The secrecy surrounding the layoffs at IBM, which most observers close to the situation have estimated will total about 10,000 in North America this year, is just one of the seeds of discontent the company is sowing in this period of economic downturn. Mind you, people are losing their jobs all over the place, and private companies aren't exactly broadcasting how badly they are being hurt by the recession. One of my friends is watching her human resources and insurance business evaporate because her small-business clients are simply shutting their doors and going belly up.
The policy of most large companies, however, is to announce layoffs of significant size. It's considered a matter of business and social responsibility and has the effect of easing the psychological blow on the laid-off worker by telling the community that it's not the fault of the workers that they are losing their jobs; it's just that the company is cutting back. By not announcing the layoffs, IBM is making it harder on the people who are losing their jobs. The message is: suck it up, the company is doing fine, you're being laid off because you weren't as good as the workers we chose to keep.
This message of inadequacy is multiplied onto a national scale. While IBM is laying off workers in North America, it is hiring workers in emerging markets. As of last year, the company had nearly as many workers in Brazil, China, India, and Russia--113,000--as it did in the U.S.
The most recent IBM layoff of some 5,000 workers has raised the ire of the union-backed Alliance@IBM, which says that IBM is "abandoning the U.S. workforce." Lee Conrad, national coordinator for the group, made that statement upon learning about a patent application IBM had submitted that essentially is for a method to outsource work offshore. "A method for identifying human-resource work content to outsource offshore of an organization," was originally submitted for a patent in January 2006, according to Christine Young, a reporter for the Middletown, New York, Times Herald-Record. The application was withdrawn in October 2007 by IBM, which said that it lacked technical content.
At the end of last month, however, the existence of a second, similar patent came to light. According to Young, the application, which had been sitting in the Patent Office for some time unbeknownst to the press, was for a "computerized system to help businesses outsource offshore jobs while maximizing government tax breaks." The application apparently referenced weighing such goals as "50 percent of resources in China by 2010," the Times Herald-Record reported. ...
Meanwhile, grumbling continues among laid-off IBM employees who just learned recently that the man responsible for steering IBM safely through the troubled waters of 2008 received nearly $21 million in compensation for his stewardship. IBM Chairman and CEO Sam Palmisano was rewarded for his efforts with salary--$1.8 million; performance-based bonus--$5.5 million; stock options and awards--$12.2 million; and perks--$1.44 million (including $493,881 for personal use of a company aircraft). The figures were reported as part of the company's filing with the U.S. Securities and Exchange Commission. ...
There is something ironic and tragic about workers who help build up a company to the pinnacle of success, only to have the current regime of well-heeled executives secretly fire them and stealthily replace them with lower-paid foreign workers. Meanwhile, stockholders and company executives continue to reap far-above-average rewards from the corporation's continued high profits--which all employees took part in producing through hard work and extraordinary dedication.
Peggy Kline had also worked for IBM, but recently lost her job along with thousands of others at the computer giant. Her unemployment, along with the impending expiration of Walt's long-term care insurance, meant the Cary couple could no longer afford the cost of his slot at Woodland Terrace.
Selected reader comments concerning the above article follow:
If your job moves to China you may get offered the Project Match option. Your job moved and you can too. We think you will like it. Of course the local currency is fish heads.
While this is an effective way to exterminate employees, do US corporations really need to behave this way to be successful?
But BusinessWeek was deluged with comments from people, many of them unemployed, who said employers are too picky, want to avoid paying for training, want to export jobs, or would rather hire cheap foreigners on H-1B visas. Here's a typical comment from someone who signed herself Lucy: "I don't believe this article at all; it's hogwash. IBM is not laying off people because of a skills-mismatch problem. They are laying off people because they want to offshore all U.S. jobs to low-wage countries, or bring in more people to the U.S. under the H-1B visa program. They also don't want to train U.S. employees."
