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6, 2000 April, 2000

Highlights—February 28, 2009

  • InfoWorld: IT deserves better than IBM or Microsoft. By Bill Snyder. Excerpts: Times are tough, but that's no excuse for the meanness at IBM or the initial clumsiness at Microsoft. I thought I was done beating on IBM for its atrocious behavior. You probably remember the company suggesting that laid off workers pull up stakes and move to India and that others who want to keep their jobs accept forced moves across the country. ...

    The e-mail actually came from the IBM employee's husband. I won't jeopardize her remaining job security by publishing a name, but here's what he had to say. (The caps for emphasis are his.)

    • An employee must maintain a minimum of 44 BILLABLE hours a week.
    • Previously provided training, sick time, vacation, holidays, breaks, etc. ARE NOT billable, therefore must be accomplished on your own time.
    • Oh yeah, if you are the bottom with 50+ billable hours, you are still a 3 performer and ripe for the guillotine.

    He further notes, "She works 60-plus hours a week, 12 to 14 hours a day, taking the daylight hours of Sunday off. Often she works overnight for the unappreciative SOBs. If she didn't work from home I would be convinced she was having an affair."

    More of IBM's family values. When someone loses his job, it's often a whole family that suffers. Consider this awful story from G.R., who wrote me a few days ago:

    I was laid off from East Fishkill IBM after 28 years of excellent service! Two kids, 18 and 13. One going to college. I was an equipment maintenance tech. We get our medical benefits from my wife, who is a teaching assistant. She may be losing her job because of N.Y. State budgets problems ... which it looks like will happen even though Obama's package went through. At that point, I cannot pick up IBM transition benefits because I didn't already have them.

    Health care, reform, anyone?

    Then there's L.S., who wonders if "IBM" stands for "I Barely Matter." She writes: "We have been given nothing in writing regarding the relocation, not even the name of a Realtor. We are being asked to give a year commitment to Boulder [Colo.], but IBM will give us no commitment that we have a job for 1 month or 3 months or 6 months or anything. There is even question on salary being lowered because there are job postings for the Boulder positions at a much lower [salary] band level than the current folks being asked to move."

  • A sad story...the Rocky Mountain News quits publishing after 150 years. Wall Street Journal: Rocky Mountain News Folds Amid Ad Slump. By Russel Adams, Shira Ovide, and Stephanie Simon. Excerpts: The Rocky Mountain News on Thursday became the largest-circulation daily to close its doors in the newspaper-industry crisis, after publisher E.W. Scripps Co. failed to find a buyer for the 150-year-old Denver paper. The closure of Colorado's oldest newspaper, which prints its last edition Friday, makes Denver the first of what could be a string of major metropolitan markets to lose a daily. Tumbling advertising revenues have endangered one or more dailies in Philadelphia, San Francisco and Minneapolis, among others, and two publishers have filed for bankruptcy protection in the past week alone. ...

    The Rocky's demise ends what is regarded as the country's oldest continuous newspaper rivalry. Fresh off the Rocky's announcement, the Post said it would publish an extra day -- Saturday -- begin delivering to all Rocky subscribers and poach some of the newspaper's star writers. ...

    Founded in 1859, the Rocky is the more conservative of the two Denver newspapers, and the rivalry between the two has become part of the fabric of the community. Some local politicians concluded that an endorsement by one newspaper would inevitably be canceled out by fierce criticism from the other. When the newspapers did agree, "Oooh. That was big stuff," said John Brackney, president of the South Metro Denver Chamber of Commerce. "Having a two-paper town has been part of the psyche of Denver for generations."

  • Rocky Mountain News: Goodbye, Colorado. Excerpt: It is with great sadness that we say goodbye to you today. Our time chronicling the life of Denver and Colorado, the nation and the world, is over. Thousands of men and women have worked at this newspaper since William Byers produced its first edition on the banks of Cherry Creek on April 23, 1859. We speak, we believe, for all of them, when we say that it has been an honor to serve you. To have reached this day, the final edition of the Rocky Mountain News, just 55 days shy of its 150th birthday is painful. We will scatter. And all that will be left are the stories we have told, captured on microfilm or in digital archives, devices unimaginable in those first days. But what was present in the paper then and has remained to this day is a belief in this community and the people who make it what it has become and what it will be. We part in sorrow because we know so much lies ahead that will be worth telling, and we will not be there to do so. We have celebrated life in Colorado, praising its ways, but we have warned, too, against steps we thought were mistaken. We have always been a part of this special place, striving to reflect it accurately and with compassion. We hope Coloradans will remember this newspaper fondly from generation to generation, a reminder of Denver’s history – the ambitions, foibles and virtues of its settlers and those who followed. We are confident that you will build on their dreams and find new ways to tell your story. Farewell – and thank you for so many memorable years together.
  • CNN/Money: IBM Ranked #1 IT Services Company in India for 2008 by Springboard Research. Leads the Market With 10.8% Market Share. Excerpts: IBM today announced that a leading analyst and information technology (IT) market research firm, Springboard Research, has recognized IBM as the leader in the Indian domestic IT services market with a market share of 10.8% for calendar year 2008. In a report titled, "India IT Services: Competing for Tomorrow's Market," Springboard ranks IBM as the number 1 vendor in IT infrastructure services and consulting services. According to the research firm, IBM continues to lead the market, leveraging its success with large end-to-end outsourcing deals and the ability to integrate consulting services. ...

    IBM was a pioneer in outsourcing services in India and has sustained its momentum in 2008 by signing major contracts in emerging verticals such as retail, healthcare and insurance, while further consolidating its position in telecom and government sectors. The sheer breadth and scale of services, execution and global delivery capabilities as well as the ability to combine software, hardware and consultancy has aided IBM in upholding its leadership position in the domestic market.

  • eWeek: More IT Vendors Make H-1B Scam List. By Roy Mark. Excerpts: Small Iowa communities were used as nothing more than mail drops in an elaborate H-1B visa fraud scheme that allowed foreign workers to illegally work on the East and West coasts while being paid the lower Iowa prevailing rates. Two IT services firms in New Jersey and one in California may be at the heart of the H-1B visa scam, but federal prosecutors warn current indictments are "just the tip of the iceberg."

    Two New Jersey IT services firms allegedly used shell businesses in two small Iowa towns—Coon Rapids and Clive—as part of an elaborate H-1B visa fraud scheme that began to unravel Feb. 11 with the arrests of 11 individuals in seven states. According to the U.S. Department of Justice, the scheme involved hiring college-educated foreign workers to allegedly fill high-tech jobs in Iowa when, in fact, the workers were sent to the East and West coasts while being paid the lower prevailing Iowa wage rate.

    In other cases, the DOJ claims, foreign workers were recruited and H-1B visas were obtained for nonexistent jobs or the workers were placed in jobs and locations not previously certified by the Department of Labor, replacing qualified American workers and violating prevailing wage laws.

  • Yahoo! IBM Employee Issues message board: Departees: Spend more Health Care Spending Account $ than you put in. By "dakra137". Excerpt: This is an under appreciated part of the law relating to your Health Care Spending Account: The year you leave the company, you can spend the whole year's anticipated Health Care Spending Account even if you have only put in a few month's worth so far. An example makes it clearer.

    Last fall, when selecting 2009 health care options, you selected to have a $4800 HCSA for 2009, which costs you $400/month of pretax income. In January and February you bought new glasses for your large family and spent $2000. You submitted for HCSA reimbursement and get the $2000, even though you have only paid in $800 so far.

    You leave the company February 23rd. You don't have to pay back anything. You still have 5 days to spend the remaining $2800 of the $4800 for the year. You are so busy you don't.

    You can still get that remaining $2800. It will cost you $400/month until you do. The explanation is at https://www.acclarisonline.com/acclaris/common/FSA%20FAQs%20IBM.html#Q8

  • IBM Pension and Retirement Issues message board: "Future Health Account implications" by "s2buell". Full excerpt: Hi - I went to check my 'future health account' details to see if I could use that for COBRA payments since I was RA'd on 2/26. I'm 50 years old. After reading 'if you meet certain age and service requirements when you leave IBM', I realized that because I was under 55, even though I had over 10 yrs of service, that $32K is going back into IBM's coffers.

