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Highlights—December 13, 2008

  • NewsChannel 34 (Binghamton, NY): IBM Sells Delivery Unit. Full excerpt: IBM confirms it has sold its division that handles internal corporate deliveries, to a French company, which will continue to provide those services as a contractor for Big Blue. The sale means those who work for IBM's Internal Global Logistics Operations, including several employees in Endicott, will go on the payroll of the new owner, Paris-based Geodis.
  • Hudson Valley Times Herald-Record: IBM Notebook: Former IBMers talk about company's 'darker side'. Excerpt: This column was launched as a compilation of news from IBM's communications department, intended to keep readers apprised of what's going on with the Hudson Valley's largest employer. It has also prompted e-mails from current and former IBM employees who say Big Blue's publicity machine is not telling the whole story.

    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 cyoung@th-record.com. IBM Notebook appears Mondays.

  • Yahoo! IBM Employee Issues message board: PBS Program "Can you Afford to Retire?" by Mike Saville. Full excerpt: Everyone at IBM needs to look at this Frontline PBS television program on line and then reflect, the last decade of what has happened to the IBM employee pensions. The exception are the executives of IBM who have a supplemental defined benefit non- qualified plan. The main corporation is United but certainly could be IBM and certainly is what is happening to GM, Ford, and Chrysler.

    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?

  • CNET: Contractless in Seattle. By Ina Fried. Excerpts: After nine months of searching for work, Ben Klausner thought he'd finally caught a break when he landed a contract gig in September doing security work for Microsoft's cloud computing project. Just a month after he started, though, he learned his contract was ending. Now Klausner, a 55-year-old former IBM worker finds himself again out of work. And the prospects for employment look even dimmer than they were before the Microsoft job.

    "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.

  • National Institute on Retirement Security: Saving Retirement From "Bah, Humbug!". By Beth Almeida. Excerpts: I was speaking at a conference in New York last week when a fellow panelist made a remarkable claim – the U.S. could no longer afford to provide the kind of retirement security middle class Americans came to expect in the post-World War II decades. The remark sounded very Ebenezer Scrooge...“Retirement security? Bah, Humbug!”

    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.

  • Bloomberg: Pension Funds Beg Congress to Suspend Billions in Contributions. By Brian Faler. Excerpts: Pension funds at Pfizer Inc., International Business Machines Corp., United Parcel Service Inc. and dozens of other companies have joined the parade of businesses seeking relief from Congress amid this year’s economic meltdown. Instead of money, they want legislation to suspend a federal law that would make them pump billions of dollars into retirement plans to offset stock-market losses as many struggle to find enough cash just to stay in business. They’re pressing Congress to consider the issue this week before this year’s session adjourns. ...

    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.

  • Yahoo! IBM Pension and Retirement Issues message board: We're not just blowing smoke! By Kathi Cooper. Full excerpt: "Pension funds at Pfizer Inc., International Business Machines Corp., United Parcel Service Inc. and dozens of other companies have joined the parade of businesses seeking relief from Congress amid this year's economic meltdown. Instead of money, they want legislation to suspend a federal law that would make them pump billions of dollars into retirement plans to offset stock-market losses as many struggle to find enough cash just to stay in business."

    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.

  • Washington Post: House Passes Bill to Ease Pension Crunch for Retirees, Companies. By Nancy Trejos. Excerpts: The House of Representatives last night approved a bill that would provide relief to older Americans who have lost much of their retirement savings and to companies that have complained of stringent requirements for funding their pension plans during a market downturn. Two Democrats, Reps. George Miller (Calif.) and Charles B. Rangel (N.Y.), and two Republicans, Reps. Jim McCrery (La.) and Howard P. "Buck" McKeon (Calif.), joined forces to propose a moratorium on a law requiring retirees older than 70 1/2 to withdraw money from their 401(k) accounts and other defined contribution plans by the end of 2009 or face a tax penalty.

    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.

  • New York Times: Pensions Get a Reprieve in Congress. By Mary Williams Walsh. Excerpts: Companies whose pension funds suffered big losses this year will not have to replenish the money quickly under a relief measure that flew through the Senate Thursday and will next go to the president for his signature.

    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.

  • Charlotte Observer: Dole, Hayes to exit with pensions. Both lawmakers among wealthiest in Congress. A GOP colleague calls the plan a ‘taxpayer ripoff.' By Lisa Zagaroli. Excerpts: When Sen. Elizabeth Dole and Rep. Robin Hayes leave office next month, they won't leave empty-handed. The N.C. Republicans, both multimillionaires and among the richest in Congress, will be eligible immediately for congressional pensions.

    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.

