Bob Strong of Chester, who called himself "a once-proud IBMer who was downsized in 1995 after 25 years of service," said Big Blue has a "darker side."
"I have friends still working there," Strong wrote. "Without exception, they all tell me how different the company is now; about the miserable conditions under which they work and how terribly low the employees' morale is. IBM employees are now subjected to longer hours and less pay. Plus, they are absolutely terrified to speak out, fearful of immediate reprisals (i.e., termination) by management. ... The first of IBM's three basic beliefs was respect for the individual. That belief has since been tossed by the wayside, replaced with the IBM executives' mantra of fatten my wallet and damn the employees!"
Joe Benedetto of Middletown, who was recently laid-off, said it is "sickening to read these articles and not the real story behind IBM's business practices.
"Why don't you report on all the IBMers that have lost their jobs?" he wrote. "IBM has continued to quietly cut the work force ... to send jobs overseas and cut American workers ... cut pensions, medical coverage and salaries. IBM has ruined countless workers' lives by taking their jobs away."
An IBM spokesman declined to comment. Christine Young covers IBM and can be reached at email@example.com. IBM Notebook appears Mondays.
The 125,000 defined benefit pension plans at the end of the 80's to the shifting of all that money to the banks and the Corporations as a result of the over 100,000 DB plans being discontinued. There are less than 17,000 DB plans today.
What the reason? The trillions of dollars that used to be in those plans. The corporations and the banks developed a plan to get the money, kind of like Hoffa in the 60's but thanks to Congress and the banking lobby and the corporate presidents, the baby boomers are going to shift from "Retirement for Life" to "Working for Life".
Just caught the tail end of the PBS program about the 401K replacing the defined benefit pension plan. IBM was mentioned. If you are a baby boomer, you are in deep trouble. The final line was that "retirement has been replaced by lifetime of work." There will be no retirement for baby boomers without a defined benefit pension. Surprise, surprise. Is someone finally taking note of what IBMers figured out ten years ago?
The program aired first in 2006 but appears to have been updated and available on DVD. You can watch the video On line at PBS at http://www.pbs.org/wgbh/pages/frontline/retirement/
What the program did not mention is the money, from the defined benefit pensions that were discontinued wound up as "vapor profit," artificially boosting the earnings of those corporations that discontinued the DB plan. Then there were stock options of the likes of Gerstner who gave himself 20 million IBM shares in 1999 and cashed in by June, before the big fall of the dow, 2008.
The fallacy of the 401K is "stock fleecing" by the executives with stock options. The executives are ripping off 401K's, 403B's, 529's, IRA's, Roth IRA's, variable annuities, life insurance, and the retirement of Americans. Thanks to Congress allowing guys like Gerstner skimming out of IBM shareholders (60% are held by retirement plans like State Street) about $2.4 Billion in stock sales over his nine years at IBM. The IBM employees discontinued/converted defined benefit pensions boosted IBM's profits which boosted the stock and then the executives cashed in with stock options from the "defined benefit pension boosting."
If you look at the end of the 80's where there were 125,000 defined benefit pension plans with trillions, the erosion since to less than 17,000 defined benefit pensions today, and correlate that to the growth of the Fortune 500 in the 90's, boosted by all those billions flowing from the discontinued or halved DB plans, it is apparent where the money went.
What a scheme. The other factor, as in the PBS program is the shift of the possibility of retirement for boomers to a "lifetime of work." The facts are that 45% of all the people in the USA over age 65 have a physical disability that prevents them from working full time, and it gets worst as they approach age 70.
So what is the bottom line?
The middle working class baby boomers will only be able to retire, if they are able to work to supplement their Social Security and Medicare healthcare costs if they do not have hundreds of thousands invested to supplement their retirement income. Even if the over 65 wants to work, sometimes they cannot due to physical ailments.
Hence, a lower standard of living. If you have ever been to Quartzite, Arizona and the thousands who live in the desert as snowbirds in the winter to save money.