    I was wondering if anyone here involved with the Cooper lawsuit knew if this would be age discrimination grounds. Seems the people I know that are being let go are under 55 as well, and would have been in the 2nd tier (I think). We were all over 40 when the pension changed from the old plan, but didn't have enough service to be considered to grandfather into it. Seems we were specifically targeted, and since Janet has done so much research on this (and I see she still comes to this board) I was wondering if I'm onto something.

    I really need the severance package to survive. But if it's age discrimination grounds, I'll happily file a lawsuit. What do you think?

  • IBM Pension and Retirement Issues message board: "Re: Future Health Account implications" by Kathi Cooper. Full excerpt: The FHA is not protected by law, including ADEA and ERISA. Announced in 1999, it is an internal benefit dreamed up by IBM whose goal was to reduce retiree medical benefits. IBM did a good job doing that too.

    They can boot you out prior to age 55 or 30 years service and you get nothing. It goes from 32K to nothing, instantly. The money was never yours, ever. Like Bernie Madoff, IBM printed it out on statements for you to see so you would think it was your money. It was used as a carrot to keep you with IBM and away from unions or other worthy companies, as if it was a legal benefit. When needed, IBM would then pull the carpet out from under thousands of employees, and never have to dish out a single penny to anyone.

    There is no law in the nation to protect you. It was an internal promise and was qualified such that you had to be 55 or have 30 years of service before you could get it. Since you do not qualify as it is written, you get nothing.

    However, if it had been a contract, that would be something else. The best labor contracts are from unions and IBM has a union, the Alliance. I am a member and we need thousands more. Please consider joining the Alliance. Get your friends to join too. http://www.endicottalliance.org/ Kathi Cooper of Cooper v. IBM.

  • IBM Pension and Retirement Issues message board: "Re: Future Health Account implications" by "ignatz713". Full excerpt: You're quite correct, Kathi. fhawontcutit, isn't it sad that ONLY now, TEN years later, the facts of the FHA are finally making an impression upon all those who are being presented with it. What is it so many people kept saying for the past ten years -- 'They wouldn't do THAT to me, WOULD they?'.
  • IBM Pension and Retirement Issues message board: "Re: Future Health Account implications" by "fhawontcutit". Full excerpt: What I find so amazing are the people who were told and who KNEW what the exposure was and stayed in denial -- not just about the FHA but, health care in general. Somehow they have convinced themselves that this freight train wasn't coming right at them, somehow they were going to avoid getting hit. Yes, it is truly amazing.
    1. If you are a retiree on the old (pre-FHA) medical plan you are at risk. IBM can pull the medical plan at any time. GM has already pulled its plan for those who are Medicare-eligible. Now Delphi has asked a bankruptcy judge for permission to eliminate its health care benefits for salaried retirees--even those who aren't Medicare-eligible. http://www.freep.com/article/20090206/BUSINESS01/902060335
    2. If you are on the FHA plan, it probably won't get you to Medicare. IBM can pull the FHA at any time. The rates are horribly expensive. And, as others have pointed out, you have to qualify for the FHA to even get it. If you are let go prior to FHA eligibility, you have NO retiree medical plan.

      (And many don't seem to realize that the FHA rates are NOT THE SAME as the active employee rates.)

    3. New hires have no retiree medical plan.
    4. If you are fired prior to eligibility, you can use COBRA (very expensive, although the stimulus bill might help out for some for a while). After COBRA, then you are forced into the individual insurance market unless you can:
      1. find another job with health benefits and you can keep a job with health benefits until Medicare eligibility
      2. go on spouse's plan, if you have a spouse, and if your spouse's employer continues its plan. What are the chances that the spouse's plan will continue, especially in this economy?

    We've tried to tell everyone for 10 years, didn't we, ignatz? But, no, too many stayed in denial, thinking it would be OK, it wouldn't happen to them.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Future Health Account implications" by "fhawontcutit". Full excerpt: Clarification: GM pulled its retiree medical plan for the NON-UNION Medicare-eligible employees.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Future Health Account implications" by Bob Sutton. Full excerpt: You are correct on two important points Kathi. There are no laws to protect people from this kind of corp. abuse and unethical actions.

    Collective action is one of the two things that IBM cannot ignore; the other are valid law suits like the one you were involved with.

    Because of the wealth of IBM and its hundreds of lawyers there are very few opportunities to justify a lawsuit against them even if you had the money to do it individually or collectively via contingency lawyers. As time goes on the few errors IBM made have been uncovered and exploited. In addition most former IBMers will have moved on with their lives and put their IBM experience behind them either because they have no choice or they choose to do so.

    Therefore there is only one practical option for current employees and some former ones and that is collective action through labor unions.

    Unfortunately it is my observation that with just a few exceptions like Kathi most IBMers are absolute wimps and people who analyze things to death but never take action. They are people who gravitate to large corps in the first place because they don't want to stand out in the crowd and they have been augmented recently by lots of new hires who simply have no other frame of reference to the past practices of IBM and therefore no motivation to do anything either.

    IBM in the US today is simply a place to build more experience on your CV and then move on and IBM is completely happy with that relationship as it reduces its headcount in all high wage countries to the absolute minimum with its global supply chain; I would estimate that would be no more than about 50,000 in the US for face to face sales and service.......the old IBM is dead and buried......RIP.

  • Fortune: IBM, The Last Company To Pull Out Of Second Life? by Eric Krangel. Excerpts: Is IBM (IBM) finally done with Second Life? Could be: Ian Hughes, IBM's "Metaverse Evangelist" and point man for all things IBM and Second Life, announced today on his personal blog he's leaving IBM to start his own company. ...

    But we haven't heard much in the past few months, as some of the buzz fades from Second Life and IBM reportedly undergoes thousands of layoffs. We have calls into IBM PR and Ian himself. But we can't say we'd really be surprised if IBM uses Ian's departure as pretext to quietly back away from its once full-throated backing of Linden Lab's virtual world.

  • Fortune: Better Business Bureau Gives Second Life An "F". By Eric Krangel. Excerpt: During my brief stint as a Second Life business reporter -- there to track the growth of the virtual economy in the 2007 heyday -- a lot of my stories centered on the fact that Second Life actually didn't seem to be a very good place to do business at all. IP theft is rampant, bugs are severe, and fraud is both widespread and unpunished. Now the Better Business Bureau chips in, and gives Linden Lab, the company behind Second Life, an "F".
  • IBM Pension and Retirement Issues: Pension Protection Act - issues at HP. By "john_v_morris2003". Full excerpt: I'm coming from a parallel universe (HP instead of IBM), but I'm wondering if the IBM side is affected by changes due to the Pension Protection Act.

    At HP, we have a defined benefit plan. The early payout was formerly based on the 30 yr Treasury rate around 3%. Under the PPA, HP will be changing the interest rate to a mix of corporate bond rates, averaging around 7%. In my case, the payout value of my pension fund will drop from around $300,000 to around $150,000. I can't give precise numbers because, despite multiple requests, HP has not given me a disclosure.

    In other words, HP is changing the indexing in a way which reduces the present value of the plan by around 50%. And they aren't telling anybody. Does IBM have a defined benefit plan which is being similarly affected by the Pension Protection Act?

  • Binghamton Press & Sun Bulletin, courtesy of the Alliance@IBM: TCE reached aquifer via elevator shafts. By Tom Wilbur. Excerpts: Hazardous chemicals found pooling below the former IBM plant decades ago have worked their way down through elevator shafts into an aquifer that feeds municipal wells, according to recent information from state environmental officials. Powerful pumps have contained the pollution to one spot, officials said, keeping it from spreading into Endicott wells on South Street less than a mile away. They are the wells closest to the pollution, and part of the village water works that supplies more than 45,000 people in Endicott and the Town of Union. ...

