Since its announcement last month, more than 1,200 people have signed a petition sponsored by the Alliance@IBM, protesting pay cuts to 7,600 technical support employees.. Whether all these signatures are from affected employees is not certain, but many of the comments seem authentic, and often heartfelt.
Comments such as "11 years on call ... Now less money than when in started in 97," "Previous loyal employee ... No more," and "This is not fair. I did not deserve this after all my hard work," are typical. ...
Last month, IBM told workers that it was reclassifying technical services and IT specialist jobs to nonexempt positions, making them eligible for overtime. But the company said it was also making a 15% base salary adjustment -- down. ...
Lee Conrad, a former IBM employee who is now national coordinator of the Alliance@IBM in Endicott, NY, said he believes globalization may be a factor in the pay cut decision and suspects other companies will be looking at how IBM manages the pay cut. "If IBM is an indication of what's ahead, it's going to be a rough ride for American workers," he said.
But readers keep asking and there does seem to be an arm's length view of the situation that hasn't been well explained to date, so here goes.
If you aren't familiar with the story, IBM was sued several years ago by employees who were classified as exempt and therefore not entitled to overtime pay, yet those employees felt that had they worked at some other company their duties would have been considered non-exempt. IBM lost the case, paid a $65 million settlement in 2006, but took until now to decide that it ought to reduce by 15 percent the base pay of the affected employees in order to keep the settlement revenue-neutral for the company. If IBM had to pay overtime, it would tie that overtime to a lower base pay, thus keeping its costs steady.
While this probably makes total sense in the IBM accounting department, the change was a surprise to the affected workers, who say they are hurt by the lower base since it also cuts their vacation pay and IBM's contribution to their 401K. It might be easy to point to that $65 million settlement as making up for some of this, except that many IBM employees who were eligible to participate in the settlement for some reason didn't sign up for it and no longer can. Now there's a communication problem that needs exploration.
What the big picture shows here is the apparent end of IBM's tradition of respect for the individual. For most of its corporate history IBM has been a pioneer -- a model -- for corporate responsibility, but that era seems to be over. Maybe there is no more fat left to trim so the company is cutting muscle, instead. But I think there is more to it than that. I think this is a logical eventuality of IBM becoming a truly global corporation, not just an American company that does business abroad.
Despite the dark stories I have written about IBM over the last couple years, the company's latest financial reports were very good and the earnings guidance it gave to Wall Street was positively glowing. This makes little sense looking at the company from a U.S. perspective, where customers are upset and profits appear to be fleeting. Cutting through the recent IBM financials shows, in fact, that the company makes little or no money in the U.S. and quite a bit of money internationally. Nearly all of IBM's current profit, in fact, can be attributed to a single condition -- the weak dollar. International sales and profits are bigger mainly because the dollar is so much smaller than it used to be -- a condition that is likely to continue, hence the glowing earnings forecast.
Maybe what IBM is doing is turning itself into a business that is mainly NOT in the U.S. Those rosy forecasts could be based on an active plan to essentially abandon the bottom of the U.S. market in favor of the top of every international market. It hurts the U.S. employees (especially those in services) but makes sense in so many ways. The model it scarily reminds me of is Tyco, which went so far as to switch its incorporation to Bermuda.
Many companies now see corporate social responsibility as a growth opportunity rather than just a regulatory compliance or philanthropic effort, with 68 percent of those surveyed focused on generating revenue through CSR activities. In addition, 54 percent believe CSR initiatives contribute to giving their corporations a competitive advantage.
Driving these beliefs is the rising influence of customers who, thanks to their ability to research and share information on the Internet, have become highly sensitized to a broad range of issues -- everything from concerns about climate change, to product safety issues, to labor practices, to corporate financial accountability, to questions about whether corporations are returning enough of their profits to the community.
Competition is fine to a degree - as long as it doesn't devolve into pure ruthlessness and selfishness, which it has in parts of IBM.
Corporate society breaks down when the number of 1s/2+s, the number of promotions, the funding of salary plans etc. are severely and chronically starved in an anorexic desire to minimize costs. Add decreased job security, increased job demands and for some pay cuts.
