What does it say, then, when the architect of LEAN is arrested for alleged insider trading?
The good news, I guess, is that he was caught. The rest of the news is bad. If Moffat is guilty as charged then it shows serious ethical and moral lapses at the very top of IBM (Moffat has been mentioned as a possible successor to IBM CEO Sam Palmisano). Even if he is proved innocent Moffat is still guilty of poor judgment in his choice of friends and of being a blabbermouth. Since Moffat is being charged, in part, with insider trading of IBM’s own shares, then LEAN itself should probably come under some scrutiny as a possible tool for generating insider profits.
Selected reader comments for the above article follow:
For those left behind we’ve been left with a division that is even more dysfunctional than before. We are having big time problems with many of our contracts, maybe more than half of them, maybe even more. It is not that our friends overseas can do the job or not. It is often not their fault. The problem is we’ve dumbed down the business. We have people doing deals who are making multi-million dollar technical decisions, who have no clue what they are doing. They sign the deal, collect their commission, move on to the next deal. Then people like me are brought in to clean up the mess.
IBM has this mindset that anyone should be able to do anything. This governs how Global Services is being managed. I don’t know if Moffat brought this to us, or if he turned it up 10 notches. Thanks Bob.
Like several other posters, I’m one of people that come in to pick up the pieces after global resources’ incompetence causes mishaps, crashes of other such failures. The scary thing is that the global resources aren’t getting better – their skills aren’t improving, they still show poor ownership of issues, they make no effort to teach themselves skills and the maturity issues aren’t improving. They still can’t handle even the most routine and simple tasks without help. Meanwhile IBM continues to resource action the experts that keep the joint running.
The sad thing is that the global resources aren’t being held accountable for their failures, failures are always blame on their US counterparts. Who is Sam going to blame when there aren’t any US professionals left.
The question is how long will it be until the global resources teams can do an acceptable job of service delivery and product development. The follow-up question is whether IBM can survive long enough for the global resource teams to become effective. IBM needs to consider that the bitterness of poor quality will linger in our clients’ shops long after the sweetness of meeting the quarter’s financial targets.
I would hope that the SEC looks into the needless 2009 Resource Actions (at least at the level of 4,800 in Jan and another 4,300 in Feb). These people were FRONT OFFICE (many were pulled off of client accounts on which they were billing), SKILLED (highly skilled, as in consultants, engineers, project managers), and STRONG PERFORMERS (many were rated as 2’s and 2+’s… some of those rated as 3’s were arguably unjustly rated as such). The work was simply offshored for a temporary but significant stock price increase. What the SEC has to look at is the money, friend, and family trail back to those who knew how significant and pervasive the cuts would be in Q1.
The EEOC should investigate the documentation that IBM has provided on those Q1 9,000 cuts… the official documents show an overwhelming, and I mean OVERWHELMING, discrimination against workers aged 40 and above. I don’t care what explanation IBM has for the process – the end result is discriminatory.
Well, now that the caught a fish, let’s see if the feds can go back and get the rest of them. Here’s hoping Bob’s mentor and all their little minions are caught and gone. Lord knows, they’ve not had much of a public drubbing over their systematic raiding of the company over the past 5 or 6 years.
Didn’t the State of Indiana just kick IBM out last week? IBM has a huge, and well deserved customer drain at the moment. There is absolutely NO quality being delivered out of their outsourced support area, and there is every likelihood a great deal of their customer’s confidential data is leaking through the cracks. How these guys manage to stay in business with most of the world’s governments is a constant puzzle to me.
And spare us the “IBM is about to collapse as layoffs will wreck contract performance!” junk that has been recycled regularly here since about 2003. Aside from whinging aforementioned fat, entitled Americans, there is no evidence. Anecdotes are not evidence, corporate results are, and IBM’s have been good for at least the last 5 years.
I don’t work for IBM, but the pathetic bleating from the ex-IBM worker bees is tiresome. There’s 400,000 IBM employees so it can’t be hard to find complainers. If you are so terrific, take your payout, and go get another job.
Forget the workers for a minute, there is a bigger issue. A company is as good as its word. If you agree to buy a product or service from a company, you expect to get what you bought. You expect to be treated fairly and honestly.