    In 2003, scientists discovered that TCE - long-known to be flowing through shallow water tables - was also forming vapors pushing into the basements of hundreds of nearby homes and businesses through a process called vapor intrusion. Soon after, IBM installed ventilation systems to keep the vapors out of more than 450 homes, and the DEC ordered the company to step up its efforts to pinpoint and clean pollution. That has been a monumental task, given the size of the 60-acre campus and unknowns about how much solvent is still in the ground, exactly where it is and how deep it flows.

  • New York Times: In Innovation, U.S. Said to Be Losing Competitive Edge. By Steve Lohr. Excerpts: The competitive edge of the United States economy has eroded sharply over the last decade, according to a new study by a nonpartisan research group. The report by the Information Technology and Innovation Foundation found that the United States ranked sixth among 40 countries and regions, based on 16 indicators of innovation and competitiveness. They included venture capital investment, scientific researchers, spending on research and educational achievement.

    But the American economy placed last in terms of progress made over the last decade. “The trend is very troubling,” said Robert D. Atkinson, president of the foundation.

  • Yahoo! Finance: Judge lets Delphi halt salaried retiree benefits. Judge provisionally approves Delphi request to eliminate salaried retiree health care benefits. By Bree Fowler. Excerpts: bankruptcy judge on Tuesday tentatively approved Delphi Corp.'s request to stop paying for its salaried retirees' health and life insurance, but he left the door open for some former employees to be excluded from the move. U.S. Bankruptcy Judge Robert Drain in Manhattan ruled that the auto parts supplier has a right to change the retirees' benefits under bankruptcy law and that the cuts are justified given the company's dire finances, its troubles finding financing and the overall state of the automotive industry.

    "It is crystal clear to me that debtor is well within its business judgment in assuming that it will need to eliminate the projected (post-retirement benefits) liability, which is projected at $1.1 billion, in order to reorganize," Drain said in making his ruling. The Troy, Mich.-based company wants to cut off the benefits effective April 1. But before it does, Drain said the 15,000 affected retirees can form a committee to investigate if certain retirees, such as those who were on disability before their retirement, have the right to negotiate with the company before it can terminate their benefits. ...

    Delphi salaried retirees hired before 1993 and their survivors currently receive health insurance benefits until the age of 65 when they become eligible for Medicare. Under the changes Delphi has requested, those retirees will be responsible for paying the full cost of their health insurance, which could amount to more than $1,000 per month for a retiree and spouse.

    Tuesday's ruling doesn't affect retirees who were covered by union contracts. Delphi's unions made wage and benefit concessions in their 2007 agreements with the company.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Judge lets Delphi halt salaried retiree benefits" by "flatsflyer". Full excerpt: More than 1,600 retirees sent letters to the judge begging him to deny Delphi's motion. The Judge ignored the 1,600 letters, you ask why? Did he get a new car, a week long vacation in Florida, 20 sessions with a hooker? Not so far fetched, our government at work.
  • Yahoo! IBM Pension and Retirement Issues message board: "Coming Soon to a Neighborhood Near You! (loss of retirement health care and life insurance)" Posted by Kathi Cooper. Full excerpt: For the past couple of weeks the NRLN has been working closely with the interim leaders of the Delphi Salaried Retiree Association as they have taken steps toward organizing the DSRA and prepared to oppose Delphi Corporation's proposal in bankruptcy court to eliminate the health care and life insurance for 15,000 Delphi salaried retirees plus their spouses.

    Unfortunately, yesterday (Feb. 24th) a New York bankruptcy court judge approved Delphi Corporation's plan to eliminate health care and life insurance for salaried retirees as early as April 1, 2009. The NRLN has issued nationally the news release below calling for President Obama to put pressure on Congress to pass legislation on bankruptcy reform that would better protect workers and retirees. The news release also points out the harm being inflicted on retirees by corporations who have evaded their moral obligations to retirees by eliminating the benefits they earned through many years of their labor.

    Soon the NRLN will send an Action Alert to you asking that you write to your members of Congress requesting his or her support for bankruptcy reform to provide a higher degree of fairness to workers and retirees.

    Bill Kadereit President, National Retiree Legislative Network.

    I feel confident IBM is eyeing this Judge's ruling with glee. Kathi Cooper.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Coming Soon to a Neighborhood Near You!" By "Rita". Full excerpt: I'm not sure if I understand this - I am currently retired but not old enough for Medicare (61). I receive a pension check and as part of my package (I was surplused in 1993 and made my 30 yrs in 1999), I was "guaranteed" access to medical benefits. Does this conversation mean that I might lose this access before I am eligible for Medicare? Or only afterwards when I would then have to find another program to pay for the extra coverage? I'm unclear. Thx.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Coming Soon to a Neighborhood Near You!" By Jim Askew. Full excerpt: "Guaranteed" means nothing since there are no laws enforcing that "guarantee." Furthermore, "access to medical benefits" really means "access to medical insurance", but the cost of that insurance and who pays for it is wide open. In fact, what it gives you is the "right" to buy medical insurance from IBM at very high rates (given that retirees are in a separate pool than current employees, since that reduces IBM's cost to insure employees). Don't mistake this "access" with the promises your managers made to you in years past in department meetings about "lifetime medical insurance" where the implication was that it would be free.
  • BusinessWeek: Cutting Mature Workers Widens the Wisdom Deficit. By Alaina Love. Excerpt: In the deluge of head count slashing and budget cuts, companies may be making critical mistakes in shedding a vital asset: mature workers. The current economic climate is prompting organizations to reexamine priorities and jobs. In the talent hemorrhage pouring from the arteries of U.S. companies are employees who hold significant institutional wisdom and knowledge—the kind that cannot be easily replaced.

    Over the last several weeks, I have heard story after story about long-term employees losing their jobs. Some were quickly replaced through outsourcing; others left gaping organizational holes that younger counterparts struggled to fill. ...

    In our research with seasoned workers, we have found many employees age 50 and older with a strong drive to make continued contributions in their field. Most of the individuals we've interviewed have a firm sense of who they are, what their purpose is, and how they can make a difference. Better yet, many are willing to share their knowledge and to help develop others. This is a huge benefit to organizations, especially in a time where employee-development budgets are shrinking. To make the most of experienced workers, I offer these recommendations to corporate leaders: ...

    We have an even more recent example of the power that the knowledge and wisdom of an older worker had on an organization's success. Like many of you, I was riveted on Jan. 15 by the footage of 58-year-old Captain Chesley "Sully" Sullenberger successfully landing USAir flight 1549 on the Hudson River, saving the lives of all 155 people on board. When remarking on the accomplishment in a recent interview, Sullenberger commented that he felt his "entire career" had prepared him for that moment. Had Sullenberger not been at the controls of the aircraft that day, the impact on passengers, their families, and USAir's future might have been disastrous.

  • New York Times: Jobless Angry at Possibility of No Benefits. By Michael Luo. Excerpts: As governors in nine states, mostly in the South, consider rejecting millions of dollars in federal stimulus money for increased unemployment insurance, there is growing anger among the ranks of the jobless in those states that they could be left out of a significant government benefit.

    The stimulus bill recently passed by Congress includes incentives to states to expand benefits to many more jobless people, including part-time workers and those who have cycled in and out of the work force, who are not covered in many states. The Republican governors of Alabama, Georgia, Louisiana, Mississippi, South Carolina and Texas, along with Alaska and Idaho, have raised protests, saying that expansion could eventually require them to raise taxes. ...

    For people like Henry Kight, 59, of Austin, Tex., the possibility that the money might be turned down is a deeply personal issue. Mr. Kight, who worked for more than three decades as an engineering technician, discovered in September that because of complex state rules, he was not eligible for unemployment insurance after losing a job at a major electronics manufacturer he had landed at the beginning of the year. Unable to draw jobless benefits, he and his wife have taken on thousands of dollars in credit-card debt to help make ends meet.

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • FactCheck.org: Doctor's Orders? Republicans claim that the new stimulus law says the government will tell physicians what procedures can and can't be performed. It doesn't.
  • USA Today: Costs for individual health plans soar. By Julie Appleby. Excerpts: At a time when more people are forced to buy their own health insurance because of job losses, costs for many individual policies are soaring. Advocates say the 17 million Americans who buy their own coverage can't negotiate lower rates the way employers or other large group plans can.

