The changes come along with a package of other high-level personnel moves, including the retirement of Nicholas M. Donofrio, executive vice president, innovation and technology, who is 62, and will retire Oct. 1 after 44 years at the company. Mr. Donofrio won't be replaced.
The changes come along with a package of other high-level personnel moves, including the retirement of Nicholas M. Donofrio, executive vice president, innovation and technology, who is 62, and will retire Oct. 1 after 44 years at the company. Mr. Donofrio won't be replaced. ...
The moves include significant new responsibility for Mr. Moffat, who is known as a hard-driving protégé of Mr. Palmisano. He previously ran IBM's personal-computer business and outsourced most PC manufacturing in 2002, before the business was finally sold. He is also credited with helping to shift much of IBM's manufacturing to offshore suppliers and moving lots of IBM jobs out of the U.S. and Western Europe to India and China. The moves have helped IBM boost profit margins, but they have often been criticized by the employees, legislators and others.
"Over 40 percent of IBM shareholders made a strong statement today by openly opposing the Board's assertion that an advisory vote on management's compensation is unwarranted," said Dawn Wolfe, social research and advocacy analyst at Boston Common. "While the company is a leader on many corporate governance issues, Mr. Palmisano's high level of compensation is of concern. Giving shareholders a Say on Pay in the form of an advisory vote would encourage the Board to explain why that level of compensation should be supported."
Editor's note: Ms. Rometty's earnings from the exercise of this set of options was $986,076. Meanwhile, due to a spending freeze in place for well over a year, GBS employees must continue to fund their own purchases of office supplies, Internet access, business telephone lines, and business software.
The increase will affect about 42,000 retirees who retired before 1997. About half of those who retired before 1997 will be eligible. The goal is to raise payments to those who were not able to participate in the 401(k) plan.
The details have not been finalized, including how it will be calculated and who will receive it, he said. Authorization for the increase was granted at an IBM Corp. board of directors meeting April 29. The raises will take effect beginning Sept. 1.
IBMers who retired before 1997 will receive a letter in the next week or so about the pension adjustment, Shelton said. Questions can be directed to the Employee Service Center at 1-800-796-9876.
Employee and retiree advocates have called for years for increases. This is the second once since 2000 and the third since 1990, Shelton said. "We tried to aid the retirees who were retired the longest," Shelton said. These are people who did not have the opportunity to earn retirement benefits through both the traditional pension plan and the newer 401(k) plan, he said.
Those who qualify will see an increase of as much as 21 percent, which could come to $180 per month beginning Sept. 1. "Our ability to do this is based on IBM's strong financial position," Shelton said. The pension fund ended 2007 with a $10.9 billion surplus in its $57.2 billion in assets. There are about 123,000 U.S. retirees.
In 2001, temporary IBM employees were forced to sign up with Manpower — often for less pay and less benefits than when they were directly employed by IBM, according to Alliance@IBM, Big Blue's union. Temporary jobs in IBM always were one-year positions, the union said. Workers who take these jobs hope that they'll become regular IBM employees after the year, with IBM's benefits.
Teegs launched the suit on April 17 for violation of the Fair Labor Standards Act, the Employee Retirement Income Security Act (ERISA) and California state labor law. The action applies to IBM employees in California, and nationwide, who were employed in job band positions six, seven and eight (from new college hires at 6 to PhD at 8) and classified as exempt anytime between July 12, 2007 and February 16, 2008, then subsequently reclassified as nonexempt.
California legislation regulating exemption in the IT field specifies that a computer professional has to spend more than 50 percent of his time performing designated 'exempt' activities, such as coding, as opposed to managerial tasks. He must also be proficient in theoretical and practical applications of systems analysis, software engineering and programming. Teegs' primary responsibilities are to install, maintain, and/or support computer hardware and software.
According the lawsuit filed, IBM failed to keep records of hours worked, which could result in inaccurate accounting for which Pension and Savings Plan benefits may be due. Also under California law, Teegs claims that the company did not honor legal meal time allowances nor provide regular wage statements.