With the Dow down to 8,900 from the high of 14,000, even diversified 401K's have lost all the gains of a decade. It will take the Dow reaching at least to 13,000 before that gain of the decade is recovered since the recession began in December 2007. This is a good time, however, to maximize your contribution to your 401K (buys cheap shares).
Don't worry, there are some baby boomers that will be able to retire, like Sam Palmisano. His retirement will be somewhere between $10,000 and $20,000 A DAY! The other group that is fairly significant are members of Congress and public employees; they have a great "defined benefit" retirement. How much is yours?
"It was frustrating," he said of his brief Microsoft experience. "You go in and you expect to be there for a year or more and after a month they tell you you have another 30 days." Klausner's story is the kind that unemployment statistics and headlines don't often take into account. Unlike companies that have had widespread cuts, Microsoft hasn't announced broad layoffs. However, that doesn't mean the ranks of those doing work for Microsoft are as robust as they once were.
I found this astonishing. As any economist will tell you, our nation can afford everything we enjoyed in 1950 and more. Our nation’s gross domestic product is roughly six times larger than it was in 1950 and household incomes have grown by a similar amount. Even in the midst of our current economic struggles, ours is still the richest society in all of human history. But like Mr. Scrooge, it is the priorities we set, more so than the absolute level of our financial resources, that are the source of most of our troubles.
Pfizer, IBM and UPS and almost 300 companies, trade groups and unions petitioned Congress last month to suspend the funding mandate. The law requires “huge, countercyclical contributions” at a time “when companies desperately need cash to keep their businesses afloat,” the group says in a letter to lawmakers. Spending to pump up pensions may cost jobs by diverting scarce capital from business operations, Ugoretz says. “If a company has to dump $150 million into their pension fund, they’ve got to make it up some place,” he says.
Let's just wait and see if Sam buys back IBM stock costing billions of cash dollars in April, or not. That will be the barometer of truth. It could be that IBM's only choice is to either buy back stock, or put the cash into our trust fund. They may not have enough cash to do both. The law currently states he has to put cash into our trust fund, if the oil level on the dip-stick is low.
The bill also would scale back a requirement that companies immediately fully fund their pension plans if they fail to meet certain benchmarks, even if their pensions have suffered big losses.
Because of strong market performance, big contributions made in the past, and a two-year phase-in of tougher financing rules passed in 2006, many companies have not had to pump much money into their pension funds in the last few years. But they suddenly faced the prospect of having to come up with a lot of cash because of this year’s financial crisis. ...
The bill rolls back parts of the Pension Protection Act of 2006, which was intended to close loopholes in the federal law that requires companies to put adequate money behind their pension promises. The loopholes became starkly apparent at the beginning of this decade, when a number of big steel and airline pension funds collapsed, forcing the federal pension insurance program to absorb billions of dollars in losses.
One problem identified was the tendency of pension funds to invest in assets, like stocks, whose values can swing sharply from year to year. That poses the risk of a company’s pension fund plunging at the same time the company itself is in trouble and cannot make up for the losses. That happened at United Airlines; its $10 billion pension failure was the biggest in the history of the Pension Benefit Guaranty Corporation.
The Pension Protection Act was meant to reduce the government’s exposure to such stock-market losses by discouraging companies from investing their pension funds in volatile assets. It gave them seven years to bring their pension funds into balance, with 100 percent of the money needed to pay for the benefits they had promised. The law made no exceptions for a pension fund that lost money while working its way toward the 100 percent target — the company still had to find a way to get it up to 100 percent within seven years. The new relief measure eases that requirement, giving companies that have big investment losses lower targets to shoot for over the seven-year time frame.
Dole, who served a six-year term, is eligible for about $15,000 a year for life. Hayes, who served five two-year terms, would get about $25,500 a year, according to the National Taxpayers Union, a government watchdog group that's been estimating congressional pensions for years. Unlike some fixed pensions, the amounts will change with the cost of living adjustment. Those figures don't include additional pensions for other public service, or 401(k)-type plans for which they received a partial federal match.