    "These folks have their back against the wall," says Jerry Flanagan, a health advocate with Consumer Watchdog, a California-based group. More people are shopping for coverage: The Golden Rule Insurance Company, a part of UnitedHealth Group, says sales of individual policies are up 24% in the past two months. A website that links people with insurers, eHealthInsurance, says applications are up 18% in the fourth quarter, compared with a year ago.

  • The Commonwealth Fund: You Can Get There from Here: Mapping the Way to a Transformed U.S. Health System. By Karen Davis, Ph.D. Excerpts: In a speech he gave nearly half a century ago, John F. Kennedy noted that the Chinese symbol for crisis comprises the characters representing both danger and opportunity. Today, his observation could not be more relevant. The potent combination of recent events in the United States has presented the nation's leaders with a historic opportunity to fix our broken health care system.

    With 116 million adults under age 65 reporting health care-related financial issues, the nation's health care crisis and economic crisis have become inextricably intertwined. As unemployment grows, more Americans will join the ranks of the uninsured. States under pressure to balance their budgets are already making cuts in health programs that serve low-income adults and children. Already families—even those with insurance—are struggling to pay their share of premiums and medical expenses. Two-thirds of all adults under age 65 report being uninsured or underinsured, forgoing needed care, or struggling to pay medical bills or accumulated medical debt.

    Ours is the only industrialized nation that fails to ensure that all its citizens have access to affordable health care. We are slipping further behind what other countries achieve with their more modest investment in health care: the U.S. now ranks 19th out of a group of 19 major industrialized countries on an important measure of health system performance: mortality amenable to medical care. If we did as well as the best-performing countries, we would have 100,000 fewer deaths each year.

  • Center for American Progress: Health Care in Crisis: 14,000 Losing Coverage Each Day. Excerpt: Even when the economy was growing, 46 million people in America did not have any health insurance. Since the recession began, an estimated 4 million additional Americans have lost their health insurance and 2 million have become uninsured. The recent turmoil in the job market is likely increasing the number of uninsured at the rate of 14,000 a day. And yet, congressional conservatives opposed efforts to stop the erosion of our health care system and help millions of Americans hold on to the coverage they have or get it for the first time.
  • USA Today: Employers fear cost of health insurance for jobless workers. By Sandra Block and Julie Appleby. Excerpts: A new subsidy that goes into effect March 1 could make health insurance more affordable for millions of laid-off workers. But some businesses fear it could also raise employer health care costs. The stimulus package signed into law this week by President Obama subsidizes 65% of their COBRA health insurance premiums for individuals laid off between Sept. 1 and the end of this year.

    Under the federal Consolidated Omnibus Budget Reconciliation Act, or COBRA, laid-off workers can continue their former employer's health coverage for up to 18 months. In the past, though, they were required to pay the entire premium, plus a 2% administrative fee, making COBRA unaffordable for most jobless workers. Average COBRA premiums exceed $400 a month for individuals, and more than $1,000 a month for families.

  • Wall Street Journal opinion: We Cannot Delay Health-Care Reform. Universal coverage means healthier people and a more productive economy. By Max Baucus and Edward M. Kennedy. Excerpts: For decades, obtaining affordable, high-quality health care has been a heavy weight that millions of Americans have been forced to bear on their own. Increasingly, skyrocketing health-care costs have threatened the stability of families, businesses and our economy as a whole. Some argue that repairing the health-care system now is impossible, given the urgency and high cost of ending the financial crisis. The claim is that we can fix one problem or the other -- but not both. In truth, the two are inextricably intertwined: Solving the nation's health-care crisis is a fundamental part of healing our economy. ...

    Approximately 46 million Americans lack any health insurance at all, according to the Census Bureau. Nearly 25 million more don't have enough insurance to keep their medical bills from sinking them financially. Insurance premiums for a family of four can cost more than $12,000 a year. According to the New America Foundation, that cost could reach $24,000 in 2016 -- an 84% increase from today. At the same time, higher deductibles, larger co-payments and greater exclusions from coverage are causing families to bear more out-of-pocket costs. Debt related to health expenses is now one of the leading causes of personal bankruptcy.

    Rising health costs also undermine our strength in the global marketplace. American employers pay far more for health care than their major trading partners, and manufacturers face particularly high pressure to compete internationally. U.S. manufacturers pay $2.38 an hour for health benefits, while manufacturers among our major trading partners pay only 96 cents an hour on average, according to the New America Foundation. Health-care reform is essential to spur growth and keep American businesses on a level playing field with the world.

  • New York Times: To Pay for Health Care, Obama Looks to Taxes on Affluent. By Jackie Calmes and Robert Pear. Excerpt: President Obama will propose further tax increases on the affluent to help pay for his promise to make health care more accessible and affordable, calling for stricter limits on the benefits of itemized deductions taken by the wealthiest households, administration officials said Wednesday. The tax proposal, coming after recent years in which wealth has become more concentrated at the top of the income scale, introduces a politically volatile edge to the Congressional debate over Mr. Obama’s domestic priorities.
  • Wall Street Journal: $318 Billion Tax Hit Proposed. Upper-Income Americans Would See Deductions Cut on Charity and Mortgage Interest. By Laura Meckler. Excerpt: President Barack Obama on Thursday will propose $634 billion in new taxes on upper-income Americans and cuts in government spending over the next decade to pay for his promised health-care expansion. The tax increases and spending cuts will be included Thursday in Mr. Obama's comprehensive budget blueprint, and signal his ambition to overhaul the health-care system, one of the main planks of his presidential campaign.

    The tax increases would raise an estimated $318 billion over 10 years by reducing the value of such longstanding deductions as mortgage interest and charitable contributions for people in the highest tax brackets. Households paying income taxes at the 33% and 35% rates can currently claim deductions at those rates. Under the Obama proposal, they could deduct only 28% of the value of those payments.

  • New York Times: Obama Offers Broad Plan to Revamp Health Care. By Robert Pear.
  • New York Times editorial: President Obama’s Budget: Progress on Health Care. Excerpts: Mr. Obama’s budget plan makes a bold and long overdue commitment to overhaul the dysfunctional and far-too-costly American health care system. The plan will not guarantee affordable health coverage for all Americans, the ultimate goal, and it contains no blueprint for comprehensive reform of the system. Those issues will have to be thrashed out with Congress.

    But the substantial sums proposed by Mr. Obama are an impressive down payment on his pledge to make health care reform a priority right from the start of his administration. Those critics who will inevitably say that he is overreaching in the midst of an economic crisis should listen to the millions of Americans — employers, employees and the unemployed — struggling with the crushing costs of health care.

    The plan calls for creating a $634 billion reserve fund for health care reforms over the next decade. And unlike the ill-fated Clinton health reform plan of the early 1990s — whose many complexities were worked out behind closed doors only to crash in Congress — Mr. Obama has mainly issued guiding principles. Coverage should be universal, affordable, portable and there should be investments in prevention and improved quality of care. He is leaving most of the details to Congress in hopes of winning political support for an arduous reform task.

    To the administration’s credit, the budget plan does not pretend that this can be paid for through swiftly delivered efficiencies. Fully half of the money, $318 billion, would come from new taxes on the wealthy. The other major source of money would come from eliminating unjustified subsidies granted to the private plans that provide comprehensive care to more than 10 million of the 44 million older Americans covered by Medicare. By forcing these plans — known as Medicare Advantage — into a new competitive bidding system, the administration believes it can save $175 billion over 10 years.

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.

  • New York Times: After Huge Losses, a Move to Reclaim Executives’ Pay. By Gretchen Morgenson. Excerpts: Should executives get to keep lavish pay packages when the profits that generated their compensation go up in smoke? As the financial crisis deepens, what might have been a philosophical question is now the topic of the day. With losses mounting at the nation’s largest financial institutions, years of earnings have been erased, investors have lost billions, thousands of employees have been let go, and taxpayers have been tapped to rescue the financial system. But executives who helped set the problems in motion, or ignored them as they mounted, are still doing fine. Humbled, perhaps, but well paid for their anguish.

