Since the 2004 agreement, the Oklahoma Tax Commission has sent Big Blue more than $4.4 million in rebates. Yet state figures show the company's job count is the same today as it was before the deal was signed.
This raises questions for the state of New York and Albany, where the ink is still drying on an agreement with IBM that will cost taxpayers $140 million for promises of job creation and economic development. ...
Economic development packages are great for politicians. Jobs are promised, deals are signed, happy headlines are made. But what happens after the hoopla? Since the Oklahoma celebration, there appears to have been no follow-up or oversight by the state. Last week, the marketing director for the Oklahoma Department of Commerce had no idea if IBM had kept its end of the bargain. "I would imagine that they had," Beth Schmidt said. "It's performance based -- if they meet the requirements and add those jobs." Yet a January report from Schmidt's agency shows IBM Tulsa's payroll remains near 1,200, the same as it was before the agreement. And in May, IBM announced 350 Tulsa accounting and finance positions were going to Argentina. ...
Exuberance over IBM's presence, be it in Oklahoma or New York, is not unusual. In Boulder, Colo., the city doled out a $100,000 tax rebate to IBM on top of state incentives worth $632,000 to get Big Blue to put a "green" data center there. "The city's money was really an indication to IBM corporate that Boulder really cares about having this company here," Frances Draper of the Boulder Economic Council told reporters. "That was an incredibly important part of their decision." This year, IBM has slashed 400 jobs in Boulder. ...
And the dirty secret is no one wants to take on IBM for fear of losing jobs and hurting the local economy, especially in areas such as Dutchess County, where IBM is such a vital player. "Nobody wants to throw the baby out with the bath water," Dutchess County Legislator Joel Tyner said. And so New York went ahead with a pact with IBM, requiring a hefty donation from taxpayers, announcing it one day before Big Blue's second-quarter profit jumped a dizzying 22 percent to $2.77 billion, defying even Wall Street's expectations. ...
Mauro recalls in 2000, then-Gov. George Pataki announced New York was bankrolling IBM with $660 million in state and local incentives. In return, the company would invest $2.5 billion in East Fishkill to create the world's most advanced computer chip plant and 1,000 "permanent" jobs. Eight years later, 1,400 people work at the East Fishkill plant. But Mauro wonders why the state suddenly has to pay another $65 million to keep them there. It "seems like double billing, since New York state and local taxpayers already paid an estimated $660 million for those 1,000 jobs," he said. "It would be good to know ... how long IBM was required to maintain those 1,000 jobs." ...
IBM is the largest private employer in Durham's Research Triangle Park, where 11,000 workers are on its payroll. Last month, the company asked Durham County for $750,000 in up-front incentives to construct a "leadership data center." The project would convert unused warehouse space on IBM's campus into a customer briefing center with support services, creating 10 new jobs. After being told by a local IBM representative that Durham was competing with sites in New York and Colorado for the $362 million project, county commissioners unanimously approved the deal. ...
Two weeks after Durham commissioners approved the incentives, IBM laid off 30 workers in Durham.
Editor's note: If you live in an IBM community, consider writing to your local newspaper to suggest that they pick up this article. For example, I just wrote this short memo to the Boulder Daily Camera's business editor: Hello Ms. Wallace, May I suggest you pick up an article from the Associated Press concerning IBM that was published recently in the Albany Times-Union and mentioned IBM Boulder? As there are a large number of current and former IBM employees in the Daily Camera's coverage area, and that the issues discussed in this effort also affect all tax papers in the area, I think it would be of great interest to your readership. (I have been a subscriber of the Daily Camera for over 30 years.) It would be a great article for Business Plus, and would be a nice change from the Camera's usual pro-business coverage. Please see http://timesunion.com/AspStories/story.asp?storyID=706921&category=&BCCode=&newsdate=7/27/2008&TextPage=1
You should go on with your life, but not forget you got robbed to make Gerstner a multimillionaire as well as many other long-time executives who were the source of the problem anyway. Since the retirement fund is now separated and "frozen" from IBM, you may consider giving the IBM brand image the same "frozen" cold shoulder for the rest of your life and encouraging everyone else around you to do the same. Don't stay angry and be vengeful, just accept the fact that IBM is just an amoral multinational company that doesn't have a loyalty record that shows it can be trusted and if you have to do this business with them, don't forget that fact.