In most aspects of IBM’s business it is cutting its customers short. IBM is promising the world and delivering a lot less. They are not keeping their word, their commitment to their customers. IBM is not treating ANYONE fairly or honesty — its employees, its partners, its customers, …. THIS IS THE CORE OF THE PROBLEM.
I have watched scores of friends at IBM get laid off. I can deal with an economic downsizing of the company, making the necessary adjustments in response to business changes. I support 22 customers who believe they are getting 24×7 support with 30 minute response times. The truth is there is no one on staff providing this service. We miss over half of the problems and find out about them when the customer calls. It takes about an hour to get someone, usually overseas assigned to work the problem. They have never worked with the customer before, they know nothing about the customers applications, and they have never touched the customers systems before. When a customer pays for 24×7, 30 minute service it is usually because their applications are pretty important to their business and outages can be very expensive. When it takes us 2-4 hours, instead of 30 minutes to fix a problem; that is not good.
IBM made commitments to its customers. IBM is reneging on those commitments. IBM expects me to withhold the truth and give the customer the impression we are doing what we promised. IBM expects me to deliver service without the staff or tools, and to lie to my customers. If the customer discovers the truth I am the person IBM will sacrifice. I am the one who will suffer the consequences. I could lose my job and my livelihood while those who made the decision to cheat my customers are not held accountable.
The fact jobs are being off shored, and pay and benefits are being cut is just one SYMPTOM of a much bigger problem. If these things were being done to adjust to a changing business that would be understandable. What is really happening is a vast culture of deception by the senior management of one of the worlds largest companies.
"There's been an awful lot of rumor and innuendo over the years from employees who are very concerned that they see IBM taking a turn towards what they believe is unethical behavior and possibly illegal behavior," alliance@IBM national coordinator Lee Conrad told El Reg. "While this can't be proved at this point, there's an underlying feeling that this arrest of Moffat might just be the tip of the iceberg." ...
In an open letter posted on its website, Alliance@IBM questions whether Moffat's alleged actions involve more than just one executive at IBM – particularly in light of Moffat being groomed to become the company's next chief executive. Conrad tells us Alliance@IBM has faxed its call to investigate to the SEC and sent it via email to the DoJ. It also plans to distribute the letter to select politicians that oversee large IBM communities, such as in New York and California.
According to Conrad, many IBM employees herald the hiring of former CEO Louis Gerstner in 1993 as the beginning of IBM's loss of respect for its workers. "What employees feel and what the Alliance feels is that the current crop of IBM executive have pretty much broken faith with the employees and the communities that IBM does business in," he said.
One of the criminal complaints in the case filed in U.S. District Court in Manhattan says Chiesi and Moffat conspired to engage in insider trading in the securities of IBM. Another complaint in the case centers on Chiesi's desire to keep her friend, Moffat, at IBM to aid the insider trading scheme. ...
'Cheering in the halls' Moffat is high up in the mid-Hudson IBM food chain, with some of the top managers there reporting to him. Employees in IBM's Systems and Technology Group make up the largest bloc of the company's more than 9,000 workers in the mid-Hudson."I have talked to a few IBMers today, and there seems to be a lot of cheering in the halls of IBM over his arrest," said Lee Conrad, national coordinator of the employee-backed Alliance@IBM. "Employees are fed up with the executives of the company who seem to not care about the plight of the working people."
'All about greed' Some of that ill will is because some of the most severe cuts in the mid-Hudson have been under Moffat's watch. "I believe it is indicative of the corporate culture inside IBM now," Conrad said. "It is all about greed. Slash jobs and payroll while the executives continue to get rich on bonuses, compensation and stock options." Moffat is a member of the IBM Performance Team and the IBM Corporate Operations Team, and some had considered him the heir apparent to IBM President, Chairman and CEO Sam Palmisano. IBM spokesman Doug Shelton said the company would have no comment.
The others taken into custody and charged were: Robert Moffat, 53, an executive at International Business Machines Corp. in charge of its supply chain, who recently was also given responsibility for its hardware, server and its semiconductor business -- and has been considered a potential future candidate for CEO. ...