So what is the reality behind the number? Detroit’s defenders are right that the number is basically wrong. Big Three workers aren’t making anything close to $73 an hour (which would translate to about $150,000 a year). ...
Let’s start with the numbers. The $73-an-hour figure comes from the car companies themselves. As part of their public relations strategy during labor negotiations, the companies put out various charts and reports explaining what they paid their workers. Wall Street analysts have done similar calculations.
The calculations show, accurately enough, that for every hour a unionized worker puts in, one of the Big Three really does spend about $73 on compensation. So the number isn’t made up. But it is the combination of three very different categories.
The first category is simply cash payments, which is what many people imagine when they hear the word “compensation.” It includes wages, overtime and vacation pay, and comes to about $40 an hour. (The numbers vary a bit by company and year. That’s why $73 is sometimes $70 or $77.)
The second category is fringe benefits, like health insurance and pensions. These benefits have real value, even if they don’t show up on a weekly paycheck. At the Big Three, the benefits amount to $15 an hour or so.
Add the two together, and you get the true hourly compensation of Detroit’s unionized work force: roughly $55 an hour. It’s a little more than twice as much as the typical American worker makes, benefits included. The more relevant comparison, though, is probably to Honda’s or Toyota’s (nonunionized) workers. They make in the neighborhood of $45 an hour, and most of the gap stems from their less generous benefits.
The third category is the cost of benefits for retirees. These are essentially fixed costs that have no relation to how many vehicles the companies make. But they are a real cost, so the companies add them into the mix — dividing those costs by the total hours of the current work force, to get a figure of $15 or so — and end up at roughly $70 an hour.
The crucial point, though, is this $15 isn’t mainly a reflection of how generous the retiree benefits are. It’s a reflection of how many retirees there are. The Big Three built up a huge pool of retirees long before Honda and Toyota opened plants in this country. You’d never know this by looking at the graphic behind Wolf Blitzer on CNN last week, contrasting the “$73/hour” pay of Detroit’s workers with the “up to $48/hour” pay of workers at the Japanese companies.
Over and over again, I've heard people repeat that the trouble was that the average UAW worker costs the auto companies $73 per hour. Nice work if you can get it. Matter of fact, it made me want to pack a lunch bucket and trudge off to Dodge Main. Trouble is, when I checked, I found that this statistic is simply not true.
Unionized autoworkers, at least the relatively few still working, made about $28 an hour last year, according to Ann Arbor's respected Center for Automotive Research. Yes, they do get benefits, and benefits cost money. But how could they rack up another $45 an hour in bennies? The answer is that they don't.
Jonathan Cohn sagely reported in The New Republic how this figure was concocted: By taking the entire cost of health care and pensions for both active employees and retirees and adding it to the average hourly wage. Yes, health care and other benefits do cost the auto companies $42 an hour. But that's because they have so many retirees. General Motors has been around for almost a century. Ford, even longer. Toyota, which didn't open plants here until the 1980s, has very few retirees. Naturally their total labor costs are lower.
To put it simply, while retired women need more money than men for a longer period of time, they actually have access to less. Because the typical woman receives a pension that is about half of what her male counterpart receives, it is not surprising that older women find themselves chronically vulnerable in financial matters. Thus it is with great interest that all eyes are on the U.S. Supreme Court as it considers a case involving gender equity in AT&T’s pension plan.
The case that was argued Wednesday, AT&T v. Hulteen, No. 07-543, raised broadly similar issues. Noreen Hulteen and three other women took pregnancy leaves from AT&T from 1968 to 1976. When the company calculated their pension benefits on their retirements decades later, it did not give them full credit for the leaves. The women and their union sued under the Pregnancy Discrimination Act of 1978, which made discrimination based on pregnancy-related conditions a form of sex discrimination.
And so, in secret, they had been discussing a bold but potentially dangerous plan: occupying the factory if it closed.