Hello - I'm a journalist at the public radio program Marketplace. We're trying to get in touch with people who have experienced layoffs to find out how people are staying in touch (or not) with the companies they've left. If you find it appropriate, I'd be grateful if you could post the following request to the ibmpension discussion group.
Anyone who responds to the inquiry by filling out the form becomes a source for public radio -- our goal is to tap people with insight into news topics to inform our reporting. And it goes without saying that we would love to have more current and former IBM employees in our source network to help us in reporting about technology, pensions, employee benefits and more topics. Many thanks, Joellen Easton.
The public radio show Marketplace is looking for people who can give us insight into what happens after a layoff. Use this link to talk to the show: http://tinyurl.com/d2nzqd.
Getting laid off can be an isolating experience in which work-based connections and relationships break down. But some companies, like IBM, Lockheed Martin and Microsoft, are making efforts to stay in touch with laid-off employees through online social networks and other means.
If you've been laid off, have you kept up relationships with your former employer, or your coworkers? Did you burn bridges, or leave on good terms? And if you are staying in touch via a"corporate alumni community," what's that like? Do you feel it's for your benefit...or the employer's, so they can find you when it's time to start rehiring?
How have you maintained work connections post-layoff? Talk to Marketplace: http://tinyurl.com/d2nzqd
Thank you, Joellen Easton Analyst, Public Insight Journalism Blogger, The Trading Floor (http://www.publicradio.org/columns/marketplace/tradingfloor/) Marketplace | American Public Media.
"A significant source of wasted time is the general predisposition to using integral units of time, based on hour or half hour increments. This is especially true of business meetings, which are invariably scheduled to last an hour. Meeting attendees will fill the full hour for which the meeting is scheduled regardless of whether the entire hour is necessary to address the business at hand. The result of this is that a meeting that could have taken less than an hour will end up wasting time due to the arbitrary hour-based scheduling paradigm."
I've never attended a meeting in the last 20 years that lasted as long as it was scheduled - it either runs longer or shorter than the scheduled time. And no, they are not typically an hour. If the meeting runs shorter, then we all leave. No one feels obligated, including the person calling the meeting, to use up the extra time. So the assumption: "Meeting attendees will fill the full hour for which the meeting is scheduled ..." is absurd unless your management paradigm is so screwed up within your company that people actually do that. That's a management problem easily solved, not a software design issue that is worthy of a patent. Perhaps the management should adopt the Best Buy corporate meeting philosophy - don't schedule a meeting unless it is absolutely necessary and then don't schedule it. You get a lot more done.
No wonder Scott Adams doesn't have to work hard... people do it for him every day. Critical thinking - where did you go?
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.
Take Time participants can use the added time in any way they wish â€“ to volunteer in the community, engage in skill development/learning activities or simply spend more time with their family. For instance, Take Time participants could take advantage of IBM's On Demand Community and find volunteer opportunities in their communities.
While IBM reported favorable first quarter earnings overall, Systems and Technology Group's performance reflected the current challenges facing hardware companies. Take Time offers employees a way to voluntarily participate in a program that provides them additional personal flexibility while providing the business with a potential way to reduce operating expenses.
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.
The pay deductions will not be taken during the summer when the time away is being used. Instead, the pay deductions will occur in equal increments from the two pay statements in September, giving participating employees time to plan financially for the cash flow changes.
Benefits coverage, including earned vacation, continues without interruption since employees are considered active and full-time employees while participating in Take Time.
And then there was a comment about "life balance," IBM's fabulous program to "help" the employee. How can you have "life balance" when you are working 6 days a week. I get emails from folks in my time zone at 11PM, 4AM, Saturdays and even Sundays. But heck, as long as the corporation is making profit, who cares? I have a lot of contacts in IBM still and I am seeing really top quality people AFRAID to take vacation time. Working on RFPs on Christmas day and Easter. I am one of the lucky ones but I surely do feel for those poor ba$tard$...