Relying on phone wiretaps, the criminal complaint described a period from 2006 and 2008 when Mr. Rajaratnam and his group allegedly swapped information that could move a stock. Wiretap transcripts appeared to show Mr. Rajaratnam working closely with Ms. Chiesi, with her serving as a key link between him and a network of contacts. Excerpts of taped conversations contained in court filings purported to show rapid-fire exchanges of information, and strategies about how best to trade on it. The wiretaps captured the high-pressure world of hedge-fund trading, as the duo discussed how certain information would weigh on coming earnings announcements of IBM, Akamai Technologies Inc. and others. ...
During a call in August 2008, according to the filings, Mr. Rajaratnam and Ms. Chiesi discussed their concerns that their trading would draw regulators' attention. "On Akamai or IBM, anything, be radio silent," Mr. Rajaratnam told her, according to court filings. "I'm radio silent," Ms. Chiesi replied, according to the filings.
The transcripts also showed the two discussing Mr. Moffat, the IBM executive. "Put him in some company where we can trade well," Mr. Rajaratnam was said to tell Ms. Chiesi on a recorded telephone call in September, 2008. Ms. Chiesi replied, according to the filings: "I know, I know. I'm thinking that too. Or just keep him at IBM, you know, because this guy is giving me more information.... I'd like to keep him at IBM right now because that's a very powerful place for him. For us, too."
Just what did they allegedly do? Using information gleaned from wiretapped conversations between the accused and others, along with the statements of an apparent informant, SEC investigators have pieced together a series of episodes alleging to show how the defendants used inside information and well-timed trades to turn million-dollar profits. ...
IBM knows Sun In January 2009, IBM was conducting due diligence on Sun Microsystems in preparation for an offer to buy it (Sun was ultimately bought by Oracle). As part of that process, Sun opened its books to IBM, providing its second-quarter 2009 results in advance of the scheduled Jan. 27 announcement. Because much of Sun's business is hardware, IBM's top hardware executive Robert Moffat was involved in the evaluation of Sun. Moffat allegedly had access to Sun's earnings results. He and Chiesi were also friends and contacted each other repeatedly during January 2009. The frequency of contact between the two increased just prior to the Sun earnings release, investigators say.
On Jan. 26, New Castle began acquiring a substantial long position in Sun. On Jan. 27, after the market close, Sun reported earnings that exceeded Wall Street's estimates, posting a two-cent per-share profit when analysts had expected a loss. Sun shares soared 21% on the news. New Castle made almost $1 million.
But I.B.M.’s ability to deliver strong profit despite a weak economy and eroding revenue has left many investors puzzled. And on that score, the insider-trading complaint has some intriguing passages.
The suspected insider trading in I.B.M. shares focuses largely on a few days in January 2009, just before I.B.M. reported its 2008 fourth-quarter results. That quarter, of course, was when the economic tailspin resulting from the financial crisis really took hold. I.B.M., as the leading supplier of computer software, services and hardware to corporations, was presumably suffering mightily.
But according to the complaint, a hedge-fund trader, Danielle Chiesi, was buying I.B.M. shares. Her purchases were not based on any confidence in I.B.M.’s superior prowess in weathering the economic storm. In conversations recorded by prosecutors, Ms. Chiesi said that without the information from Mr. Moffat, “I would be so short” the stock. Later she added, “I don’t know anybody talking about a beat this quarter,” referring to the company’s chances of beating Wall Street’s consensus expectations about its financial results.
But yes, he's been a very dangerous person to work for - sort of IBM's equivalent to Chainsaw Al Dunlap - he's cut 25 to 30% of the headcount in every organization he's run.
As for your quote "Every company that saw their stock price fall will litigate that IBM played a role by Moffat's knowledge of pending deals and insider stock trading.", I don't buy it. They just can't sue IBM for the fun of it - they will have to prove their case, which unlike the FBI, they won't have wiretap recordings.
I can't wait for the transcripts of those conversations to be made public as part of the trial proceedings - although if the defendants plead guilty, the transcripts may never become public. Don't be surprised if more charges are filed, but I doubt that more IBMers would be involved - Moffat spilled so much that there would be no need of any other IBM insiders.
