch jobs. I commend Rep. Courtney for introducing this important legislation, which is a huge step towards ensuring better access to comprehensive health care coverage for all workers and is a key part of our efforts to strengthen the nation’s middle class.”

  • ABC-TV News, courtesy of The Foundation for Taxpayer and Consumer Rights: When Insurance Won't Pay. Excerpt: All right. We are back with our series "GMA Gets Answers." We keep hearing these stories and we keep weighing in about people in battles with their insurance companies, whatever their doctors have said. And Chris Cuomo is back with another story this morning.
  • CNN: Tips to effectively battle your insurance company. By Elizabeth Cohen. Excerpts: Todd Robinson doesn't need Michael Moore to tell him the health insurance system in the United States is in crisis. Robinson's 7-year-old son, Bailey, suffered from adrenoleukodystrophy, a rare genetic disorder affecting the brain, portrayed in the movie "Lorenzo's Oil."

    The Robinsons say their insurance company refused to pay for $200,000 worth of medical bills. The company stamped "denied" on bill after bill, refusing to pay for countless medical services right up until the day Bailey died in 2005.

    The Robinsons are not alone. Tales of frustration with insurers abound. In an Internet survey that included 1,000 consumers, nearly one out of four said he or she had had a legitimate claim denied by their health insurance, according to PNC Financial Services Group.

New on the Alliance@IBM Site:
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  • New Collective Agreement ratified at Canadian IBM Global Services firm. Excerpts: The 240 members of Local 911, the Communications, Energy and Paperworkers Union of Canada voted 85% in favor of accepting an eleventh - hour contract offer from ISM Information Systems Management Canada on June 21, 2007. Seven days earlier this group of ISM Canada (IBM Global Services) employees had voted 75% in favor of striking after having rejected the employer's initial offer.

    The workers accepted a new two - year contract with wage increases of 4% retroactive to December 29, 2006. An additional 4% increase will occur at the end of 2007 and improvements to benefits will become effective immediately. [...]

    CEP Local 911 is an established bargaining unit that has represented Saskatchewan IT workers since 1973. It is one of two bargaining units at ISM Canada, a wholly - owned subsidiary of IBM Canada. The other group is represented in the Province of British Columbia by the BC Government and General Employees Union.

  • From the Job Cuts Status & Comments page (Note: There were a massive number of posts to this page during the last week. The following is a sampling of the large list of posts received by the Alliance@IBM.)
    • Comment 07/19/07: http://articles.moneycentral.msn.com/Investing/Dispatch/070719markets.aspx "This was a really strong quarter, close to firing on all cylinders," Chief Financial Officer Mark Loughridge said on a conference call late yesterday afternoon. Sounds like more RA's to me. I sure do think they are poising Global Services for some kind of sale. Artificially creating profits by stock buy-backs and layoffs. Hmm -Anonymous-
    • Comment 07/19/07: Hurray! Great quarter, everyone! All that hard work sure was worth it. Raises for everyone! Well, for almost everyone! Well, for a few of you. Well, for fewer of you, since there will be fewer of you. But your executives thank you. And really, at the end of the day, isn't that what life is all about? Now shut the hell up and get back to work. -Whee What Fun-
    • Comment 07/20/07: I was "resourced" 5/31 (after my mgmt team flew me out to NY for a week that same month, talk about a waste of money), however, it's the best thing that has happened to me in 7 years of service with big blew! Took a month off with package money, found a new job making 10k more a year about a week after starting to look and am absolutely loving it.

      For everyone left at IBM think long and hard about what you are actually achieving by staying around and doing your "bloated" projects which in my experience typically accomplish nothing each month other than continuous customer let down, creating jobs for technically ignorant long time ibm'ers, and excuses from mgmt on why your career (and salary) are stagnant.

      I was once told IBM is a "way" of life ... you got that right! I finally gave that life up and now after only 1-2 months in a new career am more successful than I was in over 7 years with IBM and am actually smiling while at work. Maybe it’s not IBM, maybe it’s simply big business and sell out CEO’s who care more about the money in their pocket than the sweat and tears put in by their dedicated (not to mention fellow American) employee’s.

