I don't take any satisfaction in forcing companies to come clean or to go underground, but IBM did the latter. They simply stopped issuing press releases concerning U.S. layoffs or force reductions. It's not that the company didn't continue to lose U.S. workers, just that they stopped talking about it. ...
First let's look at the layoff and force-reduction picture. Too many readers are fixated on that 150,000 number and on next week being the start of 2008. I get no joy from predicting large numbers of lost jobs, and reading the old column I'm not sure it wouldn't be just as correct to put the end date in May, a year after I wrote the original piece. But no matter. It would appear from my research that IBM is well on track to meet that job loss estimate if we include U.S. contractors in the number. ...
IBM has been adding jobs like crazy this year in Argentina, Brazil, China, India and Russia -- all low-cost, low-benefit operations. In India alone, for example, the company says it has hired 20,000 additional employees in the last year, bringing IBM's Indian employment to 73,000 workers.
Curiously, IBM seems incapable, however, of producing a number for either its current U.S. employees or total world employment. How is it the company can know how many workers it employs in India yet not know how many it employs in the United States?
An old boss of mine once explained that it is always cheaper to get people to quit than to lay them off. Layoffs involve severance payments, retraining, and placement assistance, while quitting requires only accepting an ID badge and locking the door behind the departing employee. More employees have quit IBM this year than have been laid off. And it is not hard to see why. The work conditions are poor and the benefit situation is deteriorating to the extent that for many workers it may not be worth sticking around. IBM's pension plan dies next week, for example, to be replaced by a 401K plan.
One supposed IBM employee who wrote to me this week claimed his pension was untouched, yet all it takes is a Google search to give public details of the pension conversion that has been in the works for more than a year and not at all a secret. A possible answer to this paradox is that the IBM employee in question is from Europe, where local laws make it difficult to fire employees for cause, much less strip them of their retirement benefits. Or maybe he's lucky enough to participate in a second IBM pension plan that isn't being converted, a plan the company doesn't like to talk about because it implies that some IBMers are better than other IBMers. ...
There is one more aspect of IBM's medical insurance that is worth mentioning. IBM is not a good negotiator of its major business contracts. IBM does not get its various services at especially good prices. Many of IBM's contracts are usually part of a business exchange -- IBM provides hardware, software, and/or services in exchange for services from a company. On the surface it looks like a good deal. However, if you look at what IBM is actually getting and its price, it is usually not such a good deal. I suspect IBM's retirees are not getting the best possible price for their medical insurance.
And changing retirement health benefits is a good way to encourage older employees to leave the company. Why stay?
So IBM is getting rid of tens of thousands of U.S. jobs yet escapes public attention. Since most of these are experienced IT workers, one would assume they can get good jobs. WRONG! Thanks to the H1B visa program they can't. Or if they can, it is with terrible pay. The USA has more than enough IT workers for its needs. H1B shuts them out of those jobs. ...
But IBM is the poster child for bad management. IBM's leadership appears transfixed on two things -- selling and cutting costs. They are pushing their sales force very hard and squeezing commissions at the same time. They are cutting everyone and everything. What IBM does not understand is how to run a business well. Everything and everyone in the company should be generating income for the corporation. The leadership should be coaching and facilitating this effort. Every line of business should be constantly monitored and there should be constant adjustments to ensure its short- and long-term success. IBM really doesn't do this. All decisions come from the top. There is no delegation of authority. Business units can flounder for years from neglect. When their financials begin to fail, they then get lots of help from the top -- the wrong type of help.
Sadly there are many IBMers in Europe, Asia, and South America who think they are the future of the company. They see the big USA job cuts as proof THEY are better. But they aren't better, just cheaper -- and with the dollar falling maybe not cheaper for long. IBM management isn't going to listen to them either. In the end it is the CUSTOMER who pays IBM's bills and everyone's paychecks. It is not IBM or Wall Street. Business is about keeping customers happy, a trick the guys in Armonk seem to have forgotten. Or maybe they never knew.
