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Highlights—May 9, 2009

  • EE Times opinion: IBM should come clean on engineering layoffs. By George Leopold. Excerpts: Perhaps more than any other U.S. high-technology company, IBM Corp. has been subjected to intense media scrutiny in the aftermath of a string of recent under-the-radar layoffs. Much of that unwanted attention is a direct result of union activism that has taken on a decidedly "we're mad as hell and we're-not going to take it anymore" tone. Following an IBM shareholder meeting last week, fighting words like "greed" were being lobbed like hand grenades.

    For its own reasons, IBM executives continue to say little about company layoffs. That policy has backfired, attracting still more scrutiny and criticism. ...

    We have asked IBM about its recent layoffs, but the company has declined to comment. For the record, J. Randall MacDonald, IBM's senior vice president for human resources, told The New York Times in March that it is routine for the company to lay off some employees while hiring elsewhere. "This business is in a constant state of transformation," MacDonald said. "I think of this as business as usual for us."

    The Times article also chronicled how IBM and other companies have scattered their layoffs, presumably to remain under the radar as worker rage intensifies. Former IBM workers provide a different perspective from MacDonald's, noting that the company reported strong quarterly results in January. One engineer recently laid off by IBM told the Times that the company is using the downturn "as an excuse to lay people off." ...

    The nasty tone of the offshoring debate is a symptom of economic uncertainty and plain old fear about the future. Workers, especially engineers, see no end to the mounting pile of pink slips. Many U.S. corporations are now so fearful of a backlash that an unprecedented number of high-tech H-1B visas for fiscal 2009 have gone unused. Industry backers of H-1B point to the current surplus of high-tech visas as an indication that market forces have corrected any abuses of the program.

    Union officials would counter that H-1B visas represent a government subsidy to industry that ultimately allows it to ship skilled jobs with decent wages overseas in the name of saving labor costs.

  • Yahoo! IBM Employee Issues message board: "Re Opinion: IBM should come clean on engineering layoffs" by "Bill and Barb". Full excerpt: As any politician will tell us, it's not the deed that gets a politician in trouble, it's the cover-up. So I find it very humorous that IBM is now finding out that the cover-up is now attracting more attention then the actual deed (the layoffs). Couldn't happen to a nicer bunch...LOL

    I really do understand if a company is in trouble it needs to cut costs. But in the case of IBM, they're not in trouble, and the way they are 'cutting costs' reminds me of a thief in the night.

  • Yahoo! IBM Pension and Retiree Issues message board: "Re: PensionPlan Mailing Dtd April 30, 2009" by "cybertramp66". Full excerpt: FYI, data on US workforce total employees from IBM annual reports. US Workforce impact 2006 to 2009:
    Year U.S. Workers Workers Cut Percentage Cut
    2006 127,000
    2007 121,000 6,000 4.7%
    2008 115,000 6,000 5.0%
    2009 * 99,000 16,000 13.9%

    * Estimated based on rumor of 16,000 cuts. 10,000 already confirmed.

  • The Atlantic Council of the United States: 2009 Leadership Awards: Bush, Kohl, Petraeus, Palmisano, and Hampson. Excerpt: Samuel Palmisano accepted the Distinguished Business Leadership Award for his role in building the largest and most diversified IT services organization in the industry, connecting investment, technology, and innovation.
  • New York Times: I.B.M. Pledges $2 Billion for Economic Recovery Gap. By Steve Lohr. Excerpt: The government’s economic stimulus package includes oodles of money — more than $30 billion — for high-technology projects like health information technology, smart electric grids and broadband networks for rural communities. But the money isn’t flowing yet, and to get individual projects underway requires upfront investment for planning and design. I.B.M. is announcing on Thursday that its big finance unit will set aside $2 billion for “bridge” financing for high-tech infrastructure efforts likely to qualify for federal grants and incentive payments under the American Recovery and Reinvestment Act of 2009.
  • Yahoo! IBM Employee Issues message board: "IBM is No Longer an American Company" by "amindtothink". Full excerpt: IBM no longer takes pride in its origins as an American company that grew up funded and supported by American industry, government and customers. There has been a conscious effort to sever the ties to America. Take the US stimulus money but ship the jobs to cheap labor countries. Citizens of the world to put huge executive bonuses in the pockets of a few predominantly American execs.

    The Watson's had great loyalty to their employees....today's IBM sees them as parts of a scheme to squeeze as extract as much profit as possible....worldwide. If today's leaders of IBM could shed all the retiree pensions and medical benefits, they would do it in a picosecond The only thing stopping them is bad PR.

  • Yahoo! IBM Pension and Retirement Issues message board: "Question about using FHA...IBM retiree benefit cost for employee" by "sfg165". Full excerpt: Does anyone in the group have knowledge or an example of what the cost of medical/dental benefits is for a single person when purchased from the IBM provider? Most all of the figures that I have seen on this message board and in the documents show an annual cost which includes a spouse/partner. For planning purposes, I am interested in finding out the cost for myself only. Any and all help is greatly appreciated. Thanks.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Question about using FHA...IBM retiree benefit cost for employee only" by "madinpok". Full excerpt: Here are the 2009 costs for the various plans. This data is for the plans available in the Hudson Valley, but costs for other parts of the country appear to be the same for equivalent plans. (Note: These are monthly premiums.)
    Medical Plan Employee Only
    FHA Plan
    Employee Only
    "Old" Plan
    Employee plus
    FHA Plan
    Employee plus
    "Old" Plan
    Aetna Open Choice PPO $659.10 $177.00 $1319.20 $810.00
    Health Net NY $847.67 unknown $1695.70 unknown
    IBM EPO - MVP $704.62 $193.00 $1409.23 $888.00
    IBM Hi Ded PPO w/ HSA - MVP $593.54 $146.00 $1187.09 $672.00
    High Ded PPO - MVP $514.21 $0.00 $1028.43 $299.00
    Med Ded PPO - MVP $614.97 $170.00 $1229.93 $782.00
    Low Ded PPO - MVP $773.97 $267.00 $1547.95 $1041.00
    Dental Plan Employee Only
    FHA Plan
    Employee Only
    "Old" Plan
    Employee plus
    FHA Plan
    Employee plus
    "Old" Plan
    Cigna DMA $15.00 $27.70 $51.91 $45.00
    Dental Basic $13.00 $26.73 $53.47 $39.00
    Dental Plu $18.00 $34.07 $68.13 $54.00
  • Yahoo! IBM Retiree Issues message board: "Re: Medicare Assignment/Aetna Integration" by "madinpok". Full excerpt: Back in the old days, IBM considered medical insurance a true benefit for employees, retirees and their families rather than a cost to be avoided. In those days, adding your spouse or dependents didn't simply increase the cost to you by a factor of 2x or 3x. But in recent years, IBM has changed its attitude, both for active employees and retirees and now views the benefit that it provides to be something for the employee only and if you want to add your spouse or dependents, then you pay substantially more for them. IBM's argument is that this makes things "fair" for single employees vs those who are married. The married employee no longer gets a bigger benefit than the single employee.

    For recent retirees who are under the FHA medical plan, the cost for Employee+spouse is indeed 2x the cost for just the single retiree. For retirees under the old plan, there is a roughly a $7000/$3000 subsidy. In your case, it sounds like you are on medicare, so you get the $3000 subsidy. Thus, the cost for you plus your spouse should be approximately 2x the cost for just yourself, plus $3000.

  • Yahoo! IBM Pension and Retirement Issues message board: "Read what can happen to GM's Pensioners" by "ibmmike2006". Full excerpt: IBM forced out thousands, changed the retirement formula, and did the cash balance conversion in the 90's and now in the first decade of the twenty-first century, there are less than 17,000 defined benefit pensions down from 125,000 in 1980 and millions will have a lifetime of work instead of lifetime of retirement. United Airlines' 120,000 employees found out what happens when their employer passes through Chapter 11. The executives did well, the bankers and lawyers make $400 Million, and the employees lost half their pensions and the taxpayers picked up the tab. http://www.pbs.org/wgbh/pages/frontline/retirement/view/

    Now GM is going through the same chapter 11 routine brought on by $4 gas with the Commodity Futures Trading Modernization act passed in 2000 that promoted middlemen to drive the price of oil to $175 a barrel without touching a drop for 18 months. The average family had $300 a month in credit card debt overspending just to cover gas to go to work they are still trying to pay it off that has dried up discretionary income to buy cars and other things like homes. It will be interesting to see if GM management and employees can circumvent the ploy of Chapter 11 for the benefit of lawyers and bankers to get to the pension assets. Here is what a retired GM executive thinks about the fate of their pensions. GM retirees facing cuts in pensions If plans are taken over in bankruptcy, billions would not be made up.