This lawsuit comes as the most recent episode in the overtime battle between IBM and its employees. In late 2006 IBM agreed to pay $65m to settle a class action suit brought on by 32,000 IT specialists and tech employees claiming overtime rights. The company struck back in January 2008, with a 15 percent cut to the base pay of 7,600 of these employees to compensate for their reclassification as exempt. The cut to the first 40 hours, IBM said, will allow the company to break even on any overtime accrued.
Reaction was outraged, as expected. One commenter to the Wall Street Journal blog, said, "I work for IBM and will be part of the 15 percent pay cut...However I am not part of the class action suit for Overtime. IBM preaches Work-Life Balance, but how can you be so if you now have to work 50 hours to make up for the pay cut." He went on to say the company would prevent employees from putting in extra hours unless the customer took on the overtime cost.
Palmisano would be an unusual sight in a Danish courtroom: Top executives "seldom" have to testify in Danish employment disputes, said Ole Hasselbalch, a professor and expert in employment law at Aarhus School of Business. Hasselbalch wouldn't comment on the reasons for PROSA's action, but said that IBM can object to the request if it thinks PROSA's arguments are invalid. PROSA said it wants Palmisano to testify because he was in Denmark when the agreement with A.P. Moller-Maersk was negotiated, and that such a large deal must have been cleared with the CEO. On top of that, PROSA believes that IBM officials in the U.S. ordered that Juul be fired after he tried to enter an IBM shareholders' meeting to question Palmisano about the nonsolicitation agreement. Whether Palmisano will have to testify will become clearer in the next few days. PROSA expects that the case will be decided before the end of the year.
Peter Gosselin’s admirable objective is to show how many people of all income levels are now insecure and afraid in an economy that Americans are constantly told, by Republicans and Democrats alike, has long been back on track. At least, that was the conventional wisdom until a year or so ago, when the current hydra-headed crisis emerged. But, in truth, the American economy has not been on track for a generation now. Even the Clinton interlude was, as we now know, prompted by intense and unsustainable financial and housing speculation.
The main theme of Gosselin, a veteran reporter for the Los Angeles Times, is the rise of deep-seated financial, health and material risk. He gathers the many pieces of the new economic America together quite beautifully, even elegantly, and brings them alive with interesting and not the usually predictable individual examples. I learned many things in this book, and I’ve been covering this territory for a long time.
Take pension and health-care coverage. Most of us who read about these matters know about, and too many of us have already lived through, the growing failure of America’s pension and health-care system. Americans depend on having a good job for having a good pension. Now pensions are being frozen by major companies like IBM, many industries from autos to airlines are on a downward slide and their pension funds won’t pay off, and the Enrons of the world caused many to lose hundreds of thousands of dollars of retirement savings through fraud. ...
But what makes Gosselin so interesting is that he digs further for the pertinent government failures. For example, the Employee Retirement Security Act (ERISA), passed in 1974 originally to protect workers, now, as he writes, protects big companies. The reason is that ERISA prevents companies from being sued by employees. In the current age, “[ERISA] has become a crucial vehicle for shifting economic dangers that our employers once helped us manage onto our backs.” ...
A former insurance consultant told me recently that some employees are paid at insurance companies according to how many claims they can deny. I was shocked. Naive me, and after all these years. Of course, that is how the companies operate. Create incentives to maximize profits. ...
To be precise, the 30-something median male—in the middle of the distribution—makes less after inflation today than did the 30-something male in the 1970s. As some perceptive commentators put it, the typical male today makes less than his father did 30 years ago. ...
In other words, typical men have made no progress compared with typical men a generation ago. This experience violates the true American dream, not the one about how we can all get rich, but the one about how, if we work hard, most of us will do better over time than the previous generation. We can’t all rise higher on the pyramid, but the whole pyramid can rise. In fact, that is what happened in the U.S. since the beginning. That is what made the nation special and its people optimistic. But now it no longer does. ...
Now the experience of the 2000s has brought the message home. Wages haven’t gone up at all in the 2000s, despite record profits and decent productivity growth. Family incomes are down. These are unprecedented in the modern economy.
They are not only tired of nation-building in Iraq and in Afghanistan, with so little to show for it. They sense something deeper — that we’re just not that strong anymore. We’re borrowing money to shore up our banks from city-states called Dubai and Singapore. Our generals regularly tell us that Iran is subverting our efforts in Iraq, but they do nothing about it because we have no leverage — as long as our forces are pinned down in Baghdad and our economy is pinned to Middle East oil. ...