      IBM just isn’t what it was, I agree it used to be THE place to work, something to say with pride, now it's simply comedy. Sorry to say but in my opinion a union won't do anything, the company (and its name) is garbage now. To end my rant, thanks IBM (and all of my fellow (ex)co-workers for training me only to let me go so another company can reap the benefits of IBM, now that's lean (only I leaned IBM out of my life) ;) -Thank you IBM and thank you LEAN!-

    • Comment 07/20/07: there will be a layoff at the end of july of 1500 people from the poughkeepsie and fishkill sites. local police told to assist in removal of employees if neccessary.does anyone have more information on this.. -Anonymous-
    • Comment 07/20/07: I work in the Rational brand of SWG. Engineer. Our director recently sent email to the group extolling the virtues of "agile" programming. Much of the material he recommended was related to the LEAN process. How worried should we be? We're already offshoring projects, so that's nothing new. Expect to see it accelerate? Is LEAN being pushed from the top of IBM, and some divisions just choose to use it as the justification for what they'd already planned to do (chop-chop)? While others really try to use it for what value it has? Or is it a corporate-wide chop-chop strategy, couched in happy-looking wrapping? I note that the director mentioned scheduling "agile training" for us next month. If it's the Poppendiecks, should I just jump out the nearest window and save them the trouble? :-) -Anonymous-
    • Comment 07/20/07: In companies where employees can trust the management to do the right thing, a union is not needed. When a company degrades to the point the workers can't trust management, the workers need a union. Looking at history, the American auto companies were non-union and fairly decent places to work until the depression, when the auto companies massively abused their workers. Due to that abuse, the UAW was formed. As I used to so say to my IBM managers (much to their chagrin): "Workers unionize when management fails them." Needless to say, IBM needs a union! -ExRochBeamer-
  • From the General Visitor's Comment page:
    • Comment 07/15/07: PDM's were RA'd in GTS - ITS (div 23). They removed the PDM model and went back to a traditional manager model. PDM's who didn't find jobs had their last day on 6/29. -Ex-PDM-
    • Comment 07/15/07: Almost all the PDMs (around 70%) and a few RDM's (about 15%)in IGS GTS sales and delivery have been RA'd. The rest will either be made into delivery or sales leaders or be RA'd in the planned 9/1 RA. -GTS Grunt-
    • Comment 07/16/07: Our department of about 22 people moved our data center to a new location over the weekend. We went from shared offices, to a cube farm in a renovated warehouse. The noise level is too high for the level of concentration we need for our work (it might be saving IBM money in real estate, but it's hurting them in our productivity). It's really a mess from the lighting (ceiling is up about 22 feet) to smells coming out of floor drains in the bathrooms. Signs in the bathroom above each toilet say "Please FLUSH after use". I'd hope we're hiring people that know how to at least do that. But I guess it could be worse. Another smaller department busted their rear ends all weekend to move their equipment, and management thanked them in a meeting today by changing their job titles to a lower level. I guess they had to find the money for the stock buyback and Sam's raise somewhere! What a great thing to tell these people after they've moved. I guess it's good management waited until after the work was done to tell them the news. -Anonymous-
    • Comment 07/18/07: Wonder how IBM made their 2nd qtr. results? A good part of it was the lack of decent raises given out on June 15th. What IBM didn't give you for working your arse off for them is what went to the profit. And guess who is going to get real big bonuses now? Not you! But Sam and his boys. So just work harder IBMers! Give up more of everything for your beloved company and the way IBM will say thank you is cut your benefits and give you less and less. And maybe an extra thank you when you get LEANed before September is through. A contract would level the playing field and give us our share of the quarterly profits. Are you interested? -Anonymous-
    • Comment 07/21/07: The team based decision meetings are to be held next week. Can anyone tell us more about it? Did we ever have it years ago? As far as I understand, every 1st line manager and their 2nd line manager are discussing and determining the ranking of their fellow employees. -Team Based Decision-
  • Pension Comments page
    • Comment 07/18/07: I wouldn't be surprised IBM will not only freeze the pension plan on 1/1/2008 but they will terminate it if it saves them money and just give everyone who is vested for a pension the lump sum and be done with it just to save paying the paltry interest credits on the frozen pension balances. -Anonymous-
    • Comment 07/18/07: i work at east fishkill. ive been with the company 28 years. i remember about 20 years ago reading on the bulletin board at work that ibm had 27 billion in the pension fund. now they say they have 2 billion. to say they screwed the employees is an understatement. they stole our pension, plain and simple. -Anonymous-
  • Raise and Salary Comments
    • Comment 07/16/07: Salary = $42.900; Band Level = 6; Job Title = IT Specialist; Years Service = over 6; Hours/Week = 40; Location = Canada; Message = I started drinking already. I'm getting screwed year after year. Oh yes, the Salary is in Canadian dollars. Sorry band 6 for dropping your average. -Test-
    • Comment 07/16/07: Here is the monthly salary survey update.
      • Band 2: 3 respondents, avg: $35K, standard deviation: $9K, range: (min/max reported): $24K to $40K
      • Band 3: 1 respondent, $25K
      • Band 4: 11 respondents, avg: $46K, standard deviation: $11K, range: $32K to $60K
      • Band 5: 3 respondents, avg: $58K, standard deviation: $16K, range: $48K to $77K
      • Band 6: 28 respondents, avg: $62K, std dev: $8K, range: $48K to $79K
      • Band 7: 59 respondents, avg: $71K, std dev: $14K, range: $49K to $110K
      • Band 8: 60 respondents, avg: $99K, std dev: $16K, range: $60K to $130K
      • Band 9: 30 respondents, avg: $118K, std dev: $17K, range: $89K to $152K
      • Band 10: 11 respondents, avg: $148K, std dev: $25K, range: $107K to $190K

