The statement released by Lee Conrad, national coordinator of the Alliance@IBM, said: "For many years IBM unions, including the Alliance, have worked together as a network of information and cooperation. The new Global Union Alliance, under the umbrella of the International Metalworkers Federation (IMF) and Union Network International (UNI) takes that network to another level and will include many more IBM unions. This past year new IBM unions have formed in Bulgaria, Chile and Argentina. ...
Alliance@IBM/CWA Local 1701 is an IBM employee organization that is dedicated to preserving and improving workers' rights and benefits at IBM. "We also strive towards restoring management's respect for the individual and the value we bring to the company as employees," the union's mission statement said. "Our mission is to make our voice heard with IBM management, shareholders, government and the media. While our ultimate goal is collective bargaining rights with IBM, we will build our union now and challenge IBM on the many issues facing employees from off-shoring and job security to working conditions and company policy."
Needless to say the 120 IBM employees were shocked and angry at this unilateral decision by corporate management. Most are veteran employees of legacy companies that have serviced IBM accounts for many years.
According to information received by the Alliance the services affected by this move are:
If an IBM employee does not choose to move to Manpower their employment is terminated.
Employees are not eligible to move to another position in IBM.
There is no separation pay if you terminate your employment or move to Manpower.
There is no credit for IBM service.
There is a "safety net" for transitioned employees for the first 12 months of Manpower employment.
Employees will no longer be allowed to participate in any IBM club activity.
Employees will not be eligible for IBM's 2012 GDP bonus.
Employees will not be eligible for the stock grant.
Accrued vacation will be paid.
Employees will not be paid for any personal choice holidays not taken.
IBM medical benefits end April 30, 2011.
Coverage of IBM Group Life Insurance ends May31, 2011.
Salary deductions for IBM Health Care Spending Account ceases on the last IBM pay period.
This and other changes have turned the IBM employee's lives upside down. Most valued the benefits from IBM and are deeply concerned that Manpower benefits are non-existent.
What is happening to these employees shows how little corporate management values employees. You are not a person to them; you are a "resource" that can be disposed of at any time.
This also shows what happens when employees are not covered by a union contract. Everything that just happened to the Greenville employees would have been negotiated with employee input not unilaterally dumped on workers with a take it or leave it outcome.
So will YOU be next. Will you come to work one day and find yourself sold off with no recourse or voice?
It doesn't have to be that way.
Help build the Alliance so that the next group faces IBM corporate management with a strong union and a contract in hand!
If you are not a member please go to our web site and join today! www.allianceibm.org
Primarily, stock buybacks are a shell game designed to boost CEO pay. Analysts look at the stock buybacks and realize immediately that they will reduce the number of shares outstanding, thus artificially boosting earnings per share. Since many CEOs get bonuses based on EPS increases, by giving money to the shareholders, they indirectly pave the way to higher bonuses for themselves.
Arnott's finding adds to a growing chorus of skepticism regarding repurchases. Several studies have found a strong link between chief executive bonus plans based on earnings-per-share targets and the use of share repurchases to give earnings per share a boost. A 2009 paper found that accelerated share repurchases, whereby companies retire shares today and enter into a contract to pay for them in the future, are particularly popular among companies whose chief executives are paid according to short-term earnings-per-share performance. Another paper reported that accelerated share repurchases tend to foretell poor stock performance.
"Since 2003, we have returned over $100bn to shareholders in the form of dividends and share repurchases, while continuing to invest in capital expenditures, acquisitions and research and development," Palmisano said in a statement announcing the dividend boost and share repurchase authorization. "Our commitment to delivering value to our shareholders remains as important today, as it has ever been."
Clearly, what IBM needed to do was spend $100bn on a time machine, or at least something that could communicate across the fabric of spacetime to prevent Big Blue from making the serious blunders it did in the 1980s and 1990s.
IBM was a genius at electromechanical engineering, so it is no surprise that the company has been able to play Wall Street so well, engineering earnings-per-share growth by buying back shares for nearly two decades. Regardless of the other things that IBM might have done with that $100bn in cash – or the many tens of billions is spend in the decade before that doing the same thing – with executives being compensated largely with stock, and with Wall Street wanting to see IBM's earnings growth continue even if revenues flatline, this is about the only strategy anyone could reasonably expect. You get the results that you set metrics for and reward. ...
If you want to think about just how powerful IBM used to be on Wall Street, just think about its May 1968 stock split. IBM had 60 million shares on NYSE at the time, and just ahead of the split its shares were trading at $688, more than doubling ahead of the split; IBM's shares traded at 59 times 1967 earnings in those mainframe salad days, and it paid out $4.54 a year in dividends.
Oh, and it didn't do share buybacks. It invested in technology and was a ruthless monopolist. IBM engineered its machines and its business in those days, not its financials.