We are not as powerful as we used to be because over the past three decades, the Asian values of our parents’ generation — work hard, study, save, invest, live within your means — have given way to subprime values: “You can have the American dream — a house — with no money down and no payments for two years.” ...
A few weeks ago, my wife and I flew from New York’s Kennedy Airport to Singapore. In J.F.K.’s waiting lounge we could barely find a place to sit. Eighteen hours later, we landed at Singapore’s ultramodern airport, with free Internet portals and children’s play zones throughout. We felt, as we have before, like we had just flown from the Flintstones to the Jetsons. If all Americans could compare Berlin’s luxurious central train station today with the grimy, decrepit Penn Station in New York City, they would swear we were the ones who lost World War II.
How could this be? We are a great power. How could we be borrowing money from Singapore? Maybe it’s because Singapore is investing billions of dollars, from its own savings, into infrastructure and scientific research to attract the world’s best talent — including Americans.
And us? Harvard’s president, Drew Faust, just told a Senate hearing that cutbacks in government research funds were resulting in “downsized labs, layoffs of post docs, slipping morale and more conservative science that shies away from the big research questions.” Today, she added, “China, India, Singapore ... have adopted biomedical research and the building of biotechnology clusters as national goals. Suddenly, those who train in America have significant options elsewhere.”
It is especially not trivial now, because millions of Americans are dying to be enlisted — enlisted to fix education, enlisted to research renewable energy, enlisted to repair our infrastructure, enlisted to help others. Look at the kids lining up to join Teach for America. They want our country to matter again. They want it to be about building wealth and dignity — big profits and big purposes. When we just do one, we are less than the sum of our parts. When we do both, said Shriver, “no one can touch us.”
Like many of the other suits that have been filed since 2006 against such big employers as Boeing, Deere & Co. and General Dynamics, the suit against Wal-Mart, which was filed last month, claims the company breached its duties as a fiduciary by allowing its 401(k) plan participants to be charged "unreasonably expensive" fees. The plaintiffs are seeking class-action status.
The suit alleges the fees were too high because Wal-Mart’s $9.5 billion 401(k) plan offered participants retail mutual funds, as opposed to less expensive institutional funds, "despite the ready availability of reasonably priced options," the claim stated, "particularly for a massive Plan like Wal-Mart’s with tremendous potential to leverage economies of scale."
That is too bad, because, as Roger Lowenstein nicely illustrates in “While America Aged,” the country “is sitting on a retirement time bomb.” He is not talking about Social Security, which, he writes, is among the more manageable of future concerns. He is addressing the large-scale failure of America’s once-enviable private pension system. ...
From all this, however, Lowenstein draws a conclusion he does not prove. “The story of pensions is, in fact, largely the story of the slow accretion of power by the labor unions,” he concludes. But is it? The unions bear plenty of responsibility in the three stories he tells. But so does management. In each case, management deliberately underfunded its obligations. ...
These three cases also fail to cover all the key bases. For example, while unions pushed their advantage in some quarters, large corporations explicitly underfunded pension obligations in the good times, not because of onerous union demands but because of greed. They wanted to make their earnings grow as rapidly and consistently as possible to boost stock prices.
Most important, the greatest cause of uncertainty about retirement has been the large-scale shift by business from traditional defined-benefit pensions to defined-contribution plans — the typical 401(k).Today, three out of five workers are covered by such plans. Why? Some businesses were surely overburdened by pension obligations and union demands. But most others, again, just wanted to make more money, and 401(k)’s cost business a lot less. Workers themselves must contribute to the plans, manage the money themselves and hope there is not a market crash just at the moment they retire. “Whatever relief this brings to corporate shareholders,” Lowenstein writes, “from the employees’ point of view the demise of pensions is a calamity in the making.”
The report "Who Pays for Health Care When Workers are Uninsured" states that ultimately, the lack of employer-based coverage generates public costs in the form of taxpayer bills to fund public insurance programs or uncompensated care. According to the report, the share of costs paid by public sources has remained roughly constant, but the total cost to taxpayers has increased substantially since 1999 to a total of $45 billion for publicly paid care. ...
