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Highlights—October 27, 2007

  • InformationWeek: Judge Tosses IBM Overtime Lawsuit. A former IBM sales rep's class-action suit is invalid, said a federal court judge, because of a previous pledge not to take legal action against the company. By Paul McDougall. Excerpts: A judge has dismissed a class-action lawsuit filed against IBM (NYSE: IBM) by a former employee who claimed the tech giant owes back pay to thousands of workers wrongfully classified as exempt from overtime compensation. The judge in the case said that ex-IBMer Tom Chau cannot sue IBM for back wages because, in exchange for severance pay, he signed a contract pledging not to take legal action against the company. ...

    Chau filed a class action suit against IBM earlier this year, arguing that Big Blue was flouting California labor laws by purposely misclassifying sales workers as managers to avoid paying them overtime. Chau claimed he was forced to work more than 40 hours per week without extra compensation and was not given mandatory rest breaks, as required by California law. Despite Chesney's ruling, IBM isn't out of the woods when it comes to such claims. The company still faces at least two similar lawsuits filed by IBM workers in California. IBM has denied that it purposely withheld overtime from sales reps.

  • InformationWeek comment regarding the above article by "JohnBick". Full excerpt: The sales reps have it easy compared to some of the professional "techies" who are required to bill 2100 hours a year, regardless of their years of service. (Vacation, sick time, most education and holidays are not "billable".) Senior management refers to this as an "organizational productivity goal" but organizations, to the department level, are frequently measured on achieving this on the average. Needless to say significant pressure is placed on the individual. (I always thought productivity was "work results per unit of time", not "hours worked"!!!)
  • Fortune: Apple Worth More than IBM. Excerpt: Here’s an interesting bit of stock market trivia from 9to5 Mac. If Apple shares open anywhere near the 186 mark they passed in after-the-bell trading yesterday, the company’s market capitalization ($161 billion) will, for the first time, pass IBM’s ($156 billion).
  • WRAL (Raleigh, NC): IBM’s Italy CEO Quits, But Big Blue Denies Any Link to ‘Virtual Strike’. Excerpts: Has last month’s “virtual strike” by IBM workers in Italy claimed a big victim – as in the CEO of IBM Italia? No, says Big Blue. Yes, says the union that organized the protest by avatars representing IBM employees in the 3D online virtual world of Second Life. ...

    “Following the historical protest against IBM Italy in Second Life, on 27th September, some important developments have taken place,” UNI said on its Web site and in a statement forwarded to The Skinny. “Mr Andrea Pontremoli, IBM Italy's CEO (who personally received all of your petitions by email) has resigned. “It seems our Virtual action had an impact on his role at IBM.

    “IBM Corporation made a complaint to IBM Italy for the way they've managed the negotiations with the thousands of employees and how they've let it lead to such a harmful image for the company. “The works council hopes to return to the negotiations' table: we'll hear more at the beginning of next week.

    “A big thank you goes to all people who supported IBM Italy workers in their struggle over the last 6 weeks. From protesters who came to Second Life and joined the action, to the petitioners who wrote letters to IBM Europe management, to those who took the time to give their ideas on how to proceed when there were no visible results to our protest and to the press who covered the event in more than 30 countries which helped put pressure on IBM as well.”

  • eWeek: 5.3% Growth Expected in Starting IT Salaries. Excerpts: Starting salaries among IT pros are expected to increase by 5.3 percent in 2008, and high-demand areas such as applications or Web development, network management or database administration will see pay increases of 7 percent or higher.

    "This was not really a surprise. The strong increases are still in the application development space, especially for individuals that have those Web 2.0 skill sets. Those who can architect and develop Web spaces had the highest increases that we saw, even 7.5 percent in some titles," Katherine Spencer Lee, executive director of Robert Half Technology told eWEEK.

  • Washington Post: Companies Add Concierges to Retain Staff. By Rasha Madkour. Excerpts: Memorial Healthcare System's employees can get an oil change and their clothes dry cleaned without leaving work. General Mills workers can skip traffic and long lines when they mail packages or get jewelry repaired. And Ernst & Young staffers need only pick up a phone to have someone plan their vacation or research nursing homes for an elderly parent.

    These workplaces are part of a growing number that are embellishing their benefits packages with "concierge services" _ everything from flower deliveries and car detailing to restaurant reservations and clothes alterations.