    The 80's, 90's, and this decade will go down in history as the assault and demise of retirement for the baby boomers shifting to a lifetime of work. Oh, don't forget that half of those over the age of 65 have a disability that prevents them from working full time.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Read what can happen to GM's Pensioners" by "dave49_98". Full excerpt: Kevin, Are you aware that Social Security is still taking in a surplus? Today?? That paid for Iraq and tax cuts for the rich. Do you know that in the 1980s none other that libertarian Alan Greenspan was part of a group that fixed Social Security?

    Did you know that Newt Gingrich, while speaker of the house and my congressperson told us at a town meeting that Social Security was fixed and it Medicare needed fixed and don't worry about Social Security?

    I am not sure where you come up with the idea that Social Security is unsustainable when a high profile libertarian and conservative say otherwise.

    Its nice that you plan on working until you are 70 but IBM sent some of our jobs to India when we were 53. Ask around and see how that income and benefits was replaced.

    It is nice that you are a proponent of 401Ks. Are you aware that a 401K was never intended to replace a pension, but to supplement it? what do you say to people that worked for lower wages in exchange for the promise of pension and health care and had the rug pulled out from under them in they 50s and 60s, what to late to make it up, by a corporation still makes 10 Billion a quarter?

    If a 401K and no health care is so great, why doesn't Sam have a similar plan to ours. Why does he not even a pay a deductible for his health care. Why is his pension guaranteed?

    Did you know that people have gone back and compared what their 30 year pension was worth versus what a 401K over the same time was worth about 50%, half as much?

    What do you tell people that worked for lower compensation for promised benefits and now their meager pension doesn't even cover the cost of premiums, let alone any medical expenses?

    While you don't believe in national health care the United States is the only country in the world that does not. We pay about double for health care with worse health outcomes that the rest of the world.

    What doesn't work is buying insurance, paying 1/3 of our health care dollars to insurance companies that pay lawyers to deny people coverage. What do you say to diabetics that cannot get coverage in the "free market"? Are you aware that under John McCain's health plan he would not be covered because he had cancer?

    People are not dying in the streets of Cancun, England, France, Germany, Australia or even Cuba due to national health care being a failure.

    My current congressperson is Dr. Tom Price, or Dr. No. Why is it that he always votes against health care for the masses but does not give up his government health care? Is Senator Kennedy dead because he has government health care or has he far out lived what you would have with your meager 401K plan?

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Read what can happen to GM's Pensioners" by "ibmmike2006". Full excerpt: When our new president came into office, I think he set a goal to establish a universal health care system for everyone similar to what Congress has. I looked into that and Congress has it pretty good. I also looked at what my US Senator will receive when he retires. He presently makes $200,000 a year. He has been a US Senator for 32 years, about the same as I had at IBM, and when he retires, he will receive 80% of his $200,000 or $160,000 a year for life with cost of living and health care.

    It is very common for federal employees, IRS employees, police, and teachers to receive the same, after 30 years, 75 to 80%. Compare with my 23% from IBM, no cost of living, and health options that eat up most of the piddly pension payment. Now compare with Palmisano; Sam will get somewhere between $10,000 and $20,000 a DAY.

    I am not sure why anyone would think that it is unreasonable to work for a company, who always emphasized how good the long term benefits like the pension of IBM were even though the wages were less than other companies, to not expect the pension emphasizing "I don't want you to go to work for the competition as IBM's long term benefits are outstanding" to have the company keep their word. I could justify my lower wages in those days knowing that those monies I was not getting were being deposited in the pension fund for my benefit. At that time, the pension was calculated as 1.5 times your salary times your years of service with no cap on years of service.

    When Lou came in, changed the pension calculation to 1.35 times your salary with a cap of 30 years. Shortly after that, he awarded himself 20 million shares of IBM stock and averaged over $20 million a year in compensation for nine years.

    A year later, in 1999 the cash balance conversion was announced. It released about $10 Billion from the defined benefit pension fund for vapor profits to boost the bottom line and employees lost 50% of their anticipated pension. Well thought out, well executed, and the courts supported the pension theft along with Congress. Money well spent by the Corporate PAC's.

    If my US Senator feels he needs 80% of his final salary, why should I be happy with 23% and if you add in Social Security, it rises to 40% with the purchasing power with no cost of living adjustment cutting the purchasing power of the pension in half, in 15 years especially since the CEO of IBM gets $10K to $20K a day?

    Everyone on this board, well almost everyone, knows IBM stole the long term employee pensions in the 90's. The money IBM stole went to boost profits and to grease the pockets of the IBM former and current executives. This has nothing to do with entitlement. I earned every bit of what I expected and never got, on call for IBM for three decades 24/7 keeping customers satisfied in the field face to face in the customers office.

    If I had known, a guy like Gerstner could alter the commitment, I would have demanded higher pay when I was 20 something so I could invest into something like the 401K. Unfortunately, the 401K was not available then and when these pension rule changes took place after 30 years, I could not make up the lost pension especially since they were forcing 30 years employees and sometimes less, out the door in their late 40's or early 50's before their pension maximized. Good luck, you have taken note not to trust IBM, but with the market losses in most 401K's, all the gain of your 401K over 10 years was lost in 12 months in 2008, you might have to ramp up your savings, a lot. In fact, you might have to work for life or die in poverty.

    As a side note, you might be lucky and not have a disability that prevents you from working full time. Where today, there are 49 million Americans who are disabled according to the US Census and there are 50 million who are going to receive a $250 check from the Government as SS, SSDI, and Veterans DI. Only 201 million are left that are not receiving federal checks and not disabled and includes kids and 20 million illegal aliens who cost the taxpayer $300 Billion a year and $1,000 each year from every American's health insurance policy. I suppose some of the 50 million might be disabled but SSDI is granted in only 40% of the requests for SSDI payments.

    Unless these kinds of problems are addressed, most will have a lifetime of work, instead of a lifetime of retirement after 65. If the defined benefit pension of public employees and others protected by unions of school teachers and police enjoy a lifetime of retirement, then it should have been possible for IBM to keep its commitment to its employees. The money had been set aside over three decades or more. Unfortunately, Gerstner had no obstacles in his way to stop him from "stealing the pension fund". No union, no organization, weak employee rights laws thanks to the courts and congress, along with a passive work force. Human Resources declared war on its employees.

    Thanks for sharing what your expectations are in the future. It appears, the last two decades of convincing employees they are entirely responsible for their future is working, even though, the executives are being taken care of quite nicely with deferred corporate funded non-qualified defined pension plans like Sam.

    By the way, if IBM had "done the right thing" with the defined benefit pension and chose not to steal the pension plan for the benefit of a few, then this board and others would not exist. But I firmly believe, "what goes around, comes around".

  • Yahoo! IBM Pension and Retiree Issues message board: "Re: Read what can happen to GM's Pensioners" by "cybertramp66". Full excerpt: ibmmike2006, Excellent summary of the corporate raid on IBM over the past 20 years. I've saved your write up as a reminder of the thefts. There is not much left to steal at this point, so the Palmisano crime family is stealing the jobs. At the current off-shoring rate, that should be completed in the next 5 years or so. You rightfully place blame, not only with the company execs and board, but with congress and the courts for enabling and upholding the criminal acts.

    I had multiple, excellent job offers when I graduated from collage 20+ years ago. Had I known the IBM promises would be broken and discarded, I never would have chosen IBM as the place to invest my future.

  • Mother Jones special report: Who Ran Away With Your 401K? Pension Privateers. How the boss absconded with your benefits. By David Cay Johnston. Excerpts: John Snow won't have to worry about his retirement. When he left the CSX railroad to become George W. Bush's second treasury secretary, he took with him a $2.5 million annual pension. The figure was based on 44 years of employment at CSX, never mind that Snow had been there for only 25 (during which, incidentally, he brutally cut safety and maintenance, to the point where a jury awarded a widow $50 million in punitive damages after a derailment—money paid by the taxpayers because of a little-known law that insulated Snow and his company from the costs of his egregious judgment). That kind of boost is unheard of for the rank and file, but not at all uncommon for corporate executives and owners.

    Snow's case is typical of the way corporate executives have, for the past 35 years, managed to gild their retirement benefits even as they hollowed out workers' pensions. It started with the 1974 Employee Retirement Income Security Act, the law ostensibly designed to ensure that workers could collect the retirement benefits they'd earned. erisa brought some important reforms—including establishing the federal Pension Benefit Guaranty Corporation (pbgc) to help workers whose pensions went bust—but it also was riddled with favors to business. And in the decades since, legions of lobbyists have helped create numerous new loopholes, exemptions, and special deals. The result is two separate and unequal pension systems: Executives get the equivalent of antebellum mansions, while workers get leaky shacks liable to collapse at the first harsh economic wind. Here are 10 of the key ways in which it happened. (Be warned: This stuff gets a bit technical. Washington is full of people who are very well paid to figure out insanely complex ways to take money from you and me.)