In the second report, “The Widening Health Care Gap Between High- and Low-Wage Workers,” the authors say increasingly fewer low-wage workers are eligible for public insurance programs or can afford to purchase private insurance. The report also says low-wage workers are less likely than high-wage workers to work for companies offering health coverage.
Len Nichols, policy director for the foundation and author of the report, said that foreign manufacturers have lower health care costs because they operate in nations with more efficient health care systems that are financed by the government.
Aon found that employees’ median monthly contributions in 2008 averaged $66 for employee-only coverage, $160 for employee-plus-one or employee-and-child coverage, $186 for employee-plus-children coverage, $189 for employee-plus-spouse coverage, and $260 for family coverage. Employer contributions averaged $326 for individual coverage, $574 for employee-plus-child coverage, $628 for employee-plus-one coverage, $633 for employee-plus-spouse coverage, $641 for employee-plus-children coverage, and $863 for family coverage.
Ralph Giunta Jr. knew something was wrong in March, 2007, when the photography major and avid skateboarder felt pain in his legs and feet. Then 19, he lost all feeling in his lower extremities and was rushed to the hospital. The diagnosis: Guillain-Barré's syndrome, a rare disease of the nervous system that typically causes temporary paralysis. His father's anxiety was compounded upon learning more about the insurance he had purchased. Even with "major medical" coverage, the plan reimbursed only $22,800 of the $206,325 bill for 19 days of intensive care.
In the end, Ralph Jr. recovered, but the Giuntas owed $265,000 in hospital and doctor bills. As he juggles maxed-out credit cards and loans from friends to make minimum payments on medical debts, Ralph Sr. admits he didn't read the UnitedHealthcare plan closely. "I thought, well, the college is offering it," he says. "Why would it be a bad plan?"
More than half of the insurance plans recommended by colleges offer benefits of $30,000 or less, according to a survey published in March by the General Accounting Office, an arm of Congress. Many plans have further limits that prevent payout of even modest maximums. While two-thirds of the country's more than 17 million college students have coverage from a parent's employer or their own job, many of the rest may be vulnerable if they suffer a serious illness or accident. With premiums and restrictions increasing under employer-provided plans, a growing number of parents are shifting children to college-sponsored coverage. But "when a student gets gravely sick, $30,000 in benefits is unrealistically low," says Alan Sager, a professor at Boston University's School of Public Health. ...
In some cases, universities have comfortable relationships with carriers that reimburse the schools a small percentage of student premiums to cover administrative expenses. This raises questions about whether schools ought to serve as what amounts to a broker. The University of Alaska system receives 5% of premiums collected through its plan. With $2.3 million in premiums expected this academic year, the payment would come to about $115,000, according to a copy of the contract provided by the system. The Kansas Board of Regents receives 1.5% of its students' premiums to cover costs of administering the plan "or other uses as determined by the Board," according to its contract. That could mean a reimbursement of about $100,000 for 2007-08. ...
The vigorous health of most college students helps make insuring them a lucrative niche, according to industry consultants. Most insurance companies, even if publicly traded, don't break out separate financial results for their student-oriented policies. But some schools disclose an indication of the profitability of policies sold to their students: the so-called benefits ratio. This shows the percentage of premiums returned to customers in the form of benefit payouts. Large health insurers typically have overall ratios of about 80%, meaning 20% of premiums goes to profits and administrative costs.
In several cases where BusinessWeek (MHP) was able to obtain benefits ratios from colleges or universities, the percentage was well below 70%. Anything below 75% ought to be grounds to negotiate a better deal, according to Eric Engstrom, president of Keeling & Associates, a consulting firm in New York. At Palm Beach Community College, the benefits ratio for the spring semester of 2008 was 42.6%, according to reports provided to the school by UnitedHealthcare.
The Alliance has been losing members due to retirement, job loss and employee financial difficulties. This web site receives an average of 40,000 visitors a month.
Tough economic times are obvious; however, we simply can not go on or take employee advocacy to higher levels if we don't build our dues paying membership. It is not just this web site: It is an office and an organization that is at stake. Our staff of 1 full time, 1 part time and volunteers/members are dedicated to building this organization; but it is up to YOU to see that we are able to keep the office open and the organization financially viable. We need to become financially independent--We can not continue to rely on being financed by non-IBM CWA members. IBM employees need to support their own organization!