  • Urban Institute: Older Workers and the Recession. By Richard W. Johnson. Abstract: For older workers, this recession is unprecedented. Retirement expert Richard Johnson explains why and what should be done to cushion its impact on seniors who want to work.
  • Workforce Management: Attacks in Mumbai Could Force Execs in U.S. to Rethink Outsourcing Plans. The fallout from the recent terrorist attacks will most likely be felt in U.S. boardrooms, as officers and directors reassess the risks involved in running outsourcing operations in India. Excerpt: The fallout from the recent terrorist attacks in Mumbai, India, will most likely be felt in U.S. boardrooms, as officers and directors reassess the risks involved in running outsourcing operations in that tension-racked country. Granted, it’s not likely many U.S. businesses will immediately cancel outsourcing contracts with Indian vendors in the wake of the attacks, which may have killed more than 300 people. India has become the preferred outsourcing destination for U.S. corporations, with American businesses sending approximately $24 billion in technology work to Indian cities such as Mumbai, Kolkata, Chennai, Hyderabad and Bangalore in 2008. All told, U.S. companies will probably ship around $36 billion in outsourcing assignments (including IT and nontech work) to India this year, says Sanjay Puri, president of the U.S. India Business Alliance.
  • New York Times: $73 an Hour: Adding It Up. By David Leonhardt. Excerpts: Seventy-three dollars an hour. That figure — repeated on television and in newspapers as the average pay of a Big Three autoworker — has become a big symbol in the fight over what should happen to Detroit. To critics, it is a neat encapsulation of everything that’s wrong with bloated car companies and their entitled workers. ...

    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.

  • Detroit Metro Times: Blaming the workers. By Jack Lessenberry. Excerpts: Blame the workers. Especially, blame the United Auto Workers. That's what we've been hearing from the talking heads over the last several weeks as our auto industry skidded toward the brink of extinction and politicians debated a bailout.

    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.

  • AARP: AARP Asks Supreme Court to Uphold Fairness for Retired Women. Excerpts: Older women face serious challenges to their retirement income security. On average, women tend to live longer than their male counterparts, but their retirement income is often far less than men’s because of historical gender–based discrepancies in wages, terms of service (due to pregnancy related leave and other family obligations), and discriminatory policies such as those addressed by the Pregnancy Discrimination Act (PDA) – all factors that influence pension calculations. ...

    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.

  • New York Times: Justices Hear Bias Case on Maternity, Pensions and Timing. By Adam Liptak. Excerpts: The argument of an employment discrimination case at the Supreme Court on Wednesday was full of references to one of the court’s more controversial decisions in recent years — the 2007 ruling against Lilly M. Ledbetter. Ms. Ledbetter lost her case because she had discovered the disparity between her pay and that of her male colleagues too late. The later effects of past discrimination, the court ruled last year in Ledbetter v. Goodyear Tire and Rubber Company, a 5-to-4 decision, do not restart the clock on the statute of limitations. President-elect Barack Obama has supported efforts to overturn that decision in Congress.

    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.

  • Watson-Wyatt: Effect of the Economy on Executive Compensation Programs (PDF). Executive Summary: The current financial crisis is significantly affecting the executive compensation programs of most companies. Compensation committees and management are being challenged to balance their need to retain key executive talent while responding to economic and public pressures to adjust executive pay levels and program components. Overall, executives will see their compensation decrease in 2009: half of all companies surveyed will cut the size of their annual bonus pool compared to the prior year; nearly 40 percent have decreased planned merit increases or expect to do so; and almost one in four companies have frozen salaries, or expect to do so. In addition, one-quarter of companies expect to decrease the value of their longer-term incentive grants in 2009.
  • New York Times: Even Workers Surprised by Success of Factory Sit-In. By Michael Luo and Karen Ann Cullotta. Excerpts: The word came just after lunch on Dec. 2 in the cafeteria of Republic Windows and Doors. A company official told assembled workers that their plant on this city’s North Side, which had operated for more than four decades, would be closed in just three days. There was a murmur of shock, then anger, in the drab room lined with snack machines. Some women cried. But a few of the factory’s union leaders had been anticipating this moment. Several weeks before, they had noticed that equipment had disappeared from the plant, and they began tracing it to a nearby rail yard.

    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.

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Los Angeles Times: Obama team seeks your input on healthcare reform. Borrowing a community organizing technique, the incoming administration is asking Americans to host meetings to come up with ideas. They'll send discussion packets to anyone who signs up. By Noam N. Levey. Excerpts: Former Sen. Tom Daschle, in his first major speech since being asked to head President-elect Barack Obama's healthcare reform effort, on Friday announced a nationwide campaign this month to solicit public input on improving the nation's healthcare system. The plan -- asking Americans to host meetings to talk about reform -- appears designed to avoid the appearance that the new administration is developing a sweeping agenda behind closed doors. That perception is widely believed to have helped doom the Clinton administration's healthcare reform efforts in the early '90s, when then-First Lady Hillary Rodham Clinton led a months-long task force that wrote the administration's legislation. "We want an open process," Daschle told a healthcare forum convened in Denver by Sen. Ken Salazar (D-Colo.).
  • USA Today: Insurers like Obama health plan (mostly). By Kevin Freking. Excerpt: The insurance industry embraced many of President-elect Barack Obama's ideas for better health care coverage Wednesday, though it opposes a key piece of his plan to require employers to help pay for that coverage. The industry said it opposes Obama's plan to require medium-size and large employers to contribute to their workers' health coverage or pay a percentage of their payroll for operation of a national, public insurance plan.
  • Z Magazine, courtesy of Physicians for a National Health Program: Examining Obama’s health-care proposal. By Roger Bybee. Excerpts: Dr. Oliver Fein and Joanne Landy spotlight the central danger of the guaranteed choice strategy: “Halfway solutions won’t work, particularly those that put more taxpayer money into helping people buy more private health insurance. Private health insurance is not only extremely costly; it will also result in more and more under-insurance and actually moves us away from achieving universal health coverage. In order to maintain profits and control their costs, private insurers will jack up deductibles and co-pays and cut benefits, [while] do[ing] all they can to recruit the healthy and avoid the sick.”