What got me to post after a lot of reading was your statement: "An analogy is someone suffering domestic abuse but has NO WHERE to go (or believes they have no where to go)" ...that is EXACTLY how I felt and said (to myself of course) many many times. I was SO SCARED. I come from a place where IBM is the ONLY game in town and my parents didn't have enough money to send me to college. The day I got into IBM at a very young age was one of the happiest days of my life (or so I thought). To see what I have seen over 27 years...words cannot express.
I am hoping that IBMretiree or some of the obviously intelligent gentlemen on this board can help me with a question. I need an answer from an 'insider'. The question is, should I take my pension now or should I wait 5 years when I hit 55? That will be my next opportunity to take it, now or 5 years from now. The reason I am asking you is, do you think with the way IBM is going it will still be there for me in 5 years? I would appreciate very much any help or advice you might have for me on whether you think I should take the money now or wait...I admit I am a very sheltered IBMer. uh... ex-IBMer... THANK YOU... for any help...Seaflea
I think you should focus on the difference in dollar value to you of having the money now vs later and how that fits into your financial situation.
I think that if you run estimates for your pension amounts for taking it now vs 5 years from now, you will find that it increases very little for each additional year that you wait - probably something in the range of 1 - 2% per year.
For that small increase, you are probably better off taking it now. Think of it this way. Say your pension will be $10,000 per year if you take it now, and $11,000 per year if you wait 5 years. If you take it now, you will have $50,000 in the bank 5 years from now vs starting off with nothing and getting $11,000 per year going forward. Even allowing for a fairly high income tax rate, if you waited 5 years, it would take you 25 years or more to hit the break even point before waiting would have been the right choice.
My math here is highly oversimplified. But the pension amounts are based on average life expectancies and the crossover point is usually around 80 years of age. IBM's pension calculations include an early retirement subsidy that results in a more generous pension (in terms of the theoretical lump sum value) the younger you are. So if you want to get the most money out of IBM's pocket, that is another reason to start now instead of waiting.
You might have an idea about how long you might live based on your family history. But who knows what else might happen in the meantime? Those unknown factors tend to make me think that, if it were me, taking the pension now is a good idea.
Finally, it is always a good idea to talk to a fee-for-service financial adviser about these decisions. It is an important, once in a lifetime choice and someone who understands your full financial picture can hopefully give you a recommendation that is right for you.
Those of us not yet Medicare eligible are going through hell trying to insure our wives. Over 900 a month is more than half our pensions or damn near. I am forced to take early SS payments to make ends meet. It is my goal to find my wife outside insurance and then get away from IBM insurance when medicare comes around. I never thought it would be like this when I came aboard over 40 years ago.
Into the early '80s, at least, they would pay for a lunch, at a restaurant of your choice, for hitting 30 years. You could invite a half a dozen of your buddies. You could even act like grownups and have a drink, or two, all of the attendees had the rest of the day off. Rod Cordell 1965-1995.
All this discussion about how bad IBM has become and how unfaithful it is to it's employees sort of chaps me. I personally think that the employees changed first. They had no loyalty to their employer. I am not sure but that it was the egg -- not the chicken. America was taken over by the psychology of entitlement -- the "ME" generation.
Lou and Randy engineered the termination of over 100,000 IBMers. Lou officially discarded the Basic Beliefs and put in place a new list of "core values". "Respect for the Individual" was not on the list. IBM stopped being "IBM" and was now "just another computer company".
Sure, IBM is amazingly successful, having had its best year ever in 2008. But the culture is gone. It is NOT the employees who did this. Do you ever see IBM making the "best places to work" list? Wonder why not?
I bet you never heard a Senior Vice President tell his reports at a town hall meeting that "if you want loyalty, get a dog".
I bet you have no idea what it's like to work your ass off, watching solid performing long term co-workers get resource actioned every quarter even though their performance was good and there's plenty of work to do, simply because the executives of the corporation are cutting costs to pump up the short-term stock price. You probably have no idea what it's like to wonder every quarter whether you get to keep your job.