At that point, everyone is looking out for themselves - teamwork and cooperation die, sabotaging of others becomes the norm. Pretension, misleading, cheating and lying become standard operating procedure. Infighting among employees and groups of employees becomes common. Organizational results plummet in a freefall.
In short, everyone starts acting like executives. Everyone and the business itself is doomed.
At the industry's annual meeting in Mumbai, executives from one company after another spoke of "the growth pangs" of rapid expansion. "Growth in our sector is linear, so if a company grew by 30%, often so did employees. When you rapidly hire, some people not suited for the job come in," said Som Mittal, president of the National Association of Software and Service Companies. ...
Since the start of the year, India’s largest IT company, Tata Consultancy Services, has asked 500 employees to leave after a performance appraisal, while IBM did the same for about 700 employees.
"A couple of years ago, employee cost structures in India were a lot lower than in other countries. So there weren’t as many firings. But now, with costs per employee rising, a company cannot afford to keep on employees who aren’t performing to par," Girish Wardadkar, president and executive director of KPIT Cummins Infosystems, told Forbes.com on the sidelines of NASSCOM’s annual conference.
And that isn’t all. "Client demands have changed as well. Five years ago, Western clients were more tolerant of the employees at Indian outsourcing companies because they were relatively new to the process. Today, if clients aren’t happy with employees at an outsourcer, they say so," he said.
GM said it would offer better terms and more choices for its already-retirement-eligible UAW workers, including increasing payouts to $45,000 for production workers and $62,500 for skilled trades workers. ...
Workers may choose a lump-sum payment, an annuity, or roll part or all of it into an individual retirement account or a 401K to postpone the tax hit and potentially make the offer worth much more than those on offer for UAW workers at Ford. ...
GM factory workers who retire after 30 years currently have pensions of about $3,100 per month, plus health benefits.
The problem lies deeper. It is the culmination of three decades during which American consumers have spent beyond their means. That era is now coming to an end. Consumers have run out of ways to keep the spending binge going.
The only lasting remedy, other than for Americans to accept a lower standard of living and for businesses to adjust to a smaller economy, is to give middle- and lower-income Americans more buying power — and not just temporarily.
Much of the current debate is irrelevant. Even with more tax breaks for business like accelerated depreciation, companies won’t invest in more factories or equipment when demand is dropping for products and services across the board, as it is now. And temporary fixes like a stimulus package that would give households a one-time cash infusion won’t get consumers back to the malls, because consumers know the assistance is temporary. The problems most consumers face are permanent, so they are likely to pocket the extra money instead of spending it. ...
The underlying problem has been building for decades. America’s median hourly wage is barely higher than it was 35 years ago, adjusted for inflation. The income of a man in his 30s is now 12 percent below that of a man his age three decades ago. Most of what’s been earned in America since then has gone to the richest 5 percent.
Yet the rich devote a smaller percentage of their earnings to buying things than the rest of us because, after all, they’re rich. They already have most of what they want. Instead of buying, and thus stimulating the American economy, the rich are more likely to invest their earnings wherever around the world they can get the highest return. ...
We also need stronger unions, especially in the local service sector that’s sheltered from global competition. Employees should be able to form a union without the current protracted certification process that gives employers too much opportunity to intimidate or coerce them. Workers should be able to decide whether to form a union with a simple majority vote.
And employers who fire workers for trying to organize should have to pay substantial fines. Right now, the typical penalty is back pay for the worker, plus interest — a slap on the wrist.
Rather than having a National Health Service as exists in the UK (courtesy of the socialist vision of Nye Bevan in 1948), funded through taxes where everyone - and I mean everyone - can have a consultation and receive treatment if deemed necessary, you have scant chance here of being treated properly for anything unless you have sufficient health insurance.
This said, however, in my experience the treatment, if you can afford the insurance cover, is first rate. There are no waiting lists, appointments can be made for the day you call (so that you actually get to see a doctor whilst you are ill and not a week later) and surgeries are pleasant and well stocked with current copies of People magazine - my gossip rag of choice. (Editor's note: In England, doctor's offices are called "surgeries."