    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.

  • Philadelphia Inquirer, courtesy of Physicians for a National Health Program: Coverage mandate will fail as a health-care reform plan. By Rose Ann DeMoro. Excerpts: It’s time for Congress to stop getting carried away with financial bailouts for big industries, especially when it comes to some of the most-profitable and least-responsible companies: the health-insurance giants. Two major trade lobbies, America’s Health Insurance Plans and the Blue Cross-Blue Shield Association, have announced that they would be willing to end their disgraceful practice of excluding people from coverage based on their health or age. In exchange, they want the federal government to force uninsured Americans to buy private insurance.

    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.

  • Wall Street Journal: Insurer Casts Off Long-Term-Care Policies. By M.P. McQueen. Excerpts: A major insurer has dumped a chunk of its long-term-care policies into an independent trust, putting tens of thousands of policyholders at risk of reduced benefits or big premium increases. Conseco Inc. officials have said the transfer of many of the insurers' long-term care policies to a new state-supervised nonprofit trust, Senior Health Insurance Co. of Pennsylvania, allows it to concentrate on its core businesses. The policies were a drag on the company's earnings because they were underpriced and required continuing capital infusions to meet the long-term needs of policyholders. ...

    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."

  • Bloomberg: Health Insurers Protest $88.8 Billion ‘Hidden Tax’. By Avram Goldstein. Excerpt: Employers and private health insurers pay a “hidden tax” of $88.8 billion each year because government programs fail to pay enough to doctors and hospitals, an industry-sponsored study found. Inadequate reimbursements by programs such as Medicare and Medicaid increase the annual cost of covering a family of four by $1,788, according to the report, issued today by the actuarial consulting firm Milliman Inc. At hospitals, the payment gap between private and public insurance has more than doubled in 10 years, the Seattle-based firm said.
  • Associated Press, courtesy of the New York Times: Survey Shows Consumerism Uptick in Health Benefits. Excerpt: Years of rising health care premiums are making U.S. workers less willing to choose plans with higher up-front costs, according a survey by consulting firm Watson Wyatt. A survey of large company employees shows that workers are significantly less willing to pay higher premiums to keep out-of-pocket expenses like deductibles and copays lower this year compared with 2007. Only 19 percent of employees surveyed this year were willing to opt for higher premiums, compared with 38 percent last year.
  • Physicians for a National Health Program: Talking Points: Why the mandate plans won't work, and why single-payer "Medicare for All" is what we need. By Len Rodberg, PhD.
  • Rochester Democrat And Chronicle, courtesy of Physicians for a National Health Program: Single-payer health system could save billions. By Peter Mott. Excerpts: Because of the current financial crisis, many observers see no point in discussing an expansion of health care coverage this year — either federal or state. Indeed, it is true that the current crisis is adding greatly to our public debt. And it is true that total health costs in the United States are already twice as high per person per year as those of any other nation and rising faster. If we were to start paying to insure our 50 million uninsured — plus an estimated 40 million Americans who are underinsured — costs would escalate hugely.

    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.

  • Los Angeles Times: Employer-based health insurance plans no longer work. By David Lazarus. Excerpts: It seems clear that change is coming to the U.S. healthcare system. President-elect Barack Obama wants it. Congress wants it. Even the insurance industry says the time is ripe to do things differently. But not too differently. The idea of doing away with the employer-based insurance system -- which has become increasingly unsustainable for businesses and has resulted in 47 million Americans going without coverage -- seems to be off the table.

    "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.

  • Wall Street Journal opinion: Why Tie Health Insurance to a Job? One thing we can all agree on is that portable coverage is more secure. By Ezekiel J. Emanuel and Ron Wyden. Excerpts: Not many people are buying cars built 60 years ago. No one is watching TV on a set manufactured in the 1940s. Patients are not lining up to see a doctor who hasn't cracked a book since before the polio vaccine was discovered. Why, then, do millions of Americans get their health care through an employer-based system from the 1940s?

    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.