I do buy it, especially for AMD and Sun. There are confidentiality agreements (CDA) signed between IBM and both AMD and Sun before they would open their books to IBM as they did. As an officer of IBM (legal representative), and by divulging material facts to outside individuals, Moffat has broken that agreement. There are usually severe repercussions for breaking confidentiality agreements. This opens a whole can of worms for actual and claimed damage by both Sun and AMD, would probably end up with massive amounts of disclosure and at least some very huge legal costs for IBM.
Every company that has a confidentiality agreement with IBM - and there are literally hundreds - and that has a CDA document with Moffat's signature on it, or some involvement by Moffat in business partnerships with these companies, would have every right to investigate the situation. They would at least have a valid argument (precedent) for saying they are concerned about the disclosure of confidential information.
Perhaps much worse is the damage to IBM's reputation as a Company that can be TRUSTED in business partnerships, even if there is a CDA. If I were AMD or Chartered or Sony or Microsoft or any one of a number of companies, I would be not looking at IBM in the same way now. I'd reconsider getting into sensitive information agreements with IBM.
In both the first complaint and the second — which you can see here (PDF) — AMD's foundries spin-off plays a prominent role. In February, AMD spun-off its chip-making business, creating a new company owned by the Abu Dhabi-backed Advanced Technology Investment Company. ATIC also partners with IBM in developing up chip-making technologies. According to court papers, both McKinsey’s Kumar and IBM’s Moffat shared insider information involving the AMD spin-off, now called GlobalFoundries. Kumar passed information to Rajratnam, the papers say, and Moffat discussed secrets with Danielle Chiesi, an employee at New Castle Funds, formerly the equity hedge fund group of Bear Stearns. Rajratnum was also in touch with Chiesi, the papers say, even though they worked for different funds. According to the complaints, both were involved in insider trades.
As of Friday afternoon, Danielle Chiesi, 43, of New York City, was the fourth most popular search on Google, one slot higher than IBM’s Bob Moffat (though two steps below Raj Rajaratnam). Moffat, 53, of Ridgefield, Connecticut, is accused of giving Chiesi private information about the AMD spin-off, IBM’s quarterly earnings, and Sun Microsystems’ quarterly earnings during the time when Big Blue was working to acquire Sun.
Selected reader comments for the above article follow:
At some point I had heard that the top 400 wage earners took in 1% of all income in the US - in 1980. I believe that the top 400 wage earners now is close to 2% of all income in the US. While looking for something to confirm this I found that in 2000, those top 400 AVERAGED 174 Million dollars a year! ~70 BILLION dollars in income for just 400 people. (They paid on average 18% in taxes - and this was before the Bush tax cuts!) If the average income were $40k (it is not) than the total income in the US would be about 6800 Billion. The average is closer to 20K or 30K. Something is really Fvcked here. The real problem is that they (the CEO scammers) are treated better than bank robbers and drug dealers while they do far more harm to society.
Selected reader comments for this article follow:
Djurdjevic said while such behavior, if true, runs counter to IBM’s core values, it may well have stemmed from signals given by former CEO Louis V. Gerstner. “The blame goes to the man who starts to loosen the rules,” he said. That included letting IBM executives sell IBM shares they acquired as compensation.
“Gerstner planted the seed of greed at Armonk. And it grew out of control in Moffat’s case,” he wrote to his subscribers. “What this IBM executive has allegedly done is simply an unlawful extension of the ‘anything goes’ greed-driven era the former IBM chairman had brought to Armonk.”
How much money Moffat is making at IBM isn’t reported in filings IBM makes with the Securities and Exchange Commission, which only requires the top five to be itemized. But Moffat was, until after his arrest, listed within the company’s profiled executives reporting to Palmisano. These facts make clear his rank was somewhere below the top five but in the top 12.
The lowest-compensated executive in the top five is Virginia M. Rometty, senior vice president for IBM Global Sales and Distribution. IBM’s proxy statement showed her 2008 salary at $617,500 and a summary of total compensation including various stock plans at $7.1 million. These reports suggest a likely total compensation of several million dollars for Moffat.