    Executives at seven major financial institutions that have collapsed, were sold at distressed prices or are in deep to the taxpayer received $464 million in performance pay since 2005, according to an analysis performed for The New York Times. Almost half of that consisted of cash compensation.

    Yet these firms have reported losses of $107 billion since 2007, a result of their own missteps and the ensuing economic downturn. And $740 billion in stock market value has been lost since these companies’ shares peaked in 2007, just before the housing bubble burst. ...

    “There is a line that separates fair compensation from stealing from shareholders,” said Frederick E. Rowe, a money manager in Dallas and a founder of Investors for Director Accountability, a nonprofit group. “When managements ignore that line or can’t see it, then hell, yes, they should be required to give the money back.”

  • Mother Jones: Who Wrecked the Economy? Foreclosure Phil (July/August 2008). Excerpts: Who's to blame for the biggest financial catastrophe of our time? There are plenty of culprits, but one candidate for lead perp is former Sen. Phil Gramm. Eight years ago, as part of a decades-long anti-regulatory crusade, Gramm pulled a sly legislative maneuver that greased the way to the multibillion-dollar subprime meltdown. Yet has Gramm been banished from the corridors of power? Reviled as the villain who bankrupted Middle America? Hardly. Now a well-paid executive at a Swiss bank, Gramm cochairs Sen. John McCain's presidential campaign and advises the Republican candidate on economic matters. He's been mentioned as a possible Treasury secretary should McCain win. That's right: A guy who helped screw up the global financial system could end up in charge of US economic policy. Talk about a market failure.

    Gramm's long been a handmaiden to Big Finance. In the 1990s, as chairman of the Senate banking committee, he routinely turned down Securities and Exchange Commission chairman Arthur Levitt's requests for more money to police Wall Street; during this period, the sec's workload shot up 80 percent, but its staff grew only 20 percent. Gramm also opposed an sec rule that would have prohibited accounting firms from getting too close to the companies they audited—at one point, according to Levitt's memoir, he warned the sec chairman that if the commission adopted the rule, its funding would be cut. And in 1999, Gramm pushed through a historic banking deregulation bill that decimated Depression-era firewalls between commercial banks, investment banks, insurance companies, and securities firms—setting off a wave of merger mania.

  • Mother Jones: Fiscal Therapy (January/February 2009). Excerpts: For years now, whenever I've been invited to lecture students on how our tax system works, I have asked a simple question: What is the purpose of the United States of America? The most common answer, be it at prestigious universities, elite prep schools, rural community colleges, or crowded urban high schools, is this: To make people rich.

    This should come as no great surprise. For anyone born after, say, 1970, the world has been shaped by Ronald Reagan's remaking of government's relationship with private interests—a vision of lower taxes, less regulation, and maximum economic leeway for those at the top. In this view, the pursuit of wealth is the warp and weft of America; everything else will follow.

    By contrast, the preamble to the Constitution tells us the nation's reason for being in 52 words that can be reduced to six principles: society, justice, peace, security, commonwealth, and freedom. Individual riches don't make the list. They are a product of American society, not its guiding purpose. Progress, then, must begin with a return to the best of the values that created this Second American Republic—one born, it's worth remembering, from the failure of the Articles of Confederation, whose principles (weak government, unfettered capitalism) found their resurrection in the economic policies of the past three decades.

    Even judged by its own yardstick, the trickle-down approach has failed to deliver: Rather than getting richer, we have been slowly impoverishing ourselves. While incomes at the very top have soared to levels beyond imagining even a generation ago, the average inflation-adjusted income of the bottom 90 percent of earners was lower in 2006 than it was back in 1973. And since 2000, the median income of all Americans has actually slipped, proof that tax cuts for the rich do not create general prosperity. Today, more and more of us do not have enough money to live on without going into debt. For each dollar of equity people gained in their homes from 1980 to 2006, they borrowed two—and while a portion of that is accounted for by poor decision making, much has to do with the sheer impossibility of making ends meet. Her hope is to borrow techniques that could help the commission sift through hundreds of thousands of tips it receives annually from informants. Last year, the agency received more than 700,000 such tips.

  • New York Times: S.E.C. Chief Pursues Tougher Enforcement. By Stephen Labaton. Excerpts: Less than a month after becoming the head of the Securities and Exchange Commission, Mary L. Schapiro is moving swiftly to reverse major decisions by her predecessor and to strengthen an enforcement program that missed several major frauds that cost investors billions of dollars. Ms. Schapiro and her aides have begun consulting officials at intelligence and law enforcement agencies about the technology they use to sort through mounds of information.

    In one of her first decisions, Ms. Schapiro reversed a policy of her predecessor, Christopher Cox, that had required enforcement lawyers to obtain the consent of commissioners before moving to resolve major cases. With the commission dominated by opponents of government regulation, this had the effect of discouraging cases and reducing penalties.

  • Wall Street Journal: Math Wizards Working on Spells to 'Cure' by Scott Patterson. Excerpts: The financial engineers are at it again. Critics may complain that these math wizards started the trouble in the first place by designing securities that couldn't withstand the market's turbulence. But they also may have the expertise to help fix the problem. "Airplanes fail, too," says Peter Cotton, founder of Julius Finance, a structured-finance firm in New York. "That doesn't mean you don't fix them."

    Mr. Cotton is one of many such engineers trying to solve a seemingly intractable problem before the government: how to design a system for buying up assets shunted into a massive "bad bank." The government doesn't want to pay too much and banks don't want to sell for too little. How big are these spreads? Last week, a triple-A student-loan auction-rate security was offered for 95 cents on the dollar by its owner. The highest bid: 50 cents

  • New York Times op-ed: Banking on the Brink. By Paul Krugman. Excerpt: Comrade Greenspan wants us to seize the economy’s commanding heights. O.K., not exactly. What Alan Greenspan, the former Federal Reserve chairman — and a staunch defender of free markets — actually said was, “It may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring.” I agree.
  • Huffington Post: Time to Stop the Nationalization Rhetoric, and Let the System Work. By David Paul. Excerpts: This week, the Federal Deposit Insurance Corporation took over Silver Falls Bank in Silverton, Oregon. Silver Falls Bank was the 14th bank taken over by the FDIC this year. This compares with 25 banks that failed in 2008 and 3 in 2007. Bank failure is not unheard of. And up until a week or so ago, the term "nationalization" was not invoked.

    Since its creation in 1933, the role of the FDIC has been to prevent runs on banks by insuring bank deposits and to oversee the orderly disposition of failed banks. For the better part of a century, it has done its job quietly and effectively. And today, we would all be well served to let the FDIC and its capable leader, Sheila Bair, do their job. ...

    The takeover of insolvent banks by the FDIC is the way the process is supposed to work, and the way it has always been allowed to work--up until now. For all of the debates over the "Swedish Model" -- where banks were taken over, balance sheets reconfigured, and then spun back out to private ownership -- the way they did it in Sweden is not actually all that different from the way they do it at the FDIC, when the FDIC is allowed to do its job. Insolvent banks are seized. Assets are sold off and the depositors are paid or, if possible, the balance sheet is cleaned up and the bank is sold off to a new owner.

    The problem today is that a small number of our insolvent banks, notably Citi, are very big and very visible. But the problems they face are the problems that the FDIC was created to fix. This is not nationalization, it is essentially a debtor-in-possession bankruptcy process whereby the FDIC serves as the receiver.

    If left to do its job, the FDIC would do what the banks resolutely refuse to do: sell their bad assets, accept the price of their business decisions, and move on. The banks refuse to do it because it would force them to face up to what the markets, and increasingly outraged taxpayers, have known for a while: They are insolvent.

  • New York Times op-ed: I Ponied Up for Sheryl Crow? By Maureen Dowd. Excerpts: Talk about being teed off. The economy is croaking and bankers are still partying at a golf tournament here on our dime. It’s a good argument for nationalization, or better yet, internationalization. Outsource the jobs of these perfidious, oblivious bank executives to Bangalore; Bollywood bashes have to cost less than Hollywood ones.