  • National Public Radio's All Things Considered: Economist: Health Care Key To Stimulus. Uwe Reinhardt, professor of economics and public affairs at Princeton University, calls the health care sector the "strongest economic locomotive working for us." He estimates that by 2015, health care will be one-fifth the size of the U.S. economy and says this is a good time to expand health insurance coverage for the uninsured.
  • New York Times: Health Care Policy Is in Hands of an Ex-Senator. By Robert Pear. Excerpts: In selecting Tom Daschle to be his health and human services secretary, President-elect Barack Obama said Thursday that he wanted Mr. Daschle, a former South Dakota senator, to pursue something that had eluded federal officials for decades: securing “affordable, accessible health care for every single American.”

    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.”

News and Opinion Concerning the U.S. Financial Crisis
Minimize "It is a restatement of laissez-faire-let things take their natural course without government interference. If people manage to become prosperous, good. If they starve, or have no place to live, or no money to pay medical bills, they have only themselves to blame; it is not the responsibility of society. We mustn't make people dependent on government- it is bad for them, the argument goes. Better hunger than dependency, better sickness than dependency."

"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.

  • Creators.com: Congress Coddles Bankers While Bashing Autoworkers. By Jim Hightower. Full excerpt: Sen. Bob Corker is ... well, a real corker. The Tennessee Republican is on the Senate banking committee that's overseeing the bailout of America's Big Three automakers, and, by gollies, he got his dander up when the three CEOs told the committee last week that they needed a $34 billion loan to survive. No way, popped the corker, unless and until you cut jobs and slash the pay of your union workers. "Before we even contemplate making a loan to these companies," corker lectured, "we need to put in place specific and rigorous measures."

    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.

New on the Alliance@IBM Site
  • Job Cuts Status & Comments page
    • Comment 12/05/08: "I have noticed a number of employees leaving BTV with boxes and personal possessions this week. Are these stealth layoffs? Can anyone in BTV confirm that someone in their dept or project has received a package and become unemployed this week? I'm sure IBM wants to keep layoffs very quiet."

      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-

    • Comment 12/06/08: look for all of ISC to be sold off soon...stay tuned. -homerj-
    • Comment 12/06/08: blue with bluesky - Mainframe people that came from AT&T to IBM last December did not do much better. In June they announce a third of jobs going to Brazil over the next year...funny thing is IBM can't find enough skilled mainframe people to do the work...great planning by the IBM management. -Ex-AT&T-
    • Comment 12/07/08: I thought GTS was a cash cow for IBM. Why get rid of it and to whom? And how can IBM still be a serious services company if it gets rid of GTS? -Anon-
    • Comment 12/07/08: Gee, why sell GTS, why did IGS? Why have most asset performing accts moved to T/T during the past year...why is GTS now almost 88% outsourced to Steady State accts? Acct locations in Brazil and India that can be sold off as acct assets while still remaining IBM later on? Starting to get a picture yet? Think about it and you can have an answer. GTS used to make money, look at the accts and client demands that were given into...with the contract demands/penalties and other things that have arisen you might want to look again at the bottom line. This has only been serving as a press relations to pump up the stock of late and for dumping hard accts into. -Anon-
    • Comment 12/07/08: i heard there is a layoff date of january 5 2009..1000 employees from poughkeepsie and east fishkill. -flipper-
    • Comment 12/08/08: Selling GTS? If it raised the stock price for the executives to reap more of their lucrative options, you bet they would sell it. Nothing else matters to them. Do you think for a nanosecond that Sam and the rest of his cronies care that GTS is a good cash cow for them? They don't care. They only care about their own greedy selves now. -blue_pigs-
    • Comment 12/08/08: Comments culled from yahoo ibm stock board: I was just told by a very reliable source (Director), that IBM will announce approximately 16K in layoffs in early January. These layoffs will be in US locations. I believe many of these will be in sales related jobs, but, that is only my thought. Rumor is internally that IBM will layoff 20-40% of US/NA sales force in 2009 starting in January (I'm guessing not only sales but all US workforce will be hit). US market has not been growing for years and this gives corporate america the chance now to truly downsize US employees and continue their investment overseas in BRIC countries as well as support the outsourcing trend that puts India as IBM's number 1 workforce by 2010.

      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-

    • Comment 12/08/08: Think about it. IBM is selling services at below US support prices That is, the US employees cost too much to support accounts. Brazil/India are much cheaper. IBM doesn't care about being able to support these accounts because #1: they just may sell this area of their business and #2: that's what 1-800-IBM-SERV is for - those people who claim to be technical support, but can't even spell UNIX, or claim to Linux admins because they run Ubuntu at home.

