Some legislative leaders have harshly criticized the performance of IBM and its partners, saying they've lost clients' documents, missed telephone appointments and denied benefits to eligible applicants. However, it was uncertain how closely the Budget Committee will scrutinize the contract or whether the panel will call for any changes. Republicans, the party of Gov. Mitch Daniels, control the five-member committee, and already Anne Murphy, secretary of the Family and Social Services Administration, got IBM to commit to a 362-page corrective action plan this month.
In its latest quarter, IBM's profit rose 12% to $3.1 billion, even as revenue fell. Public-sector business has been IBM's strongest this year, rising 7% to $4 billion in the second quarter, adjusted for currency changes. ...
Mr. Palmisano has become an informal technology adviser to White House, frequently exchanging phone calls with President Barack Obama's chief of staff, Rahm Emanuel, according to people familiar with the matter. Last month, Mr. Palmisano hosted a "smarter cities" gathering in Berlin that drew officials from 400 cities, including Madrid, Stockholm and Helsinki. ...
Part of IBM's strategy has been to lower costs by shifting more of its work overseas. IBM cut 10,000 U.S jobs earlier this year, moving many to India and other countries. Offshore jobs have reached 283,000, or 71% of IBM's 398,000 total, prompting union demands that the U.S. government stop hiring the company for federal contracts.
Companies that can institute permanent cuts without hurting revenue potential are relatively few, particularly among very large corporations. IBM (IBM) is one of these. It has begun to move thousands of jobs to India. That is old news, but its stellar second quarter earnings reminded both investors and IBM’s workforce that labor costs in America are still relatively high for most companies and that the population of highly trained workers outside the US is rising rapidly. Outsourcing cheap labor has been an efficient way to cut factory production for decades. Moving professional services overseas, particularly with firms that have tens of thousands of workers who need to have years of specialized training, has been very difficult—until recently.
IBM’s second quarter revenue was down 13% to $23.3 billion. Net income rose 12% to $3.1 billion. IBM highlighted its expense control as part of its earnings announcement. “Total expense and other income decreased 19 percent to $6.3 billion compared with the prior-year period. SG&A expense decreased 19 percent to $5.1 billion. RD&E expense of $1.4 billion decreased 14 percent compared with the year-ago period.” That could be interpreted as saying that the company is sending more work overseas to save money.
Big Blue says SPSS will be the 28th company it has added to its burgeoning analytics division. In 2007, the company acquired business intelligence firm Cognos for $5 billion, the largest acquisition in IBM's history.
But IBM is now what they term a 'Stalwart' company. Stalwarts have generally reached their maximum size. Stalwarts have slow growth in revenue and generally attract investors by paying decent dividends.
Offshoring is temporarily providing a profit boost. But it is a bankrupting strategy and will deadend -- at this rate in 5 years or so when all premium wage employees are gone. Already employees have stopped going the extra mile as loyalty has vaporized. As the old expression goes, "Trees don't grow to the sky."
There are a quite a few million of us that are stuck between 55 and 65 that don't have health insurance. Most of us have found jobs that provide us with health insurance. Many of us are not so lucky and are uninsured. My brother is in that last boat. When I talked to him about 'doing what it takes to get health insurance', he told me he has tried everything but he has always been refused. (his company stopped providing it due to the recession - an interstate trucking company) He has a pre-existing condition (diabetes) and no one will pick him up. So he and his 16 year old daughter are uninsured. He's trying to get a state medical card for his daughter, but they say he makes too much money. He hopes health insurance reform passes. I read that even if it passes, it will takes years to get it up and running. Anyway, sorry for rambling on, but please give your decision plenty of thought, especially when it comes to losing your health benefits.
In my experience, IBM doesn't really want anyone to actually qualify for the FHA. Nor do they want anyone to actually use it. A common strategy around here (if you can make it to qualifying) is to use it up as soon as you can, before IBM has a chance to revoke it. Sucks.