That is the truth - and it's not the employees that changed first. The change was that employees were once treated like assets - now they are fungible liabilities to be discarded like trash whenever the execs need to cut costs to pump up the stock price.
It used to be that IBM would invest strategically in plants, people and technology. The executives led the company with a long term focus. That too is gone. All that matters now at IBM (and a lot of other companies) is the short term stock price. The exec team has more focus on managing the short term stock price than it does leading the company.
You got your pension and retiree medical. Mine was cut in 1991, 1995, 1999 and frozen in 2007. My retiree medical was taken away and replaced with a funny money account that won't last 3 years before it's all used up. Most of my coworkers are worse off than I.
A lot of very bad things have happened at IBM in the 22 years since you retired, so rather than blame the victims, you may want to listen with compassion.
Compared to what I have now AND WHAT I EARNED AS A LIFETIME BENEFIT AND PAID FOR AS A PART OF MY IBM EMPLOYMENT COMPENSATION, I believe that any government provided "national healthcare benefit" or "single payer healthcare" system will be vastly inferior to my current healthcare coverage.
My question is: does my expectation of a lifetime assurance of comprehensive, high quality, available health care represent a contractual obligation and a "property right" which the Obama administration or any other government interlopers are Constitutionally prohibited from interfering with?
Or, in other words, if the government tries to make me accept some shabby, third-world health care plan and take away my access to arguably superior IBM Retiree health care plans, are there avenues of legal recourse under contract law, property rights ("takings", ex post facto doctrines, or whatever?
Whenever I go to the hospital, as a patient or a visitor, I've observed they medically treat everyone the same. I'm pretty sure you receive the same superior medical treatment as me and everyone else.
Regarding your concern of 'third world' medical treatment, what pills have you been popping?
I don't think that IBM and the government can ethically and legally get away with saying that we are going to exchange your proffered inducement of high quality retiree medical health plans with crappy stand-in-line government healthcare plan that doesn't pay for hip replacements because you're over 66 or whatever.
I have to believe that there are many, many underemployed trial lawyers who could articulately make the case that such a scheme (in the absence of bankruptcy) is at minimum bait and switch and arguably default on an implicit or constructive contract.
There are around 40 million Americans using single payer health insurance and they get quality hip replacements whenever they need one. It is the same superior hip replacement that you would get either on IBM's plan or on a single payer plan. (And I've never known anyone to wait for one, how silly is that?)
Bait and switch has nothing to do with it. Contract law has nothing to do with it. Why? Because IBM's health benefits are not legally protected by any law. The truth is sometimes hard to take, but that is the truth.
Be grateful that IBM provides you with health care. In fact, be grateful that you still work for IBM. If you were RA'd, like tens of thousands just lately, you would be paying up the yin-yang for your premiums, for a while, before they run out, and then you wouldn't have any health benefits at all, unless you are able to get another job at a company that provides it, if they do, which many don't anymore.
Regarding the FHA if you are lucky enough to qualify (USHR117): "IBM reserves the right, at its discretion, to amend, change or terminate any of its benefits plans, programs, practices or policies, as the company requires. Nothing contained in this summary shall be construed as creating an express or implied obligation on the part of IBM to maintain such benefits plans, programs, practices or policies. Your benefits at or after retirement may be different from those described herein due to changes made to the IBM Future Health Account or THE TERMINATION OF THE PLAN."
(emphasis mine on both quotes from IBM's docs)
2) If we don't go to a better model, most of us will not be able to afford health insurance as costs and deductibles continue to rise.
3) The US is way down on the list for quality medical care and life expectancy compared to other industrialized nations with (gasp!) socialized medicine. The US is number one in what it pays for medical costs, though. Even several non-industrialized nations have much better medial care at much lower costs. What we are doing clearly isn't working very well.
IMHO, as long as we have a "for-profit" medical system, then we'll never get costs under control. Don't give me the GOP bullsh*t lines about competition lowering prices and private being able to do it cheaper than government because it's had every opportunity to happen for many years and look at the mess we're in. The definition of a fool is someone who keeps doing the exact same thing and expecting a different outcome. It's time to give Government 2.0 a chance.