      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-

    • Comment 12/08/08: I heard System x will no longer be part of STG as of January 2009, looks like the Lenovo takeover of System x maybe true… Also, rumors of 30% cuts in STG across the board in 09 and huge lay-offs in DOT.COM.. IBMCA -IGSCA-
    • Comment 12/08/08: Manpower technical contractors hit with a 11.5% pay cut. Also hearing 12/10 STG layoffs -Wall St Sammy-
    • Comment 12/08/08: Our IGA project is being offshored to the GDC in 2009. We've all been told that we're going to have to find new jobs. How are we supposed to be motivated to train our replacements when jobs available are so scarce? How are we supposed to put aside our worries, suck it up, and train our replacements? -Worried-
    • Comment 12/08/08: To readers of this comment section: please join the Alliance as a member for $10 a month or as an associate member for only $5 a month. Help sustain and grow the Alliance@IBM CWA organization and this web site. This site is the only true site for IBM employee issues. This organization is the only employee/retiree organization that is YOUR advocate in the workplace, with the media and with our representatives in Washington DC. Please click 'joi' above or on our front page of this web site today! -Alliance-
    • Comment 12/09/08: To WhyNoBenefits... I was RA'd this past summer from BTV. I wasn't able to draw unemployment until after my "termination" date (30 days from notification). I did sign the paperwork in order to receive the separation package. That did not keep me from getting unemployment. The key was to apply immediately upon being told I was being RA'd..because it did take about a month for them to "investigate" yada/yada/yada. So while you're still getting paid by IBM-they will turn you down for benefits-but as soon as you''ve had your exit itnerview-then everything kicks in (at least that was my experience). -kicked 2 the curb after 27yrs-
    • Comment 12/09/08: TO>>-Samateme- >> The current R&D (Recession & Depression) around the world is a by-product of all the off-shoring of jobs from the USA. Now nobody can afford to buy the new products. This will cause layoffs in the off-shored countries, causing fewer left to buy new products. A self-fueling economy killing machine. I guess paybacks a bitch Better keep that 401K money in STABLE for a while longer. -no-ky-
    • Comment 12/09/08: Maybe someone could define all the acronyms in this string: Example: STG is what? IGA, GDC, what does that stand for? Please don't assume that all readers can translate these acronyms, kindly spell it out. Yes, I clearly understand that BTV is Burlington, Vermont, but not everyone can translate to understand what organizations are affected by cuts or rumors of layoffs. Help all us readers understand better. -Wondering-
    • Comment 12/09/08: To those IBMers needing to define acronyms, add whatis@us.ibm.com to your Sametime. This is a Sametime bot that will enable you to do "whatis GDC", for example. GDC = Global Delivery Center. This is another way of saying "huge pools of cheap Indian, Chinese, Brazilian, etc., labor". It essentially means offshoring. -My_job_has_been_tagged_for_offshoring-
    • Comment 12/09/08: STG = Systems Technology Group IGA = IBM Global Account GDC == IBM Global Delivery Center. Most of these acronyms can be found via google....http://www.research.ibm.com/journal/sj/464/walker.html -noone-
    • Comment 12/09/08: ISC = Integrated Supply Chain -MrYahoo-
    • Comment 12/09/08: Just some more information on the logistic sale, the Mechanicsburg's employees were called to a site meeting in the cafe on Dec 2, to be informed of pending sale. Otherwise, we the employees are in dark as our managers determine which departments and employees are in scope the move to Geodis. So the number of employees who will be effected is unknown, but we believe most of employees will tagged. So happy holidays to all, as we will not know our fate until early January. -In the dark-
    • Comment 12/09/08: I just heard from my source (manager), there will be a massive layoff in January, for sure, for STG in Tucson. Good luck to all. -Anonymous-
    • Comment 12/10/08: ex IBM colleagues in Lenovo and InfoPrint System are upset on the benefits and entitlement that they are enjoying now. Not as impressive as they expected. They were given a chance to debate during the negotiation because it was done by the management. Even some colleagues from Global Logistics are worried now and they are anticipating the same treatment where Geodis takes over in January 2009. Those who have been very loyal to IBM for many many years and they feel very depressed that the GL were sold to Geodis last week. Not sure what will happen to the rest - GBS, GTS, and those units which are good cash cows for IBM. 2009 will not be a good year for many IBMers as we anticipating lay offs will happen very soon. -Anonymous-
    • Comment 12/11/08: So - the rumor in this board and on yahoo boards of 16k US workforce starting 1/5 might have some validity to it. The Lotus services team was to have a big training meeting in Dallas starting 1/5. Last night, an 'urgent' memo was sent asking everyone to halt their travel plans to Dallas on the 4th as it is being reevaluated. Interesting stuff. Merry Christmas. -Just speaking reality-
    • Comment 12/11/08: I was part of a resource action effective, Dec.1, 2008. I worked at the .COM sales center in Atlanta. Resource action was for S&D, Div.12 across US. There are 4-5 pages of data showing the jobs eliminated. -Anonymous-
    • Comment 12/11/08: Hey IBM’ers having been RA’d from the SWG a few months ago if you think you are not being rated and ranked think again. My manager made the mistake while letting me go on the phone (didn’t even have the guts to do it face to face) that he had to rank everyone in his group. Your current PBR’s, performance means absolutely nothing it is who you know and how much they like you. In my opinion it all starts at the top with Bob Guidotti VP of Software Sales, Americas who just like the General Motors executives are lifers and have no clue on what to do or how to make sales happen when times get tough.

