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Highlights—June 18, 2011

  • Binghamton, NY Press & Sun-Bulletin: IBM turns 100: A bittersweet birthday. By George Basler. Excerpts: Fresh out of the Marine Corps and a stint in Korea, John Gosney landed a job at IBM in 1954. And did he feel lucky. "The philosophy in the community was if you were fortunate enough to be hired by IBM, you had a job for life," the 80-year-old Johnson City native said.

    Flash ahead more than 50 years, and 17-year-old Dan McGraw finds it hard to relate to that feeling. His father worked for IBM until retiring in 2009, but McGraw doesn't plan on working there.

    "I think the legacy is kind of sour because of the way IBM has gone," said the junior at Union-Endicott High School, who is doing a project on the company as part of his U.S. History Advanced Placement course. "There's not a lot of love there anymore." ...

    On one hand, there is a sense of pride that Endicott is known as the "Birthplace of IBM," and that the company grew into an international force here under the leadership of Thomas J. Watson Sr., the company's president from 1914 to 1952.

    On the other hand, is the recognition that the company has downsized dramatically from its heyday, reduced its footprint locally and been responsible for a chemical plume that continues to impact the community more than 30 years after it was discovered. ...

    At its height, IBM Endicott had roughly 11,000 employees. Add in IBM's facility in Owego, and the number went to 16,000. The focal points were the factory complex centered at North Street and McKinley Avenue, a research center in the Glendale section of the Town of Union and an Owego facility, now owned by Lockheed-Martin. IBM also employed hundreds of subcontractors and spawned benefits, such as a country club for employees. ...

    Maybe so, but IBM promoted this feeling of permanence through its public relations efforts and talks with employees, said former IBMer Lee Conrad, a long-time critic of the company's management and an organizer of the Johnson City-based Alliance@IBM, a group that struggles to unionize IBM's current workforce. The belief started to crumble in the 1980s and accelerated in the 1990s when IBM began shedding jobs through retirement incentives and then layoffs.

    Conrad sees a clear demarcation point in the company's 100-year history. Older retirees remember the IBM of old with a sense of gratitude for employee, benefits and opportunity. More recent retirees "remember being kicked out," he said.

    Brian Frey who is producing a documentary film on George F. Johnson and Thomas J. Watson for WSKG-TV, has seen the same split. If people's tenure at IBM ended in the 1970s and 1980s, they have fond memories, he said. Because of the corporation, they raised their children and benefited for an array of amenities, including the country club. ...

    While the corporation's footprint is certainly not as large as it once was, it is still one of the largest employers in the region and is stable, he said. (IBM does not release employee numbers, but independent observes put it at between 800 and 1,000.)

    Selected reader comments concerning this article follow:

    • The article stated that the community became too dependent upon IBM, but you also have to realize that IBM was the only game in town. IBM typically chose towns that had no other competition so they wouldn't have to worry about their employees shopping around for other jobs in the area. IBM also used their influence to discourage other industries from coming into town for this very reason. Now they have left and there is nobody else to fill in or take their place.
    • When I joined IBM the company was run by engineers and salesmen and there was a feeling of a working family, united to do a "fair day's work for a fair day's pay." Today IBM is run by accountants and lawyers and there is a feeling "us versus them." Gone are the days of fellowship when the GM ate in the cafeteria with the janitors and parked his car in the lot along with everybody else. Gone is the respect the workers had for their manager. I know nothing lasts forever but it saddens my heart to think of what we lost.
    • While the corporation's footprint is certainly not as large as it once was, it is still one of the largest employers in the region and is stable".........is that so Mr. Flannery? That's funny, any "surviving" IBMer I've talked to over the last 15 years or so have not exactly described the work environment as stable. You may want to re-"THINK" that one.
    • Kerin Flannery should tell the community just how many IBM employees are left at Endicott. How many were fired 3 weeks ago in the most recent job cuts. How many jobs have been offshored? IBM certainly has abandoned Endicott and is on its way to abandoning the US. What does it say about a company that ran away from where it was founded.
    • As a IBM kid, growing up in that community was wonderful. My Dad got an internship right out of Broome Tech in the early 50's and worked there for 32 years before taking one of the early retirement packages in the late 80's. I remember the Country Club pool and the family days and Quarter Century Club days and the Christmas parties (I still remember every present I received from there). What a feeling of family there was. Can you imagine what that would do for the community now if we worked toward that feeling again? Whenever I think of an idealistic company, I think of IBM in the early/mid 80's heyday. In fact, I happened to find a 25 century club comb while cleaning out a box the other day. With a Dad and brother, cousin and many friends who have or continue to work for IBM I still have a fierce loyalty to that company.
    • There are so many IBM retirees around this area that you'd think that more of them could have been talked to and quoted rather than have a union organizer Lee Conrad get quoted again. It is a shame that the press continually contacts him. I wish they'd take him off of their tickler file when anything comes up having to do with IBM as some of us do not appreciate the effort that he stands for.
    • Cooperdude: It is interesting that you are upset by the quotes from Lee Conrad, and not from anyone else. Would you like to know why more retirees don't get contacted to talk to the Press? Simple. There aren't very many that WANT to talk to the Press. I've spoken to hundreds of IBM retirees, over the years, in my capacity as a board member of the WBESC. Many of the IBM retirees I've spoken with, do not want to go on the record as saying anything negative about IBM, because they THINK IBM will retaliate and stop sending their pensions.

      Ridiculous? Sure it is; but it demonstrates to me that the IBM retirees have a LOT to say about IBM, that is negative and full of anger. I've heard some of that anger, face to face with many retirees. Others have written emails to me and to the WBESC board members.

      It's true that there are happy IBM retirees here in Endicott and the surrounding area; but I would say that statistically, 90% of them do not live in the "plume" of chemicals underneath more than 275 acres of the Village of Endicott.

      Also true, is the number of retirees that have left the area or died. Many of the IBMers that retired before 1980 are gone. It appears to me that you just don't like Lee Conrad. That's your choice. However, he does speak for many IBM retirees and former workers that IBM laid-off after 20-30 years of service.

      My question to you is: how many IBM retirees do you know that agree with you and your assessment of IBM? Where are they? Why do you think they aren't here, speaking on THEIR OWN behalf? Let me know when you figure that out.

  • Associated Press, courtesy of Yahoo!: For a pioneer of technology, 100 years of "Think." 100 years of Big Blue: IBM hits century mark as hotter companies stand on its shoulders. By Michael Hill and Jordan Robertson. Excerpts: Google, Apple and Facebook get all the attention. But the forgettable everyday tasks of technology -- saving a file on your laptop, swiping your ATM card to get 40 bucks, scanning a gallon of milk at the checkout line -- that's all IBM. International Business Machines turns 100 on Thursday without much fanfare. But its much younger competitors owe a lot to Big Blue. After all, where would Groupon be without the supermarket bar code? Or Google without the mainframe computer? ...

    For much of the 20th century, IBM was the model of a dominant, paternalistic corporation. It was among the first to give workers paid holidays and life insurance. It ran country clubs for employees generations before Google offered subsidized massages and free meals. "The model really was you joined IBM and you built your career for life there," says David Finegold, dean of the School of Management and Labor Relations at Rutgers University. Transfers to other cities were still common enough that employees joked IBM really stood for "I've Been Moved."

    Selected reader comments follow:

    • How far they fall... Now an outsourcing 'service' company profiting off of tax breaks and currency exchange. Can't wait to call customer support and talk to Watson...
    • this is a laughable PR article
    • IBM used to be a good corporation, but it has lost all integrity and ethics. They are making most of their profit by telling lies to corporate upper management on how they can take over their Technical Services and Operations support and provide better support for less money.

      How it really works, is they say it will be BAU (business as usual, non-chargeable), then once they get the contract, they lay off all of the corporations experienced and skilled technical staff and sent the support offshore to inexperienced and unskilled foreign workers such a Brazil or India. Now that have have decimated the staff, what was BAU becomes an RFS (request for service, requires a statement of work , and is chargeable)

      What the company actually gets is very poor support for more money. Meanwhile American IT technicians are out of work. Then if the company wants in country support, IBM brings in foreign H1B Visa workers. Same set of skills, just like their counterparts back in their country.