Highly paid employees received nearly $2.1 trillion of the $6.4 trillion in total U.S. pay in 2007, the latest figures available. The compensation numbers don’t include incentive stock options, unexercised stock options, unvested restricted stock units and certain benefits. The Wall Street Journal based its analysis on Social Security Administration data, which doesn’t count billions of dollars more in pay that remain off federal radar screens that measure wages and salaries.
Most of its employees work full-time at the DOE's computer center in downtown Brooklyn. As many as a dozen are working with H1B non-immigrant visas for foreigners with special skills
Listen it's hard to take a job, even in a lead role, in another country when you have a lifestyle based on income of $300K or more as most Ds and higher do. Point of the above is that if you want to, you can get these lists, just try to pester your second level or higher manager - if you have the social capital you can get the same benefits as others in the higher levels are being given (some offers as immediate sub positions with a rehire, others bridges to retirement, etc). Story is that there are 2 rulebooks being used for the RAs, one for the masses and the other for the execs.
Try your best to get the perks of the second set, your treated with kid gloves...nice exit all in all...direct links to other firms (suppliers, etc) for jobs etc. Be aggressive about it, you have nothing to loose at this point Some staff threatened bias, profiling, etc and they held off on the RA for the individuals. Should give a few more months as they do the review. Enough of you guys do this (only if you feel you were unfairly targeted for the resource action) and it may choke their internal ability to manage it and may hold off the RAs for a bit. ....good luck -Big Who-
IBM has not been able to grow revenue except by playing games with pension accounting, by financial engineering and by purchasing profitable companies and selling businesses. Thus, IBM has resorted to massive cost-cutting. If you can't grow revenue, you must cut costs to raise profit. We saw this in the 2Q announcements this week. It also happens that cutting costs is a lot easier and faster than the hard work of raising revenue.
You are considered by IBM to be a cost - this explains the large number of US layoffs, the chronically frozen expense plans, the failure to invest in education for US employees, the scrooge-like minimal and infrequent pay raises and lack of promotions. It also explains the moving of work offshore to inexperienced, low skills labor in low cost countries. IBM has an anorexic, insatiable desire to cut costs - regardless of the impact of the business.
Where this breaks down is the false executive assumption that inexperienced and minimally trained offshore resources can replace the more expensive, and more experienced, and more productive and higher skilled US resources. The truth is they can't. A lot of US employees are handling the messes and fixing the failures of these low cost resources.
My point here is to not rail against IBM, but to communicate a reality. The reality is that if IBM executives think they can replace you and what you deliver with a lower cost resource whether they are in Iowa or Bangalore, they will do it. It doesn't matter if the low cost resource can actually do the job, what matters is what the executives think that the resource can. The key thing to remember is that as a cost, you are endangered. If you can clearly and obviously offer vastly superior value in terms of impact on IBM's revenue stream that nobody cheaper can deliver, you increase your chances of surviving this situation. That's not a guarantee, but it is about the best you can do until the failures of low cost, low skill resourcing become widely evident. -Frank Reality-
Alliance reply: So how does the US IBM worker 'offer' a 'vastly superior value'; in the face of losing the very job they plan to apply their superior skills to? As individuals, that offer will fall on deaf executive ears; but collectively, as a unionized highly skilled workforce, it could be a noise executives hear and eventually bargain with for a 'smarter' IBM.
Various studies have found that health insurance is one of the most concentrated markets in the U.S., and that the lack of competition may be one factor behind sharply rising premiums. Each year, the American Medical Assn. surveys the competitive landscape for commercial health insurers; the latest report found that out of 314 metropolitan areas across the nation, 94% can be defined as highly concentrated, with two companies or even a single provider dominating the market. In 15 states, one insurer has half or more of the entire market, and in seven states, a single insurer has 75% or more.
Changing those policies is crucial to the success of health care reform, economists say — something Mr. Obama said that he would do. “Our proposals would change incentives so that doctors and nurses finally are free to give patients the best care, not just the most expensive care,” the president said Thursday in Ohio. But almost nothing in proposed legislation that has so far emerged in Congress would encourage the creation of similar hospitals.