    The entertainment Web site TMZ broke the story Tuesday that Northern Trust of Chicago, which got $1.5 billion in bailout money and then laid off 450 workers, flew hundreds of clients and employees to Los Angeles last week and treated them to four days of posh hotel rooms, salmon and filet mignon dinners, music concerts, a PGA golf tournament at the Riviera Country Club with Mercedes shuttle rides and Tiffany swag bags. “A rep from the PGA told us Northern Trust wrote one big, fat check in order to sponsor the event,” TMZ reported.

    Northern No Trust had a lavish dinner at the Ritz Carlton on Wednesday with a concert by Chicago (at a $100,000 fee); rented a private hangar at the Santa Monica Airport on Thursday for another big dinner with a gig by Earth, Wind & Fire, and closed down the House of Blues on Sunset Strip on Saturday (at a cost of $50,000) for a dinner and serenade by Sheryl Crow. ...

    In what is now an established idiotic ritual of rationalization, the bank put out a letter noting that it “did not seek the government’s investment” even though it took it, and that it had raised $3 million for the Los Angeles Junior Chamber of Commerce Charity Foundation and other nonprofits. They riposted that they have a contract to do it every year for five years; but this isn’t every year. The bank cloaks itself in a philanthropic glow while wasting our money, acting like the American Cancer Society when in fact it’s a cancer on American society. ...

    Coming in a moment when skeptical and angry Americans watched A.I.G., Citigroup, General Motors and Chrysler — firms that had already been given a federal steroid injection — get back in line for more billions, the golf scandal was just one more sign that the bailed-out rich are different from you and me: their appetites are unquenchable and their culture is uneducable.

  • Wall Street Journal: Pair Lived Large on Fraud, U.S. Says. By Steve Stecklow, Chad Bray and Jenny Strasburg. Excerpt: In the latest round of financial-fraud allegations to erupt, two money managers have been accused of misappropriating at least $553 million, and using it to fund a lifestyle of lavish homes, horses and even an $80,000 collectible teddy bear. The two men, Paul Greenwood, 61 years old, of North Salem, N.Y., and Stephen Walsh, 64, of Sands Point, N.Y., were arrested by Federal Bureau of Investigation agents and face criminal charges of conspiracy, securities fraud and wire fraud by the U.S. Attorney for the Southern District of New York.
  • Daily Finance: The 401(k) skimming scam. By Daniel Solin. Excerpts: The real problem with 401(k) plans has nothing to do with the current market meltdown. These plans are set up to benefit employers and the mutual fund industry. They profit in every kind of market. It's employees who are the losers. Current hearings before the House Education and Labor Committee are unlikely to solve the problem because Congress has traditionally been unwilling to take on the powerful securities industry lobby. Committee Chairman George Miller correctly observed that these plans are a "high-stakes crap shoot", but that is the tip of the iceberg. The 401(k) system is rotten to its core.

    Employers get paid off in the form of subsidies to select brokers and advisors who control the investment options in the plan. They, in turn, get paid by fund families and insurance companies which limit employees' investment options to costly, under-performing funds.

    The fox guarding the hen house is the big winner. They have a vested interest in steering employees in the wrong direction. That's why there is no standardized investment education. The fix would be simple and easy to implement...

    In recent testimony before Congress on the problems with 401(k) plans, the mutual fund industry was aptly described as the world's largest "skimming operation." It's time for Congress to put an end to the pigs feeding at the trough.

  • New York Times: A Bold Plan Sweeps Away Reagan Ideas. By David Leonhardt. Excerpts: The budget that President Obama proposed on Thursday is nothing less than an attempt to end a three-decade era of economic policy dominated by the ideas of Ronald Reagan and his supporters. The Obama budget — a bold, even radical departure from recent history, wrapped in bureaucratic formality and statistical tables — would sharply raise taxes on the rich, beyond where Bill Clinton had raised them. It would reduce taxes for everyone else, to a lower point than they were under either Mr. Clinton or George W. Bush. And it would lay the groundwork for sweeping changes in health care and education, among other areas.

    More than anything else, the proposals seek to reverse the rapid increase in economic inequality over the last 30 years. They do so first by rewriting the tax code and, over the longer term, by trying to solve some big causes of the middle-class income slowdown, like high medical costs and slowing educational gains. ...

    That agenda starts with taxes. Over the last three decades, the pretax incomes of the wealthiest households have risen far more than they have for other households, while the tax rates for top earners have fallen more than they have for others, according to the Congressional Budget Office. As a result, the average post-tax income of the top 1 percent of households has jumped by roughly $1 million since 1979, adjusted for inflation, to $1.4 million. Pay for most families has risen only slightly faster than inflation.

    Before becoming Mr. Obama’s top economic adviser, Lawrence H. Summers liked to tell a hypothetical story to distill the trend. The increase in inequality, Mr. Summers would say, meant that each family in the bottom 80 percent of the income distribution was effectively sending a $10,000 check, every year, to the top 1 percent of earners. ...

    “The tax code will become more progressive, with relatively higher rates on the rich and relatively lower rates on the middle class and poor,” said Roberton Williams, a senior fellow at the Tax Policy Center in Washington. “This is reversing the effects of the Bush policies,” he added, and then going even further. And just as Franklin D. Roosevelt’s tax increases on the wealthy followed a stock market crash, which had already depressed their incomes, Mr. Obama’s proposals — if they become law — would too. The combination has the potential to reverse a significant portion of the inequality trends of the last few decades.

  • The Huffington Post: The Wingnut Revolution. By Bob Cesca. Excerpts: After nearly three decades of Reaganomics in which the wealthiest two percent have grown exponentially wealthier while middle class wages have remained stagnant, a growing faction of super rich Americans is seriously pissed off -- and their Wingnut Revolution is upon us.

    Sure, the interests and influence of the wealthiest two percent make them more responsible than most for the free market policies that created this current economic crisis. But if there's one thing we've learned about those responsible for this recession, it's that the concept of accountability is about as foreign as their live-in au pairs. Instead, they're trying to pin this on Barney Frank and a legion of "losers" (read that: working class minorities) even though Ben Bernanke himself has debunked this myth.

    But accountability (a "day of reckoning" as President Obama called it) is underway in the form of the president's housing proposal, his healthcare plan and, naturally, the recovery act. At the end of the day, ninety-five percent of Americans will benefit from what amounts to the largest tax cut in American history, along with increased access to affordable healthcare and millions of new jobs.

    Though, alas, the super rich will have to pay slightly more in taxes. Yeah, that's a shame. So they're gathering in their secret war rooms in the Orange County underground and on the floor of the Chicago Mercantile Exchange, grinding the tips of their Salvatore Ferragamo Pregiato Moccasins into razor-sharp spears and fashioning their Bentley key fobs into makeshift nunchucks in preparation for a supremely ridiculous rebellion led by a cast of far-right characters more freakish than the acid trip monsters from Yo Gabba Gabba.

  • New York Times op-ed: Climate of Change. By Paul Krugman. Excerpts: Elections have consequences. President Obama’s new budget represents a huge break, not just with the policies of the past eight years, but with policy trends over the past 30 years. If he can get anything like the plan he announced on Thursday through Congress, he will set America on a fundamentally new course.

    The budget will, among other things, come as a huge relief to Democrats who were starting to feel a bit of postpartisan depression. The stimulus bill that Congress passed may have been too weak and too focused on tax cuts. The administration’s refusal to get tough on the banks may be deeply disappointing. But fears that Mr. Obama would sacrifice progressive priorities in his budget plans, and satisfy himself with fiddling around the edges of the tax system, have now been banished.

  • New York Times op-ed: The Great Solvent North. By Theresa Tedesco. Excerpt: Has the world turned upside down? America, the capital of capitalism, is pondering nationalizing a handful of banks. Meanwhile, Canada, whose banking system had long been notorious for its stodgy practices and government coddling, is now being celebrated for those very qualities. The Canadian banking system, which proved resilient in the global economic crisis, is finally getting its day in the sun. A recent World Economic Forum report ranked it the soundest in the world, mostly as the result of its conservative practices. (The United States ranked 40th).
  • New York Times: Group of Rich Americans Sues UBS to Keep Names Secret in Tax Case. By Lynnley Browning. Excerpts: UBS was sued on Tuesday in a Swiss federal court by wealthy American clients seeking to prevent the disclosure of their identities as part of a tax-evasion investigation by the United States Justice Department. ...