An affidavit in the federal case, based on wiretaps, alleges that Mr. Moffat gave inside information about IBM and its partners to Danielle Chiesi, who worked for New Castle Partners, a former Bear Stearns Cos. hedge fund that was spun out last year. He allegedly told her confidential details about coming earnings for IBM and Sun Microsystems Inc., as well as plans for Advanced Micro Devices Inc. to sell its semiconductor factory to an Abu Dhabi fund. ...
At IBM, based in Armonk, N. Y., and in nearby Ridgefield, Conn., the suburb that is home to Mr. Moffat and dozens of other IBM managers, the news shocked current and former associates. Rosabeth Moss Kanter, a Harvard Business School professor who examined IBM in her recent book "Supercorp," said, "It is astounding given IBM's emphasis on a values-based culture." ...
Mr. Moffat, "was the classic IBM executive from the cookie-cutter school of management training," according to one former associate. Mr. Moffat continued to carry on the company's tradition of wearing a white shirt to work, even though a ban on colored ones was lifted two decades ago. He was sometimes mentioned as a possible successor to the CEO. A track star as an undergraduate at Union College in Schenectady, N.Y., Mr. Moffat joined IBM in 1978 in the finance department. In 2000, he became head of the troubled PC division. Within 18 months, Mr. Moffat arranged to outsource the company's desktop-manufacturing business in North Carolina and Scotland. Three years later, he managed the sale of the rest of the PC business to China's Lenovo Inc.
Selected reader comments for the above article follow:
For much of his early life, Moffat made do with little. That discipline has given him the strength to do things others can't,or won't. Take the time, for example, that he directed a plane through a snowstorm that grounded others just to meet with a New York City customer to set the record straight about comments a rival made about IBM's future in PCs. (The customer was told that IBM was exiting the PC business; Moffat walked five blocks through driving snow to set him straight and won the customer's business.)
Then there was the time he trimmed head count in his division by 20 percent. That same week, he was singled out by a real-estate agent trying to sell him a house as the man responsible for ruining the hopes of many in the community. (Moffat turned it around and reminded the man of how many jobs were saved by those cuts.) Then there was the time he decided that the PC company needed to try a different approach to competing. (It came to him one Saturday afternoon after 14 straight hours of work when he realized that his team couldn't work any harder and, even if it did, it wouldn't matter because the team had already reached the point of diminishing returns.)
By and large, companies that converted their pensions weren't fretting over the health of their traditional pension funds. They were figuring out how to boost the corporate bottom line. Documents that surfaced in the IBM suit show that executives there considered the conversion a cost-cutting measure that would save $2 billion over a decade. But they simultaneously worried about how the pension reductions would affect upper management. They plotted more generous 401(k)s and creation of a supplemental pension system for executives. The rich are (still) different from you and me. ...
His career, begun 31 years ago after he graduated from Union College, where he majored in economics and became a track star, had in recent years gone to the fast track on the strength of his reorganizing of much of IBM’s manufacturing operations, a task that resulted in thousands of jobs being surplused and in many cases, being sent to low-cost overseas areas. By Monday, his photo and bio were missing from the company’s Web page.
Both Indiana and Texas -- where thousands of children lost health insurance because of problems from an outsourcing experiment that ended in 2007 -- learned a costly lesson, said Celia Hagert, a senior policy analyst at the Center for Public Policy Priorities in Texas. Yet more states could still consider privatization -- touted as a way to save money -- as they search for budget cuts during the economic downturn, she said. "These two huge and costly errors in Texas and Indiana should give any state pause when it thinks that privatization is going to save them money, because it's not," Hagert said. "It causes a lot of damage."
But profit margins expanded nonetheless, with the gross margin growing 1.8 percentage points to 45.1 percent and the net margin growing 2.4 points to 13.6 percent. Margins have grown in 20 of the last 21 quarters, IBM said. ...
IBM's job cutting appears ready to continue. Loughridge said IBM is on track to take out $1 billion from shared services and back-office work globally across the business. No specifics were given as to when and where. Loughridge said he expects IBM will realize $3.5 billion in cost and expense savings "from actions we've taken." "We've got a lot of opportunity to reduce structure and make our business more efficient," he said.
