More and more of the future will take place in developing countries instead of mature markets like the U.S., Europe and Japan--all of which are now in recession. International Business Machines has already turned to India and China in a big way: About 75,000 of Big Blue's 385,000 employees are in India and more than 10,000 are in China. Those countries are a given for both revenue growth and cost cutting, for multinational companies large and small.
But IBM is looking "beyond the BRICS," Palmisano said. While the West stagnates, IBM is expanding in 16 countries, including Indonesia, Vietnam, Mexico and various Eastern European nations. ...
Yes, most of the salaries demanded in emerging markets are lower. But that's not all. Palmisano personally opened IBM's Shanghai research facility. The way he sees it, Western companies are finding new sources of potentially world-class talent and all the hiring activity helps create middle-class jobs--and consumers--in countries where those were scarce.
He admits that hiring cheaper workers overseas sometimes displaces American workers. And he said the U.S. workforce needs to be better prepared for coming dislocations. IBM, which has hired so fast overseas, is encouraging employees to keep their skills up to date by offering "Personal Learning Accounts"--kind of like 401(k) accounts for continuous learning.
More ominously, in a second posting at Midrange-L, Palmer says that one of the people who IBM will let go is none other than Frank Soltis, the architect of the System/38 and AS/400 and the man who was given the title of chief architect of its successor platforms but with not much more than a mandate to move to converged hardware, middleware, and now virtualization layers. IBM spokespeople were unable to confirm this as we went to press on Friday, but the departure of Soltis would not be much of a surprise. Money is power in this world, and in a decade the AS/400 has shrunk from a $4 billion or so systems business to maybe a little over $1 billion, not including tools and services. And while a lot of that $1 billion is still profit, and there are lots of services and other products that go into i shops, with the economy in the tank, IBM may very quickly have a lot of layoffs, not just in Rochester.
Papermaster's counterclaim argues that the companies are not significant competitors and that he'll be doing completely unrelated work at Apple to what he was doing at IBM. He also claims the non-compete agreement is unreasonably broad in that it would restrict him from "working anywhere in the world based on the global scope of IBM's business" for an entire year. The claim also points out that Papermaster has lived and worked in Austin, Texas for nearly a decade while the non-competition agreement is governed by the laws of New York.
"Mr. Papermaster has no substantial relationship to New York, in that he has resided and worked in Texas for the past 17 years, and he is going to work for Apple, which is a California corporation," the filing states. "Both states hold that such noncompetition agreements are unenforceable as a matter of public policy."
Other IT vendors are doing the same thing. The only difference is that most of the other vendors don't produce charts for public consumption as detailed as the one above. Outsourcing vendors across the board are moving jobs overseas to cut their own costs and stay competitive with the Indian outsourcing firms.
The tools that President-Elect Barack Obama has to change this trend, especially during a recession, aren't clear. All the outsourcing vendors have government contracts. And even if state, local and federal agencies bar the use of offshore development in some of their contracts, government agencies are using the same offshore developed software modules as the private sector. Any government agency that has a support contract today with a major vendor is getting support, in one form or another, offshore.
Computer science has changed considerably since then. Now, there are even fewer women entering the field. Why this is so remains a matter of dispute.
What’s particularly puzzling is that the explanations for under-representation of women that were assembled back in 1991 applied to all technical fields. Yet women have achieved broad parity with men in almost every other technical pursuit. When all science and engineering fields are considered, the percentage of bachelor’s degree recipients who are women has improved to 51 percent in 2004-5 from 39 percent in 1984-85, according to National Science Foundation surveys.
Many of the companies now calling for relief have sprawling, mature pension funds with obligations so big they can dominate the companies’ own financial performance. Mr. Zion has identified nine big companies whose pension obligations are more than five times the size of their single largest liability on their balance sheets; six have signed the letter: the NCR Corporation, I.B.M., Rockwell Collins, the ITT Corporation, Northrop Grumman and the Pactiv Corporation.
Ever heard of Vapor Profits? Where do you think the defined benefit pension funds disappeared to? Do you think that the defined benefit pensions funded the Fortune 500 profits via the back door with the blessing of our Government thanks to the financial lobbyists? CEO compensation increased from 40 times entry level employees wages to 400 times in that period. Did those companies invent something that increased their profits? Naw, the profits were enhanced from the Pension funds.