But as long as the focus is on savings and not on value, such support is not likely to be forthcoming, and preventive care stands to remain a nearly negligible part of our health care expenditures. “Community health and wellness have been pushed aside in the health care reform debate partly because we have been focused on net savings, not value,” Dr. Woolf observed. “That analysis has not been favorable with preventive medicine, so people continue to get highly expensive studies and procedures that are ineffective, even though we have cost-effective public health interventions at our fingertips.” “It’s as if our house is going up in flames,” Dr. Woolf continued. “There is one room, filled with explosives, that hasn’t yet caught on fire. But people are hesitating to put out the fire because they believe they don’t have the data.”
Reform, if it happens, will rest on four main pillars: regulation, mandates, subsidies and competition. ...
There has been a lot of publicity about Blue Dog opposition to the public option, and rightly so: a plan without a public option to hold down insurance premiums would cost taxpayers more than a plan with such an option. But Blue Dogs have also been complaining about the employer mandate, which is even more at odds with their supposed concern about spending. The Congressional Budget Office has already weighed in on this issue: without an employer mandate, health care reform would be undermined as many companies dropped their existing insurance plans, forcing workers to seek federal aid — and causing the cost of subsidies to balloon. It makes no sense at all to complain about the cost of subsidies and at the same time oppose an employer mandate. ...
So what do the Blue Dogs want? Maybe they’re just being complete hypocrites. It’s worth remembering the history of one of the Blue Dog Coalition’s founders: former Representative Billy Tauzin of Louisiana. Mr. Tauzin switched to the Republicans soon after the group’s creation; eight years later he pushed through the 2003 Medicare Modernization Act, a deeply irresponsible bill that included huge giveaways to drug and insurance companies. And then he left Congress to become, yes, the lavishly paid president of PhRMA, the pharmaceutical industry lobby.
A health care package costing $40,000 or more a year would generally have no co-payments or deductibles, according to Paul Fronstin, an analyst at the Employee Benefit Research Institute, a Washington nonprofit that studies benefits. It would also have no limits on doctors or procedures, no restrictions on pre-existing conditions and no requirements for referrals. Few people have such policies, Mr. Fronstin said. “It would only be top executives who run big businesses, mainly people in the C suite,” said Mr. Fronstin, referring to companies’ chief officers.
Problem is, the belief that Congress gets cheap-but-Cadillac-quality health benefits is a myth. Some members of Congress, in fact, pay higher premiums for their health plans than they would if privately employed. "They are pretty good plans," said Robert Krughoff, president of the Center for the Study of Services, a Washington, D.C., consumer organization that publishes a guide called Consumers' Checkbook as well as an authoritative guide to federal benefits. "They're not the best plans anyone has. Many employers in the private sector have plans that are just as good or better."
Already, the group of six has tossed aside the idea of a government-run insurance plan that would compete with private insurers, which the president supports but Republicans said was a deal-breaker. Instead, they are proposing a network of private, nonprofit cooperatives. They have also dismissed the House Democratic plan to pay for the bill’s roughly $1 trillion, 10-year cost partly with an income surtax on high earners.
The fact that adults ages 55−64 are the least likely age group of adults to be uninsured is usually overlooked when considering that employers have substantially cut back on employment-based health benefits for early retirees. It is also important to understand the health insurance status of individuals ages 55–64 because of access and affordability issues with the nongroup market.
The erosion of retiree health insurance may ultimately change retirement patterns as employees nearing retirement age postpone their decision to retire upon learning that, without a job, they may not be able to obtain health insurance coverage or afford health care services that are not covered by insurance. The health insurance status of the population nearly eligible for Medicare also has implications for the Medicare program, to the degree that any increase in the uninsured population entering Medicare results in higher costs to the program.