Current healthcare plans dictate the level of treatment one receives. My hospital employee friend can tell you story after story - including the one where a patient complained of severe headaches, was denied diagnostic tests by his insurance company, and died of an aneurysm. So your complaint would seem to be more about who would set those limits (government vs. insurance companies) rather than the existence of such limits.
As for your "superior IBM Retiree health care plans," you do realize don't you that only a fraction of those retiring from IBM actually get them? As I recall, only those "retirement eligible" at the time of the '99 pension/healthcare disaster get the "old" retirement healthcare coverage. Everyone else get royally screwed and essentially have little to no retirement healthcare coverage from IBM. Your answer to that almost comes across as, "I've got MINE and it's too bad for you."
I don't think any "older" Retiree feels that way at all. What many of us do feel is that the people who could have cause changes in the way IBM treats employees, retiree's fail to do anything about the continual abuses, takeaways, clawbacks, etc. Those of us who do have the old plan where gone when this happened and the employees at that time and ever since failed to do anything, just laid back and continued to accept whatever IBM dished out. There was not much we could do other than voting our proxies, the active employee's could have done a lot, strike, sick-in's, etc. The least they could have done was to join the union. It's quiet clear now that anything the employee's could have done would have been better than what they got from Three Finger Lou and Slumdog Sam.
It's possibly too lat now because IBM knows that the 100,000 remaining US employees are short lived and they have their strategy practically fully implemented. You have trained your replacements, you have failed to support your union. IBM management knew that employees would not do anything and therefore went ahead and changed the business model.
Obama wants to develop a plan where you can keep your private insurance and I can choose a public option, if i want. And I want. We pay over $13k per year for two, high-deductible, high co-pay. I'd dearly love to buy into Medicare. The Republicans are fighting that possibility tooth and nail because they say, if a public plan is an option, no one would choose the private plans. Ummmmm. Yeah. And so I shouldn't have the public plan as an option because most would choose it? Give me the choice.
Employees and retirees should know that private-sector employers are not required to promise retiree health benefits. Furthermore, when employers do offer retiree health benefits, nothing in federal law prevents them from cutting or eliminating those benefits--unless they have made a specific promise to maintain the benefits. The key to understanding your retiree health benefits lies in the documents governing your plan.
If your employer has reserved the right in the SPD or controlling plan document to change the terms of the plan, you may lose coverage at any time during your retirement.
"Sadness, disappointment, and betrayal. We really felt betrayed by the company," said John Parsnip. Parsnip spent 33 years at Xerox. After retiring in 2001, he thought his health benefits were safe. "Sometimes we get a little naive about things, so from that standpoint you could say we were surprised," Parsnip said. Xerox sent Parsnip and close to 3,700 other retirees a letter informing them their benefits would be cut. "It's going to cost my wife and me three thousand dollars a year," said Parsnip.
Jones retired from Xerox in 2006. He took an accelerated health benefits package because he feared this would happen. Jones received a one-time payment of $20,000. This change may not fully impact him, but he says it’s wrong. "We thought the employee benefits were part of the contract between us and Xerox, but unfortunately that turned out not to be true," Jones said. Xerox says the retirees will still be able to use the company coverage but will have to pay the full group rate.
I believe that without experienced resources in developed nations like the US, Canada, Germany and the UK, IBM will never be able to design and build hardware or software products that will be able to be sold.
I think by 2015, IBM will be in serious financial straits. Our products, particularly software will be junk. Service costs will be unsustainable. Customers will dump IBM from outsourcing contracts because of ongoing failures to meet service levels. IBM will be paying hundreds of millions in penalties for delivery failures. Account problems like the State of Texas won't be the exception, they will be the rule. There won't be enough service personnel to deal with the volume of problems.