      Notes: It has been reported that the "official" range for band 8 (Software Engineer, 01A) is 60K to 144K; - I have added Bands 2, 3, and 5 for completeness, even though the number of respondents is small; - Only US respondents figure in the above since there is too much fluctuation in exchange rates to take into account non-US salaries. -Anonymous-

    • Comment 07/17/07: Salary = 42000; Band Level = 2; Job Title = ssr; Years Service = 10; Hours/Week = 40 to 50 any more isn't worth it; Div Name = igs; Location = central; Message = IBM means service award twice in 10 years. Told in symposium were the top 5%. The best of the best. Why doesn't compensation reflect that? 3% raise in this economy is an insult. -1 check from the poorhouse-
    • Comment 07/18/07: Salary = 64K; Band Level = 7; Years Service = 3; Hours/Week = 40; Location = Tulsa; Message = Finally got a promotion to band 7. Yee haw. Oops, there must be a error in the payroll system since I only got a 3% raise for my promotion. Seeing that this is the first raise that I've received in the 3 looong years that I've been exiled here, I guess it probably isn't an error after all. I'm sure I won't get anything next year, even though IBM just announced wonderful quarter 2 results. Time to look elsewhere. -stupid for staying-
    • Comment 07/19/07: Salary = $120,000; US Band Level = 8; Job Title = Consultant; Years Service = 1; Hours/Week = 45; Div Name = GBS; Location = NY; Message = No raise and a 2% bonus. Ex-employee by the end of the month. -Blue Moon-
    • Comment 07/19/07: To "stupid for staying": Congratulation on your promotion! But as you will see getting promoted in IBM is no big deal now. Certainly it doesn't mean big $$$ or even the potential for bigger $$$. I hope your management doesn't drop your PBC rating since now "they have raised the bar" when you got promoted. This has happened to me and has happened to others and will continue to happen as long as we don't get some protections and a fairer appraisal process through a union contract. -band_on_the_run-
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Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC.

If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

This site is designed to allow IBM Employees to communicate and share methods of protecting their rights through the establishment of an IBM Employees Labor Union. Section 8(a)(1) of the National Labor Relations Act states it is a violation for Employers to spy on union gatherings, or pretend to spy. For the purpose of the National Labor Relations Act, notice is given that this site and all of its content, messages, communications, or other content is considered to be a union gathering.