      IBM is nothing but a greedy and horrific corporation. Like I said, I used to respect them, now they cannot go out of business soon enough. Our government knows about this business model, and obviously approve of it. Wonder why our country is in such an economic crises. Obama and his buddies know the truth, and they still blame US workers instead of our greedy corporations.

      • Everything you said is true, only IBM rarely uses H1B visas, they use L2, inter-company transfer. Easier and cheaper for them.
      • You are right except this behavior predates Obama by a decade at least.
      • Absolutely true. I used to work there in Endicott. I grew up during its boom years and watched it degrade into the despicable employer it is now. Go to the IBM union site (Alliance@IBM) and read about what this company has degraded into.
    • To me, when I hear IBM it does not mean International Business Machines, after my experience with them it is more like International Bowel Movement. Especially when it comes IBM Global Services.
      • I know people who have worked for Global Services. Truly horrific work environment. Management actually makes workers falsify time sheets to cheat customers.
  • Wall Street Journal: IBM Crafts Succession Plan. Palmisano Seeks Advice Toward Bequeathing His Legacy of Dependable Earnings and Rising Shares. By Spencer E. Ante And JoAnn S. Lublin. Excerpts: As International Business Machines Corp. prepares to celebrate its centennial on Thursday, the contest to become the company's ninth chief executive is heating up. People familiar with the thinking of Chief Executive Samuel J. Palmisano say he is seeking advice on how to handle the transition and that they expect him to designate a successor by appointing a president or operating chief in 12 to 18 months. ...

    The top candidate is sales chief Virginia M. Rometty. The 53-year-old executive has separated herself from the pack over the last year, according to recruiters and former and current IBM executives. Global Services boss Michael E. Daniels, 56, is seen as the No. 2 choice. Rodney C. Adkins, 52, who is senior vice president for hardware, faces longer odds. None of the candidates was available for comment.

    Ms. Rometty "has been one of their top stars for at least a decade," says Jim Steele, a former IBM executive. "I don't see anybody else who has been as powerful and as good a candidate," adds Mr. Steele, who now is chief customer officer at Salesforce.com Inc.

    Ms. Rometty, who has spent three decades at the company, made her mark leading the 2002 integration of PriceWaterhouseCoopers LLP's consulting arm, which moved IBM from a pure technology provider into a top strategic adviser. More recently, Ms. Rometty ran part of IBM's services business.

  • Wall Street Journal: At Mature Techs, a Young Vibe. H-P, IBM, Microsoft Pour on the Charm to Compete for Talent With Start-Ups. By Joe Light. Excerpts: After International Business Machines Corp.'s Watson computer beat two former "Jeopardy!" champions in a televised match earlier this year, the company lugged its machine to Carnegie Mellon University in Pittsburgh, where it battled students. A major goal: Persuade some of those students to consider a career at IBM.

    The move was part of a new charm offensive by mature technology companies, including Microsoft Corp. and Hewlett-Packard Co., as they compete for engineering students against sexier start-ups, such as Facebook Inc. and Twitter Inc., and hipper heavyweights, like Apple Inc. and Google Inc.

    Since big companies can't offer the inexpensive stock and hefty responsibilities that often come with joining a start-up, the established companies instead are emphasizing their resources, global scale and a desire to create a more start-up-like environment. ...

    IBM says the Watson match at Carnegie Mellon drummed up excitement, especially among highly prized graduate students. Company executives say nine Carnegie Mellon students with technical backgrounds, including graduate students, were recruited to the company this year but that the real effects of the match won't be seen until next fall's recruiting season. Carnegie Mellon computer-science Dean Randal Bryant says he didn't know of any computer-science undergraduates who have gone to IBM in the last couple of years, though the school has recently sent several graduate students.

  • Yahoo! IBM Employee Issues message board: "IBM 100th Anniversary-Endicott view" by "finitewisdom". Full excerpt: A well-written, thoughtful view on IBM's history by Rick White: http://www.pressconnects.com/article/20110610/VIEWPOINTS02/106100320/IBM-100th-A\ nniversary-Endicott-view?odyssey=nav|head
  • Yahoo! IBM Employee Issues message board: "Re: IBM 100th Anniversary-Endicott view" by "lastdino1". Full excerpt: As expected (being one of the past dime a dozen) this article was written by a disgruntled employee. It's kind of interesting that in the old days only the outstanding performers were promoted to managers. I suspect he won't be getting the booklet or an invitation to this Thursday's events. My Retired Life is Good.
  • Yahoo! IBM Employee Issues message board: "Re: IBM 100th Anniversary-Endicott view" by "Paul S". Full excerpt: Well now come on, 45,000 IBMers fired since 2005, and unknown thousands of Canadians and others as well. I never found the finest technical people promoted to management ever. Appraisals have a lot to do with selling yourself. I personally know a man who came to IBM at age 19 who graduated from college also at age 19. This man was the most technical guy I have ever met. Bar none. While he sat with me for several years I barraged him with technical questions :-). Years later I found out he was given a 3. He's now working at a firm in NYC, and he was almost instantly scooped up. What baboon of a manager gave him a 3 should be publicly pilloried. IBM lost a technical giant - and it had to do with "someone has to get a 3 and he's new in the department". He was also very "aw-shucks" and not a big-self promoter. One sees such institutional idiocy and feels compelled to criticize IBM and its management. If criticism means a person is disgruntled, well that's how millions wound up in the Soviet Gulag because someone in-charge feels threatened by criticism and brands the critic "disgruntled".

    Most of the recent firing has happened since you left the company Dino. I saw a few people leave who had kind of lost their niche, but after the first wave of firings, I saw Band 10 engineers, holders of multiple invention patents, and some really fine dedicated people thrown out the door. I didn't see any troublemakers or "dead-wood" leave the company in any layoff in the last 10 years.

    Anyone who witnessed the effect on a co-worker would be disgruntled. In fact the term "disgruntled employee" is often used by management to dismiss very legitimate complaints. If IBM wants to replace decades of training with 23yr olds from the 3rd world, just to goose short-term unsustainable profits... YOU as a stockholder should be disgruntled too. I see my bigger dividend check and say: This too shall pass.

    We lost accounts worth a billion dollars over time - are you still voting "yes" for the board and Sam on your proxy?

    Well I've wasted some perfectly good breath... now back to work on a Sunday morning - from home.

    Rick wrote a beautiful piece, splendidly worded. As a 3rd generation IBMer, I wholeheartedly concur with his view.

  • Yahoo! IBM Employee Issues message board: "Re: IBM 100th Anniversary-Endicott view" by Liz Butler. Full excerpt: I find it so sad to read your (lastdino1) posts. You are one of the lucky ones who retired while there were still benefits. I am a second generation IBMer. My father retired in the very early 90's and has seen his IBM benefits especially medical erode. I was hired in 1980 and the HR person told me as part of his speech welcoming me to family that IBM was a cradle to grave company that would always take care of me.

    I worked my butt off for IBM. I was consistently a 1 or 2+. I traveled for IBM and put in consistently long hours. Yes, I was paid fair. I moved to a work at home position because IBM didn't want to pay for real estate. I reluctantly did it but IBM assured me they would pay for the equipment (phone, printer), phone service and internet service. First they wouldn't pay for needed equipment once it wore out. Printer died, you had to get the new one. Next to go was the internet service because heck, you would have it anyway, then it was the phone services. They wouldn't reimburse except for a pittance because you should negotiate dirt cheap prices on your own and you had to mail in phone bills (Mail in 2011). Towards the end I was paying over $100 a month in internet and phone to work for IBM (now who's the millionaire?), never got supplies and of course you always paid the electric for working at your own home.

    I watched as they gutted my dept through layoffs and I not only had to take on the work of those who left but had to work with people who replaced others who barely could speak or write English let alone understand the business or job requirements and watch them turnover positions every 2 to 3 months.