When that happens, the experienced technical employees that IBM has RAed will have jobs with clients or competitors or be retired. Even if IBM execs realize the low cost/low skill/offshoring approach has failed miserably, there will be very few experienced hands who will come back to save IBM. After IBM dumped them and treated them like trash, they won't come back. If IBM continues this strategy, the company will go eventually go bankrupt.
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.
Alliance reply: Your numbers of 121,000 and 115,000 are correct. Subtract the 10,000 from first quarter job cuts and we are down to 105,000. But also remember the number of employees forced out and retired over the years AND the fact that IBM has also been hiring new people from acquisitions. The number of job cuts has been very high. Only IBM knows the true number. We can only guess/estimate; because IBM never confirms their headcount or releases numbers of total workforce reduction, publicly. They never have.
Whether Cringley is correct or not is nearly a moot point by now. It's clear that IBM is on a long term mission to reduce the US IBM workforce to close to a single digit percentage; by virtue of their desire to increase the workforce in BRIC and elsewhere. That '900,000' IT tech job idea from Sam Palmisano to Obama is nothing but deception and an outright lie, to get $30B in Stimulus $$$. Wonder why Cringley didn't come out with a comment on that?
Alliance reply: It isn't a 'size' issue, necessarily. Size and location are only two factors. The main thrust of IBM's resistance will be denial of the unit 's existence, altogether. The difficulty is that IBM has been clever about spreading out their "organizational units" all over the globe. Then labor laws in each place fail to account for that reality, and the 'unit' can't necessarily be declared a bargaining unit. IBM is not as dumb as they are evil. Our best shot is getting small groups of members to actively organize their co-workers and get their co-workers to do the same. The hope is that it spreads like "spilled gasoline on a driveway"... figuratively speaking, of course.
It appears to me that the GDF is not as successful as the big wigs planned. Several big accounts have pulled out of the GDF and/or never went in. IBM is in jeopardy of losing other big accounts too. The idea of providing limited services by low paid staff with little experience is not working. As a result of this short sighted management to save money, IBM will lose more accounts. It may take a while, but the big blue beast is heading for demise. -IBMer-
Independents and BPs are killing them as far as services go, MS is killing them on the sw side, and power is far far away from competing in terms of price. Finally system i is toast. So what do they have left? not much.
If you are still there - make escape plans. Poorly run in terms of products, pricing, marketing and staffing. Tons of lying to upper management - false oppties in Siebel, crap everywhere and everyone convincing everyone that IBM rules all. Seriously, IBM does not and it is in big trouble. Bigger then people think - even investors. Customers are migrating to the ms stack in droves and using non ibm services to do it. -bob-
I have watched them bring on a steady stream of “college hires” in the last few years, and most last 2 or 3 years and leave when they realize they won’t be getting double digit increase and promotions every year. They seem focused on climbing and IBM isn’t where it happens. Again, no criticism of them, I was there once myself.
As to skill sets, in the job market I’m looking at, they commonly ask for 7 to 10 years in a given technology or even more, and assume you started you career at 25, the absolute minimum jumps you into you 30’s and probably more if you count in an MBA or several criteria like 5 years as a manager or team lead, etc. Hard to be 30 and have 15 years of professional experience with BSCS and MBA – no offense to those 30’ish folks meant.
Also, interesting to note in the various reporting on “lay-offs” that the 3/27 RA is mentioned on several tracking sites, but no others. I personally know of an entire group in S&D that was notified 1/26, and have heard of others. Those “selected to participate” in that one need to let any media outlet know so they are not forgotten. -RA_04/2009-
As most of us are underpaid for our skill sets at IBM, I've seen the opposite at IBM, with a lot of 15+ year people being WAY over paid for their lack of skills. You can pretty much bet anybody with 15 or 20 years of service with IBM is most likely a Band 8 employee, and making upwards of $90-$110K (maybe minus that 15% cut from last year and depending on their geography). I work with some of these "elders" and they simply can hardly perform any aspect of their job 1) without being asked 20 times to do it or 2) without being told HOW to do it. -anonymous-
In remarks prepared for delivery to health care providers on Monday, Mr. Obama says: “These groups are voluntarily coming together to make an unprecedented commitment. Over the next 10 years, from 2010 to 2019, they are pledging to cut the growth rate of national health care spending by 1.5 percentage points each year — an amount that’s equal to over $2 trillion.”