Although Congressional negotiations over health care legislation are continuing, Doctors Hospital seems to be getting much of what it wants. Thus far, physician-owned hospitals have been insulated from some of the most onerous potential restrictions in the health care legislation moving through Congress. Representative Pete Stark, a California Democrat who wants to clamp down on physician-owned hospitals, said their formidable lobbying had helped eliminate his proposal to limit physician ownership to 40 percent at any hospital. “Particularly led by these guys in Texas, these guys who have been raising tons of money for contributions,” Mr. Stark said in an interview. “I am sure that some of my colleagues have been willing to hear them out.” ...
The gleaming, well-equipped Doctors Hospital at Renaissance, which has expanded to 503 beds from 30 in six years, has become a footnote in the health care debate. It was featured unflatteringly in a June article in The New Yorker about geographic disparities in health care spending, a story that President Obama has cited repeatedly in speeches and meetings. The article, which is sharply disputed by hospital officials, posited that physician ownership provided “an unholy temptation to overorder” tests and procedures because doctors earn not only their fees but also a share of the hospital’s profits. At Doctors Hospital, where 353 of its 452 owners are physicians, net revenue amounted to $64 million in 2008.
If health legislation succeeds, the industry would likely get a fresh batch of new customers. In particular, many young and healthy people who currently forgo coverage would be forced to sign up and pay premiums that would offset the cost of insuring older Americans.
Insurers have focused their opposition on some Democrats' push to create a new public health-insurance plan -- an entity they fear will drive private insurers out of business. House versions of the legislation include a public plan, but the Senate Finance Committee is expected to opt for nonprofit cooperatives that would pose less of a threat to private insurers. ...
Meanwhile, insurers continue to wage an aggressive campaign against Democrats' proposals to create a public health-insurance plan. America's Health Insurance Plans has stationed employees in 30 states who are tracking where local lawmakers hold town-hall meetings. Big insurer WellPoint Inc. has set up an online network where it makes the case against the public health insurance plan and urges consumers to contact their elected officials.
It’s a funny story — but it illustrates the extent to which health reform must climb a wall of misinformation. It’s not just that many Americans don’t understand what President Obama is proposing; many people don’t understand the way American health care works right now. They don’t understand, in particular, that getting the government involved in health care wouldn’t be a radical step: the government is already deeply involved, even in private insurance. And that government involvement is the only reason our system works at all.
The key thing you need to know about health care is that it depends crucially on insurance. You don’t know when or whether you’ll need treatment — but if you do, treatment can be extremely expensive, well beyond what most people can pay out of pocket. Triple coronary bypasses, not routine doctor’s visits, are where the real money is, so insurance is essential.
Yet private markets for health insurance, left to their own devices, work very badly: insurers deny as many claims as possible, and they also try to avoid covering people who are likely to need care. Horror stories are legion: the insurance company that refused to pay for urgently needed cancer surgery because of questions about the patient’s acne treatment; the healthy young woman denied coverage because she briefly saw a psychologist after breaking up with her boyfriend.
And in their efforts to avoid “medical losses,” the industry term for paying medical bills, insurers spend much of the money taken in through premiums not on medical treatment, but on “underwriting” — screening out people likely to make insurance claims. In the individual insurance market, where people buy insurance directly rather than getting it through their employers, so much money goes into underwriting and other expenses that only around 70 cents of each premium dollar actually goes to care.
"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.
At Goldman Sachs, for example, bonuses of more than $1 million went to 953 traders and bankers, and Morgan Stanley awarded seven-figure bonuses to 428 employees. Even at weaker banks like Citigroup and Bank of America, million-dollar awards were distributed to hundreds of workers. ...
Mr. Cuomo, who for months has criticized the companies over pay, said the bonuses were particularly galling because the banks survived the crisis with the government’s support. “If the bank lost money, where do you get the money to pay the bonus?” he said. All the banks named in the report declined to comment. ...