    I watched them take me from a 1 to a 2, because they reorged and thought it was appropriate in a new group to lower all appraisals. I then saw them take me to a 3 in January with no explanation and then RA me a month later (there's the reason for a 3). The reason was I was a band 10, I was paid too high, had 30+ years, was 50 and in the US. They replaced me with 5 offshore people with no experience who can't do the job but I bet they still pay less than the salary I earned through years of hard work. So the blood thirsty second line made brownie points for lowering the salary line - who cares if the business is no longer supported.

    I had 19 years and was 39 when IBM revoked my retirement support. Now at 50 with 30 yrs and a few months I was surgically excised from the company. No "retirement" lunch, no good byes and they yanked my system access with no warning, no retirement health care because I am under 55. I watched everyone I worked with get laid off and they were all over 50, including my manager.

    I will not be celebrating IBM. I have been on job interviews where I have been told they don't want long term IBMers because they feel we are too imprinted with IBM culture and don't adapt well. Of my friends laid off over the years half are still looking for work.

    So lastdino, I am so happy you worked during the good days of IBM. Stop slamming those of us who have worked through the worst, and for those who are still trying to survive there. I have relatives still in IBM looking over their shoulders.

    I joined this forum to learn things not to listen to you gloat. I have learned lots of interesting items and read lots of interesting posts but you seem to just want to make people unhappy. Liz.

  • Yahoo! IBM Employee Issues message board: "Re: Dino has been removed from group" by "William". Full excerpt: Good riddance to bad rubbish. Divergent opinions are one thing. I avoided posting in the past because Dino didn't just disagree with the points of an argument. He attacked a person's first-hand experience with a matter and did everything he could to discount the individual.

    I was a team lead in Chicago on an account and watched a Global Services team get decimated from a headcount of 9 down to 2.5 FTE's (Full Time Employees). The final insult was when we were made hourly. We Claimed (and worked) slightly less OT to keep our boss happy. After a month, we were told in a team meeting that it was a performance issue that we had to work so much OT to meet hour SLAs.

    My co-workers and I worked the mandatory 2196 billable hours every year while salaried. I asked my former co-workers who had found new jobs what kind of hours they were working, and found 8 hours days were the norm, with no management screaming at them at 2 or 3 in the morning for mundane issues.

    I was laid off for 17 months, but now I make the same salary as I did in IBM and I only work 8 hours a day, 5 days a week. Many times now, I feel like I am working a half day. Compared to some days with IBM, I am.

    I jumped at the opportunity to sign a separation agreement when it was offered. My boss had calculated the severance payment to be the maximum of 26 weeks since I had over 13 years of service. Payroll shortchanged me 7 weeks because they had recorded the wrong hire date for me. My boss said, with a payroll manager on the phone as well, that it was the most dishonest thing he had ever witnessed done to an employee. The payroll manager responded that it wasn't my bosses place to make the determination of when I was hired. I recouped most of my losses through another avenue. I can tell you first hand that even when you sign the covenant "not to sue", it doesn't give IBM the right to violate Federal Labor law without consequence.

    I still have a friend who is a Transition Account Subject Matter expert. He works 12 hour days and is all over the US half of the time. I have another friend who is in Marketing, gets a lot of goodies, but did lament the fact that calls can happen all hours of the day or night.

    I'm not writing this to be all about me though.

    The battles I had to fight by myself would have been much easier to fight as an employee, if I belonged to a union. I was led to believe by my management that I was the only person who had a problem working 48-50 hour weeks. The reality is nobody wants to really do that, and I can tell you first hand, that it's actually pretty uncommon in the real business world. (Unless your management recognizes and compensates you for it.)

    I am still an IBM stockholder, and was appalled by the amount of compensation the executive management receives while seeing the 0-1.5% raises my friends got this year.

    It is time for a union in IBM. The management deserves it, and the employees that sacrifice their families, their health, and their career growth for IBM certainly do.

  • Yahoo! IBM Employee Issues message board: "Comment on pension for IBM's 100th..." by "sby_willie". Full excerpt: From http://www.ibm.com/ibm100/common/images/junespecial/ibm_centennial.pdf. "Other times, tension is caused by a seismic shift in the world around you. By the middle of the last decade our pension obligations were almost as large as our revenues. We had to address this or risk severely impairing IBM's long-term competitiveness. Yet we also knew that helping our people build secure futures is itself a competitive advantage. So the real work began—to replace the traditional pension plans with entirely new kinds of programs and options. Certainly some employees did not welcome the change. But many did, and several aspects of the new program are viewed as leading innovations."

    IBM rubs more salt in to the cash balance pension heist. Like IBM is proud of this INNOVATION in it's storied history.

  • Yahoo! IBM Employee Issues message board: "Re: Comment on pension for IBM's 100th..." by "Paul S". Full excerpt: What he meant to say was, to have honored ALL of our pension obligations would only have cost us ONE Quarter's profits. Unfortunately we need to squander 3 times that money to buy back shares of stock in the last 12 months. If you count the number of times the word "palmisano" appears in the book, you start to get an inkling of what's going on here. At least I hope that however shrunken the pension is, I might still collect it. But with Sam and Randy at the helm one can't underestimate the amount of thuggery they'd resort to in lining their own pockets.
  • Yahoo! IBM Employee Issues message board: "Re: Comment on pension for IBM's 100th..." by "madinpok". Full excerpt: The statement is certainly deceiving.

    They are comparing pension obligations that will pay out over 30-50 years to the revenue of a single year. And they ignore the fact that, at the time the changes were made, IBM was not putting a single dime into the pension fund.

    The pension fund was fully funded and was growing at a rate that met the annual funding requirements. So the excuse that they had no choice but to change it is completely bogus. They only reason it was changed was executive GREED.

    And how does cutting the future pension value of all the people thrown into the cash balance plan by 50% help build a secure future for them? If it does anything, it undermines their future security.

  • Yahoo! IBM Employee Issues message board: "Re: Comment on pension for IBM's 100th..." by "chz_whiz". Full excerpt: "Certainly some employees did not welcome the change. But many did..." So who were these "many" who welcomed an employee/retiree heist? Is this centennial really meant to be a joke book?
  • Financial Times: Indian IT outsourcers face fresh challenges. By Mary Watkins and James Fontanella-Khan. Excerpts: ...Mr Mittal admits that India’s traditional IT outsourcing model is experiencing a fundamental shift as it adapts to the post-economic crisis environment. “We’ve now moved to an outcome-based model” – being paid on performance, rather than one based solely on the number of people deployed on any one job, he says. “That is giving outsourcers an incentive to be more efficient.”

    Analysts put it more bluntly, saying that India’s IT sector has reached maturity and, while revenues are still growing, margins are being squeezed. Milan Seth, a partner and technology analyst at Ernst & Young in India, describes the global financial crisis as a “game changer” for many IT outsourcing companies. Customers are now looking for more tailor-made and innovative solutions. ...

    “It’s not only about cutting costs, it [is] about creating tangible value,” says Mr Apte. “The days of vanilla [basic] outsourcing are over. Indian companies need to become more like the IBMs, Accentures and Capgeminis of the world if they want to survive.” Malcolm Frank, chief strategist at Cognizant, says customers no longer want simply an existing function delivered at a cheaper price but are also looking to restructure their business and take advantage of new technological shifts – such as the move to cloud computing and mobile working. ...

    The US recently raised the cost of applying for business visas used by Indian outsourcers to send their employees to overseas locations from $320 to $2,000 amid calls from politicians to protect US jobs. Mr Mittal says the rise in visa costs is unlikely to have a big impact on the industry. But he admits that Nasscom’s members are concerned that the “political rhetoric” could be converted into more serious action. Indian companies point out that they already have operations in the US, staffed by local people, which helps to counter claims of protectionism. Others are opening offices in Latin America that are able to serve clients in a similar time zone without the same visa restrictions.

  • Linked In's Greater IBM Connection: Having left IBM about 2 years ago I seem to be reminded from employees who are still working that IBM is not the same IBM I had joined. Full excerpt: OK, this is not all bad. However, businesses do have to change to be successful and grow but some values need to remain. I think of all the pride I had in being an IBMer especially when there was a crisis and how IBM would jump in with all their resources to help the community. We did things like "paint the town" in Detroit where we updated, painted and fixed up homes for people in the inner city who couldn't afford to. We responded to communities who were experiencing disasters.