Start with revenue growth. This was a big concern last year, when analysts feared that much profit growth was a result of layoffs and other cost-cutting, instead of robust growth in demand.
Just as I knew better during my working days at IBM that I couldn't completely rely on IBM's promises to take care of me during my retirement years - the fine print, as I recall, clearly stated that there were no guarantees. And even if I had lost my IBM pension, I would still be able to maintain my modest but comfortable retirement lifestyle. It's all about sound financial planning.
So, I disagree with your assertion that 'The only reason it worked out for "us" was that we were born a few years earlier than most.' It worked out for me because I worked hard, because many of my accomplishments were deemed valuable by the business, because I have for the most part lived within my means, and because I never let all the nonsense that I endured as a non-management IBM employee get the best of me.
The nonsense, by the way, spanned my entire 32 year career - not just the Gerstner and Palmisano years. I know that others have not been as "lucky", but let's remember that no one ever forced anyone to work for IBM. Each of us makes choices in life and each of us needs to take responsibility for those choices.
The loss of a monthly annuity check and the replacement of that with a high risk 401K all sounds good until the "high risk" kicks in - then everyone wants the "low stable returns." Such is human nature, I guess. We are always looking in our rear view mirrors and asking, "what could have been."
History will be the test on whether a Gerstner - Palmisano run company with no belief system can rival an eighty year run of a Watson - Watson run company. What you and I enjoy today is the result of the Watson - Watson era, not the Gerstner - Palmisano era. Our monthly annuity check that enables us to have a stable cash flow was the result of a team that believed in sharing the wealth.
The same stockholders that are cheering will be the same one going after Palmisano's successor in a few years when everything comes home to roost: underinvestment in acquisitions products such as Micromuse and Candle, a growth strategy based on acquisitions not internal organic growth, loss of the best people in the business because of poor morale, division between corporate executives and the 100's of thousands that are responsible for that profit and poor investment in tools to make its people productive such as requiring the usage of Lotus Symphony rather than the latest Microsoft tools.
Someday the stockholders will start asking the following questions:
The danger signs are everywhere as they are with every "bubble" yet Fortune magazine chooses to ignore them in their interviews. It will be John Akers all over again - was he the problem or was it the "100 billion dollar corporation by the '90s CEO" that converted lease to purchase, built factories beyond need and saw our sales force leave in droves because of triple digit quota increases?
A manager is a person that does things right, a leader does the right things. We haven't seen true leadership at the IBM corporation in a long, long time. The only reason we can't recognize that is our memories and the memories of the press are too short.
As for stock, I put my IBM money that I sold when I heard our CFO for the first time in IBM history blame the sales for for poor execution and put it in energy. It has performed a lot better with less risk than any individual stock like IBM. Not that I have any particular acumen at stock picking - I just go with a strong mutual fund with strong leadership at a strong company. In my very humble opinion - that does not describe IBM today for the long term investor.
So some questions to ask before you sink too much of your retirement dollars into IBM - betting on any single stock is a risky proposition and folks tend to talk about their great returns and fail to post how much they lost elsewhere. I know I am not going around telling folks how much I lost when I bet on one country to turn it around - Japan.
Whew - no more single country bets for me. Cheers, Pete.
So, Mel, if you agree with IBM management that all employees are simply replaceable parts, then by all means, bet on the stock; if, however, you believe that quality employees DO matter, and you acknowledge from past history that when morale is low during a recession, the best employees flock out the door as soon as the job market turns, leaving the mediocre behind, then you might consider hedging your position by shorting some IBM stock.
According to a survey by professional services firm Towers Watson (TW), the percentage of young workers who cited their pension plan as a reason for staying with their current employer has jumped from 28% two years ago to 43% now. Those who like their company's 401(k) plans, in contrast, declined from 19% to 17%.
Alan Glickstein, a Dallas-based senior retirement consultant at Towers Watson, said he was surprised that so many young people cited their defined-benefit pension plan as a main reason for sticking with a job.
"What they want is security," Glickstein says. "They saw people who were ready to retire after working a large number of years suddenly face a big setback because of the financial downturn. Whether it hit them directly or indirectly, it created fear, and the reaction is 'I don't want that.'" ...
Glickstein believes that if the job market improves with the economic rebound, some companies may be forced to resume offering traditional pension plans again, or their employees will flee to firms that do. "The fact that younger employees are now saying they value security and it would matter to them if they had a pension plan, could start influencing employer behavior about what they offer,'" he says.
Cons: After being at IBM for about 5 years I realized that things just weren't happening at IBM. And here are some of the reasons I left IBM.
Lack of basic facilities: By claiming that they were stopping giving tea and coffee to employees just because it will save $6 million to the organization they set a very bad precedent which highlighted complete lack respect towards the employee. For managers, these simple things don't seem to make sense. But then again these are simple things and management should have handled it differently than just killing the basic facilities for employees.