IBM executives are now getting really concerned that the brand is being associated with that of a foreign company. They want to be known as a "global" company, not a company foreign to the US. They want to be perceived for sales purposes as "American" yet not have to show loyalty and financial commitment to America. Unfortunately, any global company pulling its operations from the US to other countries is essentially moving itself to become a non-US brand, a foreign brand.
IBM may be registered in Armonk, New York, but that's just were a piece of historical paper resides. It's really a company with most of its assets and operations outside of the US. Essentially a foreign company from an accounting point of view.
The worst may be yet to come. The deficit announced by Jim Nussle, the White House budget director, does not reflect the full cost of military operations in Iraq and Afghanistan, the potential $50 billion cost of another economic stimulus package, or the possibility of steeper losses in tax revenues if individual income or corporate profits decline. The new deficit numbers also do not account for any drains on the national treasury that might result from further declines in the housing market. ...
Representative John M. Spratt Jr., Democrat of South Carolina and chairman of the House Budget Committee, said the new deficit figures confirmed “the dismal legacy of the Bush administration.” “Under its policies,” Mr. Spratt said, “the largest surpluses in history have been converted into the largest deficits in history.”
The recently passed housing bill authorizes the Treasury Department to spend virtually unlimited amounts to rescue the nation’s two mortgage finance giants, Fannie Mae and Freddie Mac, should they be at risk of collapse. The Congressional Budget Office estimated the new rescue authority could add a total of $25 billion to the deficit in the next two years.
The bad news, though, is that while the money is out of your retirement account you are not receiving an investment return. You are also paying yourself a below market rate of interest, which means that as a lender to yourself you are not being paid in full. And should you fail to pay the loan back you will have to pay taxes on the monies and pay a 10 percent penalty on top of that. Finally, the interest payments you are paying yourself are helping to grow your retirement savings, but you have paid them in after-tax dollars, and will have to pay taxes on that “gain” again when you retire and receive money from the account. ...
The data point the way for current trends. As the economy slows, people are losing their jobs, and wage gains are falling behind sharply higher prices for energy, health care, transportation, and food. Families need to find ways to smooth themselves over the current rough patch even more so than in 2004, the endpoint of our analysis of the available data. With other venues to borrow money, particularly home equity lines, closed off due to lower house prices, tighter credit standards, and slower income growth, families are turning increasingly to the easily accessible loans from their 401(k) plans. The data through 2004 is a harbinger of the erosion in retirement security to come as families are economically squeezed from all sides.
"In our opinion, 401(k) plan participants are at far greater risk of falling short in their retirement savings if they roll over their plan balances to a retail IRA compared to a mid- to large-sized company 401(k) plan," the Hewitt statement said.
Eighty-seven percent of women are worried about the rising cost of health care, versus 77% of men, and 64% of women are concerned about outliving their retirement assets, compared with 46% of men, according to the survey by Hartford Financial Services Group, an insurance and financial-services company, and MIT's AgeLab, a research group focused on the older population.
Still, long days at work take a serious toll. For starters, it is very hard for employees to maintain a healthy lifestyle when work and commuting consume 60 or more hours a week. It is probably not a coincidence that obesity has become more prevalent as work hours have expanded for some. Too many hours at the office can also wind up being counterproductive. Employees who are overtired or preoccupied with neglected personal issues are unlikely to perform at their peak. They fall behind, spend more unproductive time at work to catch up, and so on. It is in managers’ interests to help employees find ways to get more done in less time, and some are trying.
“The retirement benefits of employees have escalated rapidly in recent negotiations, at an average annual rate of over 7% since 1999, a rate far exceeding the rate of inflation,” according to a Boeing statement about the contract negotiations. “While we are willing to discuss increases in retirement benefits, this rate of increase cannot be sustained.” ...
Boeing also plans to propose ending its retiree medical plan for new IAM- and SPEEA- represented employees, placing them into a new “plan that enables future employees to save for long-term medical expenses on a tax-advantaged basis.” The proposed changes wouldn’t affect defined benefit and retiree medical programs for existing IAM and SPEEA employees. ...