    So, I must ask, where are in in helping the people in Joplin? Where is IBM in the helping Detroit to rebuild? Why isn't IBM leading and helping in the communities in the South devastated by tornados and flooding of the Mississippi? Where are the trucks we used to fill with clothing, with canned foods, with shelters?

    Sure, its great to help those people in need in foreign countries, but charity begins at home. Lets bring back the lustre! Lets get Randy to stop running the Company and let Sam take the charge. I was very proud to be an IBMer! Come on you guys...get back in the game and win back the hearts of your employees.

    Selected comments to this post follow:

    • I agree with most of the comments, but those changes not only happened in IBM USA, I saw the same trend in other IBM locations. I worked 8 years in IBM USA and 10 years in IBM within other countries, seeing the same "move away" from the 7 basic beliefs to the so called new company, where the profits and margins are what is important. I feel proud as an ex-IBMER of what the company gave me and for my accomplishments throughout those 18 years, but when I left IBM back in the early 90's, I was certain that the IBM that I admired was gone for good, still, I also wish that the basic beliefs were and integral part of the future IBM, a reborn from the ashes after 100 years.
    • It is sad to see a paradox of values and execution. It seems we all saw it to some extent while there and I constantly hear it from folks still there. I hope the centenary book can be true to the changes on the inside, but somehow I think it may gloss over changing workforce global demographics. I don't believe IBM is unique in such an evolution - it is the price to be paid in an era of low barriers to global competition and the relentless pressure of shareholding blocs.
    • Angus, Carlos, Ian, Peter, Sean, David, this has been a great discussion. There is one concept though that I take issue with. I constantly here people say that "times are different." Times are always different. Tomorrow will be different from today. I hear folks say, "the global economy" is the factor. Well, during the Great Depression when The IBM put down its roots and foundation to last for a hundred years, a business in order to find lower wages just had to cross state lines. In New York City we had sweat shops with women and children working in them. We were condemning children to die in coal mines to supply energy to steel mills. So although different, still the same. Whether it is across the globe or across a state line unethical businesses will always try and exploit the weak. I believe that poor leaders use the excuse of "times are different" to divert from tough paths.

      I believe Tom Watson Sr. established a company on principles that positioned The IBM to be a leading corporation when the Great Depression ended. Men and Women didn't leave the company when times got better - they stuck around to make it better and more competitive. I also believe that "the company" was once about "us," executive and employee alike. When I joined no one said "the company" this or "the company" that... it was "us and we" together finding a balance between a corporation that turned a profit and shared that profit between workers and stockholders and customers equitably. That is how a long term business maintains itself.

      If you want to read a little bit about Tom Watson Sr.'s views on "Character and Responsibility" you can read one chapter from my book here: http://www.beneaththedancingelephant.com/character-and-responsibility.html

      It starts with my IBMer (IBM Caretaker) perspective and then his speech (word for word) in the 30's. There is also a Preface and Introduction if you find the above interesting.

      Questions I want to put out there for IBM Management to answer is the following:

      • "Will IBM be around in 2111 to celebrate its bicentennial with the path it is on today?"
      • "Will employees stick with the company when this recession ends to make the company better like they did after the Great Depression?"
      • "Are you maximizing stockholder value when you fail to make each and every one of the 300,000+ employees enthusiastic about showing up for work each day? Do you really believe a few hundred enthusiastic executives can provide more stockholder value than 300,000+ committed enthusiastic individuals?"
      • "Do you really think patents are more important than the talent that invents the patent?"
      • "Do you really believe that a $1,000 equivalent stock option vesting over five years will keep anyone with the company?"
    • Go Pete, I am with you 100% and whilst I accept that things have to change your questions to IBM Management are right on the button. Of course we all know they will never respond, but well said anyway!
  • New York Times: Revealing Hidden Costs of Your 401(k). By Ron Lieber. Excerpts: Your 401(k), 403(b) or other similar plan isn’t free. In fact, it’s probably pretty expensive, costing you tens of thousands of dollars in lost retirement money over the course of your career.

    But just try to figure out how those costs break down. Several weeks ago, I talked about the biggest cost, the underlying expenses of the mutual funds in your plan. You can keep those low by begging your employer for more low-cost index funds, which have the added benefit of outperforming most actively managed funds over the long haul.

    But there are also various administrative fees that come with a workplace retirement plan, and you usually pay for those, too. It is the rare employer, however, that breaks out those costs for you.

    Instead, the costs are embedded in the expenses of many of the mutual funds you pick. In a practice known as revenue sharing, fund companies refund some of the expenses to the service provider running your plan to pay for its administrative costs.

  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Anonymous in Austin, TX: (Past Employee - 2009) “Decent place to work” Pros: Nice to telecommute, nice to have access to latest technology. Cons: Constant fear of lay offs, long hours, poor internal communication structure, upper management inaccessible - often times seem to think they are royalty, see a lot of empire building without apparent regard for the company. Advice to Senior Management: Be more sensitive to the needs/desires of all levels of employees and not so entirely focused on self.
    • IBM Graduate IT Consultant in London, England (United Kingdom): (Current Employee) “Low pay considering company success.” Pros: Good hours. Easy to be seen to perform at a high level. Great people. Cons: Very poor pay at lower org levels. Tedious processes for everything. Major information overload at all times re company products, policies, strategy etc. Very sales oriented to the point where I question their genuine client care. Cut-throat internally regarding internal structuring of deals. Advice to Senior Management: Pay according to what people deserve. To pay consultants median IT industry pay is not sustainable and the lack of talent shows. Graduate turnover is very high and will continue to be with the current package offered. Be careful of being too sales oriented. This will scare away clients.
    • IBM Anonymous: (Past Employee - 2010) “Mundane” Pros: Employees are given the flexibility to work from home using a company-issued Lenovo laptop. Additionally, the office areas are built in such a way that you need not work from your assigned workplace. There are spaces with basic amenities where you can also work from comfortably. Cons: Mid level managers are not afraid to raise their voices indiscriminately to pressure their subordinates. Lots of unhealthy pressure in the workplace. Advice to Senior Management: Learn to hire mid level managers who treat employees with respect. Don't overlook the weaknesses of the matrix organisation structure.
    • IBM Software Engineer: (Current Employee) “Welcome to India Business Machines.” Pros: - Flexible working hours; - Can work at home; - Some very bright technical staff; - Good place to start a career but don't stay any longer than 3 years.

      Cons: - IBM is eating itself from the inside out with cost cutting to meet corporate EPS targets. - Staff education virtually abandoned bar online courses. - Gradual reduction in the UK workforce as jobs are transferred to Eastern Europe, China and India. - Staff celebrations are rare and when they happen you have to pay for the food. No different for the 100 year company anniversary. - Pay rises well behind inflation or non existent. Within 3 years of starting, graduates commonly find themselves on less than new grad starters (where IBM has to pay closer to market rates). - Yearly PBC appraisal system demands a fixed number of underperformers to be identified, who must "improve" on some arbitrary measure or face being removed by a separation package. - Plenty of bad blood remaining after various pension measures in 2009 caused many older staff to leave.

      Advice to Senior Management: Perhaps it would be best to sell your shares before the company pays the price for years of living on past glories

    • IBM Anonymous: (Past Employee - 2011) “Lots of work but treats people as 'resource" commodities'." Pros: When compared with its competitors, IBM has a great benefit package with lots of choices. With it's brand recognition, IBM has an enormous amount of work for IT professionals.

      Cons: IBM will often sell long-term application maintenance services as a loss-leader to secure future profitable consulting services. There is definitely a disconnect between the services sales force and the services delivery teams. What this means is that the employees assigned to deliver the maintenance contracts are overworked in a high stress environment with a management philosophy of "shape up" or be shipped out (i.e. replaced or released).