    Perhaps no company pampers its employees as much as Internet search leader Google Inc. The Mountain View, Calif.-based company offers a diverse menu of perquisites that include three free meals a day, plus other on-site conveniences like car washes, oil changes, massages, haircuts, dry cleaning, child care and medical care. The employees have to pay for some services while Google subsidizes others.

  • eWeek: As Offshoring Gets Realistic, Can IT Workers Relax? By Deborah Perelman. Excerpts: Some people argue that the golden age of software offshoring ended in 2005. Between 1995 and 2005, when the dollar was strong and the post-communist countries were felled by low wages, there was often a 5-to-1 cost advantage borne by outsourcing IT development projects. ...

    "There was a time not very long ago when, really, you didn't have to be very smart to realize that to reduce cost, you could just ship the work to a different place, and that it was virtually impossible for a U.S.-based programmer to compete in this market," said Singleton.

    However, he said, it was a simplistic model. Now that the price advantage is disappearing, managers don't have the easy option of just moving work and hoping that cost advantages cover any inefficiencies. They have been forced to work smarter or not offshore to gain cost advantages alone.

  • BusinessWeek: The Visa Shortage: Big Problem, Easy Fix. A broken system is driving our best-educated foreign workers—talent desperately needed by U.S. companies—to Europe, India, and China. By Vivek Wadhwa. Excerpts: The problem with H-1Bs, which were originally intended to let U.S. companies recruit highly skilled workers, is that they can be misused (BusinessWeek, 10/10/07). John Miano, of the anti-outsourcing advocacy group Programmers Guild (programmersguild.org). says these visas are frequently used to import low-level computer programmers who work at below-market salaries. Miano estimates that 56% of computer workers, who make up 45% of the H-1B pool, are in this low-skill category. Yet these visas are also used to hire highly skilled engineers, scientists, doctors, and computer-information architects.

    With the number of available visas drying up, there's no easy way for the current batch of international students to stay. This means they need to find jobs back home or in other countries. Additionally, there is already a backlog of more than a million skilled immigrants working in the U.S., mostly on H-1B visas, who are waiting for a yearly allocation of 120,000 permanent-resident visas. So we are headed for a massive reverse brain drain (BusinessWeek, 8/22/07) of skilled workers and students. ...

    Unlike many of the problems facing the U.S., this one isn't hard to fix. All we need to do is increase the number of visas that are available for international students who get job offers from U.S. companies. An even better solution is to offer these students permanent-resident visas rather than H-1Bs. In the new global landscape, we need the world's best talent on our side.

  • CNN/Money: IBM Says It Wants To Patent A New Way To Profit From Patents. Excerpts: IBM Corp. says it has dreamed up a new method for profiting from its vast storehouse of patents. And by the way, the company wants to patent the idea.

    Beyond the circularity of the concept, IBM's application is notable because the company - the world's top patent holder - has been campaigning to improve the quality of patent filings and reduce so-called "business-method" patents.

    "I think this is absolutely a business-method patent," said Barbara Fiacco, a patent attorney with Foley Hoag LLP.

    The new patent application was initially filed in April 2006, updated last April and published by the U.S. Patent and Trademark Office last Thursday. It covers what IBM calls "a system and methods for extracting value from a portfolio of assets, for example a patent portfolio."

  • New York Times: For Women, Greater Obstacles to Retirement. By Fran Hawthorne. Excerpts: Vicke Elisa was ready to jump at the offer of a consulting position — and a $40,000 raise — in Washington six years ago. But a benefits expert whom she worked with at the DeKalb County Board of Health in Atlanta stopped her short. The new job had no pension plan, the expert pointed out, whereas Ms. Elisa would be eligible for one from the State of Georgia that would pay as much as 90 percent of her salary after she retired.

    More women are doing such retirement financial analysis, for good reason. They can’t afford to retire. Whether they have a traditional pension or a 401(k) plan, women consistently enter retirement with about half as much money as men do. The explanations have been known for years. Women generally earn only about 80 percent of what men earn. That hurts because the formula for a traditional pension is based on income, while the lower earnings make it harder for women to put money aside in a 401(k). Yet those skimpier 401(k)’s must stretch over a longer time frame, as women outlive men by about five years, on average.