But it really is a minefield. The first hurdle occurs when choosing insurance cover. There are many forms of insurance, which range from the all-singing-all-dancing cover which we receive as part of our expat package, where we are covered from tip to toe with just a limit on dental claims, to different schemes, including Co-Pay where the patient is liable for a certain percentage of costs incurred.
Do you take the chance, have limited cover and still be able to afford to go on vacation or do you insure yourself up to the eyeballs and no longer wear shoes? Television commercials for health insurance are prolific - it really is a big deal and worth billions of dollars a year.
It is extremely commonplace here for employers to provide health cover as part of a salary package, which is why the rumour goes that Americans fear losing their jobs more than they fear much else.
Monthly cover for a family can be horrifyingly expensive. The husband of an American friend of mine, for example, has recently become self-employed and his monthly family health insurance premium now costs more than their monthly mortgage repayment. We Brits don't think about that alternative when we are complaining about the NHS.
I’m both a health-care-card-carrying Canadian resident and an uninsured American citizen who regularly sees doctors on both sides of the border. As such, I’m in a unique position to address the pros and cons of both systems first-hand. If we’re going to have this conversation, it would be great if we could start out (for once) with actual facts, instead of ideological posturing, wishful thinking, hearsay, and random guessing about how things get done up here.
To that end, here’s the first of a two-part series aimed at busting the common myths Americans routinely tell each other about Canadian health care. When the right-wing hysterics drag out these hoary old bogeymen, this time, we need to be armed and ready to blast them into straw. Because, mostly, straw is all they’re made of.
Editor's note: This is a must read article!
You wouldn't get to see a full contract until you plunked down your cash. Your monthly car payment would go up 20 to 30 percent every year, and, by the way, the steering wheel might be extra.
The auto industry doesn't work like that, of course, but the market for people who buy their own health insurance does.
"I have been living with a dark cloud over me, thinking I am one illness away from poverty," says Kathie Baughman, 57, a self-employed title searcher, of Howard, Pa. She couldn't get individual health insurance because she takes medication for high blood pressure and once had a lab test that detected slightly high blood sugar. ...
People who consider themselves in fine health can be declined insurance because of previous treatment, even for conditions such as hay fever and acid reflux. ...
Reforming the health insurance system and reducing the ranks of 47 million uninsured Americans have emerged as major issues in this year's presidential race, with some candidates proposing to use tax breaks and the individual insurance market to solve the problem. But the stories of many consumers who struggle with high costs and a lack of access to individual health insurance because of medical conditions underscore the hurdles that must be cleared.
Sound far-fetched? Take a closer look, starting with the millions of Americans staring at the loss of their homes due to the sub-prime loan debacle. It's not a loan or a mortgage crisis for those families; it's a debt crisis being forced upon them by the banks, hedge funds, and insurers who are desperate to shift their own mammoth debt onto someone else.
Banking, other financial institutions, insurance and real estate which make up the finance sector, now account for about half of U.S. corporate profits. And, they are in trouble with more than $2.5 trillion in outstanding consumer credit, $800 billion of that in credit card debt, and another $10.1 trillion in domestic mortgage debt.
Being thrifty won't solve that problem. The financial planners have identified two lucrative pots of money. Trading carbon credits for industries and employers that want to brand themselves as green while continuing to pollute. And, making a killing in health care, currently 16 percent of our national economic pie and rapidly growing. ...
Compelling people to buy insurance, however, is not the easiest sell. Big insurers and HMOs have a well deserved bad reputation for heartless denials of care - that's how they make money. And, it's pricey. Premiums the past decade have gone up 87 percent, not to mention the ever climbing bills for deductibles, co-pays, and a host of other transaction fees.
The finance industry is over the moon with this scheme. For insurers, it means millions of new customers marched into their offices with the force of law. With no controls on costs, many consumers will just add on more debt. That's a boon for the credit card companies and other financial institutions, but a heavy new burden on many of the same people now losing their homes or struggling with other financial hardship. ...