    The suit, filed by a lawyer in Zurich, Andreas Rued, on behalf of nearly a dozen American clients, underscores the growing clash between Swiss banking secrecy laws and those of the United States. Tax evasion is not considered a crime in Switzerland. Disclosing client names under Swiss law is a criminal offense and can expose bank executives and officers to fines, prison terms and other penalties. UBS is the world’s largest private bank and Switzerland is the world’s largest offshore tax haven, with trillions of dollars in assets.

New on the Alliance@IBM Site
  • Survey Question: If you were resourced from IBM, in the 24 months prior; were you ever on a medical or personal LOA? Please provide your answers in your comment message to Job Cuts... we will post them.
  • RA's employees needed to talk to media. Anonymous if you wish. Send email, name and phone number to ibmunionalliance@gmail.com Alliance@IBM (2/9/2009)
  • Job Cuts Status & Comments page
    • Comment 2/21/09: -Soon-To-Be-Canned- : I've come to the same conclusion and realize my future, with or without severance, is not with IBM. They cut my team in half. I do not want to work for a company like IBM any longer. I don't know what the future holds, but it won't hold IBM, IBM products, IBM business partners, nor IBM stock. I also work for GBS. But I plan to leave on my terms, not theirs. -Six months left-
    • Comment 2/22/09: Has anyone else noticed the us.ibm.com addresses of foreign IBMers working in their respective home countries? I have seen several Russians with a "us" email address although they are Russian nationals living and working in Russia. Wondering why they are being given "us" addresses... -Anonymous- Alliance reply: To falsify the true number of IBM US employees?
    • Comment 2/22/09: ibm doesn't wanna give pay cuts and they don't care if they're going to piss off a greater portion of their workforce, either. there was a decent discussion on pay cut vs layoff over on the greater ibm connection group on linkedin.com, too.. but its pretty clear their intention is to shrink the US workforce as much as possible and the more attrition they can get through low morale the better. it simply is not going to get any better for you, so unless you enjoy being treated like crap by your employer you should at the very least be sending out resumes just to see what other opportunities may exist. -left-awhile-ago-
    • Comment 2/23/09: Yes, while in IBM I have worked with a number of people physically located in India, but with IBMUSA email addresses. No one knows the number of W-2 USA employees in the IBM. As a public company, doesn't IBM need to report that to SEC and/or IRS? Oh, BTW, you cannot figure that out from Blue Pages as their record on paper is 100% US based. You can only figure out that in person, when you actually work and talk to that person. -axedToday-
    • Comment 2/23/09: Re: -waiting_for_the_axe- Search in Blue Pages (IBM's internal employee directory) for internet addresses beginning "luxoft". I should clarify too, Luxoft appears to be a contractor hiring Russians and assigning them ".us" addresses. I know the location of some of them are definitely not local as the manager travels to Russia to see them... -Anonymous-
    • Comment 2/24/09: I think this post is relevant to this section. Here is a link to an article that proves that IBM is asking for Stimulus money, point blank: http://washingtontechnology.com/articles/2009/02/23/telecom-broadband-stimulus.aspx The IBM portion of the article is on page 2. What I want to know is: Is the Obama administration actually going to give this money to IBM with no restrictions, qualifications i.e. re-hire the thousands of fired IBMers? I mean seriously, ..REALLY? I don't think they will get the money UNLESS they show some reverse off-shoring/outsourcing and actually do something with 'good faith' bargaining. BTW.. I don't believe that IBM knows what ''good faith' bargaining is, anyway. All the more reason fro IBMers to raise the awareness of your House and Senate reps by writing letters, calling them, and demonstrating in the streets....shouting "IBM: Bring back fired American's IBM jobs before you do anything else to "help" the USA economy...and DO IT NOW!" --
    • Comment 2/24/09: Hi I have never been on bench in 8 yrs in IBM and now I am on bench from past 3 weeks ..I did not had any interview and my RDM could not find me anything or get me an interview what does ur expert advice say .. what is going to happen to me and people like me -anonymous-
    • Comment 2/24/09: And it continues. Coworker in my department is now training his Polish replacement. The rest of our staff is anticipating our jobs going to China or Poland before end of the year. Our program manager won't share anything with us, he's keeping us in the dark. At least have some decency for your fellow human beings! -anonymous- Alliance reply: Please send details such as type of work being offshored and location offshored from to allianceibmunion@gmail.com
    • Comment 2/25/09: To those 'on the bench': Any updates?Any word on what lies ahead? Severance, no severance? -anonymous- To Anonymous - the silence is deafening -slammed-
    • Comment 2/25/09: I hope all of the US and Canada based employees are proud to work for a company that earned the following recognition: IBM Ranked #1 IT Services Company in India for 2008 by Springboard Research I am 50 ( with 2 grade school kids) and have over 20 years of service with IBM. I am a PM trying to find work as the account I am on is bringing on "Global Resource PMs" and they are getting the new projects as they get signed. I am down to about 30-40 hours of work for the next 30 days. Then I hit the bench. In my 20 years with IBM, I have never been on a bench or without flowing work to keep me busy. -Still Ducking-
    • Comment 2/25/09: 30 SDM's were just given notice today out of the internal accounts side, I know AHE, GWA and a few others were impacted.. word is another 22 coming. would be interested in hearing from any of those affected. -newhits-
    • Comment 2/25/09: Alliance Chapter for Canada being formed. If interested contact the Alliance at: allianceibmunion@gmail.com -Alliance-
    • Comment 2/25/09: How can companies like IBM massively outsource jobs to third world countries without calculating the cost of instability, political upheavals, popular unrest, or unfavorable changes in the law and culture there? Aren't the outsourcing companies risking a sudden collapse of business, vulnerability of data and intellectual capital, and financial/human resources loss if terrorism, revolution, natural disasters, or war strike there? The US is overall a safer place to do business. Sending Americans on a Project Match to these countries simply begs the question too. -Concerned-
    • Comment 2/26/09: RTP based AMS DPE told to train his India based counterpart and transfer the role in 12 months -RTP Developer-
    • Comment 2/26/09: Layoff big enough to put a hole in the world coming to ITD, from Joanne Collins-Smee down, hitting ITD server and operations people particularly hard. Accounts who were previously given a choice to object due to impact on their business are no longer being given a choice or are being flat-out lied to. Regulars being chosen ahead of subks, so subks in your group are no longer any defense. This one is going to be enormous and wide-ranging. Announcement the last week in March, with employee departure dates in late April. -Monster-
    • Comment 2/27/09: Real Leader Needed, you say "executives have shown nothing to make us feel like they are in it for the company". In addition, our executives refuse to open up and communicate effectively with employees. There is no "connection" between executives and employees. This has established a hostile environment. Us against them. Not a way to run a company. You also never see an ibm executive on the business shows. What are they hiding from? Investors are wising up, ibm's days are numbered. -NoConnection-
    • Comment 2/27/09: Any other RAers running into this? My exit interview is delayed because my severance check has not arrived. It's 'in the mail'. IBM has laid off so many frickin' people they can't even process them. Good grief. Was to be 2/26, no check 2/27, who the $%@#%$# knows?! This kind of falls into cruel and unusual punishment. To top it off, they somehow managed to process my leaving and I cannot connect via ATT client from home. Will my badge even work to get in the building for the meeting?! Happy to leave the idiots behind.. -Anonymous-
    • Comment 2/27/09: I am no longer a manager. I was a manager in STG for 6mo's, managed 6 people. Laid off 2 on 2/23. Reassigned the other 4. I asked my manager if I had a job and if not can you give me the 6mo's pay so I can go find another job. To date, I have heard nothing and have not done a thing for 2 months. No severance, nothing to do and just waiting. Anyone else in this position? -Sonic Rendezvous-
    • Comment 2/27/09: After more than 25 at IBM I have lost count of the number of RAs this company has used to cut costs. The fact of the matter is the company has to make money or everyone (with the possible exception of Sammy P) will loose their job. As a stockholder, and RA victim, I believe there are pros and cons to the IBM RA s. For this reason I propose the following proposal be raised at the next stockholders meeting ... The CEO and all executive management positions be relocated to a developing county. IBM will help current executives relocate to overseas where they will become new IBM employees of that country and receive the prevailing pay rate and benefits. Think of the money saved if we pay Sam in rubles or rupees -Confused Stockholder-
  • General Visitor's Comment page
    • Comment 2/24/09: I just watched President Obama address the joint session of Congress. He is going after the greedy CEO's raking in the millions and millions like Sammy Palmacrapo. Sammy has been laying off tens of thousands of US IBMers and outsourcing our jobs. President Obama will put a stop to this insanity, Sammy. Praise be Jesus!!!! Sammy, look out you A**hole. President Obama is out to get you. You greedy slimy b*****d!!! -IBMer-
  • Pension Comments page
    • Comment 2/25/09: FYI: Interest crediting rate for the frozen cash pittance plan in 2009: 2.8% For 2008 it was 5.2% -frozensolid-
  • Raise and Salary Comments
    • Comment 02/25/09: Salary = $107K; USD Band Level = 8; Job Title = SDM/PM; Years Service = 8; Hours/Week = 55; Div Name = ITD; Location = Coast to coast; Message = Long time 1 and 2+ performer reduced to 2 this year. Bone-us = $2600, which is an insult. "Should just be grateful to get it", my ass. IBM should be grateful they can get someone with my expertise and work ethic to work the hours I work for what they pay me. Before an IBM customer bought my company in 2001, my bonus percentage was in the 12-15% range, with yearly stock options as well. My youngest is going off to college in the fall and I may very well have to give notice to IBM that I can no longer take call or work long hours as it looks like I'll need to take a part time job while my kids are overlapping in school to keep up with the skyrocketing cost of living, insurance, and my kids' tuition. I used to think I was fairly compensated, but those feelings have gone by the wayside over the past 3-4 years. My numbers are already in the spreadsheet for salary averages, although it's been a few years. -LowlySDM-
    • Comment 02/25/09: Salary = 80K; Band Level = 08q; Job Title = materials logistics advisory professional; l Years Service = 31; Hours/Week = 40; Message = IBM -anonymous-
  • PBC Comments
    • Comment 2/23/09: Prior Yr PBC = 2; This Yr PBC = 2; This Yr Bonus = 6%; Prior Yr Bonus = 4/7%; Message = I can see that ole sammy was true to his word that we would see bigger bonuses. Lets see cut 5K or more people after a record year and increase bonus 1%. -getting all that extra bonus-
    • Comment 2/23/09: LexMark, you are better off with a second job. 1) because you can diversify and build a resume that will help you outside of IBM, 2) you expand your personal network which will help you get a job when you need one and 3) a second job is guaranteed income, not subject to political whim like a PBC based payment. And yeah, IBM is no place for a new college grad. In no way shape or form can I recommend IBM to a new grad. It used to be that IBM was good as resume fodder.,.stay a couple years and get something on the resume. I think now the IBM resume line item isn't worth the negative impact to the career. I've seen more than one frustrated new grad trying to make way in the IBM machine. I've seen many new grads come in IBM with lots of new ideas and energy only to be chewed up and knocked down. It's sad really. -anotheronegone-
    • Comment 2/24/09: Prior Yr PBC = 2+; This Yr PBC = 1; This Yr Bonus = 9.4%; Prior Yr Bonus = 4.2%; Message = First 1 rating in many years. Variable pay higher than expected given the economy. -Long Term IBMer-
    • Comment 2/24/09: Prior Yr PBC = 2+; This Yr PBC = 1; This Yr Bonus = 10550; Prior Yr Bonus = 7500; Message = Band 9 - worried about job -A GBS Java Architect-
    • Comment 2/25/09: Prior Yr PBC = 1; This Yr PBC = 1; This Yr Bonus = 8%; Prior Yr Bonus = 8%; Message = 12.4K bonus - band 8 in SWG -NotInIndia-
    • Comment 2/26/09: Prior Yr PBC = 2+; This Yr PBC = 2+; This Yr Bonus = 5%; Prior Yr Bonus = 5%; Message = Bonuses were decent this year all things considered. Supposedly, band D's and above did not receive a bonus. -Anonymous Coward-
    • Comment 2/26/09: Prior Yr PBC = 2; This Yr PBC = 2; This Yr Bonus = 4.25%; Prior Yr Bonus = 4.25%; Message = Exact same amount this year as last year. Considering the current economic circumstances I'm very satisfied. -anonymous-
    • Comment 2/27/09: Prior Yr PBC = 2+; This Yr PBC = 2+; This Yr Bonus = 3600; Prior Yr Bonus = 3500; Message = 7% both years ..I am ok with it as I don't kill myself -my update-
    • Comment 2/27/09: Prior Yr PBC = 1; This Yr PBC = 2+; This Yr Bonus = 2700; Prior Yr Bonus = 4000; Message = Got 8.6% for the PBC 1 last year, got 5.6% for PBC 2+ this year -Jaded-
    • Comment 2/27/09: Prior Yr PBC = 2; This Yr PBC = 2; This Yr Bonus = 2700; Prior Yr Bonus = 2400; Message = I was not thinking of getting a bonus this year or, if any, half the amount of previous years. I got a higher one despite the economic crisis and despite being lower in the 2's than previous years. -yo-
    • Comment 2/27/09: Prior Yr PBC = 2+; This Yr PBC = 2+; This Yr Bonus = 2030; Prior Yr Bonus = 2296; Message = I don't understand how folks are posting much bigger bonuses for getting the same or even lower PBC ratings than me. What the hell is going on? My share always seems to be the dregs despite glowing reviews. This year's is lower than last year's, both percentage-wise and dollar-wise. Last year's was a little over 4%, this year's a little under 4%. I feel like I'm just spinning my wheels. -NeverEnough-
  • 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. A few sample posts follow:

  • "I just spoke to a friend still caught in the Blue Pig..." by "omegadoom". Full excerpt: His take was that Sam has only a couple of years left and he wants to get as much short term dollar gains at the expense of IBM's long term reputation. Why spend a premium on software and services when the only thing you compete upon is price. QoS is getting worse and the short term key is to maximize margins on lower dollars. Kind of sucks for those in SWG who try to develop a good product with their hands tied.
  • "The End Game" by "Frank_Reality". Full excerpt: There will be no internally-driven change for as long as one can predict. Those that "get it" are too low on the corporate ladder to effect change. Those who try will be destroyed by the layers of executive sycophants who protect the Leader from reality. Denial is key to maintaining their positions. The Leader must be right, or else! The changes that will occur are the ones to be eventually exacted by the market. The market may be slow, but it is ultimately brutal. I have no hope that Sam's replacement will be any more enlightened than Sam. Disaster looms. There is no hope for the clueless.
  • "Has the other shoe dropped yet?" by "omegadoom". Full excerpt: I escaped the blue pig a couple of years ago. I'm finding out a couple of my friends (including a very senior exec in SWG) have gotten their pink slips. Rumor has it that Friday the 13th or the following Tue was when those in IGS/BCS were getting their cuts announced. Has anyone heard anything?
  • "Don't know dates..." by "messy desk". Full excerpt: I don't know any dates (it's just now tues eve so something could have happened) but I have heard discussions from leaders placing names on RA lists...
  • "no GBS cuts, yet" by "VMember99". Full excerpt: I think you meant GBS...the term BCS was retired a while back. No announced cuts in GBS AG. Reductions likely will not happen in GBS until Q2 or Q3.
  • "igs, bcs,gbs" by "omegadoom". Full excerpt: All the same... I guess one could joke about GBS meaning global business solutions in that when staffing a project in the US, their sources will be global and on shored. ;-) No offense to those in GBS, but rumor has it that the new centers in IA and MI are going to be staffed with H1B as much as possible.
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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