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
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  • San Jose Mercury-News, courtesy of Physicians for a National Health Program: Competing health insurance plans equally flawed. By Malinda Markowitz. Excerpts: It’s time to wave the warning flag on the steamroller demanding action on health care this year - no matter what it is. Rather than resulting in sound policy, the drumbeat could just as easily produce a hastily designed “compromise” that perpetuates our state’s health care crisis while stalling real reform for years to come.

    Consider Massachusetts, whose mandatory health insurance law is the model for Gov. Arnold Schwarzenegger’s proposal and which provided much of the inspiration for a similar legislative proposal vetoed by Schwarzenegger earlier this month.

    The Massachusetts law was hurriedly rushed through its Legislature last year amid clamor for passage of a law that its advocates could claim solved their health care morass while burnishing the credentials of politicians such as Gov. Mitt Romney, then in the final stages of preparing his candidacy for president.

    Today the law remains a mess. Despite tax penalties for failure to buy insurance, only 20 percent of the uninsured have purchased the mandatory plans - and 94 percent of those who have enrolled received full or partial public subsidies.

    One reason so many are willing to accept the fines is the law’s failure to control costs. Even the cheapest plans have high deductibles and co-pays, and huge gaps in coverage have eroded existing benefits for many families with modest incomes. ...

    Sadly, the main beneficiaries of a rushed “compromise” will be the same insurance companies that created the present crisis. They would harvest millions of new customers, with the government using its power and the public purse to further an insurance industry that will continue to be able to profiteer and deny care.

    We don’t have to turn just to Massachusetts to see an example of how this can lead to disastrous public policy. A decade ago, the same “consensus” pushed the hurried passage of energy deregulation. That was followed by blackouts, skyrocketing energy costs for consumers, financial calamity for the state, and open thievery by Enron and other energy corporations. Californians should demand that legislators pull the plug before we plunge into another disaster.

New on the Alliance@IBM Site:
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  • Update on Virtual strike in support of IBM Italy Employees: IBM Italy CEO Resigns! Following the historical protest against IBM Italy in Second Life, on 27th September, some important developments have taken place:
    • Mr Andrea Pontremoli, IBM Italy’s CEO (who personally received all of your petitions by email) has resigned. It seems our Virtual action had an impact on his role at IBM. IBM Corporation made a complaint to IBM Italy for the way they’ve managed the negotiations with the thousands of employees and how they’ve let it lead to such a harmful image for the company.
    • The works council hopes to return to the negotiations' table: we'll hear more at the beginning of next week.

    A big thank you goes to all people who supported IBM Italy workers in their struggle over the last 6 weeks. From protesters who came to Second Life and joined the action, to the petitioners who wrote letters to IBM Europe management, to those who took the time to give their ideas on how to proceed when there were no visible results to our protest and to the press who covered the event in more than 30 countries which helped put pressure on IBM as well.

  • From the Job Cuts Status & Comments page
    • Comment 10/23/07: Now IBM "indirectly" cuts more site services cafeteria staff: "As you are aware, the Southbury site population decreased significantly over the last year and there was a corresponding reduction in sales at the C building Snack Shop. In order to maintain our cafeteria and catering service levels we decided to close the Snack Shop. A broader selection of food and beverages will continue to be available in the CSB Cafeteria, Monday through Friday, 7:30 AM to 10:30 AM, 11:30 AM to 1:30 PM and from 2:00 PM to 3:00 PM. Questions can be directed to David Pfirman, pfirman@us.ibm.com, tl 376-4340 Regards, Joe CIGNA Services VP and Southbury Senior Location Leader 150 Kettletown Rd. Southbury, CT 06482 (203) 486-4153 email: Ragusa@US.IBM.COM"

      Well at least a site executive is admitting what I and we have known all along: that the population of Southbury has been down and is going down... hey, to him it is good news... that's why he wants to let us know that we don't need this snack shop open anymore. It's more cost savings and $$$ in his pocket. You should see Mr. Ragu's Blue Pages photo: he's got the Taj Mahal behind him in. So you don't have to be an idiot not to know who his real allegiances are!! Of course most of the IBM sheep probably think"that's so cool".. THINK TWICE now, right now. -sby_willie-