He mentioned "rebalancing our work force," which is lingo for IBM's way of firing with one hand and hiring with the other, often in different locations, and more often than not overseas. IBM is the largest private employer in the mid-Hudson, but a shrinking one because of hundreds of job eliminations early this year.
More such cuts are expected broadly, said Lee Conrad, national organizer for Alliance@IBM, a workers' group. "We expect the cuts to continue throughout the year," Conrad said. "IBM's been cutting just about every quarter. We know the offshoring of jobs is ongoing, so we expect more IBMers in the U.S. to be unemployed."
More Cost-Cutting. During the conference call with analysts, Loughridge was asked by Bernstein Research analyst Toni Sacconaghi whether he believes corporate IT spending has recovered in light of what he called "tepid guidance." Loughridge said IBM is seeing an overall stabilization in the economy. He reiterated that the revised earnings-per-share (EPS) guidance reflects "the confidence we have going into the fourth quarter." Loughridge also hinted at further savings and acquisitions. He said IBM expects to finish the year having reduced operations expenses by $3.5 billion. The company cut 9,000 jobs in the first half of the year. Loughridge suggested more cost cuts could be in the offing. "We've got a lot of opportunity to continue to reduce structure and make our business more efficient," he said.
I could have sworn Bob "Cookie Jar" Moffat had switched jobs with Ginny "Who Me" Rometty in January...where Ginny took Bob's STG position and Bob took her GBS position (can one of the GBSers confirm this or am I wrong?)...so I hold him responsible for having the "brilliant idea" to pull off great consultants doing our job (providing our customers with value, even though us ex PwC-Cers suspected something fishy all along with IBM Sr. Management) and telling us we were no longer needed (and not bothering to ask my immediate BP manager or my client if they agreed with such blindsiding).
I must say I am SO glad to be out and watching from the sidelines now...the honest, hardworking and ethical employees of IBM and our clients do not deserve this, and I hope if any other goons in the C-suite were also dabbling in this shenanigan, that they be caught as well. I must say I really feel bad for my colleagues still at IBM, hard workers and dedicated to clients bamboozled by the shady IBM Sales people IBM loves to coddle and ridiculously reward (leaving the front line consultants having to deal with irate clients that are suffering from poorly scoped projects, and us REAL and ETHICAL consultants scratching our heads as to who in God's Green Earth put these shoddy proposals together and GET REWARDED HANDSOMELY in doing so...leaving the consultants to clean up their dirty work) having now to live through this mess.
Morale was already in the toilet after the first wave, there have been two more in Strategy and Change. With the summer reorg, its clear to me IBM wants to get rid of all the REAL Strategy and Change practitioners, those of us who knew the art and have some "in name" group only there for show. -One_of_16K_this_year_but_glad_to_be_out-
Find one Medicare recipient who would be willing to drop it. At recent town hall meetings there were those who ranted and raved over any new health care coverage and a lot of their chants were because: 1) they did not want socialized medicine, and, 2) there were others yelling to not take away their Medicare. What the hell do they think Medicare is? And if it is so terrible, why are recipients so fearful of losing it? Many, like you, don't want more debt. No one does. But, we need to shore up a very broken system. You are obviously not an Obama fan but he's addressed how the government will pay for health care improvements. It is not via debt.
Speaking of debt, though, I wonder how much of this country's health care could have been paid for with the money we've spent on the useless, mindless, senseless, deadly wars we are in over in Iraq and Afghanistan ... at least one of which that was started and perpetuated with lies? The over $1,000,000,000,000 (that's 1 trillion) would go a long, long ways. To put a trillion dollars into perspective, if you received $27,000,000 (27 million) each and every day of your entire life, on your hundredth birthday you would still not have one trillion. It would take a little while longer. And, that is what we've spent on these two wars with what to show for it? So, get off the debt bandwagon. At least health care improvements would provide something for out fellow man.
You said, "Doctors are ready to change careers over nationalized healthcare." How do you know that? Have you done a legitimate and valid poll across America? If what you wrote were to be true, and it is not other than a small percentage, then how do you look at the AMA supporting Obama's goal along with many, many individual doctors who have come out publicly pro-Obama ... by the way, nurses have, too?