In June, Boeing announced it will close its defined benefit plan to non-union employees hired after Dec. 31, putting them in a new non-union defined contribution plan. (See Boeing to close non-union DB plan, P&I Daily, June 25.) Also, in the last several years Boeing has closed its defined benefit plan to new employees represented by four small IAM locals that negotiate separately from the main IAM contract, moving them into a new DC plan. Mr. Healy said. These changes have affected fewer than 100 employees, he added.
Both the IAM and SPEEA oppose ending defined benefit plan coverage for new employees represented by the unions, officials from the two unions said July 29 at a teleconference they hosted. ...
Stanley Sorscher, SPEEA legislative director, said in an interview that closing the DB plan is “just a bad deal. It’s a poor replacement in dollars and cents for the defined benefit plan. ... It shifts risks to employees. … Success in the aerospace industry depends on a capable work force. The message of a 401(k) plan is its portability. You are daring people to leave early in their careers. Traditional defined benefit and retiree health-care plans are rewards for a long-term career. Boeing is telling aerospace employees, ‘you don’t have a long-term career at the company.’ An experienced, capable and effective work force matters for the (aerospace) industry.”
At the teleconference, Mr. Sorscher said, “The Boeing pension plan … is considerably overfunded. So we don’t see this (need for curtailing the plan) as an urgent cost issue.”
Connie Kelliher, IAM spokeswoman, cited a union statement that said, “One look at the recent activity in the stock market is proof of why you need to have a guaranteed benefit at retirement. … If Boeing wants to eliminate pension for new hires, you can only imagine what they have in store for current employees and existing retirees. Pension remains a top concern and one that must be addressed in this contract.”
Editor's note: How nice it would have been if IBM employees had been represented by a union at the time IBM screwed us out of our pension and retiree medical benefits.
“More and more board candidates are saying that it’s just not worth it,” Neff says about the challenge of recruiting star executives for corporate boards. Since Sarbanes-Oxley became law in 2002, a typical corporate director’s time commitment has risen sharply. “I’d say by 50%,” he estimates, to about 200 hours a year. And for a troubled company (that’s most companies these days!), reputation can be a major turnoff. “Who wants to have their picture, along with a dozen other directors, in a New York Times story about a company in trouble?” Neff asks.
Moreover, compensation often doesn’t make up for the hassle. After Sarbanes-Oxley was enacted, director pay increased some 15% annually, Neff says. It’s still rising, but at a much lower rate. Today a directors at the top tier of Fortune 500 companies typically pocket about $200,000 a year.
Editor's note: It's easy to understand why it's so tough to recruit corporate directors. Only $1,000 an hour? How can anyone live on that?
According to about a dozen Wal-Mart employees who attended such meetings in seven states, Wal-Mart executives claim that employees at unionized stores would have to pay hefty union dues while getting nothing in return, and may have to go on strike without compensation. Also, unionization could mean fewer jobs as labor costs rise.
The Wal-Mart human-resources managers who run the meetings don't specifically tell attendees how to vote in November's election, but make it clear that voting for Democratic presidential hopeful Sen. Barack Obama would be tantamount to inviting unions in, according to Wal-Mart employees who attended gatherings in Maryland, Missouri and other states. "The meeting leader said, 'I am not telling you how to vote, but if the Democrats win, this bill will pass and you won't have a vote on whether you want a union,'" said a Wal-Mart customer-service supervisor from Missouri. "I am not a stupid person. They were telling me how to vote," she said. ...
Wal-Mart is a powerful ally. Through almost all of its 48-year history, Wal-Mart has fought hard to keep unions out of its stores, flying in labor-relations rapid-response teams from its Bentonville, Ark., headquarters to any location where union activity was building. The United Food and Commercial Workers was successful in organizing only one group of Wal-Mart workers -- a small number of butchers in East Texas in early 2000. Several weeks later, the company phased out butchers in all of its stores and began stocking prepackaged meat. When a store in Canada voted to unionize several years ago, the company closed the store, saying it had been unprofitable for years.