Frankly if IBM employees do not see the value of this employee organization then the future of our work is in jeopardy.
Please consider joining the Alliance@IBM as a member for only $10 a month--the cost of a few Starbuck's coffees. Your dues and involvement help the Alliance with the following:
We also have the expense of keeping an office up and running: Rent, Office supplies, fax, phones internet access and mailings of organizing materials; such as newsletters, flyers and brochures.
We believe Alliance@IBM has, by its very existence; given IBM Corporate Mgmt pause, during their anti-employee actions.
The bottom line is that if we are NOT here, then IBM Corporate Management has the field. There will be some who say that employees do not want representation through an employee organization or a union. Now is the time: Prove them wrong or prove them right.
Alliance reply: We very much appreciate your point of view and your obvious support of our effort. Thank you for watching us from across the ocean. We have known for some time that we have friends and supporters in other countries. We are connected to the IBM Workers international Solidarity and have been, for some time. We are now carrying their web pages on our web site: http://www.allianceibm.org/iwisindex.htm also this page: http://www.allianceibm.org/unions.htm We will be contacting you and will try to provide specific information to you that we hope will be of some help in your workplace. Thanks again for your comments. We appreciate them.
The only way we will ever get that great work environment back is to unionize. Then WE have a contract that frees us from wasted time worrying about job loss. Management can stop wasting time scheming how to screw us out of money and benefits to make themselves look good and concentrate on focusing the team against the competition to make profits and stocks soar. As everything, salary and benefits wise, will be negotiated by trained professionals on both sides. The results should be fair and equitable to IBM and its employees and be fairly administered so even more savings; as we wont need outsourced administrators trying to explain the convoluted benefits package no one really understands.
I do not know if modern IBMers could work in that environment though. Earning respect from the quality of your work instead of the sharpness of your backstabbing knife. Being able to trust your peers to protect you and themselves without a second thought because anything else is detrimental to the work environment. Respect for each other is what made things work so well back then. IBM called it respect for the individual. It did not flow from IBM. It was the employees respecting each other and if IBM wanted respect they had to give it also.
That respect can live again in a union. The biggest difference between a union negotiator and a CEO is a union negotiator will make concessions and accept a pay cut if times are really bad . A CEO won't. And in fact, will manipulate numbers to maximize his/her own bonus and raises. Which is worse for a business? The Greedy CEO who wants to take take take without really performing, of course! -Exodus 2007-
Alliance reply: The message board and the comments are the same thing. If we closed the message board to non-members, then the comments would be limited to union members, only. Our existing members have been concerned about our 'giving away the store' for some time. Especially when they see the membership decline because of layoffs.
You are right about the web site being a good vehicle to getting more employees to join. The point is, we need funding to continue that effort. Our dues paying members are the union. When new members join and pay $10 per month, they are helping to continue our effort and their own. There is a huge responsibility to be shouldered; if we all carry some of the weight, we can move forward quicker, toward a number of sign-ups that can make a huge difference when the time comes to vote.
Organizing is a very difficult. Especially when the economy is plummeting and the working people become egregiously affected. The days of IBMers being 'safe' from the economic woes of layoffs and downsizing have been over since 1990. The new IBM has opened the door of opportunity to its employees to form a union and bring some protection and sanity to this whole process. The most necessary ingredient is the non-management employees; standing up for each other and weathering the ups and downs of 'Globalism'.
Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. Some sample posts follow:
It's probably not a surprise to anyone on this forum that SO has run into problems. The "raison d'etre" in SO has always been COST CUTTING. Charge exorbitantly high fees to the clients, yet run the business as cheaply as possible. The cost-cutting mentality has infected the entire business. Every day, I deal with managers whose major (probably only) concern is that they don't get stuck with the bill. I'll bet everyone on this forum who works (or has worked) for IBM has dealt with them.
This mentality has certainly affected customer relations. Employees working for customers don't want to work for IBM, because they know what's coming. The customers also know what's coming, because they bring in lots of lawyers, outsourcing consultants, etc. before signing any deal. The chickens are coming home to roost, indeed.
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.