  • Mother Jones special report: Who Ran Away With Your 401K? Who Shredded Our Safety Net? What starts with "f," ends with "k," and means "screw your workers"? That's right—401(k). By James Ridgeway. Excerpts: Like most people whose quality of life depends upon the fluctuations of an IRA, 401(k), 403(b), or other acronym-soup retirement account, I was born long before such things existed. It's easy to forget, now that more than half of us have been made shareholders, that until well past the middle of the 20th century, most people had nothing to do with the stock market: Wall Street was for the wealthy and the reckless. It was a world most Americans didn't understand and, after 1929, didn't trust. Some lucky people had pensions, but few had the privilege of even thinking about retirement. They were too busy trying to survive the present—which in my childhood meant the Great Depression and then World War II. ...

    After the war, my father joined IBM and remained there for about 15 years. I remember that he was constantly in debt from paying our college tuitions and medical bills for his ailing parents. He never talked about it, but every so often, I would see a line of bills from credit companies spread out on the bed. He had a fierce dislike of Wall Street and the banking industry, formed during the Depression and abetted now by his high-interest debts. Although he had a three-hour round-trip commute on the New York Central Railroad every day from our home in a then-unfashionable part of the Hudson Valley, he often remarked how grateful he was that he didn't have to ride the New Haven trains with all the cocktail-wielding brokers. Even if he'd had any money to spare, he wouldn't have invested it on Wall Street. But when he retired, he got his pension, which my mother continued to collect after he died—not much, but enough to live on in a frugal way.

  • Associated Press, courtesy of Yahoo! News: Congress leery about Obama's plan on tax loopholes. By Stephen Ohlemacher. Excerpts: President Barack Obama promised sternly on Monday to crack down on companies "that ship jobs overseas" and duck U.S. taxes with offshore havens. It won't be easy. Democrats have been fighting — and losing — this battle since John F. Kennedy made a similar proposal in 1961. Obama's proposal to close tax loopholes was a reliable applause line during the presidential campaign, but it got a lukewarm response Monday from Capitol Hill. ...

    Lost revenue isn't the only problem, Obama says. He contends the current system gives companies an incentive to invest overseas rather than creating jobs in the U.S. "It's a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, N.Y.," Obama said Monday.

  • Associated Press, courtesy of Forbes: Obama's tax plans raises high-tech hackles. By Michael Liedtke. Excerpts: President Barack Obama's plan to impose U.S. taxes on corporate America's overseas profits threatens to open a big crater in the financial statements of technology companies. While additional taxes are rarely popular, Obama's decision to go after corporate earnings outside the United States is a particularly prickly subject for technology executives because the industry has been steadily boosting its overseas sales amid rising demand for its gadgetry and services.

    If Obama's proposal becomes law, the hard-hit companies would include tech bellwethers like Hewlett-Packard Co., IBM Corp., Cisco Systems Inc., Microsoft Corp. and Google Inc. Each of those companies realized a benefit of more than $1 billion from lower foreign tax rates in their most recent fiscal years - an advantage that could lost if Obama is able to change the rules. ...

    Collectively, HP, IBM, Cisco, Microsoft and Google lowered their tax bills by a combined $7.4 billion in their last fiscal years by taking advantage of lower tax rates outside the United States, according to an analysis by The Associated Press. ...

    Obama reasons that U.S. companies will create more jobs in the United States if there is less of an advantage to setting up operations overseas.

    But Guardino disagrees, maintaining that high-tech firms and other U.S. companies are establishing more foreign offices to take advantage of their biggest growth opportunities. And as they bring in more revenue overseas, companies are also able to hire more workers in the United States as well as in other countries, Guardino said. (Editor's note: If this is the case, why has IBM's North American employment plummeted?)

  • New York Times: Obama Calls for Curbs on Offshore Tax Havens. By Jackie Calmes and Edmund L. Andrews. Excerpts: The proposals would especially hit pharmaceutical, technology, financial and consumer goods companies — among them Goldman Sachs, Microsoft, Pfizer and Procter & Gamble — that have major overseas operations or subsidiaries in tax havens like the Cayman Islands. They have some of the mightiest lobbying armies in Washington, as well as influential patrons in Congress. That combination will test Mr. Obama’s ability to stand up to powerful interests and marshal support among lawmakers at the same time that he is trying to win passage of major health and energy measures. ...

    Economists are divided over whether higher taxes would give corporations incentives to move jobs overseas or impair economic growth at home. In the coming debate, both Mr. Obama and the business lobby will claim that their way will save jobs.

    The top corporate tax rate is 35 percent, but the Treasury Department estimated that in 2004, the most recent year for which data is available, American multinationals paid $16 billion in taxes on $700 billion in foreign income — an effective rate of 2.3 percent. ...

    Mr. Obama said most Americans paid taxes as “an obligation of citizenship,” but some businesses and rich people were “shirking” their duties, “aided and abetted by a broken tax system, written by well-connected lobbyists on behalf of well-heeled interests and individuals.” “It’s a tax code full of corporate loopholes that makes it perfectly legal for companies to avoid paying their fair share. It’s a tax code that makes it all too easy for a number — a small number of individuals and companies to abuse overseas tax havens to avoid paying any taxes at all,” the president said. “And it’s a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York.”

  • New York Times: Obama’s Plan on Corporate Taxes Unnerves the Indian Outsourcing Industry. By Heather Timmons. Excerpts: President Obama’s proposal to change the American corporate tax system is winning few fans in India, where some say it is aimed at curbing the country’s outsourcing industry. Perhaps that is because Mr. Obama specifically struck out at the epicenter of Indian outsourcing.

    The president vowed Monday to overhaul a tax code that allowed companies to pay less tax, as he put it, to “create a job in Bangalore, India, than if you create one in Buffalo, New York.” One element to that change could be the elimination of a deduction for American companies when they invest in subsidiaries outside the United States.

    American companies have tens of thousands of employees in India in wholly owned subsidiaries. Many of these Indian operations handle customer service and back-office functions, particularly for banks and credit card companies. American businesses employ thousands more in India by contracting work to local technology and outsourcing companies. ...

    Many business people in India were upset by Mr. Obama’s tax proposal. The president of the Associated Chambers of Commerce and Industry of India, Sajjan Jindal, said it could “kill the spirit of competition.” The Indian affiliate of CNN spent Tuesday afternoon asking economists and politicians whether Mr. Obama was “anti-India.” An editorial in The Times of India said Bangalore had become a “catch-all term to hang U.S. economic woes on.” ...

    Some big American companies have large numbers of employees in India. For example, General Electric has about 14,500 employees in India, I.B.M. more than 74,000, and Citigroup more than 10,000. In addition, India’s information technology and outsourcing companies employ about 2.2 million people, and American companies account for about 60 percent of their business.

  • Forbes: Pink Slips Replace Gold Watches. By Ashlea Ebeling. Older workers have stopped retiring, but more are being laid off. Excerpt: Even before the market crash the average retirement age for men--which hovered at 63 from 1982 through 2005--had started to rise as Americans contemplated longer life spans and reduced traditional employer paid pensions. The age hit 64 in 2006. Last year, as fearful workers delayed retirement, it rose to 65. It could well reach 66 once 2009 numbers come in. "It is possible that the economic downturn may have lasting effects on the retirement decisions of older workers," Munnell says.
  • The New Yorker: Brain Gain. The underground world of “neuroenhancing” drugs. By Margaret Talbot. Excerpts: Recently, an advice column in Wired featured a question from a reader worried about “a rising star at the firm” who was “using unprescribed modafinil to work crazy hours. Our boss has started getting on my case for not being as productive.” And on Internet forums such as ImmInst, whose members share a nerdy passion for tweaking their cognitive function through drugs and supplements, people trade advice about dosages and “stacks”—improvised combinations—of neuroenhancers. (“Cut a tablet into fourths and took 25 mg every four hours, 4 times today, and had a great and productive day—with no side effects.”) In one recent post, a fifty-two-year-old—who was working full time, studying for an advanced degree at night, and “married, etc.”—wrote that after experimenting with modafinil he had settled on two daily doses of a hundred milligrams each. He believed that he was “performing a little better,” adding, “I also feel slightly more animated when in discussion.” ...