      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-

    • Comment 12/11/08: At a recent All Hands meeting the VP of Americas SSO loudly touted IBM's commitment to 'green' computing. During Q&A when asked how taking employees that today are working from home and requiring them to drive up to 50 miles each way under the GDF initiative fit in with 'green'. After dancing a few minutes she noted that employees could take 'personal initiative' and take action such as car pooling or buying a hybrid vehicle. Let's see....15% pay cut, crack down on OT, added costs from GDF and the healthcare hike and a salary that's less today than I made 5 years ago despite 2+ ratings and raises every year I've been with IBM and I should offset the environmental impact of driving into a GDC by purchasing a new car? Every year I think IBM management can't get more out of touch with the workforce and every year I get the same surprise. -GoingGoingGONE-
    • Comment 12/11/08: I'm another who's in through CDI and was hit with a 13.5% pay cut at the end of November. CDI is no help in finding another position as long as IBM has me. -CDI Doesn't Help-
    • Comment 12/12/08: Have on good authority that a large company wide RA is coming in January. Notification in the middle of the month. SWG is definitely part of it. -FedUp-
    • Comment 12/12/08: To those of you who talk about having no life at IBM. In all the years I worked there they always brought up the "work/life" total 100% BS. I never had a work life balance there, and management didn't give a damn about you or your family, because they were not up at 2am when I was working a problem. In fact my manager was NEVER there at 2am when I was online. The only way to stop things like this and actually have a work/life balance is to install a UNION. Only then will people be treated fairly. Until then, the "cuts happening now" headlines will always be there. -havalifenow-
    • Comment 12/12/08: a VT State Rep commented this week that BTV was laying off 300 folks this Tuesday, 12/16. I wonder if he/she meant 1/16 ... as mid-January seems to be the new buzz with the changes forever changing BTV -BTV Brrr-
    • Comment 12/12/08: ISSW in SWG just announced that they are canceling their WebSphere Technical Conference (WSTC 2009) in Vegas that was supposed to be held in February. This is just the start of a major cost cutting campaign which the rumor has it will include some significant layoffs across SWG. -Anonymous-
    • Comment 12/12/08: I heard IBM just loss the Amex account to EDS, all full timers/ contractors on the account will be gone by Feb 09, was told by IBMers on the Amex account.. Merry Christmas to all... -Mr. Canada-
    • Comment 12/12/08: CDI makes commission of anywhere around $7/hr to $14/hr per employee and keep passing the entire cut from IBM to their employees. Moreover the rates IBM pays is not transparent to the Contractor. It seems there is also a policy which does not allow Contractors to change projects within IBM. Hostage Situation? -CDI-victim-
    • Comment 12/12/08: I'm about to get out soon if things go like they should and the news I couldn't talk about before is very true. Rumors about large target dates originally set for first of 2010 have been moved to Feb of 09. Prepare to see huge cuts and reorganization with some massive layoffs across the board as sites in Bangalore are getting ramped up. Don't believe it? Then ask the 28 people currently in India to bring and train the IBM Certified Masters (even though they don't have any other certs) to do the other levels. Afterward's they will be the telecommute links for the GDC's.