Today there is talk about government bailout of EVERYONE. Ted Turner was on a talk show on how he never got bailed out by the government when CNN was in trouble early on, he convinced private investors to get him out of hot water.
There lies the problem, all the "skimmers" who make money skimming off wall street investments are looking for someway to cover their butts and not be sued for $billions by those they skimmed from before the crisis by having the taxpayer pick up the tab for their risky losses. So far, looks like Poulson and the rest of his financial bank buddies are on their way to pulling off the biggest heist of the American Taxpayer in History.
Ken Chenault of American Express, IBM board of directors member, was in major magazines bragging how well he managed American Express to record profits last year. Today, he is asking Congress for $2.5 Billion. As Jay Leno said, "When I get my bill from American Express, can I send a note with my bill to take my payment from the "bailout" money I am paying for in taxes? Fat chance of that.
There seems to be a love affair with our government with the banks and hedge fund managers, making billions of dollars last year. How did they do that?
Have you ever heard of "skimming off the top"? They used to call that embezzlement. When a stock option is exercised, it is skimming from the IRA's, pension funds, mutual funds, stocks, 403b's, 457's, and 429's of the American people. When you read of banks making huge profit, did they make something? No, they skimmed off the top, and no one, in our government was watching them. When you read about American Express making $billions in profit, did they make something? No, they just charge 29% interest if you are one day late on a statement mailed 7 days before the due date of the bill.
Henry Poulson, US Treasurer is worth $700 million thanks to stock options from Goldman Sachs as CEO in 2006. Now he is dolling out $700 Billion to his old company, Goldman Sachs and his other "de-regulated" buddies in the financial banking system.
Have you noticed how the price of gas has dropped in half? Could it be that the Commodity Futures Trading Commission is doing their job and not looking the other way when it came those 10 commodity futures companies making $13 billion in profit in 2007?
What the hell is going on here? Who is watching out for the American people today?
If you fly in a helicopter, 100,000 feet in the air with radar that cuts through all the baloney, spin, press releases, rationalization, political speak, and just plain bunk, it should be clear how all these few guys are putting billions of dollars in their sock. It is not from inventing something or making something, it is skimming with financial schemes from those who invent, make things, and work for a living, namely the American people.
Under the Pension Protection Act of 2006, the rules were tightened to force companies to calculate the value of their pension plans so that they better represented the value of the investments the plan has at a given point in time. Previously, the value was average over many years to smooth out sudden increases and decreases in the market value. That long term averaging was viewed as bad because it allowed some companies to hide the fact that their plans were seriously underfunded and to avoid taking any action until it was too late.
The new rules attempted to fix that, but now have their own "bad" aspect, at least from the companies' point of view. In a large, sudden down turn like the stock market it is currently experiencing, many pension plans have become underfunded - at least for the moment. This will require the companies to contribute some large amounts of money to the plans. But in a year or two, it is likely the stock market will recover, making those contributions unnecessary in hindsight.
The trouble is, there is no way to tell. Maybe the markets will recover quickly, maybe they won't. If you are an employee/retiree, you'd like to see the pension plan fully funded so you can be assured of your pension in the future. If you are the company, you'd rather not put up any extra money right now when the economy is bad. Having to do so might make the financial health of the company worse.
In my opinion, the companies are trying to take advantage of the bad economy to try and loosen up on the regulations. I don't view that as a sign that they want to walk away from their obligations completely. Just that they want some greater latitude in funding their pension plans. But if a company is not healthy, that may increase the risk of the retirees getting the short end of the stick.
Although the Pension Protection Act of 2006 says that plans should be 100% funded, it also recognizes that plans may become underfunded due to fluctuations in asset values.
Companies whose pension plans are underfunded have 7 years to get the plan back to 100% and must amortize the amount of the underfunding over that period. That is, they must add a significant portion of the underfunded amount each year.
If the underfunding is due to a market downturn, it is likely that the market will reverse itself during that time and help close the gap. However, the company can not assume that will happen and contribute nothing in the hope that the market will take care of the problem.
In the case of IBM, IBM's U.S. pension fund had a value of $57,191 million at the end of 2007 and obligations $46,323 million. Thus, it was over funded to the tune of $10,868 million, or 23%.