Rationing is a right wing scare tactic, Ralph ... something they are good at. There is no accurate data that suggests or confirms that rationing would have to be implemented were we to finally see provisions of health care for all Americans. While I admit it is not a valid sampling, I've been to my PCP, my cardiologist, and my ear doctor within the last 6-weeks. My wife was at her foot doctor yesterday with me in along for the ride. At my PCP's, I was 1 of 3 patients in the waiting area (office has 4 doctors); at my cardiologist's, I was 1 of 2 (office has 5 doctors); at my ear doctor, I was the only patient (single doctor office). At my wife's foot doctor yesterday (office of 4 doctors), she was 1 of 2 patients. She and I have never seen a waiting room overflowing at any of our doctors. The majority of doctors take one whole day or a half day off each week. Bottom line, doctors are not overworked. They pull some awful hours, but they have a lot of free time.
"Employers and employees will face shockingly higher [health care] costs," warned Helen Darling, president of the National Business Group on Health, whose members include Fortune 500 companies such as American Express, Coca-Cola and IBM. Companies are raising deductibles, co-payments and employee out-of-pocket limits. "In better economic times, employers are better able to shoulder the [health care cost] burden. Not as much now," said Billet, who estimates that costs could increase between 10 to 20% for insured workers.
As you've probably heard, Colorado is at the center of the health care debate. That's because we have Chubby Baby and Skinny Toddler and have therefore introduced to the nation what Michael Bennet has correctly called the Goldilocks Paradox. (OK, I added paradox, but Bennet had the Goldilocks idea. No mention of the three bears.)
It began with the chubby, healthy, breast-fed baby, Alex Lange of Grand Junction, being turned down for health insurance by Rocky Mountain Health Plans because, his parents were told, he was "too fat." His parents appealed, noting that Alex was too young to be treadmilled.
We moved on to skinny, healthy, curly-haired 2-year-old Aislin Bates of Erie, rejected by United Healthcare's Golden Rule subsidiary because she didn't meet the height and weight standards. If you get turned down by, uh, Golden Rule, try to imagine your chances with United Healthcare's other divisions.
As Bennet said on the Senate floor, insurance companies were apparently looking only for children who were "just right." You see, Alex and Aislin had the dreaded pre-existing condition, which apparently can mean anything at all. Take the case of the Florida woman rejected, according to The Huffington Post, for her pre-existing condition — rape. Seems she had been assaulted and was taking doctor-prescribed, just-in-case anti-HIV drugs. How golden is that rule?
Chubby Baby and Skinny Toddler fought back in the traditional American way — by going on TV. It was sort of like Balloon Boy, except featuring children at actual risk and with no family "Wife Swap" history. ...
You know what happened. In both cases, the insurance companies coincidentally reversed themselves in what has become known as the "Today" Show Pre-Existing Exemption. ...
OK, we laugh, what with the happy endings and all — except there are no happy endings, not unless Harry Reid can find 60 votes in the Senate to get health care reform passed. Until then, we have a country in which not only fat and skinny healthy babies can go uninsured but also sick babies. Imagine a country in which any baby — sick or healthy — is without health insurance, and then tell me why we don't need reform.
The latest news is that Harry Reid will include a public option in the combined Senate bill. My guess is it will be one that includes an opt-out clause for reluctant states. Colorado, say, can choose the public option, and Nebraska, say, can turn it down. We'd see which state would prosper. Or, as a nation, we could stay with what we'll call our Jack Sprat model, in which the next Chubby Baby and Skinny Toddler get left out:
Jack Sprat could eat no fat, his wife could eat no lean.
And when they tried to get their kids insured,
The system picked them clean.
"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 bonuses are offensive," Obama senior adviser David Axelrod said Sunday on ABC's "This Week," adding that banks must do more to support lending across the country and should stop their lobbying efforts aimed at blocking the passage of new financial regulations that are being prepared in Congress. ...
White House Chief of Staff Rahm Emanuel chided Wall Street firms for neglecting their responsibilities "in the short period of time where they have a level of normalcy because of what the government did to help them." "Not only do they come for a bailout . . . they're now back trying to fight a consumer office and the type of protections that will prevent another type of situation where the economy is taken over the cliff by the actions taken on Wall Street and financial market," he said on CNN's "State of the Union."