      Advice to Senior Management: My advice to IBM leadership is two fold. 1.) For the long-term application maintenance contracts, stop the mentality of a "quarterly results only" focus and keep your focus on the profitability and client sat for the entire duration of the long-term deal. A short term loss in terms of investment in tools and process that has positive long-term effects is often not considered because of the immediate effects to this quarter's results. 2.) Recognize that people assigned to deliver long-term contracts are your greatest asset since they build long-lasting client relationships and provide avenues to future business. At the grass-roots level, people assigned to long-term contracts are made to feel like a disposable commodity that can easily be replaced like any other "resource".

    • IBM Associate Partner: (Current Employee) “The Elephant is Tripping.” Pros: Global name recognition; Ability to learn new things; Variety of clients and projects; International opportunities; Fair salary; Multiple locations to work from; Technology leadership. Cons: No empowerment of employees; Too easy to get away with doing little or poor work; Expense policy does not support employees who travel 100%; More focus on selling internal to IBM than at the client; Many of the Partners need to be replaced. Easy to get lost in the crowd; Will not hire the delivery experts required to maintain our leadership position. Advice to Senior Management: Apply Lean and Six-Sigma to all internal processes; Empower employees to make decisions; Eliminate redundant and NVA approvals; Open the pocketbook and hire top-notch delivery experts.
    • IBM Worst Place I've Worked in Austin, TX: (Past Employee - 2011) “A mind-numbing, life-draining experience.” Pros: Some good people. Decent 401k. Cons: Totally incompetent management. No respect for regular employees. Constant layoffs. No clue how to develop great products. Advice to Senior Management: Nothing. Too ignorant to know what they're doing wrong.
    • IBM Anonymous: (Current Employee) “Okay place, bad leadership.” Pros: Decent pay, okay benefits, okay hours. Cons: Terrible leadership, Wouldn't want to work there for a long period of time.
    • IBM Anonymous: (Current Employee) “USED TO BE A GREAT COMPANY” Pros: The people you work with are great. Cons: Senior management treats people like commodities. No respect especially long-term employees who kept company afloat in the lean times. Advice to Senior Management: Treat US Employees with respect and pay them for the work they do!
    • IBM Anonymous in Washington, DC: (Current Employee) “Big company lot of opportunities to stay at the level you are hired (non executive), expectation to work weekends.” Pros: Large company, different projects and clients. Opportunity to travel. Large knowledge base if you are able to navigate it. Good benefits such as matching 401K and vacations.

      Cons: Big company lot of opportunities to stay at the level you are hired (non executive). Expectation to work weekends (60+ hours) because everyone else does too but there is no incentive to work those other than to keep your job. Management is too much focused on keeping share price and dividend growth In consulting side though human resources are the key piece but are viewed as widgets as simply "supply and demand." Too much bureaucracy In sales -- it is too hard to sell In delivery -- it is too hard to deliver because during sales very high expectations from IBM are set - "IBMers are super humans" and "IBM has great tools, methodology, templates" but none exist or are often irrelevant and non usable.

    • IBM Anonymous: (Current Employee) “Its been less than a year, but so far the journey with IBM has been quite good. No room for complain.” Pros: Chance to work on some of the latest technologies and trends in the IT Space. Chance to work with an Industry leader. Promotes healthy work - life balance. Seasoned leaders at the top management. Cons: Sometimes the pace at which work moves is a little slow, considering the size of the organization and team. Advice to Senior Management: Your (sic) already doing the best!
  • Sarasota Herald-Tribune: Wal-Mart Workers Try the Nonunion Route. By Steven Greenhouse. Excerpts: After numerous failed attempts to unionize Wal-Mart stores, the nation’s main union for retail workers has decided to try a different approach: it has helped create a new, nonunion group of Wal-Mart employees that intends to press for better pay, benefits and most of all, more respect at work. The group, Organization United for Respect at Walmart, or OUR Walmart for short, says it has quietly signed up thousands of members in recent months, and it is going public this week with a Web site, ourwalmart.org, and a Facebook page. Organizers say they have more than 50 members at some stores, and they hope to soon have tens of thousands of members. Wal-Mart has nearly 1.4 million workers nationwide. ...

    “The managers at our store and others are running over their associates as if they didn’t exist,” she said. “They treat them like cattle. They don’t seem to care about respect for the individuals. We need to bring back respect.”

    Unlike a union, the group will not negotiate contracts on behalf of workers. But its members could benefit from federal labor laws that protect workers from retaliation for engaging in collective discussion and action. ...

    OUR Walmart has been inspired by a handful of groups that unions formed when they recognized it would be too difficult to unionize a company.

    The foremost model is the Alliance at I.B.M., a group with several hundred dues-paying members and some 5,000 supporters that has backed several shareholder actions and has often spoken out to the news media on workplace safety issues and the outsourcing of high-tech jobs. The Alliance once mounted a protest that helped persuade I.B.M. to revise a pension overhaul that had hurt many older workers.

    “It’s very difficult to win a union election in the United States, especially at sophisticated companies like I.B.M. and Wal-Mart,” said Lee Conrad, the Alliance’s national coordinator. “But these groups show you can raise issues that help workers.”