Quota system: This is a big beast within this organization that is effecting lot of people. Every manager is supposed to maintain a fixed average for the ratings, as a result there are lot of dissatisfied employees.
Bell curve: At one time bell curve funda was a fashion within IBM <sic>, managers used to put employees under the bell curve and rationalize salary on the bell curve. Not any longer, employees are fed up of hearing of the bell curve and all the other stupid crap that the management has to prove employees didn't work hard enough.
Lack of transparency: Employee policies such as notice period have been changed without giving much opportunity to employees and such policies have no precedent in the industry
Growth: Smart hard working people are feeling suffocated as there aren't enough opportunities for people to grow.
Compensation: If you are smart then your compensation is surely less by about 50% of the current market compensation. And though the management has been promising to cover up the 50% for long, but the sad part is that even though IBM may have great quarters, the gap just keeps on increasing.
Advice to Senior Management: At the very heart of the problem, IBM is a company for share holders. It cares more about the share price and executive salary than the very well being of the employees who are pillars and the drivers of this foundation. The employees, particularity at the technical level have been ignored for long now. And as a result talented folks are leaving in huge numbers. Management should infuse the confidence back in the employees by putting in good HR practices and keeping things simple, and yet remain aggressive on the product and sales front. The later option though pretty obvious, seems to have been lost with focus on revenue earnings.
Reasonably good opportunity to network (but ever increasing targets means this is less so than before since people spend time chasing numbers for their measured targets rather than collaborating, which is not measured.)
Constantly evolving technology and consulting strategies mean things can stay interesting (but the constant churn also keeps the organization off balance and inhibits the ability to deliver what IBM sells.)
Pay has seemed pretty good in the past, but it has flattened out. and bonuses pegged to growth mean that two years in a row of great performance only rewards the first year, since the second year did not grow at a higher rate than the first.
Cons: Red tape is up - increased focus on business conduct guidelines leads to constant flow of emails to take ever more education on new policies, challenges to expense reports, and other requests that absorb an increasing amount of time.
Competence is down - IBM has become so fond of innovation that there is no longer a stable foundation underlying day to day work. Ever day becomes an experiment. Just in time project staffing means you have no idea who will be on a project and whether or not it will be a training mission for them.
Targets are up - utilization and sales targets continue to go up. You can take your vacation, but you may have to work back a couple of weeks worth of hours to make up for it in order to meet your target.
Work life balance is down - it is expected that people will work well over 40 hours per week of billable work to meet utilization targets, then add more hours for the increasing red tape, more hours for long distance travel, and you quickly end up with no time for yourself or family.
Travel is up - cross country travel is up. One person travels to the east coast for project A and another travels to the west coast for project B. Despite an expressed policy to not "staff to clear the bench", it is clear that that is how projects are staffed today.
People managers are now working full time in the field, typically on projects where none of their reports are deployed - how much time do you think they spend getting to know their reports? Self-promotion is now a must, and it can be paper thin since who has the time to check out what people say about themselves?
Advice to Senior Management: The "new" IBM is in the process of commoditizing its consulting services workforce. This puts at risk the ability to deliver what you sell. There is a limit to how long that can go on before customers catch on.
Churning middle and upper management may lessen the risk of stagnation, but it also means the organization is constantly being pushed down the capability maturity scale by hyper-innovation, led by people who are on a never ending training mission, and will move on (escape?) to a new assignment before they experience the downside of what they are doing - leaving behind a mess for someone else to clean up (and no doubt claim credit for).
People are in effect encouraged to overlook the second and third words in "Innovation that matters ...", one of IBM's core principles. If you ask "what did you change today" rather than "what did you get right today", what would you expect the results to be over time?
For many years IBM unions, including the Alliance, have worked together as a network of information and cooperation. The new Global Union Alliance, under the umbrella of the International Metalworkers Federation (IMF) and Union Network International (UNI) takes that network to another level and will include many more IBM unions. This past year new IBM unions have formed in Bulgaria, Chile and Argentina. In a statement from the IMF and UNI about the new Global Union to IBM unions:
As IBM has set itself up as a truly global company, trade unions also need to set up a truly global alliance cooperating to the maximum extent for the benefit of their members and IBM employees. This meeting creates an IMF/UNI Global Union Alliance at IBM of trade unions with members working for companies owned by IBM or companies in which IBM has a significant interest.
The purpose is to express the determination/commitment of trade unions at IBM to work together at global level based on shared values and objectives to strengthen communication and cooperation and to implement action coordinated by IMF/UNI global union.
The objectives are:
The partners of the Alliance will work together with the aim of protecting and furthering the interests of IBM employees throughout the world.