The ruling is a significant setback to the nation’s labor unions, which argued that e-mail systems have become a modern-day gathering place where employees should be able to communicate freely with co-workers to discuss work-related matters of mutual concern. ...
“Anyone with e-mail knows that this is how employees communicate with each other in today’s workplace,” said Jonathan Hiatt, general counsel for the A.F.L.-C.I.O. “Outrageously in allowing employers to ban such communications for union purposes, the Bush labor board has again struck at the heart of what the nation’s labor laws were intended to protect — the right of employees to discuss working conditions and other matters of mutual concern.”
These challenges will shape how employers tackle an array of workforce demands, from recruiting to relocating employees to designing health care benefits. Here is a review of the most influential workforce management trends that companies will need to address in the coming year: ...
Retirement benefits: The retirement benefits landscape will likely see a resurgence of cash-balance pension plans in the next few years, now that any legal uncertainty has been put to rest with the recent passage of the Pension Protection Act. Over the past few years, many companies froze or terminated their cash-balance plans because of a 2003 U.S. District Court ruling that said IBM’s cash-balance plan violated age-discrimination laws.
As employers continue to move away from traditional pension plans, they find that cash-balance plans are more cost-effective, Glickstein says.
Call centers and other outsourced businesses such as software writing, medical transcription and back-office work employ more than 1.6 million young men and women in India, mostly in their 20s and 30s, who make much more than their contemporaries in most other professions. They are, however, facing sleep disorders, heart disease, depression and family discord, according to doctors and several industry surveys.
My eyes well up every time I watch it. I hate that. However, the gist of the story is "doing the right thing". When it comes down to making a decision, when you do the right thing, you cannot regret that decision. When I look at IBM, the IBM executives in particular, and the board of directors like Chenault of American Express, who prey on the misfortunes of vulnerable people in the name of profit, I think they are pretty much, the character of Henry Potter in the film of Frank Capra. Only driven by profit, greed, and heh heh, the woes of those going through unfortunate circumstances.
I meet people all the time of different financial well being. There for the grace of God go I. What do they have in common? Many times, it is illness, loss of job because of illness, and just bad luck. To not have empathy for those who have bad luck is a Sin.
To not have empathy for those who have bad luck is a Sin. I also meet with people who have been blessed, they do not know anyone who has lost their job, or been disabled with an illness that prevents them from working. They have had a steady stream of income that increased annually. They sometimes, categorize those who rent, live at a low income level, as lazy, unintelligent, or someone without ambition. WRONG. I suggest those of you, like Nick Donofrio, Sam Palmisano, or Randy McDonald, son of Mr McDonald, go to a mission or a food pantry and see who walks through those doors looking for support and help.
This is my Christmas Message to the IBM executives. Merry Christmas.
The Agenda for Shared Prosperity is examining every aspect of the American economy to understand its strengths and weaknesses, and to develop policies that will deliver a better result for the greatest number of our fellow citizens. Our guiding principle is that policies have to be at the scale of the problems they address.
As part of the Agenda, we have examined retirement security, and as our new Briefing Papers in this area show, the problems are enormous. Retirement security has been a key part of the American dream, and bad public policy is now playing a huge role in undermining it.
Thanks largely to Social Security, most Americans since the Second World War could expect to retire, to stop working before they die, and to enjoy several years of leisure at the end of their life. Increasingly, they could expect enough income from Social Security, pensions and other savings to maintain the standard of living they had while they worked, or at least something close to it. In fact, the average age of retirement fell dramatically from 1950 to 1970, from about 68 years of age to about 62.5 years, before leveling off. With growing unionization came shared prosperity and increasing pension coverage. Americans lived longer but were able to retire earlier.
But those golden years are disappearing. The conservative "you're on your own" philosophy—what we call "yo-yo economics"—has accelerated the decline of traditional pension plans, the disappearance of employer-provided healthcare, and, ironically, an erosion of personal savings. Today fewer than 20% of private-sector workers are covered by a traditional pension, and the national savings rate is near zero.