    “Yeah, in a competitive field—if suddenly a quarter of the people are more equipped, but you don’t want to take the risks with your body—it could begin to seem terribly unfair,” he said. “I don’t think we need to be turning up the crank another notch on how hard we work. But the fact is, the baseline competitive level is going to reorient around what these drugs make possible, and you can choose to compete or not.” ...

    And yet when enthusiasts share their vision of our neuroenhanced future it can sound dystopian. Zack Lynch, of NeuroInsights, gave me a rationale for smart pills that I found particularly grim. “If you’re a fifty-five-year-old in Boston, you have to compete with a twenty-six-year-old from Mumbai now, and those kinds of pressures are only going to grow,” he began. Countries other than the U.S. might tend to be a little looser with their regulations, and offer approval of new cognitive enhancers first. “And if you’re a company that’s got forty-seven offices worldwide, and all of a sudden your Singapore office is using cognitive enablers, and you’re saying to Congress, ‘I’m moving all my financial operations to Singapore and Taiwan, because it’s legal to use those there,’ you bet that Congress is going to say, ‘Well, O.K.’ It will be a moot question then. It would be like saying, ‘No, you can’t use a cell phone. It might increase productivity!’" ...

    All this may be leading to a kind of society I’m not sure I want to live in: a society where we’re even more overworked and driven by technology than we already are, and where we have to take drugs to keep up; a society where we give children academic steroids along with their daily vitamins. ...

    This winter, I spoke again with Alex, the Harvard graduate, and found that, after a break of several months, he had gone back to taking Adderall—a small dose every day. He felt that he was learning to use the drug in a more “disciplined” manner. Now, he said, it was less about staying up late to finish work he should have done earlier, and more “about staying focused on work, which makes me want to work longer hours.” What employer would object to that?

  • Business Insurance: Wells Fargo to freeze cash balance plan. By Jerry Geisel. Excerpts: Wells Fargo & Co. is freezing its cash balance pension plan, making it one of the largest employers to do so. Effective July 1, employees no longer will earn benefits in the plan. Wells Fargo also is freezing the cash balance plan sponsored by Wachovia Corp., a Charlotte, N.C.-based bank Wells Fargo acquired last year. ...

    It also said that the 401(k) plan "is one of the most beneficial tools" for employees to save for retirement.

New on the Alliance@IBM Site
  • IBM Italy Union questions executive perks. Excerpts: We’d like to inform you that we have started in Italy a national campaign against IBM manager’s excessive bonuses. In the middle of the economical global crisis, and during 9600 job cuts in IBM US, the management of GTS department of IBM Italy reserved for themselves a large reward and in addition went on a free holiday to a famous and expensive resort. Our cost estimate for this holiday is between $40000 and $150000. This waste of money by IBM Italy management is not fair and is offensive in the opinion of IBM workers. ...

    Revenue and dividends are going only to the investors, and year after year more bonuses are going to IBM managers. This is having a negative affect on the morale of IBM employees. Bonuses to corporate management are under scrutiny by President Barack Obama’s administration. Management bonuses are also under the control of Sam Palmisano, our CEO and Corporate Social Responsibility offices. We will no longer accept these excessive benefits to IBM managers. We ask IBM to reinvest money in the direction of IBM workers (main stakeholders of this company), and especially to the employees that have not received salary increases for 7 or 10 years. On top of this many education course are cut due to low funds.

  • Job Cuts Status & Comments page
    • Comment 05/01/09: To both sides of the age issue: You are BOTH right. In some cases jobs & entire divisions are moving offshore on a 1:1 ratio and doesn't matter whether you're 20 or 60. Older workers are prime targets with higher salaries and who are more costly to insure and make pension contributions. Those savings are ALSO going to fund overseas work. They have this down to a science to maximize diversion into cheaper markets and exploit lower US corporate tax rates on overseas profits. Has absolutely nothing to do with your skills or performance. Not only are older workers devasted with lack of income just like younger workers, but we don't have the time to rebuild a career. The last few years of employment are THE most critical for retirement contributions AND adversely affect Social Security calculations. -annonymous-
    • Comment 05/01/09: John Boy, thanks so much for the response. I should have mentioned it in my first post, but my husband wasn't given the honor of an in-person exit interview. Instead, they told him to freaking MAIL his laptop out of state with his separation agreement. Can you believe that??? It's terrible and insulting. Anyway, there was no in-person exit interview, so there was no chance to hand my husband any type of check (severance, last paycheck, vacation, owed expenses). It seems we're now at the mercy of the USPS to get a hard-copy check to us? You'd think a publicly-traded company doing such mass, mass layoffs would have a better system for this. -WifeOfEx-GBSer-
    • Comment 05/01/09: Heard this week that the next round is in planning stages for ITD. At least quarterly through year end. -LowlySDM-
    • Comment 05/01/09: Exit interview? My manager never once thanked me for all my years of service at IBM, the revenue that I generated, or the fires that I put out (metaphorically). There was no wish of good luck. Was he more worried about covering his own arse? Has he kept on the blinders as to what is happening? Or perhaps he just doesn't give a damn... In any case, I didn't care one bit, I just wanted to get it over with and get my forms signed so that I can move on and get on with life outside of IBM. It is such a change from the way that I felt when I became an employee -- proud in a way and thankful to have landed a position at this company. My, how things changed over the years. We are all in a terrible position now, as the work needed to organize and take back the control that the employees need will be difficult. For those who have left IBM as I have, we need to stay vigilant and ensure that this type of treatment does not continue for us within the scope of our future employment. The need to take control extends beyond the boundaries of IBM, and perhaps the Alliance can be a starting an rallying point. -SickOfItAll-
    • Comment 05/01/09: Incredible budget constraints imposed .....RA's by the thousands, outsourcing of american jobs overseas.......yet 2 NEW GULFSTREAM JETS BEING ORDERED @ $70M /each. FACT! -Amazed-
    • Comment 05/02/09: _Amazed_ You do not think Sam would survive a commercial flight do you? An ex IBMer or a friend of one would beat his greedy ass in the bathroom if he tried to. What I do not understand is when the company he runs gives the lowest paid employees a 1 percent raise and the highest paid employee (HIM) a 29 percent raise, anyone would be amazed that he bought himself 2 new jets? Angered or Disgusted yes but Amazed? Nothing corporate America does to its non-union employees should amaze anyone. After all, Anyone working without a contract is no better off then a serf in medieval times. The fiefdom gets the profits and the serfs get the broken backs. I understand where you are coming from and agree with you in the fact that it is flaunting the wealth whilst pleading poverty but the lord and master can do that as long as we peasants do not rise up to stop him. -Exodus2007-

      Alliance reply: Agree whole heartedly. Although, "rising up to stop him" would not stop him; BUT rising up to take a seat at the bargaining table and being able to influence stockholder meetings in your favor (like CWA did at AT&T) would be just as good as an end result. He and all CEO's like him will continue to get rich and gloat with their wealth... however, organizing will at least level the field.

    • Comment 05/03/09: Johnny Boy comment on 4/29/09: You are so correct on the secrecy aspect of IBM. IBM has made secrecy a way of life so that no one trusts anyone. What a way to live your life and work for a company where you can trust no one. The fear is that if you know something about what someone else knows, then that is a threat to their job. If an employee thinks that "no one else knows how to do what I do" will keep them safe and employed, the latest round of layoffs has eliminated that belief. NO ONE is SAFE! -Gone and Glad-
    • Comment 05/04/09: I watch this post and am amazed. I no longer am employed by IBM but I was for 9 years- the IBM of my youth (70s - 80s) is long gone. This is a sweat shop. I do not believe unions are a panacea for all our woes but the only way you can somewhat control you destiny with any company is to have a union contract. Good luck to you all. -glocker-
    • Comment 05/04/09: My last day was 4/27 and I received two checks as well. To me this felt like a last ditch effort to get folks on the fence to sign the separation contract. If you sign the contract you get to leave with both checks on the spot. If you don't then your manager has to call someone to figure out which envelope may be issued, despite the fact that both envelopes are addressed to the employee. You can't open both and leave the severance. I had same feeling you get when a car salesman says he'll have to talk to his manager. Oh yeah, and Internet Security Systems employees shouldn't be surprised to learn that severance for original ISS workers is counted from our IBM takeover, 10/24/06, not our ISS hire date. Everybody got 5 weeks or less. -ScrewIBM-
    • Comment 05/05/09: This is not the company that I hired on with 28 years ago. I remember graduating from college and happily telling my mom and other classmates that I was being hired by IBM. This was a highly respected company and a company that would hold the highest respect for its employees. As a manager, I got a chance to go onto college recruiting trips and I would proudly tell the students what an honor it was to work for a company like IBM. I would talk about the opportunities that the company would afford them, if hired. On several of the campuses that I had the opportunity to revisit, the students would flock to me to hear about the wonderful company named "IBM".