By the time their six-day sit-in ended on Wednesday night, the 240 laid-off workers at this previously anonymous 125,000-square-foot plant had become national symbols of worker discontent amid the layoffs sweeping the country. Civil rights workers compared them to Rosa Parks. But all the workers wanted, they said, was what they deserved under the law: 60 days of severance pay and earned vacation time.
And to their surprise, their drastic action worked. Late Wednesday, two major banks agreed to lend the company enough money to give the workers what they asked for.
Despite the structural flaws of Obama’s plan, his approach will at least allow progressives to argue that the public component of guaranteed choice should become the dominant model of U.S. health care reform.
That would be exactly the wrong direction for health-care reform. Proposing mandatory coverage as the solution overlooks the one-fourth of insured Americans who are rationing their own medical care because they can’t afford to pay the bills. One in eight late-stage cancer patients turns down recommended care because of the cost, according to a recent report in USA Today. And let’s not forget the insured patients who are denied needed treatments that their insurers don’t want to pay for.
A mandate for individuals turns the challenge of health-care reform on its head. It would be a massive bailout for one of the most merciless industries in America - and one that’s already rolling in cash. The 18 biggest insurers reported $16 billion in profit last year. Now, in exchange for promising the coverage they should have provided all along, these insurers are demanding additional billions of dollars in profit from people who would face fines or other penalties if they didn’t hand over the cash.
Frank Darras, an Ontario, Calif., attorney who represents policy owners in disputes with insurers, calls the Conseco spinoff "unfounded, unfair and unprecedented. This company took the premiums and promised them independent living in their golden years, and they have kicked them to the curb. The trust can't survive. It is on the ventilator right now."
Believe it or not, there is one proposal that could cover all Americans for all needed services and save money. And it is now that we must explore that proposal. Studies have shown that national savings would amount to $350 billion per year. At the national level, this proposal is called Medicare for All, and it is embodied in Congress as Bill HR676. In New York state, it is called Single Payer New York, and it is one of the options now being studied by the governor in Albany. The propagandists call it “socialized medicine.” But it is not — because most doctors and hospitals would be private and working in their own facilities.
"There are very few economists who say that if they were king, the employer-based system is the one they would pick," said Henry Aaron, a senior fellow at the Brookings Institution who specializes in healthcare.
"The problem is that it's not possible to just walk away from the employer-based system. The 180 million people who currently receive coverage from employers would go ballistic." In other words, the crappy insurance system you know is better than the newfangled system you don't. This seems like a lame reason to remain wedded to a system that, by and large, fails to serve the interests of both the American people and U.S. businesses. ...
Employer-based health coverage is a historical accident. Businesses began offering it during World War II to attract workers during a government-imposed wage freeze, and the benefit gradually became the primary form of health insurance. Many large employers now bellyache about healthcare costs. During recent bailout hearings, the Big Three automakers said their Japanese counterparts enjoyed a competitive advantage because workers' health insurance was provided by the government. Yet U.S. businesses have been reluctant to call for radical change in the insurance system.
Employers didn't start offering health benefits roughly 60 years ago because they were experts in medical decisions. It was a way of circumventing the World War II wage and price controls. Barred from offering higher salaries to attract workers, employers offered health insurance instead. Aided by an IRS ruling that said workers who received health benefits did not have to pay income taxes on them, and by the fact that employers could write off the cost of the health benefits as a business related expense, this accidental arrangement became the primary way most Americans access health care.
The system worked at first, but a lot has changed in 60 years. Back then, the average soldier returning from World War II took a job with a local company where he would work for decades until he got a gold watch at a big retirement party. Today, lifetime employment is dead. By 42, the average American will change jobs 11 times. Sixty years ago, most American companies competed only against neighboring companies for lucrative contracts. Today, most businesses are up against foreign companies that don't foot the bill for their employees' health-care costs.
Whether Mr. Daschle, a former Senate majority leader, can succeed where others failed is unclear. “Year after year,” Mr. Obama said, “our leaders offer up detailed health care plans with great fanfare and promise, only to see them fail, derailed by Washington politics and influence peddling.”