But on Saturday, excited administration officials called me to say that this time the medical-industrial complex (their term, not mine) is offering to be helpful.
Before we start celebrating, however, we have to ask the obvious question. Is this gift a Trojan horse? After all, several of the organizations that sent that letter have in the past been major villains when it comes to health care policy.
I’ve already mentioned AHIP. There’s also the Pharmaceutical Research and Manufacturers of America (PhRMA), the lobbying group that helped push through the Medicare Modernization Act of 2003 — a bill that both prevented Medicare from bargaining over drug prices and locked in huge overpayments to private insurers. Indeed, one of the new letter’s signatories is former Representative Billy Tauzin, who shepherded that bill through Congress then immediately left public office to become PhRMA’s lavishly paid president.
The point is that there’s every reason to be cynical about these players’ motives. Remember that what the rest of us call health care costs, they call income. ...
I would strongly urge the Obama administration to hang tough in the bargaining ahead. In particular, AHIP will surely try to use the good will created by its stance on cost control to kill an important part of health reform: giving Americans the choice of buying into a public insurance plan as an alternative to private insurers. The administration should not give in on this point.
But let me not be too negative. The fact that the medical-industrial complex is trying to shape health care reform rather than block it is a tremendously good omen. It looks as if America may finally get what every other advanced country already has: a system that guarantees essential health care to all its citizens.
If history is a guide, their commitments may not produce the promised savings. Their proposals are vague — promising, for example, to reduce both “overuse and underuse of health care.” None of the proposals are enforceable, and none of the savings are guaranteed. Without such a guarantee, budget rules would normally prevent Congress from using the savings to pay for new initiatives to cover the uninsured. At this point, cost control is little more than a shared aspiration. ...
Henry J. Aaron, a health economist at the Brookings Institution, said that when he heard the industry’s promises on Monday, “I had a Rip van Winkle moment, as if I had fallen asleep in 1977 and woke up again this morning.” Mr. Aaron served in the administration of President Jimmy Carter, whose proposal for hospital cost controls prompted the industry to undertake a short-lived “voluntary effort.” After President Bill Clinton proposed an overhaul of the health care system in 1993 and 1994, the growth of health spending slowed, only to surge a few years later.
Drew E. Altman, the president of the Kaiser Family Foundation, offered a historical perspective spanning nearly four decades. “Neither managed care, nor wage and price controls, nor regulation, nor voluntary action nor market competition has had a lasting impact on our nation’s health care costs,” Mr. Altman said. “Reformers should not overpromise.”
"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.
On the other hand, the Social Security Administration continues to send out monthly checks to 35 million retirees and their spouses, 9 million disabled workers and their families, and 6 million families whose breadwinner has died. In other words, the government system has proved to be much less fragile than the private system of retirement savings. ...
The new information that we have about Social Security is how well it has withstood the onslaught of the financial/economic crisis. Social Security checks have gone out on time. Though the amounts are not large, the benefits are increased each year to reflect changes in the cost of living, and they continue for as long as the recipient lives. So, despite the modest amounts, the benefits are extremely valuable and people can count on them regardless of what happens to financial markets or the real economy.
In contrast, the financial crisis has demonstrated the vulnerability of 401(k) plans to economic and financial conditions. 401(k) balances, which are modest at best, declined in value by about one-third. And, as the financial crisis spread to the real economy, employers suspended their matches, and employees without jobs were forced to discontinue contributions. In other words, in the wake of the shift away from traditional defined benefit pension plans, the only real supplement to Social Security for most private sector workers is fragile.
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:
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.
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.
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