      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-

    • Comment 12/12/08: I've been retired from IBM for almost two years now and I stopped following the message board on the Alliance. For some crazy reason I decided to see what was going on. Wow.....not only has nothing changed....it's gotten worse. I forgot how amazing it is how many people get cut but the number of executives and management grow. I was with the company 33 years and spent a lot of time around the top corporate executives. These guys are the epitome of what is wrong in the US today. I can honestly say you couldn't pay me any amount of money to come back. In the two years I'm retired, IBM has increased my benefit cost by 25%. If I knew that when I left I would still have left. -Happy I'm Gone-
  • General Visitor's Comment page
    • Comment 12/01/08: Are you in the same boat for this cruel downturn? if not, how you protected yourself from this brutal "stuck Market Casino games" in 401K, ESPP and portfolio losses ? I am extremely worried about the 401K taking huge beating and I don't have many years to make up. My portfolio losses are mounting to 3 years of savings. Buy and Hold ? is killing me. Is there any hope and optimism out there, other then keeping the job? -401K_mercy-
    • Comment 12/01/08: I somehow doubt this Union will ever get off of the ground with IBM. I remember when I started IBM 10 years ago, there were Union members handing out pamphlets in the hallway of IBM's cafeteria. IBM is very strategic in it's business model. They know enough to not lay off too many people at the same time and just how to put the thumb screws to those who remain by trying to keep up moral. By the time there is enough workers for a Union, it will barely be enough for IBM to even consider staying opened in the USA, because by that time they will be mostly moved over seas. India will have 80,000 IBM employees by the end of the year. Fat chance on getting India to arbitrate, because that word does not even exist in the Indian culture. By 2010 it is very possible to have 80% of the USA employees outsourced as per IBM's business model that was started in 2002-2003. -IBM7777-
    • Comment 12/02/08: 401K_mercy— If your 401K investments are in common stocks, they are down now but they will come back. The key is to be diversified and keep putting money in. Right now your monthly inputs are buying more shares than they would have a year ago. A fixed monthly investment will buy more low cost shares in a down market and fewer expensive shares in an up market. Hang in there! -Living on the IRA-
    • Comment 12/04/08: To -Living on the IRA- Have to agree with your optimistic view of the stock market but how about it never really comes back to say DOW 10000? The USA bailout package is trying to treat the patient but not curing the symptoms that caused the malady. The same folks who caused the credit crisis are still running the show. No blame is being admitted but it is clear something went very, very wrong that even with de-regulation should not have occurred if sensible minds were in charge. Just because the stock market showed the best returns over the long term doesn't guarantee that it will do so now. -anonynous-
    • Comment 12/05/08: I watched the Senate hearing yesterday, while Senator Corker from Tennessee, verbally twisted UAW President Ron Gettlefinger's arm into agreeing to consider giving up the equity of the payments to the retirees; that the union has already agreed to postpone until 2010. Corker wanted more. So did Shelby. In my opinion, the anti-union part of the Senate wants to see the union busted. Period. Bankrupt the company, bust the union, and reorganize the company with non-union labor. Yet, they don't have a problem with handing over $150B to AIG; who has since laid off thousands of workers. The 'bottom line' is that union workers are under attack more than they have ever been. In this case, their total labor costs are only 10% of what the company spends to stay in business. On top of that, the auto execs could be lurking for mergers with Mexican car companies and spending the bailout billions on the merger and outsourcing labor.

