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Highlights—April 27, 2013

  • CRN: IBM's Adkins Reassigned; Rometty Tells Employees They Need To 'Step Up'. By Rick Whiting. Excerpts: IBM President and CEO Ginni Rometty also reportedly addressed IBM employees in a video that urges them to "step up" and move more quickly to new computing models to stay competitive.

    The latest developments apparently are the fallout from last week's poor first-quarter financial results, including a 17 percent plunge in Systems & Technology sales.

    While reporting the quarterly results to financial analysts last week, IBM CFO Mark Loughridge indicated that employee layoffs are likely this quarter and the company is considering changes -- and possible divestitures -- of its underperforming businesses including its System x, Power system and storage product lines. At the time the CFO specifically blamed much of the quarter's poor results on several big contracts for mainframes and software that didn't close before the end of the quarter. ...

    Rometty generally provides employees with a brief video commentary after each quarterly earnings. But this week the usual pep talk included comments that employees need to work harder, according to a story in Thursday's Wall Street Journal, which said it had seen the video.

    The story, which described Rometty's comments as "unusually blunt," said the CEO told employees they need to speed up the company's shift to new computing models to get back on track.

  • CRN: Sources: IBM-Lenovo Server Talks 'Moving Quickly'. By Kevin McLaughlin. Excerpts: IBM's negotiations to sell its x86 server business to Lenovo are "moving quickly" and official word that the deal is closed could come at any time, a source familiar with IBM's plans told CRN Thursday. IBM is reportedly seeking $5 billion to $6 billion for its x86 server business, an industry source who has been tracking the deal told CRN last week. Lenovo confirmed last week that it is in preliminary negotiations to buy a third-party server business but stopped short of identifying the technology vendor. One source said Lenovo is acquiring IBM's low-end System x rack mount and tower systems but that IBM is keeping its PureFlex and BladeCenter servers. ...

    IBM employees, speaking on condition of anonymity, said big organizational changes are afoot that impact the full hardware portfolio. At least two IBM labs that support the full range of x86 servers have been notified that they will soon be part of Lenovo, sources said.

    This week, support teams at IBM's "SuperLab" in Research Triangle Park, N.C., which develop server firmware and other utilities for IBM's x86 and other server lines, were informed that they'll be transferring to Lenovo, sources with knowledge of the matter told CRN.

    Last week, sources told CRN that staff in IBM's product engineering (PE) lab at Research Triangle Park, which supports all of the vendor's server lines, had been informed that they'll be moving to Lenovo. ...

    IBM, which last week reported first-quarter earnings that disappointed Wall Street, has already begun shaking things up in its Systems and Technology Group by instituting a hiring freeze, sources said.

  • Wall Street Journal Digital, courtesy of YouTube: IBM's Chief to Employees: Think Fast, Move Faster (video, 4 minutes). IBM CEO Virginia Rometty delivered a rare companywide reprimand telling employees the company needs to move faster and respond more quickly to customers. WSJ's Spencer Ante reports.
  • Barrons: IBM "Looks Very Dangerous". The tech giant spurs concern after announcing its first quarterly-earnings shortfall since 2005. By Johanna Bennett. Excerpts: "It looks very dangerous. I wouldn't touch it [the stock] here," says Barron's Roundtable member Fred Hickey, editor of the High Tech Strategist newsletter.

    Investors are right to be worried. IBM's top line has stopped growing, a hard-to-fix problem given the economic headwinds facing big companies that depend on corporate technology spending. And IBM may struggle to deliver the double-digit profit growth investors crave.

    "The stress in their financial model is coming to light," says Brian Marshall, an analyst with ISI Group who rates the stock at Cautious. "They have done a phenomenal job over the last ten years expanding their profitability. But IBM has over optimized the operations and we are now seeing the stress fractures in the financial model. People say there are three truisms – you can count on death, taxes and double-digit earnings from IBM. That isn't the case anymore."

  • Yahoo! IBM Employee Issues message board: "Re: IBM 'Looks Very Dangerous'" by Paul Sutera. Full excerpt: It's an insane model for a world economy. You must destroy as many jobs as you can to keep increasing profits. What's wrong with making 3 billion every quarter? No, it can NEVER be enough. We must keep the firing going! Guess what Sam, Ginny, and all your ilk? It doesn't work, you won't thrive if we don't thrive. We're all connected.
  • Yahoo! IBM Employee Issues message board: "Re: IBM 'Looks Very Dangerous'" by Bob Sutton. Full excerpt: The analysis left out one of the biggest contributors to IBM profitability and that is cheap labor arbitrage in both the US and EU. Since US headcount is down from over 250k to now just 90k at some point you run out of high cost labor. If you combine that with their liquidation of the low margin business at some point you run out of both. Are they there yet? They can run the US with less than 90k headcount and whatever they have left in EU but not by much and they are running out of low margin business and continued buyback impact.

    If IBM does not get some acquisitions to boast revenue its days of double digit profit growth are numbered; its track record to date is literally the liquidation of the IBM brand with financial manipulation much like a LBO transaction

  • Reuters, courtesy of Yahoo! Finance: IBM CEO Rometty urges employees to act faster: WSJ. Excerpts: IBM Corp's Chief Executive Virginia Rometty told employees the company had become too sluggish and unresponsive, after it posted weak first-quarter results, the Wall Street Journal reported on Wednesday, citing IBM's internal video message addressed to its employees. ...

    Rometty set a new rule. If a client has a request or question, IBM must respond within 24 hours, the newspaper reported she said in that call. She addressed the call to over 434,000 employees worldwide. ...

    IBM blamed a poor performance by its sales force for some of the shortfall for the poor quarterly results. But analysts said it was not just one quarter - the company's sales have been weakening consistently, dragging down results with or without the changes in the yen. ...