      I am so disappointed about the way I was treated after 28 years of service that I would not recommend my worst enemy to work for this company. After 28 years of good performance and 25 years of management, I was treated like something flushed down the toilet. I did not get 30 years, therefore, my retirement check is altered in pay and my medical is gone in one year.

      A landed person from India comes over and take my job. I was not even thanked for the years of travel, hard work, recruiting, etc. that I did for this company. I would have never thought my career would have ended this way with this company. On 4/27. ,my manager told me to send her my thinkpad, badge, and IDs to my computer and I could take the rest of the day off. She told me she would send me my check when she got the items. Twenty eight years ended in 1.5 minutes. I am truly disappointed. -Very disappointed-

    • Comment 05/05/09: I don't think the top management really cares about future of IBM. Even if IBM goes bankrupt the next day, they are still rich. IBM is just a machine that makes money for them and the investors. If this machine is down, there are other machines. The true IBM spirit is long gone, the greedy and money power have driven IBM to today: sell bad services, lie to clients and force low quality product to them. Hope ppl who really care about IBM, care about America will do something good to the nation. -Anonymous-
    • Comment 05/05/09: To all of those who are still a part of IBM, do not get complacent. The massive push of services staffing to the Iowa GDF is still to come, and soon. Those who have held on this far may face a tougher challenge, as work-at-home employees confront the directive to train new low-paid staff, document step-by-step procedures for the job you perform, and finally to begin working at a GDF. You may not receive the severance and transitional benefits given to those in the earlier RAs. And many will go along with the program, hoping that giving in and busting your butt will somehow spare you in the end. It won't, because you have no leverage (remember all this talk about "At Will Employment"?). First-line managers, project managers, and account support staff will find themselves tossed aside quickly this time, too. Understand that they may not consider what to come as an "RA." -Gabba Gabba Hey-
    • Comment 05/05/09: To Very Disappointed: I am so sorry. I'm in the same boat & feel your pain. It's inexcusable. How I wish I could turn back the clock and never joined this company. You younger folks - take heed. Spend your loyalty wisely - you'll never get these years back. -annonymous-
    • Comment 05/06/09: STG Canada was a real sweatshop - and quite ridiculous. I was given an impossible quota with no science behind it - and a limited set of customers -- all with no IT budget. -Anonymous-
    • Comment 05/06/09: GBS colleague of mine told me he received 30 day notice yesterday. -mac-
    • Comment 05/06/09: IBM is trying to cut some cost now. New program called "Take Time" is asking people to take some time off for 1/3 pay. See more info here: http://w3.ibm.com/news/w3news/top_stories/2009/05/stgswg_taketime.html. For those with no access, some info from that link: "A new pilot program will allow some IBMers the option to take time off this summer at partial pay. The voluntary program – called "Take Time" – is open to Systems and Technology Group and Integrated Supply Chain employees in the United States." "How it works Regular full-time employees can take anywhere from 10 to 20 extra days off (or seven or 14 extra days off for employees working an alternate work schedule) – at one-third pay – from May 15 through August 31. They are free to structure the time away as they prefer – one day a week, all days consecutively, or some variation in between, in full-day increments. Employees who are on IBM sales incentive plans or in client-impact support roles are not eligible to participate." -annonymous-
    • Comment 05/06/09: They're running a pilot program for STG & ISC. You can take 20 extra days of vacation this summer at 1/3 pay. What do you all make of this? Are they trying to see how many people will bite, and if not enough bites, keep going with their original June layoffs? -prelude to June layoff?-
    • Comment 05/06/09: Prelude to June Layoff: that is interesting. Those of us that were not let go are sucking up the work of those that were. We now have half as many people doing twice the amount of work. That "Take Time" plan is concerning. It would have been so much easier for IBM to say that in order to adjust to the economic condition, we are taking a temporary (6-month) 10% pay reduction across the board. I think the Take Time is going to be used as a means of "who's a team player and participated" effort. Even if you participate, the work you are leaving behind does not get done by someone else. Therefore, you get a back log, less pay, and more time to try to get caught up. It is a ridiculous program. -Concerned@IBM-
    • Comment 05/06/09: Very interesting on the vacation @ 1/3 pay. Scrambling to buy time? I wonder if all the bad press has finally caught up to them. Now that they didn't buy SUN and can't hide behind layoffs related to that, more layoffs will stick out like a sore thumb. AND the whole overseas tax profits issue is on the national front burner and will cause scrutiny. Gotta love it :):) Get organized while you still have time. -annonymous-
    • Comment 05/06/09: Let's think ruthless like IBM management for a second... OK, you've cut & cut & cut people... your projects were already critically under staffed 2 or 3 cuts ago... but YOUR manager's manger assumes.. there's always room for cuts, even if there isn't, AND no matter what the cuts HAVE to be done... how do you figure out who else to cut? Assume everyone should be working the butts off and shouldn't have time to blink, far less sleep, far less take extra time OFF cause they all want to WIN.... YAY!... so, anyone who would voluntarily take time off when things are so critical... MUST NOT WANT TO WORK here THAT badly... let them volunteer for time off... and cut THOSE people, when the time's right... muhahahah!!

      Ok, enough ruthless thinking... I'm so sorry you folks at IBM are going through this. Been there done that... got out when I saw the writing on the wall. I wish you guys the best, when you're looking for your next job ... don't wait for these guys to chase you down the hall. Be proactive, take your careers (and lives…) back!!! Start a union or get out... either way, you'll be happier -Sincerely-