      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-

    • Comment 12/06/08: Folks, after reading this discussion board I am convinced that US corporations have a major problem on its hands. It is causing our current economic crisis. CEO's like Sammy Palmisano are just interested in greed and financial wealth for themselves. They suck up to Wall street. The employees are the pee ons at the bottom doing the work and Sammy doesn't give a rats ass about you. If cutting your job will boost the stock price Sammy would do it in an instant. It reminds me of the days of slavery in the south. Sammy is the plantation owner and the employees are the black slaves doing the work. Let's support the Alliance and get a Union going and stop this injustice. It is costing you and me our jobs. -Concerned IBMer-
    • Comment 12/08/08: I was canned from this company 2 years ago. I've watched the headlines on this site for 9 years, always the same, "cuts happening now". I work for a small company now that does not need a union. They treat us well, but for the big bullies like IBM, who treat their workers like dogs, this will continue forever until a union is in place to make them treat people like people again. I come back to look from time to time but the headline never changes. Without a union, this company is not worth wasting your time working for. Not worth the stress, lost time away from your family, etc. It's better on the outside. -gone_2_years-
    • Comment 12/09/08: Hello, After working at IBM so many years they decided to give me the axe. Now, I get another job on the same site in the same building with a different company and guess what, I got in for one night and worked there and then they denied me access with a contractor. IBM is ridiculous and denied me and my family the right to work. IBM would rather pay my unemployment than allow me back to work with a different company. This is insane! Now, the company said IBM never told why (no reason of my denial in the building), do I have a lawsuit case here? Anyone know the law, do I have a case on this? -Denied-
    • Comment 12/10/08: Anyone see the movie "Christmas Vacation"? I'm sure most of you have. My fantasy is to have Uncle Eddie go out and bring Sammy to my house with a great big red bow on his head. I'd kick him is the ass for all the grief he has caused us. It really helps me sleep at night thinking about that. LOL -Anonymous-
  • Pension Comments page
  • Raise and Salary Comments
    • Comment 12/08/08: Salary = 60300; Band Level = 7; Years Service = 5; Hours/Week = 46; Div Name = IGS; Message = 15% cut in pay and no raise for 2 years. -Anonymous-
    • Comment 12/12/08: Salary = 64,500; Band Level = 6; Job Title = software engineer; Years Service = half year; Hours/Week = 30-50 depending on work load; Location = tx; Message = no idea what to expect in the later years, but just thought I would contribute to the statistics -notme-
    • Comment 12/12/08: Salary = 50000; Band Level = 6; Job Title = Sourcing Analyst; Years Service = 4; Hours/Week = 40; Div Name = Integrated Supply Chain; Message = I just wanted to contribute the stats and tell anyone thinking of working for ibm to reconsider. This company by far is one of the worst when it comes to employee satisfaction. I have spoken to many recruiters, who have said the longer you stay at IBM the more compressed your salary will be come. We all know this because they are a low payer and do not really give raises due to "budget." I agree with many of the people here, I have a job not a career. I will take the next reasonable job offer I get and vow never to work for this terrible company! -Regretting this job-
    • Comment 12/13/08: Salary = 46000; Band Level = 6; Job Title = Systems Integration Specialist; Years Service = 8; Hours/Week = 45; Location = CT; Message = Just recently had a daughter that is only 3 months old and because of my conversion from Exempt to Non-Exempt and the so-called cap my manager tells me the customer wants to keep expenses down I can't afford to look for a job as we can't afford day care and my wife needs to work too for us to make ends meet. Now I make 2K LESS than I did when I was offered this job back in 2000. I am also bracing myself for any Resource Actions that might be coming for me with this new GDC initiative. Way to go IBM! What a way to inculcate loyalty and pride in your workers. -Wants To Leave-
    • Comment 12/13/08: Salary = 72,000; Band Level = 7; Job Title = Advisory IT Specialist; Years Service = 11; Hours/Week = 45; Location = Canada; Message = for the poster below, 800,000 R is 20,000 canadian, which is about one third of average band 6 pay here...so you understand why there is a hiring boom in India, and also why there is a 70% turnover in staff. It appear you guys in India have figured it out, get in, get some experience, and get out -paul-
    • Comment 12/14/08: Salary = 101400; Band Level = 8; Job Title = I/T Architect; Years Service = 15; Hours/Week = 40; Div Name = ITS; Location = Midwest; Message = No longer with IBM. Proactively left. Upper management is what will bring this company to it's knees. Too many layers of management and individuals with manager titles and no direct reports. Lou Gerstner did a great job of trimming the layers between you and the CEO. Palmisano has reversed that. Company needs to lean out layers of management overhead. -Pete-
    • Comment 12/14/08: Salary = 78000; Band Level = 7; Job Title = Hardware Engineer; Years Service = 6; Hours/Week = 60; Div Name = STG; Location = SouthEast; Message = My first line manager is a great manager. Too bad all the dips above him suck. IBM will never become a decent place to work again until they begin cutting jobs from "Senior VP" level down instead of "grunt" level up. The morale is horrible and the only thing Sam and his cronies care about is their pay, bonuses, and stock price. -Bob Marley-
  • PBC Comments
    • Comment 12/10/08: Anyone as psyched as I am to do this year's PBC? I dread this lousy totally subjective screw job each year and especially since it has to be done during the holiday season (which is supposed to be a happy time). -PBCthis-
    • Comment 12/11/08: My predication is that IBM will use the economy issues as justification to reduce PBC payouts this time around. We all can anticipate the usual "propaganda" speech...other companies are laying off employees, we only had a profit of billion, not enough to share with the workers, yada, yada, yada -Crystal Ball-
    • Comment 12/11/08: To "PBCthis": I have been mostly copying-and-pasting stuff from previous PBCs. As you said, it's a completely useless exercise since our rating has been decided 12 months earlier. Why waste time on writing it? -Anonymous-
    • Comment 12/11/08: PBCthis - I completely agree and on top of it our PBC rating is pretty much decided in 1Q. What a huge waste of time and energy. Why don't the manager just give us the rating? My guess is that the manager needs our write-up so they can write our results! Cause let's be honest most of the IBM's manager haven't a clue what their employees do day to day. -anon-
    • Comment 12/11/08: -anon- True. They most likely made up their minds in 1Q or maybe 2Q about your PBC during a calibration session earlier this year. I think they have to do it before the salary review process around mid year. The reason they wait to tell you the results at year end is they (your management) want to dangle hope in front of you. They also wait to see what you wrote in your PBC so they can possibly brow beat you about it. They can always give you a lower PBC. I doubt you can ever move up. Also, if you are late with your PBC or you fail to actually submit one you get a PBC 3 since, without a PBC you can't make any of your business commitments. -sby_willie-
    • Comment 12/13/08: Prior Yr PBC = 2; This Yr PBC = ?; This Yr Bonus = ?; Prior Yr Bonus = 0.3%; Message = You all are right about mgmt not having a clue as to what's going on at an employee's desk. Since most of my work was sent to Argentina months ago my workload has been reduced to about 5 hours PER MONTH. Sure there's the occasional extra assignment that truly takes an extra hour or two but other than that, I've been getting back at IBM by just drawing a paycheck. I'm physically at my desk about 30 hours a week and I spend a fair amount of time online improving myself with online coursework. Now if there was actually a good relationship or some loyalty with IBM would I be doing this? Not a chance. But hey, they keep on paying me & there's no 'love' from the top. Plus increasing the time here at IBM for my resume doesn't hurt. And if I don't have to look for another job right now in our economy AND if I can increase my knowledge while I'm here to better prepare me to find something else - why not? -Tulsa employee-
    • Comment 12/15/08: To "Tulsa": Bravo! Milk IBM for all they're worth. They deserve it. -Anonymous-
  • International Comments
Vault Message Board Posts

Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC.

If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

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