New on the Alliance@IBM Site
  • Worldwide Day of Action: June 14, 2011. US IBM workers wear black and blue to call attention to job cuts and declining work conditions. Press Release-Day Of Action (PDF). Download Flyers:
  • Job Cut Reports
    • Comment 6/12/11: IBM celebrates its centennial this week. Let all of us contribute to this celebration by writing reviews in glassdoor.com, commenting on online articles, etc. If many of us speak with one voice and tell their stories this might get some public attention that IBM fears so much. -HillBilly- Alliance reply: Be sure to go the the main page of this web site for news and flyers on the Day of Action. IBM is hoping that the 'positive' image comments in the Press, regarding their 100th, will convince the world to be happy for IBM and celebrate. If you want to adjust that image to reality, we're all for it. Any press articles or internet articles that 'spin' the celebration ALL positive; are your invitation too set the record straight, if they offer a comment section. Just 'keep it real'.
    • Comment 6/12/11: "More than half of present IBMers have less than 5 years of employment in IBM. They get the anniversary book. IBMers RAed after 10-15-20-25-30 years of former employment or retired (some forced retired) don't get one? Did retirees get a book? Now what does this say about how IBM values former employees who significantly helped over many years of loyal, dedicated employment service to get IBM to their century anniversary?" Wow, good point. I had 20 years with IBM and retired. I wasn't even aware of the 100th year anniversary book. You would think they could have sent out a mailing to all retirees and at least offered to let us buy one. I am proud of my contributions to the IBM company. The fact that they didn't even bother to notify me, makes me mad. It tells you a lot about the management there now. -Sammy Sucks-
    • Comment 6/12/11: GFG planning meetings in Somers this week. This can only mean more cuts. -Still Working - Waiting for the next ax-
    • Comment 6/12/11: For those of you that got a book. How did you get it? Internal mail slot, handed out by manager, sent to home mail address? This is my 10 year anniversary with IBM, and I'm still employed, but have yet to see a book. Didn't even know there was one. Not very interested in getting it, but I would like to know how you got it. Maybe it's only for the managers' pets. Just saying... Oh yeah, I'll be wearing black and blue on Tuesday! -anon-
    • Comment 6/12/11: The articles on IBM's 100th anniversary are a bit misleading. It is almost like IBM exclusively supplied the verbiage for the articles. One article says Gerstner changed the old IBM dress code. This is incorrect since casual dress code in IBM started a bit before him. Also, they got a comment from a 23 year old IBM woman who says the reason she is glad to work for IBM is for "the security". This has got to be incorrect or will prove incorrect the closer she gets to her 5 year IBM service anniversary where the RA target gets quite large. Happy Birthday Big Blew. How many more you will have is a point of conjecture as long as RAs continue with the race to labor bottom. -anonymous-
    • Comment 6/13/11: IBM has cancelled all work from home programs in Silicon Valley effective June 2011. All IBM workers, both employee and contract/vendor are now required to come to the office each workday. -Anonymous-
    • Comment 6/13/11: Regarding Silicon Valley W@H programs being cancelled, is this specific to SVL (i.e., SWG division only)? Please elaborate - we have not heard this in other SF Bay Area divisions. -Anonymous2-
    • Comment 6/13/11: All OT for contractors has been cancelled. That's OK. I grabbed as much as i could while the getting was good.... -contractor-
    • Comment 6/13/11: Hello Anonymous, Software Group headquarters had an all managers conference call about 3 weeks ago. They were told to tell employees if they have a cube, they need to be in 5 days a week. Some areas took this seriously and implemented it immediately. Others are telling employees, do what you want. Many affected employees are managers that have been working at home for a long time. So, at my location it's been implemented unevenly. The steam and tension between areas and groups is building. IBM talks about being "green" but they sure aren't practicing it. My view this is yet another attempt to irritate more US employees into quitting. It appears to be succeeding. -Green? Where?-
    • Comment 6/13/11: 300+ cuts coming to the GDFs by end of June. No word on how spread out with sites. Probably a bit, to keep things quiet. -finger_on_the_pulse-
    • Comment 6/14/11: My husband received his book through USPS. He is not "favored". As a matter of fact, he received the book about 14 days after he was told he was being RA'D in September. Guess Big Blew does not want him bad mouthing the company! LOL too late -Anonymous-
    • Comment 6/14/11: Many thanks for those that had the courage and solidarity to wear black and blue today. Those that didn't wear the colors THINK again when you get RAed and what little you wouldn't do to subtlety tell IBM management how you feel. -anonymous-
    • Comment 6/14/11: "300+ cuts coming to the GDFs by end of June" Dubuque will bear less of the cuts: 1) it's a new GDF 2) they resources there cost less to IBM. Also, don't be surprised if some of the cuts are masked as job transfers to the new GDF in Columbia MS from existing, established positions in the other more costlier GDFs. -da_facts-
    • Comment 6/14/11: I got to come in to my office starting next month. I worked at home since joining IBM. Now I have to report to an office an hour away from home. This stinks. Well at least I still haven't been transferred to another office in another city far away so I got to consider myself somewhat fortunate. -balanced-
    • Comment 6/14/11: Hi anon: I received my IBM centennial book yesterday entitled "Making the World Work Better - The Ideas that Shaped A Century and A Company" with forward by Sam. It was delivered to me by the office services team in the office. It comes in a white envelope with my name and org. code on it. Tomorrow is the big day, June 16. Many of us are going to the celebration event hosted by IBM. Think about it. What are the chances we will get to attend the next one? LOL -Jaggua-
    • Comment 6/15/11: I received my centennial book, as well. It's a very sad tale of what IBM was and now what it has become. It was a great American company, and it is now a global corporation with no loyalty to any country and certainly no loyalty to employees. -Anonymous-
    • Comment 6/15/11: Does anyone have the numbers on how many IBMers still work in the U.S. versus the numbers in other countries? I think the US has less than 25 percent worker left but hopefully I'm wrong. -Ouch*it*Hurts-
    • Comment 6/15/11: I worked almost 30 years before getting RAed. I'm a Quarter Century Club member. Isn't that worth IBM giving me the anniversary book? Don't I count? I can't stand now how arbitrary IBM is now to the people that contributed to their 100 year history. -booked-
    • Comment 6/16/11: To those being moved back into offices. From an IBM executive position it makes perfect sense even though office costs are higher than work at home. IBM charges the cost of an office/cubicle to the department. Empty offices get charged to IBM real estate which comes under corporate. This drags down their performance and bonuses. The only way for them to fix it is to fill the empty space with people so they can get the charges moved out of corporate. -anonymous-
    • Comment 6/16/11: to ouch...ibm will not release that number anymore...estimates are...over 120K in india...and somewhere between 90 - 100k in the us...i have never heard how many ibm'ers they have in Russia, china, etc. ibm has abt 427k employees worldwide -answering ouch-
    • Comment 6/16/11: All those co-workers going to the celebrations and singing the praises of IBM. Do you think Sam cares? It is all public relations. THINK of that when you get your RA pack in a few months. -not celebrating-
    • Comment 6/17/11: They laid off the Resource Deployment Managers and they are being replaced with managers in Costa Rica. MY RDM is now going to be in Costa Rica. This is beyond stupid. -anonymous-
    • Comment 6/17/11: Yes, anonymous-6/16/11, SWG executives are fattening their own bonuses by forcing former work-from-home staff to drive long distances to fill empty offices. And remember, those offices were emptied out by RAs -Gorya-
    • Comment 6/18/11: After seeing the title of the centennial book along with Sam's name at the bottom, I tossed the thing into the recycling bin.-Anonymous-
    • Comment 6/18/11: @not celebrating.... Our little celebration is happening next week, catered, speakers, etc...the works...I have yet to find one employee who will actually be attending, unless you're a major suckup or 'because you're expected to'. what a joke... -Skippingout -
    • Comment 6/18/11: Fidelity is staffing up for you guessed it, another round of layoffs. Primarily in the US. This is not a rumor this is confirmed. -Anonymous-
    • Comment 6/20/11: @booked - let me know where I can send you my anniversary book. You probably did not get one because you are near term RA listed. I have no desire to waste my time reading this book. -Content-Not-Impressive-
    • Comment 6/20/11: I know of at least one group in AMS in GBS (I/T support for internal IBM account) that told remaining US employees that they were immediately being placed on the bench and have to find themselves a job on a commercial account. Evidently they don't want any US workers supporting the IBM account. -Anonymous-
  • IBM Global Union Alliance Comments:
    • Comment 6/15/11: Country = Bulgaria; Union Affiliate = PODKREPA; Job Title = na; IBM Division = GDC' Message = I work for IBM, Global Delivery Center in Sofia, Bulgaria. Yesterday the company was full of guards from the security company. When we asked the guys why there are so many of them they confessed that the manager asked the management of the security company to be omnipresent here as a 100-year- celebration was going on at the company and he feared a protest and distribution of protest leaflets from the union at the company. I was really smashed. It all happens in 21st century in EU. No rights to protest, no right to have union activities. What a shame! What a disgrace for IBM! -anon-


News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Wall Street Journal: Insurance For the Sick. By Rachel Louise Ensign. Excerpts: Insurance for individuals with pre-existing conditions, such as cancer, arthritis or diabetes, is about to get cheaper and easier to enroll in.

    Effective July 1, the Department of Health and Human Services is lowering premiums by up to 40% for participants in the federally administered Pre-Existing Condition Insurance Plan in 17 states, including Florida, Arizona and Texas, and the District of Columbia. (To see which states are cutting premiums, go to HealthCare.gov or call (866) 717-5826.)

    Individuals with higher premiums can expect to save the most. For instance, a 65-year-old in Nevada with a $1,000 medical deductible and $250 drug deductible will pay $487 per month, down from $778. That's a yearly savings of nearly $3,500. In Virginia, a 40-year-old with a medical deductible of $2,000 and a drug deductible of $500 will pay a $168 premium, down from $281 -- saving more than $1,350 annually.

  • New York Times op-ed: Medicare Saves Money. By Paul Krugman. Every once in a while a politician comes up with an idea that’s so bad, so wrongheaded, that you’re almost grateful. For really bad ideas can help illustrate the extent to which policy discourse has gone off the rails.

    And so it was with Senator Joseph Lieberman’s proposal, released last week, to raise the age for Medicare eligibility from 65 to 67.

    Like Republicans who want to end Medicare as we know it and replace it with (grossly inadequate) insurance vouchers, Mr. Lieberman describes his proposal as a way to save Medicare. It wouldn’t actually do that. But more to the point, our goal shouldn’t be to “save Medicare,” whatever that means. It should be to ensure that Americans get the health care they need, at a cost the nation can afford.

    And here’s what you need to know: Medicare actually saves money — a lot of money — compared with relying on private insurance companies. And this in turn means that pushing people out of Medicare, in addition to depriving many Americans of needed care, would almost surely end up increasing total health care costs.

    The idea of Medicare as a money-saving program may seem hard to grasp. After all, hasn’t Medicare spending risen dramatically over time? Yes, it has: adjusting for overall inflation, Medicare spending per beneficiary rose more than 400 percent from 1969 to 2009.