With fewer financial resources and fearful of losing health insurance, more and more of the elderly are remaining in the workforce. A quarter of those 65 and older worked in 1950, and by 1985 their employment rate had fallen to about 10%. Today it's 15% and rising. If we don't change federal policy, the dream of a decent retirement will be denied to more and more of our citizens, even as the productivity and wealth of the nation continue to increase. ...
The second big policy problem has been that Congress has encouraged employers to replace traditional pension plans with individual account plans, shifting both the risk of investment loss and the cost of saving for retirement from the employer to the individual worker. A real pension guarantees a steady stream of income to retired workers—it does not shift risk onto individuals who may not be able to adequately manage it.
A 401(k) plan or IRA guarantees nothing. They are, however, cheaper for employers, and they generate tremendous fees and profits for Wall Street and financial firms. They also particularly benefit the well-off. So it's easy to see how they have achieved a measure of political success. But 401(k)s do precious little for the average worker. After 20 years of experience we can say with confidence that 401(k) plans have not built broadly shared retirement security, but instead eroded it. The nation is richer than it was 20 years ago, yet Americans nearing retirement are less prepared than they were a generation ago, and the future looks even dimmer.
Demographers say thousands of people like Kerr are heading to the Rocky Mountain West in their later years. Forget the warmth of Florida and Arizona. Baby boomers, in particular, are gravitating toward the peaks and sagebrush basins of Wyoming and Montana, promising to turn these states from relatively young into two of the nation's oldest. ...
Working was what Lee and Beth Dix had in mind in 1999 when they began thinking about leaving Washington, D.C., where he was a systems analyst for IBM Corp. and she was a corporate planner for Fairchild Corp.
Lee Dix, 62, said the couple researched dozens of communities in Idaho, Montana and Wyoming, then flew to Denver and started driving. The couple ended up in Cheyenne, the first overnight stop on their trip.
The policy, set forth in a new regulation, allows employers to establish two classes of retirees, with more comprehensive benefits for those under 65 and more limited benefits — or none at all — for those older.
More than 10 million retirees rely on employer-sponsored health plans as a primary source of coverage or as a supplement to Medicare, and Naomi C. Earp, the commission’s chairwoman, said, “This rule will help employers continue to voluntarily provide and maintain these critically important health benefits.” ...
But AARP and other advocates for older Americans attacked the rule. “This rule gives employers free rein to use age as a basis for reducing or eliminating health care benefits for retirees 65 and older,” said Christopher G. Mackaronis, a lawyer for AARP, which represents millions of people age 50 or above and which had sued in an effort to block issuance of the final regulation. “Ten million people could be affected — adversely affected — by the rule.”
The law gives workers in defined benefit registered pension plans the right to receive bridging benefits on a stand-alone basis or up to 60 percent of their accrued pension while they continue to accrue additional benefits. The 60 percent limit will be based on the amount of lifetime pension benefits (and bridging benefits) that the employee would receive if he or she was taking full retirement.
These plans are a financial drag on Medicare as the government pays them about 12 percent more, on average, than the same services would cost in the traditional Medicare program. All too often, the private plans are an ethical horror as well.
As Robert Pear reported in The Times last week, unscrupulous insurance agents have tricked people into dropping traditional Medicare coverage and enrolling instead in private plans that do not meet their needs. Agents typically receive $350 to $600 for each patient they enroll in a private plan. Some try to boost sales by pretending to be Medicare officials, forging signatures or hiding the fact that a patient’s doctor will not be part of the private plan. Others barge into homes and use high-pressure tactics to push poor, semiliterate people into a private plan.
A large human service provider toughened eligibility for coverage in response to the new law, requiring employees to work 30 hours a week to qualify. That took away the option of work-based coverage for nearly 100 low-wage workers, but made them eligible for cheaper, state-subsidized insurance. It could reduce the company's costs while increasing the state's.
Another employer split his firm into separate corporations, each with fewer than 11 full-time employees, according to his insurance broker. That way he does not have to offer insurance, nor pay a fine.
Businesses from Boston to the Berkshires are responding to the state's landmark health insurance initiative in ways that could help it succeed - or stumble. Policy makers are watching and waiting, but said they will act if many employers dodge their obligations.