A report from someone over on the IBMpension group says that the pension fund has lost 22% so far this year. If that is correct, that would suggest that the current value of the fund is about $44,609 million. That means it would now be underfunded by $1,714 million, or 3.7%
With 7 years to close this gap, IBM would have to contribute about $244 million to the fund this year to be in compliance with the Pension Protection Act. They could easily make that contribution out of cash on hand (IBM had $9,755 million in cash as of Sept 30, 2008). Or, IBM might chose to contribute shares of stock to the fund, as they have done in the past.
The ERISA regulations prevent IBM from removing money from the pension fund without incurring severe penalties. Also, even if IBM were to terminate the pension plan, they are still obligated to pay each and every employee and retiree their vested benefits.
In addition, IBM can not simply dump the pension plan and turn it over to the Pension Benefit Guarantee Corporation. The PBGC would only get involved if the pension plan was underfunded and IBM went bankrupt. Then, the rules of the PBGC would come into play and the pensions of some retirees might be reduced. For 2008, the PBGC guarantees pensions up to $51,750.00 (this is an age 65 amount).
Despite the significant downturn in the market, I see no signs that make me worry about the IBM pension fund and IBM's ability to keep it fully funded at this point. Sorry for the long post. I hope it helps put you at ease.
Keep your chin up, above all don't give up, and good luck, Thanks, M. Nalasco.
Compensation is being scrutinized as never before, especially on Wall Street, where the year-end bonus season is coinciding with a government bailout of finance companies. At a time when the average taxpayer already is feeling stretched, public money is being used to support an industry that paid out $33 billion of bonuses last year. Wall Street itself blames the compensation system for playing a role in the credit crisis by encouraging excessive risk-taking. ...
"Wall Street, when I began my career, had no public companies. They were private partnerships where executives had their personal wealth at stake, and they developed their risk-reward system when it was their own money at risk," said Jeffrey Sonnenfeld, an associate dean at the Yale School of Management. "They've kept that system, but it's other people's money at risk now. That's kind of outrageous." ...
Greg Coleridge, a director of the committee, said the pay issue is a new manifestation of economic injustices that have long concerned the Quaker social action group, and one that has struck a nerve with members. "We have public dollars coming from taxpayers, people who are having an increasingly difficult time in our corner of the world in Ohio, being transferred" to Wall Street, said Coleridge, who works in Cuyahoga Falls, north of Akron. "The leverage these dollars provide gives someone inside government an opportunity, and maybe in fact the responsibility, to provide some kind of limit on executive pay."
Case in point: One option that looks pretty good for us over 65 gang is the IBM Aetna "Medicare Open Plan". What you don't find in the info they have supplied is that for prescription there is a "donut hole" . You enter the Hole when the "total costs", that is what you pay and what they pay (without subtracting the rebates and discounts the drug suppliers give Aetna) reaches only $3,700. After that you pay 100% until you leave the Hole by amassing $4,100 of your out of pocket costs.
For any couple over 65, this rule applies to each person separately and for many of us we will reach the hole before the year is out! So be forewarned and fore armed! Wilmer Haas a 1990 San Jose retiree.
That's why benefits are the next big target. For every employee who makes $75,000, a company typically spends $30,000 more in benefits. So for employees who still have jobs after cost-cutting layoffs, the potential for more pain lies ahead. Health insurance is traditionally the revenue drain that budget hawks focus on, with costs averaging $10,000 per employee (about $6,000 for singles and $14,000 for those supporting a family). "I expect that by January, the number of people without health insurance will rise above 50 million as companies scale back," says Bruce Raynor, president of Unite Here, a labor union that represents half a million workers in a variety of industries. (Read "Putting Health Care on an Energy Diet.")
The results of the study, published by the respected journal Health Affairs, belie the notion held by many American politicians that health care in this country is the best in the world. That may be true at a handful of pre-eminent medical centers, but it is hardly true for the care provided to a huge portion of the population.
The Commonwealth Fund’s survey of 7,500 patients in Australia, Canada, France, Germany, the Netherlands, New Zealand, Britain and the United States focused on patients who suffered from at least one of seven chronic conditions: hypertension, heart disease, diabetes, arthritis, lung problems, cancer or depression.
The care they received in this country — or more often did not receive — ought to be a cause for shame. More than half of the American patients went without care because of high out-of-pocket costs. They did not visit a doctor when sick, skipped a recommended test or treatment or failed to fill a prescription. The uninsured suffered most, but even 43 percent of those who had insurance all year skipped care because of costs.