    • Comment 05/06/09: There is going to be lunch celebration on May 8th at RTP. The funny part about this, is that IBM told the executives NOT to have parties for boosting Morale. That's right. No parties, so there is someone (executive, Balog) that's going to pay for the lunch with his own money for everyone. Man, it is about time, huh? There is something so big that the executives are hiding and not telling anyone. We all know things are not alright in STG, but there is just more than that. No money, and probably we won't make the numbers for 3rd Quarter. -Loose Bird-
    • Comment 05/07/09: >> IBM is trying to cut some cost now. New program called "Take Time" is asking people to take some time off for 1/3 pay. What a swell idea. I bet the employees in the dept. who don't take the time off and have to cover for the others will love this. Or will the joyous vacationers have all their work waiting for them when they come back? Or will they have overseas help brought in to cover for the happy vacationers and find their jobs cut when they come back? I would imagine this all makes for one happy, stress-free vacation. What a great idea!!! One word on this: BEWARE. -anonymouse-
    • Comment 05/07/09: I think the new 1/3 pay time off program is simply a way of identifying those who can be away without impacting the clients. Maybe someone is realizing the potential blowback with the random RA's. -canuck-
    • Comment 05/07/09: Ha, the "Take Time" program (scam) for 1/3 pay. I wonder how big a bonus the HR guy got for dreaming up that one. Management will just make you work evenings and weekends to makeup and complete the work that went undone on your days off. And they will spread the work out to other employees. The work gets done at 1/3 the cost to IBM. These HR scum bags are diabolically brilliant. BTW, if you are not already working evenings and weekends, you have a high risk factor for a future RA wave. All in good time. IBM can only digest so many RAs at one time. Be assured, they will get to you soon enough -Spartacus-
    • Comment 05/07/09: As bad as it sounds, I view IBM's new Take Time program as an indicator that voices expressing outrage about job cuts are being heard. We may need to embrace IBM's Take Time program so that we can live to fight another day. It may be another trick from IBM's evil HR department, or it may be face saving way to slow down the layoffs. Though this appears to be another stupid IBM program, we can't be oppose to everything. Food for thought. -LearningFast-
    • Comment 05/07/09: STG and ISG are only eligible for the "Take Time" program. Why not all of IBM, particularly IBM CHQ Armonk? I reckon STG and ISG is hurting and desperate to try to make their 3rd QTR numbers. Hence this new program. Another knee jerk reaction by desperate IBM divisions or LOB's. If you think they are offering this to stop a planned RA in June then I can easily convince you that the sun rises in the west and sets in the east each day :) -nofoolhere-
    • Comment 05/07/09: Another possible motive that would make total sense; it's all about the stock holder value; Here is a true story for those who are in the dark, last year IBM cut the pay on the tech supporters by 15% as repercussion for the overtime law suit. It was not that they could not afford to pay the law suit, but they wanted to recoup the costs of the law suit and they did it within one year. Year to year, they saved 15% across these recouped salary reductions. So, the one third paid time off, is a good metric for determining who can afford a pay cut, who is willing to take a pay cut, and how much can IBM cut someone's salary before the employee pushes back. Obviously, people are complacent because they continue with the abuses that the gorilla is handing down. This whole abuse is going to continue, as history repeats, until we Unionize and Push back. -Possible-Motives-
    • Comment 05/07/09: The take time off pilot could never carry over to an area like Global Services. Any reduction in billing reduces the utilization and you would be penalized on the PBC and receive a lower rating and/or reduced compensation. .They are targeting internal and non-customer facing IBMers - and my guess is that this program would show you are not needed and set you up for an RA. -anonymous-
    • Comment 05/07/09: Anyone who's wondering "who the heck would do my job?", still doesn't get it. Management doesn't value you or the work you do. If they're willing to pay you 1/3 pay not to work then they must think you're at least 50% overpaid. As far as this not working in Global Services, maybe they would just ask remaining employees to cheat customers even more by billing more hours than actually worked. They were doing this 12 years ago when I was in IGS, I expect it's even worse now. -anon-
    • Comment 05/07/09: Project Match is a joke. A H1-B Visa (Indian) holder was RA. He applied to Project Match. Two weeks went by and nothing. I believe he interviewed, etc. and never heard back. HR followed up several times with the Project Match project office. Not sure where the disconnect was - I think - from India. So, the dude was finally let go and he was told he could still explore the opportunity externally. I swear this company is so f'd up. You get wrong answers from the ESC, HR screws up left and right, we run our employees in the ground and they discard them like garbage. -yes@endicottalliance.org-
    • Comment 05/07/09: This new "Take Time" was developed because of the public outcry of the layoffs this year. You cannot expect the public to not be angry over a company that has conducted mass layoffs and be one of the few companies that had RECORD EARNING profits during this recession. The buzz is already out on the big June layoff and IBM cannot afford any more bad press. This is a way of trying to achieve their payroll/headcount goals without getting the bad press of a layoff. Someone in IBM's hierarchy is reading these posts. I wish these bastards had thought of this before all the other layoffs that were done this year. -Whatever-
    • Comment 05/07/09: IBM has been flying low under the radar with "stealth" layoffs. IBM is still laying off people in Burlington. But you don't hear it in the press. Why? Because the numbers are small but continuous. Like the drip drip drip chinese water torture. Marching orders came from Sammy Palmapoopo. He wants to keep it quiet to keep it out of the Burlington Free Press. This IBM company makes me want to puke. :-( -BTVer-
    • Comment 05/08/09: -RA'd_04/2009- Interesting... A question I'd like to hear Sam answer... If the skills of those being RA'd are outdated, not needed, or non marketable, why are many of those affected having to train their replacements? Why would useless knowledge need to be passed on? -Gettin-Hosed-
    • Comment 05/08/09: It is interesting to see how a company that a lot of future engineers want to work for is doing this to its current employees. A friend of mine working for IBM has directed me to look at this page, and it now gives me a good reason NOT to seek to work for IBM. I'm so disappointed. I'm sure I'll tell my other friends about this page. Very interesting and a lot of good information. Good job IBMers. Keep posting more!!! Let the students read and read. This will let them know what's the right choice to make when applying for a company. -MIT Student does NOT like IBM Anymore-
    • Comment 05/08/09: To "Whatever", trust me, IBM could care less about bad press. They try hard to hide their assaults against employees, but if it gets discovered, C' est la vie. Palmisano made $21 million in 2008. The same year he cut the pay on the tech specialists by 15% -- oops there goes the mortgage payments

      IBM won't admit that the RA program is an offshoring program, so RAed people cannot take advantage of the Obama changes for the TAA program to support displaced workers. And you get severance but so what, it gets deducted from your unemployment claim, so that is a wash.

      IBM is pocketing the Obama COBRA subsidy on health insurance so kiss that goodbye. The IBM Future Health Account will only last you 4-5 years so if you are RAed in your 50's you'll go bankrupt before you reach Medicare age. Oh, and wait until you see the costs of retiree medical thru IBM starting about $10K/year for a single person. They discontinued traditional pensions after the courts wouldn\'t let them loot the old pension plan. I could go on and on, but this is why IBMers no longer trust the Palmisano crime family. -Spartacus-

    • Comment 05/08/09: An IBM patent application for increasing productivity through shorter meetings (i.e., meetings don't have to fill up the full half-hour or hour they're scheduled for---you can leave early if you get everything done): Link -Anonymous in Rochester-
    • Comment 05/08/09: An IBM patent application for increasing productivity through shorter meetings? You can patent common sense? Only in IBM. Besides, if it wasn't for long meetings most managers would have nothing to do. -anon-
    • Comment 05/08/09: The 40+ IBM employee population is dwindling - no news here. There will be a generation shift beginning now. The new employees coming in, whether here or in BRIC countries, will have little to no expectations of this corporation. They will have a job with a stated salary, that's it. They will work until they either burn out or find a job elsewhere. IBM will get the job done, one way or another, and as cheaply as possible. As an employer, the bar has been lowered for IBM. Nice going. -anon-
    • Comment 05/08/09: C'mon folks. The Time Out program is a way for IBM to retain skills without paying for them. If they laid off the workers, they'd not only lose the skills but they'd have to pay unemployment. Then, when the workload increased with the economy, they'd not only have to hire, they'd have to train people....an expensive proposition. So they're hedging their bets by making this offer. One way to use the Time Out productively is to secure employment elsewhere. -Think-
    • Comment 05/08/09: Word just came through that contractors in through CDI will be required to take 20% time off between the middle of May and the middle of June. CDI will work with the first line IBM manager to "minimize any impact". In already-strapped groups, this is pie-in-the-sky thinking. -CDI_drone-
    • Comment 05/09/09: Take Time program......... Why so many questions about IBM's motivation ? IBM knows that employees will take the time off at 1/3 pay. Except IBMers will not take that time off, they will continue to work from home or come into the office to train their indian replacements. IBMers are so afraid now to take even a long weekend. IBM has you by the short hairs so you will work continuously for .33333 of your salary. You don\'t want it to look like IBM can manage without you for a few days now, do ya ?

      Just a warning, this may become your full salary. IBM is just testing the waters. I covered a meeting for my manager. Here is the plan. By year end 2010 10% of IBM will be located in the US. The remaining employees will be located in india, singapore, hong kong, vietnam, communist china, brazil, argentina, russia & eastern europe etc.... The few with balls in EU will remain for a while. I have a question. Why are IBM US employees so cordial to the H-1Bs that are here to take your job ? Why do you even train them? A small severance package? What do you think your expected survival rate would be in their country? They know you are losing your livelihood to them.

      You have two options. Organize or remain as you are. I don't work for IBM anymore, but the people who read this site (non IBM employees - media included ) have a bit of a problem understanding and empathizing with people who don't seem to want to help themselves. After reading many of the posts, I'm in agreement. -ex_ibm_lackey-

    • Comment 05/09/09: I recently left IBM but just got this in my email from my former contractor employer:
      In light of the current economic conditions, IBM recently notified CDI that from May 10th through June 13th all CDI ITD resources are required to reduce normal work schedules by 20%. This action is not a reflection of any dissatisfaction over the services provided by you or CDI but rather a business decision. Your IBM Manager will work directly with your CDI Account Executive to coordinate a reduced work schedule that minimizes any impact to IBM or its clients. You should receive the communication regarding your reduction schedule from your CDI Account Executive. When you begin working the reduction schedule and notifying CDI of these reduced work hours please enter 0 hours into the CDI Web Based Time reporting tool and note the word “furlough” in the comment section. This decision and action is not to be discussed with any IBM clients. It is expected that normal work schedules will resume after this request is completed
    • Comment 05/09/09: I just don't understand who people are trying to impress by working extended hours over the required time that IBM mandates each employee work. I can assure I am not one of those suckers. I have worked on occasion in the past, but it came tied to comp time off or I put in Totals for extra pay. You are your own problem when it comes to overtime, all you have to do is just say no. The management is responsible for the work load, not the employee. Do the math and go home after 40 hours. There is no such thing as job security without the Union. Do NOT kid yourself by thinking you are actually impressing somebody by working overtime. You are nothing but a sucker if you do. -Why-Work-Overtime-
  • General Visitor's Comment page
    • Comment 05/04/09: Now with President Obama's recent announcement of offshore operations tax shelters that IBM undoubtedly uses we will undoubtedly see more USA RA's than IBM might have planned. IBM is hell bent on making that 2010 earnings per share and will stop at nothing to get there so Sam, Randy, Mike Daniels, and Ginny "AIG" get their windfalls. And those that don't get selected for RA don't be surprised if the raises for 2009 get cut in response. Folks we need to unionize now to protect whatever is left for us in IBM before it all disappears. -anonymous-
    • Comment 05/04/09: Did anyone read the article in last week's Business Week that mentioned IBM layoffs? The article said there is a skills and knowledge mismatch between US employees and those sought by employers. The section on IBM says that IBM wants to become a company specializing in "analytics," and therefore does not need the skills of much of its current workforce. If someone can find the link to that article online and flood them with letters to the editor, that would so make my day. -lookout-
    • Comment 05/04/09: Had dinner with an American Express IT manager this weekend. He informed me that they just kicked IBM to the curb in favor of EDS. He said it was due to cost. Thanks to corporate greed, IBM is in decline. -AmEx_favors_EDS-
    • Comment 05/04/09: Can someone help me understand if we've cut costs, moved our services to the BRIC countries to reduce costs, how are still too expensive and keep losing key accounts? It's not like the worker bees are making huge sums of money. -anon
    • Comment 05/04/09: To AmEx_favors_EDS: Is the entire AMEX account going away? My department has about 20 people that support websphere for this account. This is scary news. -Mike@home-
    • Comment 05/05/09: You can tell how IBM views the people that get their paychecks: They use terms like resource action, workforce rebalancing, and the one that says the most, FTE. For those who are not part of IBM and reading these messages, FTE stands for "Full Time Equivalent." This is a term that has been used for years within IBM instead of saying worker, employee, etc. When they can increase headcount in a team, they say that they have been allocated another FTE.