    But inflation-adjusted premiums on private health insurance rose more than 700 percent over the same period. So while it’s true that Medicare has done an inadequate job of controlling costs, the private sector has done much worse. And if we deny Medicare to 65- and 66-year-olds, we’ll be forcing them to get private insurance — if they can — that will cost much more than it would have cost to provide the same coverage through Medicare.

  • Wall Street Journal: Study Sees Cuts to Health Plans. By Janet Adamy. Excerpts: A report by McKinsey & Co. has found that 30% of employers are likely to stop offering workers health insurance after the bulk of the Obama administration's health overhaul takes effect in 2014. ...

    Previous research has suggested the number of employers who opt to drop coverage altogether in 2014 would be minimal. But the McKinsey study predicts a more dramatic shift from employer-sponsored health plans once the new marketplace takes effect. Starting in 2014, all but the smallest employers will be required to provide insurance or pay a fine, while most Americans will have to carry coverage or pay a different fine. Lower earners will get subsidies to help them pay for plans. ...

    In surveying 1,300 employers earlier this year, McKinsey found that 30% said they would "definitely or probably" stop offering employer coverage in the years after 2014. That figure increased to more than 50% among employers with a high awareness of the overhaul law. ...

    The nonpartisan Congressional Budget Office, in a March 2010 report, found that by 2019, about six million to seven million people who otherwise would have had access to coverage through their job won't have it owing to the new law. That estimate represents about 4% of the roughly 160 million people projected to have employment-based coverage in 2019.

  • Washington Post: McKinsey refuses White House request for info on study faulting Affordable Care Act. By Greg Sargent. Excerpts: The other day, the consulting company McKinsey released a startling study claiming that 30 percent of employers are planning to stop giving health insurance to their workers as a result of the Affordable Care Act. The study received a good deal of press coverage and was widely bandied about by conservative politicians and media outlets as proof that conservative warnings about the law are coming to pass.

    But as a number of critics were quick to point out, McKinsey’s finding is at odds with many other studies — and the company did not release key portions of the study’s methodology, making it impossible to evaluate the study’s validity.

    There’s now been a new twist in this story.

    I’m told that the White House, as well as top Democrats on key House and Senate committees, have privately contacted McKinsey to ask for details on the study’s methodology. According to an Obama administration official and a source on the House Ways and Means Committee, the company refused. ...

    How did McKinsey conduct their study? An article accompanying the study claimed that 1300 employers of varying sizes, industries and regions had been surveyed. But there’s a good deal more we need to know about how it was conducted in order to verify its reliability. For instance, as Kate Pickert argued persuasively, a detailed breakdown of the sizes, locations and industries included in the survey would help us evaluate whether it’s “representative of American business as a whole.”

    Also: The article about the study says it “educated respondents” about employer-sponsored insurance before asking them whether they would drop it after 2014. But we have no idea what that means or, more broadly, what question wording was employed in this study. Pickert asked McKinsley for more info about the methodology of the study. The company declined to comment. Politico asked McKinsey for the study’s question wording, and was turned down.

  • New York Times op-ed: The Case of the Mystery Study. By Paul Krugman. Excerpts: Update: The plot thickens. Brian Beutler reports: "But multiple sources both within and outside the firm tell TPM the survey was not conducted using McKinsey’s typical, meticulous methodology. Indeed, the article the firm published was not intended to give the subject matter the same authoritative treatment as more thorough studies on the same topic — particularly those conducted by numerous think tanks, and the Congressional Budget Office, which came to the opposite conclusion. And that’s created a clamor within the firm at high levels to set the record straight."

    “This particular survey wasn’t designed in away that would allow it to be peer review published or cited academically,” said one source familiar with the controversy. ..

    Reached for comment today, a McKinsey spokesperson once again declined to release the survey materials, or to comment beyond saying that, for the moment, McKinsey will let the study speak for itself. However, McKinsey notes that the survey is only one indicator of employers’ potential future actions — that the conclusions remain uncertain and employers’ future decisions will ultimately depend on numerous variables. The three authors of the report were not immediately available for comment.

    Another keyed-in source says McKinsey is unlikely to release the survey materials because “it would be damaging to them.”

    Both sources disagree with the results of the survey, which was devised by consultants without particular expertise in this area, not by the firm’s health experts.

  • Talking Points Memo: Controversial McKinsey Health Care Study Creates Major Dissent At Firm. By Brian Beutler. Excerpts: A third source speculates that the firm may have reached its outlying conclusion by basing its questions on the firm's own advice to clients on how best to arbitrage the new reforms. Specifically, under the law, employers could devise their benefits packages in ways that makes them unappealing to lower-income employees, who would then have to enter the exchanges. Though TPM could not confirm this, the conclusion is supported by a disclosure within the McKinsey study itself.

    "Our survey shows significantly more interest in alternatives to ESI [employer sponsored insurance] than other sources do, for several reasons," the report says. "Interest in these alternatives rises with increasing awareness of reform, and our survey educated respondents about its implications for their companies and employers before they were asked about post-2014 strategies. The propensity of employers to make big changes to ESI increases with awareness largely because shifting away will be economically rational not only for many of them but also for their lower-income employees, given the law's incentives. ...

    Republicans, and reform opponents, seized on the report's conclusions to sow further suspicion of the law. That prompted a response directly from Nancy-Ann DeParle, the White House's point person on health care. On the official White House blog, she noted that similar health reforms in Massachusetts led to a growth in employer sponsored insurance, and cited numerous other studies that reached precisely the opposite conclusion. "This one discordant study should be taken with a grain of salt," she wrote.

  • Wikipedia: McKinsey & Company. Excerpt: McKinsey & Company, Inc. is a global management consulting firm that focuses on solving issues of concern to senior management. McKinsey serves as an adviser to many businesses, governments, and institutions. It is recognized as one of the most prestigious firms in the management consulting industry and has been a top employer for new MBA graduates since 1996. ...

    McKinsey has produced more CEOs than any other company and is referred to by Fortune magazine as "the best CEO launch pad". More than 70 past and present CEOs at Fortune 500 companies are former McKinsey employees. Among McKinsey’s most notable alumni are: ... Louis V. Gerstner, Jr., former chairman and CEO of IBM and chairman of The Carlyle Group

  • The Baltimore Sun: Corporations profit from health care waste. Neither Democratic nor Republican proposals address $1 trillion in unnecessary annual spending on health care. By Charlie Cooper. Excerpts: The United States wastes about $3,000 per person annually in health care spending — nearly $1 trillion a year. That's bad enough. Even more disturbing is who gets that trillion. The fact is, we cannot understand politics in the U.S. by watching mainstream media or following the arguments of Democrats and Republicans. That's because neither side is honestly addressing the main problem.

    In the U. S., according to Rick Kronick, a political scientist at the University of California at San Diego, "health care costs [are] going up at 2.4 percent a year faster than GDP." We spent $2.5 trillion on health insurance and health care in 2009, or $8,086 per person, fully 17.6 percent of gross domestic product. In the next highest-spending nation, annual per-capital costs run about $5,000. Our health spending is remarkably above average and yet our health outcomes are below average for developed nations.

    Drs. Steffie Woolhandler and David Himmelstein estimated that in 1999, Americans spent $1,059 per capita on administrative costs compared with only $307 spent in Canada — about $225 billion per year. The corporate geese are going to spare no effort to hold on to this golden egg.

    Other components of waste in the U.S. health system include relatively high compensation for doctors; high prices for health services and pharmaceuticals due to the lack of a system that can negotiate fair prices; overuse of tests and other procedures; lack of access to primary care; and self-rationing, whereby people wait until their conditions are more advanced and costly to treat.

    All this is driven by corporate profits. Doctors are increasingly employed by for-profit hospitals and practices, labs benefit from over-testing, and drug companies and device makers profit from lack of preventive services and overuse of medications and procedures.

    The health care industry spends over a half billion dollars per year on lobbying. The corporate stranglehold on both parties that operates through the campaign financing system, the lobbying industry and corporate control of the media keep the real story in the background while politicians rant about death panels and Grandma eating dog food.