    • Comment 10/24/07: Looks like GTS server services sales and other departments will be sold to Wipro. Directors, GM's and VP's are shuttling back and forth to India. The US sales lead has been there for weeks; working out the details on how the transition will be done with a minimum of skilled slaves leaving. Word is that this will be announced in the new year. -Indian Slave in 2008-
    • Comment 10/24/07: Has everyone seen the Alliance web site front page? The IBM Italy CEO resigned; apparently as a result of the his poor handling of the "Second Life" virtual strike. Gee.. organizing CAN make a difference. What a concept! See for yourselves... http://www.allianceibm.org -frontpagereader-
    • Comment 10/24/07: Look for lots of cuts in 2008 (June timeframe) for BAND 4 support positions. Most will be offshored to India, Malaysia etc. All INTERNAL SUPPORT orgs are S*O*L. Anyone know if the resource package is now only 3 months? -Gone in 2008-
    • Comment 10/25/07: Regarding the RA package. The intentions from the management is to have the same package as the one currently offered to PBC 3/ 4 when they push you out the door.. 1 week per year of service. So much for supporting those who have been here for so long. This is one of the LAST BARRIERS to wholesale job cuts.. the cheaper it is to cut folks.. the more they will cut to make their quarterly numbers etc...Get prepared .. get a resume polished up. This way you will be prepared when you do get cut so you can accept the money and move to the next gig..Its over in the US for IBM.

      They are taking ANY role that they can feasibly take off shore. REMEMBER back stabbing Sam's promise to the stockholders as well.. He promised performance of the stock that WILL ONLY BE REALISTIC THRU DIVISION SALES AND MASSIVE CUTS..FACT We have too many internal divisions conflicting with each other competing for sales etc.. too much overlap. So instead of consolidating.. look to groups being sold.

      Just like others have mentioned Wipro.. count on more drastic cuts and group losses soon. To the lemmings that think PBC will cover you.. You cannot hide and PBC ratings do not mean squat. I was a top performer getting 1's and 2+'s for over 8 years. The difference on these cuts is now they are pruning the 7 layers of management as well.. so that same crappy feeling we have about job security ? lmao.. our managers are feeling the same. LEAN your dedication and work effort. No matter how much you bust your ass.. your efforts and dedication do not mean $hit to IBM anymore.. its over. -SoreSphincter-

  • General Visitor's Comment page:
    • Comment 10/25/07: 2008 Health Benefits enrollment opened yesterday. Premiums increase, co-pays (notable prescription drugs) increase, deductibles increase. Guess what doesn't increase ? The amount IBM pays for employees health benefits. Their costs remain unchanged. This has been stated to me by someone from IBM Netbenefits. I have it documented. All health cost increases are being passed on to employees. Thanks IBM. Someone in the benefits department is going to get a 1 PBC and a nice bonus for keeping the IBM Corporate costs unchanged for Health Benefits. It was easy. Just pass all cost increases on to employees. -Unhealthy-
    • Comment 10/25/07: Enrolled this morning and -Unhealthy- is right on track. Taking the same option for medical, dental and vision, my cost has gone up 15% just for myself. I need to look closer at the plans, but I believe the coverage levels inside my medical plan have now higher co-pays on my side required. This is going to be tough on families since our raises and income sure aren't going up as much to compensate. I'm still so far off from market value, this is another slap in the face. -Anonymous-

      Alliance Reply: IBM will continue to 'slap the face' of you and your co-workers as long as you are not organized and without any bargaining power of your own. A contract will stop the face slapping and shameful treatment of IBM employees in the U.S. As we have said before; IBM unions in Europe and Japan have been able to negotiate these issues and have them end successfully in favor of the employees. We need to organize here and now to get that power of voice in the workplace. Slap back!

  • Pension Comments page
  • Raise and Salary Comments
  • PBC Comments
  • International Comments
    • Comment 10/25/07: Country = USA; Union Affiliate = CWA Local 1701; Job Title = Sr. I/T Specialist; IBM Division = I think 1K (it'll invariably change with the next reorg.; Message = Cisco- keep fighting IBM! Don't give up. A case in point is what IBMers in Italy have done with the virtual strike. I'll support whatever action the IBMers in Ireland want to take. We all have to stand united since we know how united IBM is as a global empire that is now against us. -sby_willie-
Vault Message Board Posts:
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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.