His basic idea: Create a board modeled on the Federal Reserve to “offer a public framework within which a private health-care system can operate more effectively and efficiently — insulated from political pressure yet accountable to elected officials and the American people.”
By the year 2010, more than 6 million Americans annually will be seeking medical treatment abroad, according to the Deloitte Center for Health Solutions, a consultancy. The potential savings are significant. Knee surgery that costs $70,000 to $80,000 in the United States can be performed in India for $8,000 to $10,000, including follow-up care and rehabilitation, Dr. Hashmi said. Similar savings could be achieved for such common procedures as hip replacements and spine surgery.
"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.
Instead of fretting over government intrusiveness, titans like Jamie Dimon of JPMorgan Chase, Ken Lewis of Bank of America, Lloyd Blankfein of Goldman Sachs and John Mack of Morgan Stanley should be dancing a jig that Mr. Waxman and Mr. Cuomo have given them cover to make the one change on Wall Street that would help their bottom lines and prevent the tragic cycle of lurching from one financial crisis to another. But if they don’t, then the new secretary of the Treasury should help them see the light.
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:
I've been trying to understand why I'm feeling this way. Maybe it's leaving a big company with its security (such as it is) for a small company? Maybe it's been that I've been weekdays away from home for this project since July. Or maybe it's the feeling that I'm running away from IBM and this transition project and not sticking it out like my colleagues in the project. Well, it's really all of the above and it's really giving me a hard time thinking about it. I wonder if there's anyone else out there who's been in my position and has come through all right after leaving IBM.
You haven't failed or abandoned your buddies: you've made a life-enhancing decision in your own best interests. I found solace in Is 55:12 every time I felt as you've described above in your note. "You shall go out with joy and be led forth with peace..." Nothing better than that in this life. as we say in Texas, "Buena suerta."
I came to IBM from a smaller company that got bought out by IBM a few years ago. Despite some bright spots, I have to say that I've had a sense of malaise and depression here. I can tell from talking to the employees in their 40s and 50s who talk about the good old days of IBM that something's amiss in today's IBM, or at least IBM and I aren't suited for each other.
I've always admired the insight that you, civilliberty, ABC, and Dose of Reality (and unnamed others) bring to this message board. Thanks a lot guys for your advice and humor.
Through all the troubles I've experienced this year, I have finally found something that allows me to be able to deal with it (after I have experienced NUMEROUS serious health problems all year that have threatened my life). I have been reading the book "The Purpose Driven Life." This has greatly helped me to re-confirm what life should be about, what it is about, and who it is about. TRUST me when I say this really helps put things into perspective, even things beyond IBM (believe it there are things beyond IBM), and has lessened my stress and anxiety. I can now trust that what should be will be, and that I can be happy outside of my current job.
Hopefully this helps, I think we all need help from this crumbling leadership. IBM definitely is not like it was in the good old days! Great luck to you, and everyone else!!!
You have forded the river of opportunity and the reached new shores of equality, freedom of though and freedom of being valued like a human being, not a disposable tool. You have triumphed where many are too scared or too beaten down psychologically, paralyzed to take that one chance to succeed. You are now among an elite. The survivors of one of the most organizationally psychotic companies in the world.
One word of warning, however. You have now probably arrived into an organizationally optimistic organization. Like battered male or female spouses who have left their diseased relationships and suddenly freed slaves, you need to stop and take stock of your new freedom and positive mental environment. Many ex-IBMers fail to change because they can't re-learn the new, more positive and individually rewarding situation that most in the world work in. Like Pavlovian dogs, they can't take the pain, insults and punishment out of their minds.
Take time to decompress and heal mentally. Don't leap at the first opportunity. Don't act like a political mad dog like you were bred to be in IBM, and don't bite the gentle hands that feed you.
You are out of the new 21st century forced slave labor nightmare called IBM. Don't take that nightmare as a chip on your shoulder for the rest of your working life. Take the time to heal yourself and move forward.
Leaving IBM is like withdrawal from a nasty addictive drug that saps your individuality. Move forward slowly and you'll find your past nightmares to be a most invaluable lesson of how things should never be from a corporate, ethical and moral perspective.
The brass ring is now in your hand. It's now your turn to offer it to help other colleagues out of the corporate nightmare called IBM and to move ahead to achieve whatever you define is success! ///
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