  • The Center for Media and Democracy's PR Watch: Health Insurers Pump Your Premiums Into a Financial Black Hole. By Wendell Potter (former insurance company executive). Excerpts: Ever wonder what happens to the premiums you pay for your health insurance? You might be surprised to learn that more and more of the dollars you pay for coverage are being sucked into a kind of black hole. It doesn't really disappear, of course. It just doesn't do you a bit of good -- unless, of course, you believe it is to your advantage that it ultimately winds up in the bank accounts of a few investors and insurance company executives, including those who have to power to deny coverage for potentially life-saving care.

    If you've been paying attention to what health insurance company CEOs have been saying to Wall Street over the past several months, you will know that they are spending more and more of their firms' cash -- which comes from you, of course -- to "repurchase" their firms' stock. And Wall Street absolutely loves that.

    I once handled financial communications for CIGNA. So I knew that whenever the company could tell its shareholders that the amount of money it earned on a per share basis during the preceding three months was more than expected, those shareholders and other investors would likely show their appreciation by offering to buy even more shares of the company's stock. When more investors are buying stock in your company than are selling it, the stock price will go up. And when that happens, everybody who owns stock or can cash in a bunch of stock options -- including you, if you are a senior manager or a health plan medical director -- will suddenly be richer.

    Being very familiar with how and why this happens, your company's top executives will do whatever they can make sure the earnings per share (EPS) exceeds Wall Street's expectations. One of the ways they do this is by joining the investors in buying shares of the company's stock. They are actually repurchasing or buying back those shares because it was the company that initially put the shares on the market in the first place.

News and Opinion Concerning the "War on the Middle Class"
Minimize "It is a restatement of laissez-faire-let things take their natural course without government interference. If people manage to become prosperous, good. If they starve, or have no place to live, or no money to pay medical bills, they have only themselves to blame; it is not the responsibility of society. We mustn't make people dependent on government- it is bad for them, the argument goes. Better hunger than dependency, better sickness than dependency."

"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.

  • New York Times: Obama Seeks to Win Back Wall St. Cash. By Nicholas Confessore. Excerpts: A few weeks before announcing his re-election campaign, President Obama convened two dozen Wall Street executives, many of them longtime donors, in the White House’s Blue Room. The guests were asked for their thoughts on how to speed the economic recovery, then the president opened the floor for over an hour on hot issues like hedge fund regulation and the deficit. Mr. Obama, who enraged many financial industry executives a year and a half ago by labeling them “fat cats” and criticizing their bonuses, followed up the meeting with phone calls to those who could not attend.

    The event, organized by the Democratic National Committee, kicked off an aggressive push by Mr. Obama to win back the allegiance of one of his most vital sources of campaign cash — in part by trying to convince Wall Street that his policies, far from undercutting the investor class, have helped bring banks and financial markets back to health.

  • truthOut: America Needs Taxes. By Carl Gibson. Excerpts: What do USAA, CVS Caremark, Costco, UnitedHealth Group and Berkshire Hathaway all have in common? They're all multi-billion dollar American corporations that pay their fair share of taxes and don't hide their money offshore. In fact, if you combined the federal tax receipts of just these five corporations, that accounts for more than $7 billion. Theoretically, that money paid for 175,000 teachers at $40,000 a year, or for the guaranteed healthcare for sick and injured 9/11 first responders outlined in the Zadroga bill.

    Oliver Wendell Holmes Jr. said "Taxes are the price we pay for civilized society." Taxes have paid for everything from the interstate system to national parks, the moon landing and the liberation of France. In fact, Eisenhower, a Republican, presided over an era where corporate taxes accounted for a quarter of all federal tax receipts, and the richest Americans still enjoyed their wealth while paying a 90% top tax rate. Americans were never more prosperous as a whole than during that era. Now, loopholes and lobbying have lowered the top tax rate to its lowest point since the Truman era, and corporate tax dollars only count for 5-7% of all federal tax receipts.

    After the Great Depression, our leaders had a vision for America. They fought to see ours was a country where everyone was afforded the opportunity for free basic education, an affordable home, a steady income and free healthcare for the poor and the elderly. FDR took to the airwaves in his last months of life to push for a second bill of rights that guaranteed all of these things and more. MLK called for an economic bill of rights to be drafted in 1967 that guaranteed Americans a fair standard of living.

    Instead, the American people who pay taxes and abide by the laws put before us are seeing these essential pillars of American democratic society crumble to pieces. The same corporations who pay for the campaigns of our elected officials and own the mainstream media are instead allowed the opportunity to not only avoid paying their fair share to participate in society, but also to spend millions lobbying our leaders to continue avoiding their obligation. ...

    If an American business wants to employ our workers, use our infrastructure, and depend on us to make them prosperous, they should be required to pay our taxes. Our leaders must reform our tax laws to reinforce that standard. Let's hold government and businesses accountable to the American people -- the real shareholders.

  • truthOut: Been to a Nursing Home Lately? By Michael I. Niman. Excerpts: With Republicans in the Senate and Congress almost unanimous about wanting to terminate Medicare and Medicaid, I think it’s time we all pay a visit to a nursing home and see the greedy senior citizens whose stubborn longevity threatens the very idea of a luxury tax break on yachts and second homes.

    I’m serious. This is what it’s come down to. During my lifetime, the richest five percent of the American population saw their tax rates drop by almost two thirds while their income outpaced the rest of the nation by similar numbers. Despite the revenue shortfalls caused by these cuts, the Republican Bush administration started two wars, one of which is now the longest war in US history, saddling us with what is ballooning into a multi-trillion dollar war debt. But unlike their predecessors, they never instituted a war tax to cover these costs. The result was predictable to anyone who ever balanced a checkbook. The math is simple. Wild military spending coupled with irresponsible tax giveaways to the rich equals structural deficits as sure as the sun will rise.

    Add to this the mayhem that resulted from the deregulation of the financial industry, where banks were allowed to make insanely bad loans, then bundle them together, wrap them in shiny cellophane, and dump them on an unsuspecting global securities market, and you have the financial collapse of 2008. Not allowing a good crisis to go to waste, the same politicians whose policies created this perfect storm of a fiscal collapse and a bankrupt government have used it to push “austerity,” not in the way of a responsible tax plan or the curtailment of military spending and corporate welfare but in the form of pushing the agenda they’ve been pushing for more than four decades—the wholesale looting of our national wealth through the annihilation of the public sector.

    The logic, sold to us daily by the most sophisticated propaganda system the world has ever known, goes like this: Don’t blame the greedy rich, who psychotically want to reap unimaginable benefits from society while essentially putting nothing back into the pot. And don’t blame the hawks in government or the war profiteers who swell their campaign coffers and fund their propaganda with our tax dollars. And certainly don’t blame the multinational companies that often own both our energy and defense sectors, and our media. No. They have nothing to do with our current fiscal problems. Instead blame old people, greedily clinging to life, taking the Jell-O right out of our mouths.

    The deal we all signed onto went like this: We pay Social Security and Medicaid taxes all of our productive lives. In exchange, we gain the peace of mind that when we eventually grow old and fall ill, we will have some baseline of medical support. We pay when we’re strong and we collect when we’re weak. In the interim, the knowledge that we can grow old with some modicum of dignity and a decent chance of survival cuts down on our stress for the five decades or so between youth and old age. It’s not a bad deal, which is why the American people overwhelmingly support these programs.

    The new math, arriving in the form of what’s become known as the Ryan Budget, or the Republican Kill Medicare Budget, breaks this promise of security to the American people. Put simply, under the GOP plan, we work for decades paying into a system that is supposed to give us some sense of social security, hence the name, only to be told, perhaps in 2012, that we’re fucked. Those years or decades of payments are being looted to underwrite the continuation of wars and tax cuts for the rich. What we get instead is a coupon which we can use toward the cost of a private insurance policy, if we can somehow afford one, and if one is miraculously available. Picture this conversation: “My mother (or uncle, or brother, or fill-in-the-blank) has Alzheimer’s (or MS, or ALS, or terminal cancer, or had a stroke, or an aneurism, or fill-in-the-blank) and needs 24-hour medical care. How much will it cost to insure them? We have a $1,500-per-month government coupon. Hello, are you still there?”

If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

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