Though the governors of three big states — California, Illinois and Pennsylvania — proposed sweeping plans to restructure health care this year, none will finish 2007 with bills passed and signed. In each state, the initiatives confronted entrenched opposition from insurance and other business lobbies that made it far more difficult to build a consensus for change than in the smaller New England states that acted in recent years.
Still, the issue of health care has the ability to create the kind of stories that force reactions from candidates. Just this week, news organizations focused on a 17-year-old girl who died on Thursday hours after her insurance company reversed its decision to deny her request for a liver transplant.
Nataline Sarkisyan had leukemia and received a bone marrow transplant from her brother. But she developed complications that caused her liver to fail. Cigna HealthCare, her insurer, turned down a request earlier this month to pay for a transplant, saying the procedure was experimental. Though Cigna reversed itself in the face of protests, including a rally of 150 teenagers and nurses outside its offices, Sarkisyan died several hours later at the University of California at Los Angeles Medical Center. On Friday, her parents said they will sue Cigna.
A team of Harvard Medical School researchers assessed the effect of acquiring Medicare coverage on the health of previously uninsured adults. In the article, "Health of Previously Uninsured Adults After Acquiring Medicare Coverage" (Journal of the American Medical Association, Dec. 26, 2007), J. Michael McWilliams, M.D., and his colleagues present the strongest evidence to date that health improves significantly when people gain health insurance. For example, for every 100 uninsured adults with heart disease or diabetes before age 65, the researchers found that with Medicare coverage they had 10 fewer major cardiac complications, such as heart attack or heart failure, than would be expected by age 72. ...
"Our findings have important policy implications," the authors note in their JAMA article. "Proposals to extend insurance coverage to uninsured near-elderly adults have been introduced in the U.S. Congress and endorsed by the American College of Physicians. Providing earlier health insurance coverage for uninsured adults, particularly those with cardiovascular disease or diabetes, may have considerable social and economic value for the United States by improving health outcomes."
Does anyone ever think hard about this: Why did any company or corporation decide to offer any regular employee a pension in the first place?
Does anyone wish to answer this now? The average American worker will have no pensions and probably no retirement security unless they know the real value of what a pension provides. You can bet all CEOs and corporate executives will continue to have a pension so they can retire! Yes, they are very different than the average American worker: they demand a sure thing. They still get a sure thing. They demand retirement and retirement security without living with the fear of having their retirement income be at the mercy and whims of the bets placed in the ca$ino stock market . Why can't the average American worker WAKE UP and demand and get the same treatment??? -Anonymous-
Alliance Reply: To answer your first question: just for the record, many companies that offered a pension to their employees, during the 1950's-1970's; were trying to head off any union organizing. IBM, supposedly modeled their employee benefits and amenities after many of the major unionized workforces in the industrialized USA, for that very reason. There was a shoe company (Endicott-Johnson) in upstate NY that also offered a generous benefits package previous to IBM's model during the 1930's and 1940's. That company fought unionization as well. Ironically, even with that model, IBM Europe still had to accept trade unions and works councils within their shops in France, Germany, Italy and even Japan, that still exist today.
Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC.
Today's highly compensated executives face many difficulties, including figuring out how they can possibly spend all of the rich rewards they've earned on the backs of ordinary workers. Take a look at the insider trading of many of our IBM executives—spending the cash from all that stock "acquired at $0 per share" must be a real challenge! Or, imagine the difficulty IBM CEO Sam Palmisano will face spending his $10,000 to $20,000 a day pension when he retires!
As a way of helping out our beleaguered, modern-day robber barons this site will periodically feature "spending opportunities" that the "upper crust" of our society may want to take advantage of!
The six-acre oceanfront estate on Gin Lane includes a 13,000-square-foot, eight-bedroom main house and a 7,500-square-foot "guest house" with three bedroom suites, staff quarters and a four-car garage. With more than 400 feet on the ocean, the grounds include a pool and spa, a self-watering clay tennis court and a lily pond.
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.