      Talking about headcount implies that they have a head, which would make them sound human. IBM's workers are not a valued resource, they are numbers on a chart that have associated financial implications to the company with their salary, benefits, retirement, and need for costly items in an office such as chairs, electricity, and heat. You are not defined by the skills and experience that you have. Your PBC rating is arbitrary. You are an FTE, and you cost too much money.

      There are people in other countries that don't need the same salary, and they don't require benefits of the same nature. As for the minimum number of people required in the USA, they'll take care of that with the Band 3 people they bring in new to the GDFs. Those folks will gladly sign up for the jobs, what with unemployment being so high and the economy in this state. But hey, without an employment contract, we are free. Free to have them do whatever they wish to us. -Pickles-

    • Comment 05/05/09: To anon: Because companies don't reduce what they charge for outsourced services. They price it on American heads and then send the contract, the work and the jobs overseas to do it cheaper. The 'profits' sit overseas untaxed and repatriate them piecemeal (at 5% tax) - mostly to pay $20M salaries of execs. In the meantime, Americans lose their jobs and the companies who think they are saving money by outsourcing to a big IT firm get hosed in the meantime. Read this. It's the best synopsis I've read on how they do it. http://www.istockanalyst.com/article/viewarticle/articleid/3218065 -annonymous-
    • Comment 05/06/09: Did anyone else notice that Sam Palmisano's 2008 comp and benefits package totaled about 0.17% of IBM's profits that year? Sam received about $21M and IBM profits were $12.3B. (Figures taken from the MC Press Online article). Anyone know if this is an unusually high percentage, or is this just the way things are these days? -Think-
    • Comment 05/08/09: The comments about the new corporate jets must be true. That or we're seeing just how cheap these bastards are becoming. The IBM Innovation Center in Waltham is having some rooms repainted. We've heard IBM is buying the paint, but the employees are being required to paint it. I wonder if Sam had to paint his office. -anonymous-
    • Comment 05/08/09: Sam said there would be 250,000 who would get raises this year.. Just heard that In Fishkill no one below a 2+ will get one.. Wonder if that is across the board? If you do the math, it is possible that no one in the US will get a raise if below a 2+ because there are 330,000 workers world wide, and less then 130,000 in the US. So every one out side the US is a 2+ or better and maybe a few in the US. If you take out management, then the numbers are even more revealing: http://video.msn.com/dw.aspx?mkt=en-us&from=truveo&vid=2824b236-421d-4c47-8a24-990ce4a969bc Ich Bin Muede -Anonymous-
    • Comment 05/09/09: It has not been mentioned lately, so I will bring it up once again: I encourage all IBM employees (current and former) to head over to http://www.glassdoor.com and write up an honest assessment of your experience working for IBM. There are sub-divisions for Global Services, Systems and Technology, and other groups/countries. I cannot say how many people check these sites to gauge a company before applying or accepting an offer, but it certainly could only help in letting people know how you have been treated. It is another tool for the workers, as companies may find that their actions have consequences when eventually the most talented people have the information to help them decide which employer deserves to benefit from their efforts. A company's actions can only soil its reputation if the word gets out. Just tell the truth and avoid unhelpful rants, as the reality of how things have changed over the last ten years is powerful enough. -MuffinMan-
  • Pension Comments page
  • Raise and Salary Comments
    • Comment 5/05/09: It's not crass to wonder - after all, if IBM is going to cut employees left and right, they can at least compensate the ones the keep. It would be another matter if they kept salaries in check and retained their employees. Anyhow, it's now May 5 and the IBM Salary W3 page still highlights the 2008 plan. My manager stated last week he has heard nothing. Boggles the mind. -wondering-
    • Comment 5/05/09: -wondering- I hear you! BUT (also not intending to be crass) since IBM can just RA thousands each month with impunity then why should they be so generous to support a salary increase plan? After all IBM needs to stay competitive in the global economy and IBM considers most USA employees overpaid, under skilled and under educated. I have heard through the grapevine that management and HR are so busy with RAs that the salary plan cycle will be delayed this year. RAs and cost cutting practices and policies take the utmost priority. Wouldn't it be great to have a union contract spelling out when and how much your raise will be? -anonymouse2-
    • Comment 5/07/09: At our weekly staff meeting today, management indicated none of us will be receiving raises this year. Guess we don't have any of the 250,000 people that Sam said would receive a raise. And no, it isn't crass to wonder whom is going to get raises this year. We lost 30% of our department back in January and have been buried with projects ever since. We're putting in our solid time each week, but projects continue to fall through the cracks. The staff is finally waking up. We're overloaded with tasks and management makes no move to help bring in assistance (not that we expect it anymore). People are beginning to verbally voice their frustration in the office and are sick and tired. Now I just wish more of them would sign up for the union! Most of them are too nervous and scared after the way management rules by fear. -anonymous-
  • PBC Comments
    • Comment 5/05/09: If your manager is indeed honest they can tell you what you PBC for this year is going to be already...... Ok, maybe they can't tell you exactly but it will be no better than what they tell you now. The ranking and calibration sessions have already been done for this year. -anonymous-
    • Comment 5/08/09: Band Level = 5; Years Service = 4; Prior Yr PBC = 2; This Yr PBC = 2+; This Yr Bonus = 3000; Prior Yr Bonus = 2000; Message = hi ;-anonymous-
  • International Comments
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Yahoo! IBM Pension and Retiree Issues message board: "Re: High Risk at Losing Retiree Medical" by "madinpok". Full excerpt: I agree with fhawontcutit. You need to let your representatives know what you think we should have. The other side, those with vested interests in the current health care system, have already started their campaign to undermine any changes to the current system and protect their profits.

    An organization called Conservatives for Patients Rights is running TV ads that try and scare you about any changes to the health care system. The ad says Obama's system will put bureaucrats in Washington in charge of *all* your health care decisions. They want you to believe you won't be able to choose your doctors or hospitals and that the system will be worse than what they have in England or even Canada. They want you to believe you will have no control over anything.

    Who are the Conservatives for Patients Rights? The organization is backed by a man named Richard Scott. Don't know who he is? Scott previously started the for-profit hospital chain in 1987 that later became the $23 billion Columbia/HCA. He was ousted from this post in 1997 after an FBI investigation of Columbia/HCA that led to 14 felony convictions and $1.7 billion in criminal and civil fines for Medicare fraud.

    Now, do you think they have your best interests in mind? Don't fall for their FUD.

  • Consumer Reports: Hazardous health plans. Coverage gaps can leave you in big trouble. Excerpts: Many people who believe they have adequate health insurance actually have coverage so riddled with loopholes, limits, exclusions, and gotchas that it won’t come close to covering their expenses if they fall seriously ill, a Consumer Reports investigation has found.

    At issue are so-called individual plans that consumers get on their own when, say, they’ve been laid off from a job but are too young for Medicare or too “affluent” for Medicaid. An estimated 14,000 Americans a day lose their job-based coverage, and many might be considering individual insurance for the first time in their lives

    But increasingly, individual insurance is a nightmare for consumers: more costly than the equivalent job-based coverage, and for those in less-than-perfect health, unaffordable at best and unavailable at worst. Moreover, the lack of effective consumer protections in most states allows insurers to sell plans with “affordable” premiums whose skimpy coverage can leave people who get very sick with the added burden of ruinous medical debt. ...