The partners will take concrete action to enlarge the network by improving contacts with unions in countries where employees are unionized and make every effort to organize unorganized plants/locations.
The Alliance@IBM looks forward to the forming of this new organization for IBM employees and their unions.
As many of you know, we have lost many members due to job cuts at IBM US.
Please help us build the American section of the new IBM Global Union Alliance. If you are not a dues paying member of the Alliance, please consider joining today at: https://afl.salsalabs.com/o/4004/donate_page/alliance-join
"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.
In the first three months of this year, more than 300 companies, trade associations and lobbying firms were targeting provisions of the financial regulation law, records show. And more than 400 were lobbying on the health-care law, the reports show.
My description of the budget debate is in no way an exaggeration. Consider the Ryan budget proposal, which all the Very Serious People assured us was courageous and important. That proposal begins by warning that "a major debt crisis is inevitable" unless we confront the deficit. It then calls, not for tax increases, but for tax cuts, with taxes on the wealthy falling to their lowest level since 1931.
And because of those large tax cuts, the only way the Ryan proposal can even claim to reduce the deficit is through savage cuts in spending, mainly falling on the poor and vulnerable. (A realistic assessment suggests that the proposal would actually increase the deficit.)
President Obama's proposal is a lot better. At least it calls for raising taxes on high incomes back to Clinton-era levels. But it preserves the rest of the Bush tax cuts — cuts that were originally sold as a way to dispose of a large budget surplus. And, as a result, it still relies heavily on spending cuts, even as it falls short of actually balancing the budget.
So why isn't someone offering a proposal reflecting the reality that the Bush tax cuts were a huge mistake, and suggesting that increased revenue play a major role in deficit reduction? Actually, someone is — and I'll get to that in a moment. First, though, let's talk about the current state of American taxes.
From the tone of much budget discussion, you might think that we were groaning under crushing, unprecedented levels of taxation. The reality is that effective federal tax rates at every level of income have fallen significantly over the past 30 years, especially at the top. And, over all, U.S. taxes are much lower as a percentage of national income than taxes in most other wealthy nations.
Amid these bountiful breaks, the Obama administration is at least trying to ensure that the beneficiaries of this largess pay the taxes they owe. The Internal Revenue Service has opened a Global High Wealth Industry office to investigate the tax compliance of monumentally rich Americans. It is following up on its victory against the Swiss bank UBS — which handed over data on 4,450 Americans with secret offshore accounts — by opening investigation offices in Panama, China and elsewhere. ...
Most estimates put the tax gap — the difference between what should be paid and what is paid — at more than $400 billion. Academics say most of the cheats are in the top tax bracket, so it is good to see the I.R.S. investigators focusing there. The country would be in even better fiscal shape if Congress and the White House stopped giving the rich so many tax breaks.
No sooner had they arrived than the corporate lobbying corps came to visit, saw what these supposed rebels were made of, and quickly conquered them without a fight. The forces of big business needed only to lay out some campaign cash – and quicker than you can say "Business as usual," the budding lawmakers snatched up the money and immediately began carrying the lobbyists' corporate agenda.
Check out the financial services subcommittee, which handles legislation affecting Wall Street bankers. Five tea partiers got coveted slots on this panel, and all five were suddenly showered with big donations from such financial lobbying interests as Goldman Sachs. Now, all five are sponsoring bills to undo parts of the recent reforms to reign-in Wall Street excesses. Steve Stivers of Ohio, for example, hauled in nearly $100,000 in just his first two months in office – 85 percent of it from the special interests his committee oversees. He insists that the cash he took from Goldman Sachs and others has nothing to do with his subsequent support of bills that Goldman is lobbying so strongly for. Stivers claims that his sole legislative focus is on jobs for Ohio's 15th district.
Really? Among the deform-the-reform bills that Steve is carrying is one to let Wall Street giants avoid disclosing the difference in what the CEO is paid and what average employees make. Another would exempt billionaire private equity hucksters from regulation. I can see that these bills are great job extenders for the barons of Wall Street, but how do either of them create a single job in his district?
This stuff does nothing but shelter the greedheaded banksters who wrecked our economy. Is that what the tea party rebellion was all about?
You mean they didn't do anything like that?
You mean that even while warning about an imminent fiscal crisis, they actually tried to cut taxes on the rich to their lowest level since 1931?
Why, you might actually think that they're not sincerely concerned about the deficit. But that can't be true, since they keep saying that they are.
O.K., you get the point. It's truly amazing that so many commentators — people who presumably know something about the relationship, or lack thereof, between what politicians say and what they do — are willing to accept at face value claims of deep, sincere concern about the deficit from people whose actual priorities are demonstrated by their absolute unwillingness to sacrifice anything they want in the name of deficit reduction.
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