Recent news of a pay package for Bank of America's outgoing chief executive, Kenneth D. Lewis, illustrates the challenge facing the White House and Treasury. The Treasury's pay czar, Kenneth Feinberg, persuaded Lewis not to take any compensation for his work this year after the bank received $45 billion in government aid. But because of Lewis's contract with the bank, he is still on track to receive nearly $70 million in retirement money, something Feinberg can't prevent.
A big concern among the wealthy right now, their advisers say, is not populist anger but how it might translate into tax-the-rich legislation on the federal and state levels. Their concern is twofold. The first is that any tax increase has a direct impact on the income they withdraw from their portfolios. More money going to the government means less to live on. “They’re very concerned about taxes going up,” said William Woodson, managing director at the Family Wealth Management group at Credit Suisse. “The percent that goes to taxes is significant if it’s a 15 percent capital gains vs. 25 percent capital gains. It makes a big difference.”
We’ve spent the last few decades shoveling money at the rich like there was no tomorrow. We abandoned the poor, put an economic stranglehold on the middle class and all but bankrupted the federal government — while giving the banks and megacorporations and the rest of the swells at the top of the economic pyramid just about everything they’ve wanted. ...
Even as tens of millions of working Americans are struggling to hang onto their jobs and keep a roof over their families’ heads, the wise guys of Wall Street are licking their fat-cat chops over yet another round of obscene multibillion-dollar bonuses — this time thanks to the bailout billions that were sent their way by Uncle Sam, with very little in the way of strings attached. Nevermind that the economy remains deeply troubled. As The Times pointed out on Saturday, much of Wall Street “is minting money.” ...
We need to make some fundamental changes in the way we do things in this country. The gamblers and con artists of the financial sector, the very same clowns who did so much to bring the economy down in the first place, are howling self-righteously over the prospect of regulations aimed at curbing the worst aspects of their excessively risky behavior and preventing them from causing yet another economic meltdown. We should be going even further. We’ve institutionalized the idea that there are firms that are too big to fail and, therefore, “we, the people” are obliged to see that they don’t — even if that means bankrupting the national treasury and undermining the living standards of ordinary people. What sense does that make? If some company is too big to fail, then it’s too big to exist. Break it up.
Why should the general public have to constantly worry that a misstep by the high-wire artists at Goldman Sachs (to take the most obvious example) would put the entire economy in peril? These financial acrobats get the extraordinary benefits of their outlandish risk-taking — multimillion-dollar paychecks, homes the size of castles — but the public has to be there to absorb the worst of the pain when they take a terrible fall.
Enough! Goldman Sachs is thriving while the combined rates of unemployment and underemployment are creeping toward a mind-boggling 20 percent. Two-thirds of all the income gains from the years 2002 to 2007 — two-thirds! — went to the top 1 percent of Americans. We cannot continue transferring the nation’s wealth to those at the apex of the economic pyramid — which is what we have been doing for the past three decades or so — while hoping that someday, maybe, the benefits of that transfer will trickle down in the form of steady employment and improved living standards for the many millions of families struggling to make it from day to day.
One day, the federal government won't be able to keep all these interest rates artificially low. The Chinese government, our major financier, is growing restless. The dollar's sharp decline relative to other currencies is an ominous sign. If this problem accelerates, it will put pressure on the Fed to let interest rates rise to protect the dollar from a collapse. But until rates go up, Wall Street will be chowing down on essentially free money, while fixed-income people living off their investments will have to eat into their capital, take more risk or reduce their standard of living. A nice reward from their government for a lifetime of saving. Thanks for nothing, guys.
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.
This site is designed to allow IBM Employees to communicate and share methods of protecting their rights through the establishment of an IBM Employees Labor Union. Section 8(a)(1) of the National Labor Relations Act states it is a violation for Employers to spy on union gatherings, or pretend to spy. For the purpose of the National Labor Relations Act, notice is given that this site and all of its content, messages, communications, or other content is considered to be a union gathering.