Even Mr. Daschle, who will also be director of a new White House Office of Health Reform, acknowledges that the task will be difficult. In a recent book, he portrays the health care industry as a collection of “special interests” and predicts they will wage “all-out war to defeat reform.”
"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.
Wow, what a tough guy! But why pounce on Detroit, when he and his colleagues so meekly gave up $700 billion of our money to Wall Street hucksters? OK, the numbskull auto bosses goobered by flying to Washington in their separate-but-equal corporate jets, failing to grasp the "optics" (corporate-speak for bad image) of pampered CEOs jetting in for a taxpayer handout.
But, wait — the honchos of Citigroup, AIG, et al. have also been jetting in and out of Washington for their gimmies, yet Corker and Co. raised no hue and cry, nor did they impose any "rigorous measures" as a condition of Wall Streeters getting taxpayer cash. Indeed, the total bailout of the financial barons — counting loans, stock purchases, guarantees and backdoor handouts by the Treasury and Federal Reserve — is nearly $8 trillion. Yes, that's 8 followed by 12 zeroes! Amazingly, though, the beneficiaries of this phenomenal taxpayer largesse do not have to provide any public benefit in exchange, and Congress isn't even being told where most of the money has gone.
We do know, however, that one banking giant — Citigroup — has been given about $300 billion of our money, roughly 10 times what all three of Detroit's automakers are seeking. Interestingly, the CEO of Citigroup is drawing at least $216 million in personal pay this year. Corker and his ilk, however, saw no need to demand that Citi's CEO take a whack in his pay.
What we have here is a class divide — a chasm, really. Right-wing pundits, echoed by such Congress critters as Corker, see the auto industry's financial crunch as a golden opportunity for union-busting. They're pounding the United Auto Workers, asserting that the good wages and benefits earned by UAW members are an anvil around the neck of U.S. car makers, preventing them from competing with, say, non-union Japanese auto companies.
But, wait — labor costs are hardly the drag they're portrayed to be, totaling less than 10 percent of a car's price tag. If the highly skilled union members worked for free, that wouldn't begin to save the corporations. Detroit's problem is not on the factory floor, but up in the executive suite, where inept, $10,000-an-hour CEOs can't come up with cars that the public wants to buy. UAW members don't design the cars — they build what the geniuses upstairs put on the assembly line.
How bizarre that Corker thinks autoworkers make too much money and wants the government to knock down their pay. The senator is paid about three times what a UAW member earns, and he doesn't have to have any real skill, do any heavy lifting or produce a product.
Yes, autoworkers make a good living — but isn't that what we want for the people of our country? They define America's middle-class ideal. They can afford to buy homes (and cars), send kids to college, take vacations — and pay taxes to cover Corker's Senate salary. Sustaining and expanding such a vibrant, productive middle class ought to be the goal of public policy. Yet the corkers of Congress are doing the exact opposite, pursuing a cheap-labor America that enriches the few at the expense of our nation's true economic strength. They are doing the bidding of the corporate elite, whose only industrial idea for the past 30 years has been to kick labor in the shorts. All who support such ugliness and mindless destructiveness should be given Henry Ford bobbleheads and reminded of the auto pioneer's wisdom: Good wages are the lifeblood of the industry — and of our economy.
Sam Palmisano has been kissing ass and sucking up to Wall Street telling them how the current economic situation in the USA is a great opportunity for IBM. They have him on their short list as a nominee for CEO of the Year. (Check out the General Comment section here). It wouldn't surprise me that IBM management would do a stealth layoff in BTV. If you noticed IBM let the 100+ contractors go on election day so it would get buried on the back page of the news. IBM management can be very clever and very evil at the same time. -BTVer-
Shame on the entry by whoever who thinks all IBMers buy 40K cars and shamefully spend. That is not the case. We are thoughtful savers who watched our pension stolen and our 401K's now plunge. We are the best and brightest in the US, graduating at top universities at the top of our class/and strong honest work ethic. We are engineers and science majors. We've seen our pensions stolen and now what we thought was safe/white collar jobs outsourced. Salaries have been frozen for the past 5 years with no increase for the price of inflation for senior employees. Those are the cold hard facts.