"If this merger continues and is consummated, they will surely lose benefits going forward," Robert Roach, general vice president of the International Association of Machinists, told the Health, Employment, Labor, and Pensions subcommittee, referring to Northwest workers his union represents.
He said he believes Delta management will "fight us very hard" and he argued that the combined airline should not be allowed to "dump their garbage" on the government's pension insurer if Delta were to seek to terminate pension plans. "I clearly know the value of a defined benefit pension plan," Roach testified during the hearing, which was broadcast on the Internet. He said he is a former TWA employee whose pension was frozen and later terminated.
Their plan would fatten the insurance industry and make it an even more formidable opponent of true reform than it already is. If SEIU and the AFL-CIO get their way, the day that all Americans have affordable insurance will be pushed into the unforeseeable future.
If gas prices had risen during my adult lifetime — since I got out of high school in 1961 — at the same rate as per capita health-care expenditures, gas would not be $4 a gallon today. It would be about $15.
And as Democrats urge, everyone in Switzerland has health coverage (it's required by law), with the government providing generous subsidies for those who couldn't otherwise afford it. So does it all run, to use a Swiss cliche, like clockwork? Yes and no. Switzerland's 7.5 million citizens are, by and large, quite happy with the system.
It’s hard to imagine a country that could provide a more valuable example than Singapore. The Southeast Asian city-state is widely regarded as a health care superstar, especially when compared to the United States. Life expectancy at birth in the U.S. is 78 years; in Singapore, it’s 82 years. The Singaporean infant mortality rate is a mere 2.3 deaths per 1,000 live births, versus 6.4 in the U.S. As some have noted, these trends persist despite the fact that the U.S. has far more caregivers: 2.6 physicians per 1,000 people, compared with 1.4 physicians in Singapore. The United States has 9.4 nurses per 1,000 people; Singapore, just 4.2. Last—but certainly not least—is the issue of spending: the U.S. spends almost 16 percent of its GDP on health care, while Singapore spends a mere 3.7 percent.
For reformers eager to cite examples proving that their health care ideals are a formula for success, Singapore offers a powerful case study. Its population is healthy, its system isn’t overloaded by medical professionals, and health care spending doesn’t gobble up a huge chunk of its economy. So how does Singapore do it?
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:
The managers at IBM know this happens but are powerless to stop it. They know what they need to pay to keep their best people but their hands are tied. The one-size-fits all salary plans that come out of Armonk take away all their options. "I'm just a vice-president, I'm not able to have much influence on decisions like salary. That's decided at a level much higher than me." Aaaarrrggghhhhh!
To drive these results, we have been executing a strategy that aligns investments to growth opportunities. In the emerging markets we've been investing to capture the opportunity created from the build-out of the infrastructures in these high growth economies. While in the more established markets, we're managing our business for productivity, and we're delivering solutions that provide value to our clients.
If you don't understand CFO-speak, I can translate:
Reading this, if I want a fast-paced career, I go to the emerging markets and stay away from the "more established markets." - that assumes I want to go global for a growth career. Other option is go to a growing company/market/industry in the geography I want to be in. Pretty much what ABC has been saying - the boutique firms are the growing market in US.
As a stockholder I'm fine with this. IBM has told us what they're going to do, why they're doing it, and given targets through 2010 for the results they expect. As an employee, staying in the US at IBM and hoping I'll find a fast-paced, growing career is a little delusional.
If they're behind this much publicly it's got to be worse privately and the creative TPI penalties have got to have kicked in by now to make the pain even worse. http://money.cnn.com/news/newsfeeds/articles/apwire/b283a70442268f840268e33698f45b04.htm
Rumors flying at the Alliance and other IBM sites that they've also lost the Ameriprise account which would be severe blow to the IBM brand in the finance area.
The deal is to consolidate Texas's multiple departmental mainframe data centers most of which are in or near Austin, to one. Plus one other over in San Angelo. Austin has been a home to thousands of IBMers since 1967 and the Pig has laid off many thousands there since the early 90's. Every single resident there has either been laid off by the Pig themselves, or knows or is related to someone who has.
So do you think many of them jumped at the chance to join the Pig when begged? But "duh," why talk to these idiots in SO Sales?
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