    For our investigation, we hired a national expert to help us evaluate a range of real policies from many states and interviewed Americans who bought those policies. We talked to insurance experts and regulators to learn more. Here is what we found...

  • ABC News: Health Insurers Try to Scuttle Obama Plan. Insurance Industry Chief Moves to Head Off Government Competitor. By Teddy Davis and Ferdous Al-Faruque. Excerpts: The insurance industry's surprising request for more government rules and oversight is its latest attempt to convince Congress to reject a main component of Obama's health care reform plan -- a government run insurance program that would be open to all Americans under 65 and compete with private insurance plans. ...

    Most Democrats, however, remained skeptical about the insurance industry's offer. "Trusting insurance companies in a regulated market is not something I think the American people are ready to do," Andy Stern, the president of the Service Employees International Union, told ABC News. ...

    In an effort to find a compromise on an issue which has become a key sticking point in the debate over health-care reform, Baucus asked Sen. Chuck Schumer, D-N.Y., to develop a plan, which he presented Tuesday, that would require any new government-run insurance program to comply with all the rules that apply to private insurance.

    "Just as bad as a public plan with an unfair advantage, is no public plan at all," said Schumer. "The American people have some problems with the government. But they have a lot more problems with private insurers."

  • Taking Note: Provider Backlash. By Naomi Freundlich. Excerpts: Fifteen years ago, insurers were trying to put a brake on healthcare costs by “managing care”—which often meant saying “no” to patients. Too often, insurers denied coverage for care that patients needed. Then came the backlash against managed care, and insurers relented. They began to say “yes” to more treatments, and passed the cost along to customers in the form of higher premiums, co-pays and deductibles.

    More recently, insurers have begun trying to save money by shifting their focus from patients to doctors. Increasingly, insurers have been delaying payments to physicians, and, doctors say, insurers are underpaying for many services. Physicians are now fighting back, bringing lawsuits against insurers. Doctors often complain that we live in a terribly litigious society. Now, they are hiring the lawyers. Are the suits justified? ...

    Insurers have focused on business practices that include delaying payments to providers, “bundling” several procedures and then reimbursing at a lower rate, and underpayment of services provided outside the network. These newer cost-containment measures have now raised the ire of providers. According to an article written by Maureen Glabman in the February 2009 issue of Managed Care, class-action lawsuits filed by providers against all of the major health plans have nearly tripled from the late nineties to the first five years of this century.

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.

  • The Progressive: From the Archives: Molly Ivins on Fiscal Folly. By Elizabeth DiNovella. Excerpts: I’m knee-deep in the 1990s right now and found this gem, written in November 1998 by Molly Ivins. (I really miss Molly these days. She was able to be hilarious while being outraged.) Molly writes:
    President Clinton is wrong. This is not a “do-nothing” Congress: They’ve done lots of damage .In a major act of fiscal folly, Congress repealed that Depression-era reform the Glass-Steagall Act. Now banks, insurance companies, and brokerage houses can merge away. This leaves banks, already in trouble from making so many marginal commercial loans, vulnerable to any disasters in their allied insurance companies and brokerage firms. When the banks get in trouble, guess who bails them out?

    Speaking of bailing out banks, I also ran across Timothy Geithner’s name in 1998. In July 1998, we ran excerpts from a transcript of a House Bank Subcommittee. Bernie Sanders questions Geithner, who was then Assistant Secretary for International Affairs for the Treasury Department, about whether the IMF is “simply a front group for giant banks, global corporations, and wealthy investors.” Sanders shines, asking why the IMF makes loans to countries that suppress human rights, such as Indonesia. And Geithner? Well, he just sounds like a technocrat. (But we already knew that.)

  • Wall Street Journal: For Mother's Day, Give Her Reins to the Portfolio. Excerpts: Fess up, fellows: The masters of the universe have turned out to be masters of disaster. No matter which aspect of the financial crisis you consider, there is a man behind it. So, it is worth pointing out, this Mother's Day weekend, how different things might be if the financial world were female. Finance professors Brad Barber and Terrance Odean have found that women's risk-adjusted returns beat those of men by an average of about one percentage point annually. In short, women trade less frequently, hold less volatile portfolios and expect lower returns than men do.

    On the other hand, in the testosterone-poisoned sandbox of the male investor, the most important thing is beating the other guy; the second most important: bragging about it. The long term is somebody else's problem, and asking for advice is an admission of inferiority. Worrying about risk is for sissies. Leverage is good, since it raises returns -- while the market goes up. Is it any wonder the male-dominated world of Wall Street has boomed and busted every few years for more than two centuries?

    Women, by contrast, put safety first. Even after controlling for age, income and marital status, women are more inclined than men to wear seat belts, avoid cigarette smoking, floss and brush their teeth and get their blood pressure checked. They even have been shown to be 40% less prone than men to run yellow traffic lights. Women are less afflicted than men by overconfidence, or the delusion that they know more than they really do. And they're more likely than men to attribute success to factors outside themselves, like luck or fate.

  • Wall Street Journal: The Curse of the Class of 2009. For College Grads Lucky Enough to Get Work This Year, Low Wages are Likely to Haunt Them for a Decade or More. By Sara Murray. Excerpts: The bad news for this spring's college graduates is that they're entering the toughest labor market in at least 25 years. The worse news: Even those who land jobs will likely suffer lower wages for a decade or more compared to those lucky enough to graduate in better times, studies show. ...

    Trading down to a lower-skilled job isn't just a hit to Mr. Friedson's ego. It could also hurt his bank account for years to come. Economic research shows that the consequences of graduating in a downturn are long-lasting. They include lower earnings, a slower climb up the occupational ladder and a widening gap between the least- and most-successful grads. In short, luck matters. The damage can linger up to 15 years, says Lisa Kahn, a Yale School of Management economist. She used the National Longitudinal Survey of Youth, a government data base, to track wages of white men who graduated before, during and after the deep 1980s recession.

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. Some sample posts follow:

  • "Is this going to kill Offshoring?" by "omegadoom". Full excerpt: For some reason my other post got put into a message under a different discussion instead of a new thread... Oh well... http://www.cnn.com/2009/POLITICS/05/04/obama.tax.code/index.html

    Essentially Obama wants to close a loophole in the tax code which would pretty much kill a large incentive for IBM et al to offshore. (If you saw their patent application...) Sure you may save on the dollar per hour rate, but overall the cost incentives just went down because you lose the tax savings. Not to mention that the value add benefit isn't there.

    As someone who sold lab services, I routinely had to show the value add of why it was smarter to bring in a higher priced body for a shorter period of time, because I could show the value add and justify the rates. Offshoring is definitely losing its luster. If Obama gets his way, IBM just got spanked along with a couple of other multi nationals.

  • "Temper the hope, hold the drama" by "wonderaboutibm". Full excerpt: Omegadoom -- I sincerely hope that you are right. But IBM is really, really deep into labor movement to India. It is now their vision from the tunnel. It will take a lot more than just tax changes to slow things down. Actually, virtually every positive indicator in favor or offshoring will have to go south, and even then IBM will sail on with the outsourcing, like the Titanic, even if it means hitting the iceberg. We will see no meaningful change for the next couple of years at least. IBM has little flexibility in its approach.
  • "Point of No Return" by "Frank_Reality". Full excerpt: I generally agree, except I don't see any change happening until it is too late for the survival of the company. There's an old country saying that once a farm dog tastes blood, it will keep killing livestock until it too is killed. Once tasted, the dog craves and will do anything to get more.

    So too it is with IBM execs. When they choose to deny the many failures, high turnover, rapidly escalating salaries, quality problems and lack of productivity of low cost countries because they have tasted apparent cost savings, their arrogant strategy of myopic, relentless cost-cutting and offshoring will continue. Denial is contagious. Imagine quarter after quarter after quarter of denial heaped upon denial heaped upon denial.

    Isn't it remarkable how IBM is spending more executive resource on optimizing the stock price than it is on growing the company.

    Like the captain of the Titanic who received warnings of bergs ahead, but arrogantly steamed on at speed, Sam and his henchmen have had their warnings, but have chosen to ignore them and in fact have told the harbingers of doom to STFU.

    So by Sam's decree, it will be "stay the course, full speed ahead" into trouble.

    Like the captain of the Titanic, the thieves and scoundrels at IBM's helm will drive toward failure at top speed and by the time they recognize the abysmal condition of the company, there will be no way to recover. Unlike the captains of old who had character to go down with their ships, Sam and his ilk will head for the executive class, gold-plated lifeboats and leave the employees and stockholders with squat.

    "Nice to have known you, it was great (for me) while it lasted" Sam will shout to those freezing to death after the IBM ship sinks.

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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