No finance industry, no manufacturing and now no high tech jobs in the US. What is left? This country has a tough road a head as the laws of steady state kick in and wages try to equalize across the planet. 25 years dedicated to a company with endless overtime and commitment/doesn't matter. While tax bailed out wall street and banks are worrying because their end of year bonuses will be cut (shameful that tax payers are allowing failing companies to pay any bonuses while taking tax dollars), the rest of the professional working world is worried whether or not we will have jobs in 2009.
Oh yes, the job layoffs have already started a month ago in IBM. I've gotten 2 resumes from top IBM resources in the past month and no jobs to move to in the rest of IBM /they're all frozen! All high tech companies on the outside have hiring freezes as well. There is no where to hide. I' don't see how the economy can possibly turn around at this point .Any rallies are bear rallies and a good time to sell! -Samateme-
And now with the GDCs in play, that's IBM's out to paying severance. Sure, your job is moving to Fishkill (or Boulder), and you can keep your job if you relocate, but if you can't, you have 30 days to find another IBM job or you're out on your ear, no severance because they offered you employment. Sneaky as all hell - the only folks in any position to relocate are single (no spouse/children to consider) and living in apartments. Who can afford to even attempt to sell a house in today's market. I'm getting out as soon as I can. -waiting_for_the_axe-
So internally they cut jobs, make excuses and blame everyone else so they can make their bonuses while externally telling Wall Street how great things are(look at last quarters earning report). Therefore Bob, I rank you LOW based on your integrity and ability to manage for example the System z Great Lakes region sales team has not made quota in at least 3 yrs and you justify keeping the first and second line managers while allowing them to rank their reports for Resource Actions how nice. As a result, you’ve been selected for permanent layoff and are eligible to participate in the Stockholders(owner of the company) Resource Action. To show you how nice and concerned IBM is about you and your family, you have the option to find another job within IBM in the next 30 days - Oh did I forget to tell you all the jobs are frozen and the separation package sucks. I’m Bad. Merry Christmas Bob -Golfer4IBM-
News will go out in January for notification of final in Feb. Prepare to see larger cutbacks as there was a Global Call about how mgmt is about to handle the RA allocation's. By now most of the contractors remaining are forced to 12-15% cuts in contracts and next part is limited hours never to exceed 40 ascribed as well in the new SOW's. Cuts are meant to show a 20-30% improvement in profit lines before the next reports come out in March...that came from the top!
We were told outright there are no positions available unless a customer demand of SLA's is pushed (specifically customer pushes the compliance to have specific cert people). Most PM's and SDM's are going to be customer facing here with more secondaries from India and Brazil. Too many issues with China of late to push there more right now..namely there has been more help to hire at the Bangalore facility.
This is the allusion I talked about a couple of weeks ago but was afraid to; people started to leak more so now I could say the rest. Game plan is for US to only be 30% of final workplace numbers so IBM will have more global standing and more available contracts in other locales. Sam even talked about taking away contracts from TATA, NK!!!! -IBM UC'd-
US Taxpayer money to outsourced labor, that the taxpayer laborers will never see again, along with their jobs. This all stinks very bad. And all the while, the anti-union American worker sits by and criticizes unions as though they were the chief problem. The problem is with the Chiefs, not the indians..... (apologies to Native Americans). Meanwhile, back at the IBM ranch... the company is making money hand over fist, for their Executives; and firing people that 'cost too much'. How can a company like IBM hate their workers more than the Auto companies do? They're not even unionized yet! I think, that in itself, is a good enough reason to organize IBM workers.... not just here in the USA, but internationally. A global union for IBM makes sense and could become a precedent to leveling the playing field for labor; not racing to the bottom like they are now. We're in freefall folks...Free Fallin' (apologies to Tom Petty) -Ubuntu2u2-
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