But "having" insurance is not the same as being able to use it. You're only being mandated to purchase the premiums; they're not mandating the insurance companies to make sure you get the care you need. Nor does "having" insurance protect you from financial ruin. ...
It accelerates the dismantling of group insurance plans with individuals forced to go it alone in the individual market, and institutionalizes risk and cost shifting on to the backs of individuals and families. It distorts the role of government, which should be to protect people, not act as an insurance agent.
But there may be hope on the horizon. Lured by the baby boomer generation's size and affluence, a number of insurers have begun to market policies specifically geared to the 50-to-64 age group. Some of the nation's largest health insurers – Aetna, Humana and WellPoint – are introducing more comprehensive products designed for people who were used to benefit-rich plans in their jobs.
Consumer advocates are cautious about the new individual plans, wondering whether they will do any good for older adults who haven't been able to purchase affordable coverage because of pre-existing conditions. Prices will remain high, the advocates predict, and many chronic conditions will still be excluded. ...
Early retirees without employer-subsidized coverage can expect to spend an average of 40 percent of their pre-retirement income for their medical expenses, according to the Commonwealth Fund. "For the pre-Medicare crowd, one serious illness or injury could wipe out their savings and drive them into bankruptcy," said Sara Collins, a health insurance expert with the group.
Nevertheless, it was a unique meeting to have both Senators explain their bill and to sit with an audience for an hour to answer questions. The first tip off was that the forum was sponsored by AmeriHealth, a large Medicaid HMO. The Mayor of Philadelphia (who will be featured this Wednesday on ABC News with Charles Gibson) came to thank them for coming and stating his gratitude that someone in Washington was working on this problem. He came short of actually endorsing the bill however and conveniently left. ...
Despite these rumblings, I think it is pretty clear that the American people want single payer. It is the politicians who are out of tune with this. We will need to do a lot more educating about this. The impending recession may cause millions more Americans to lose their health insurance. Simply requiring them to buy insurance is not a solution in the face of a recession and we should demand that Congress create a real safety net, not one based on the fantasy that everyone buy overpriced for profit private insurance with huge deductibles.
This is standard-issue free market orthodoxy at its finest. Unfortunately, this isn’t the whole story. In fact, there’s an even stronger argument to be made that consumer-driven health plans could lead to higher health care costs.
The Wrong Patients Forgo the Wrong Care. Research by the RAND Corporation’s health insurance experiment shows that when you shift costs to the consumer, patients forego both wasteful and effective care. And this is particularly true of the patients who cost us most in the long run—those suffering from chronic diseases.
A 2007 paper from the National Bureau of Economic Research looked at retired California public employees on Medicare, and its findings contradict some of the basic assumption of the consumerist movement. The study’s authors--from Harvard, MIT, and the University of Oregon-- found that chronically patients who are asked to shoulder more of their health care costs deferred, neglected, or opted-out of doctor’s visits and drugs when the price got too high. This short-term cost reduction led to long-term catastrophe, as their hospitalization rates were significantly higher than other patients suffering from chronic diseases. Immediate savings ultimately led to a greater—and otherwise preventable—use of more expensive care. Oops.
“The nation’s over reliance on specialty-care services at the expense of primary care," Steinwald added, "leads to a health-care system that is less efficient." The GAO official also noted that the U.S. lags in life expectancy, infant mortality and health-care quality measurements despite spending more per capita than other industrialized nations.
Keep the Pressure on! Take a stand! SAY NO to Pay Cuts! Tell me more...
Organize and bend Sammy over for once. I like all IBMers from my generation distrusted Unions un till I realized they are my co workers. My buddies who are getting the shaft right next to me. When me and my team stick together against what is wrong and unfair in our workplace we are a union. How can that be a bad thing? God bless all in these trying times. -Exodus 2007-
Why are there only some 435+ members out of all of us that read and post here? Do you think for one minute that management will make it better? If you do, just look at the recent history behind you. I know there are thousands of you out there, sitting on the fence, wanting to join, but hesitating because you hope this will get better or at least level off on its own. Well that just is not going to happen, at least not until there are none of us left employed. I beg you to join us.