At Morgan Stanley, for example, compensation last year was more than seven times as large as the bank’s profit. In 2004 and 2005, when the stock markets were doing well, Morgan Stanley spent only two times its profits on compensation. ...
Though it has been known for months that billions of dollars were spent on bonuses last year, it was unclear whether that money was spread widely or concentrated among a few workers. The report suggests that those roughly 5,000 people — a small subset of the industry — accounted for more than $5 billion in bonuses. At Goldman, just 200 people collectively were paid nearly $1 billion in total, and at Morgan Stanley, $577 million was shared by 101 people. All told, the bonus pools at the nine banks that received bailout money was $32.6 billion, while those banks lost $81 billion.
Sure enough, last week, Morgan Stanley explained its quarterly loss by saying that some of its traders were still “gun shy” after last year’s near-death experience in the financial markets, but that the firm now planned to increase its risk taking. To try to stay competitive with Goldman and other banks, Morgan Stanley has also allocated a big chunk of its net revenue for compensation.
This from a couple of firms that 1) probably wouldn’t even be around today were it not for ongoing government rescues of the financial system and 2) by dint of being too big to fail, now enjoy an implicit guarantee of future bailouts if their bets go wrong. The financial system may be stabilizing for now, but the danger to taxpayers if markets were to buckle again is at least as great as ever. ...
The problem is that the bonus-driven risk culture is reasserting itself now, while comprehensive reform will probably take until next year, if it occurs at all. A solution is for Congress to handle bankers’ compensation as a stand-alone issue, as the House Financial Services Committee has said it is ready to do. There is no question about the need to end the perverse incentives that helped to set off the financial crisis. There is ample, and justified, anger among Americans about outsized pay — often to the very same bankers who profited from the bubble — to warrant fast-tracking the issue.
As debates in the blogosphere in the last couple of days have made clear, there are a couple of possibilities of what is at work here. One is that Goldman and others are literally using privileged information to make trades ahead of markets, in which case they are committing a felony. Specifically, the abuse is known as "front-running," or trading ahead of customers, and it is an explicitly illegal form of market manipulation. Front running is epidemic on Wall Street--the whole point of an investment bank trading for its own account is to take advantage of its specialized knowledge of markets--and the SEC or the Justice Department shuts down front-running when it becomes too blatant to ignore.
The other possibility is that the Goldmans of the world have found themselves a nice loophole. Tapping into the Stock Exchange's own computers and other sources of trading activity is something that anyone in theory could do, but only a few privileged insiders have the sophistication to exploit what they find. Often orders are placed, only to be cancelled. Their purpose is to figure out what the market is willing to pay, and then get in ahead of it. ...
Now, as then, it is a mark of Wall Street's stranglehold on politics that the most sensible of remedies seem impossibly radical. One very good way to damp down the dictatorship of the traders, and raise some needed revenue along the way, would be through a punitively high transactions tax on very short term trades. Genuine investors should get favored fax treatment. Pure traders should be taxed, and very short term manipulation taxed into oblivion. If the financial crisis has proven anything, it is that capital markets have become an insiders' game in which trading profits crowd out the legitimate business of investment. The whole business-models of the most lucrative firms on Wall Street are a menace to the rest of the economy. Until the Obama administration recognizes this most basic abuse and shuts it down, it will be more enabler than reformer.
Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. Sample posts follow:
We all have to play nice-nice with our GR (global resource) peers. and when your GR team lead sends notes to IBM US mgmt that they need MORE WORK from their US counterparts, IBM mgmt. rolls over and gives them more work. Reminds me of an old CCR song: Fortunate Son.
And when you ask them, how much should we give? Ooh, they only answer more! more! more. What a sad, pathetic, f'ng company.
What's more pathetic is how India is not held accountable since they are Sam's chosen ones and how anyone who reports problems with India are considered anti-team, racist and uncooperative.
The sacred cows over in India aren't cattle, they're the "office boys" pretending to be IT professionals working for IBM. What a sad, pathetic f'ng company indeed.
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