Give it a year. That is just a measly $120 (less than dinner for two at some fancy restaurant). The more that join, the more that will join in the cause, as they see our numbers grow stronger. If after the year you are still not satisfied cancel your membership and drop out, because if we don’t do something we may not be here in another year! PLEASE THINK ABOUT IT !!!. -*** BOHICA ***-
Alliance reply: Thanks for your support. Our total membership including members, associate members and subscribers is 6000. We need to build the Alliance into a strong force to challenge IBM. The recent pay cuts are not the last. We have an average of 50,000 visits a month to the web site. We need everyone who comes here to join the Alliance.
Alliance reply: We are in the same situation that many other unions are. We lose members and supporters as the company sheds employees and when employees retire. Many members have also quit IBM to go to other companies. A lot of our base came into the Alliance during the pension fight and also are no longer with IBM. As anyone who has worked in IBM knows there has been a concerted effort to force US employees out of IBM and that impacts us as well.
Alliance Reply: Apparently, you are a customer of IBM, as evidenced by your email address (we won't print that). It's unfortunate that IBM doesn't listen to customers like you.. They might learn something. Thanks for your comment.
The PM family will feel the same pain very soon. Originally, it was scheduled to hit in mid to late 2nd Qtr, they will push that off until QT3 or QT4. There will also be the cut in the severance package. You have heard this from multiple sources. The package will now be the same as those who were forced out under the PBC3 "Work Plan" Remember the concept of forced attrition.. that's the whole effort here team.. forced attrition. They want you weak and willing to except any demands they push down. They plan on folks leaving on their own due to the piss poor work environment.
Do you remember when management would have major announcements on fixing the morale issues ? The Spirit teams? That's gone.. forced attrition.
Big changes coming up towards qtr4 of 08. Global Services is being shopped.. it has been. The overhead has been too high compared to the revenue, so they are doing what they can to get the numbers in line to market it effectively. The moral and impact to us is not on the radar screen. Doing this in a dignified way has been out the window as that would effect the bonuses and stock incentives that the certain few are receiving. Our wonderful management team will continue to put the square peg in the round hole, by hammering it in and shaving off the excess until its fits.. this is the mantra from the top team that has been empowered to make this happen.
Expect wages comparable to those in Indian companies. Remember that article that set fire to the sametime system? about the massive layoffs and job shifts to India.. that's still on. That's the goal.. COTS COTS COTS make us look very good on the books.. keep the lawyers busy with the customer complaints.. they need enough time to sell this blue pig.Keep your eyes open and resume up to date. DONT QUIT they want you to do that.. milk it and look while you milk it.. that way when the RA hits you, you will get paid to leave -Anonymous-
Sorry to sound calloused but being tied to a phone/pager on your off hours is your own choice. Your manager should know that when you clock out & go home, you're not reachable until the next day. I've told my manager that I'm a dad & husband first - IBM is farther down the list. I'll work hard when I'm here but when I'm gone, don't bother me. This is another reason to unionize so that being tied to a pager has a significant financial benefit to it. If management wants you available 24/7 then your pay should increase significantly as well as requiring that vacation time either be allowed (no pager) or get unused vacation time paid at year end. -Tulsa_member-
Those of you who are tied to IBM 24/7 have created the monster yourselves (IMO) by bowing to managements demands all the time. Try it some time - take a weekend off & "forget" the pager at work, don't answer your cell phone or home phone. I can tell you the dividends at home are much sweeter and longer lasting than at IBM.
I know that I am not on IBM's "go to" guy list as far as extra duty is concerned. When I was a go to guy my first year here, it didn't get men anywhere. My skill set is very marketable and there are plenty of jobs around that I can land a job elsewhere if needed. IBM has a poor enough reputation in Tulsa that they have a hard time recruiting anyone except college grads or retirees. So the likelihood of being let go is pretty slim. -Tulsa_member-
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 total cost? $86,000, which included a $5,000 bill for catering.
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.