    Rometty said IBM needs to speed its shift to new computing models to get back on track, the Journal reported citing the video.

    Selected reader comments follow:

    • Employee morale is the lowest in recent years in the silicon valley. After all the cost cutting, there is not much they can cut any more. Employees are leaving for better pay and benefits in the silicon valley. Weekly going away lunch and no new hiring in US. Plus, no top university students is coming to IBM because other companies are offering better compensation. The target for $20 for 2015 is not achievable without IBM put more investment in human capital.
    • I love that when the company does well, the CEO takes credit (along with a mammoth bonus) but when the company does poorly, everybody else is to blame.
    • If IBM does not make money then it is employees fault. If IBM makes money then the management takes credit and bonus!!!! This is called US crony capitalism and such form of capitalism can not work for a long time...
    • Unfortunately, I work there. They pay well below the industry average, nobody gets any raises (including cost of living increases), and no matter how bad the company is doing, Rometty still gets a bonus. Does that sound like incentive for its employees to produce? More like incentive for employees to leave, which I will do asap! Go ahead Ginny, move more of the business to China and India. Pay those people squat and see how much "better" your company is. Perish the thought of rewarding your home grown engineers FIRST in order to reap rewards later. But that doesn't meet the American business model, which is #$%$-backwards with shareholders coming first.
    • To all IBM employees on the slave ships: Good news: Extra gruel today. Bad news: Ginny wants to have a boat race - ROW FASTER!!
    • in 1990 IBM had about 400K total employees world wide. About 250K where in USA and 150K overseas. Today IBM has less than 100K US employees while 300K+ overseas. In short IBM laid off and eliminated more than 150K jobs in USA but complains that US has shortage of engineers and programmers!!!
    • Why should this be surprising? For years, IBM has been firing highly-skilled, highly-motivated employees (mostly in the U.S.) and replacing them with employees who are much less skilled and much less motivated (mostly in India).
  • Yahoo! IBM Employee Issues message board: "IBM CEO Rometty urges employees to act faster: WSJ" by Paul Sutera. Full excerpt: It's laughable that a falloff in revenues equivalent to 90 million dollars is probably the salary plus options of Ginny and maybe 2 other VPs added together. To say nothing of all the other executive stock options of VPs and retired executives. We'll be laying off thousands for an amount of money equal to the salary+options of a handful of executives at IBM.
  • Yahoo! IBM Employee Issues message board: "Re: IBM CEO Rometty urges employees to act faster: WSJ" by "older_bassman". Full excerpt: Just shows how out of touch Ginni is. The issue is the same as IBM had in the early 90's. The ranks of middle, upper and executive management has become so bloated that employees are hamstrung on getting their jobs done. There were more levels on management when I retired in 2010 that I had when Gerstner was hired. Cut the levels back down to 5 or 6 from worker to CEO and she will find everything starts to move faster.

    Now the question why aren't more folks joining the union to stop this type of blame game by having well defined work rules?

  • Yahoo! IBM Employee Issues message board: "Re: IBM CEO Rometty urges employees to act faster: WSJ" by Paul Sutera. Full excerpt: I'm hearing about some 2nd lines being in the cross hairs. Or given opportunities to "temporarily" relocate to places like South Africa. You have to look at the levels of middle-management - but I know these people are busy - navigating the endless bureaucratic processes that are now a part of IBM. We have a tool that tracks sales opportunities. We need a whole person just to maintain the tool. Gerstner stripped out whole organizations - those empty parking lots are great for taking walks, listening to birdsong, etc. So temporarily after Gerstner's axe fell on the company in the '90s, we had fewer middle-level managers. But I'm pretty sure these middle-level managers are very busy... me, I'm a lowly Software Engineer that shares an office.
  • Yahoo! IBM Employee Issues message board: "Re: IBM CEO Rometty urges employees to act faster: WSJ" by "metoolikeyou". Full excerpt: In the 80's, the head of the small division I worked for had only 2 VPs and 3 directors reporting to him. In early 2000, the division head had 5 VPs and several directors reporting to him. The number of employees remained about the same but the number of executives had more than doubled. In the 80's, each division had an IBM vice president in charge, and several division VPs reported to him. Today, we have senior VP, VP, General Managers. We even have VPs reporting to VPs/GMs, who report to yet another level of VPs/GMs. Some VPs have only a few employees reporting to him/her. The number of low level employees has decreased so much already in the US. I am totally confused.
  • Yahoo! IBM Employee Issues message board: "Re: IBM CEO Rometty urges employees to act faster: WSJ" by Lee Conrad, President, Alliance@IBM. Full excerpt: According to my sources there are 3,700 executive level employees in the US.
  • Yahoo! IBM Employee Issues message board: "Re: IBM CEO Rometty urges employees to act faster: WSJ" by "dogbreath127k". Full excerpt: I bet this would not have been a problem if IBM did not decimate the sales and marketing teams directly and indirectly. Their short term plans are coming back to bite them right in the butt.
  • Yahoo! IBM Employee Issues message board: "Re: Two PBC 3s - Retirement Eligible - 30+ Years with IBM - Second Choicer" by "dotsymccloskey". Full excerpt: I suggest that anyone with 30+ years of service and gets the minimized separation package to get a lawyer. The lawyer will know what to do. All I wanted was the separation package (26 weeks pay). If anyone wants details on my story they can feel free to write me at dotsymccloskey@...

    My lawyer wrote 1 letter to IBM and there was no charge. I think the important thing was that IBM knew I had a hired a lawyer. When I received my separation check from IBM it was for 26 weeks pay. There was no discussion and no documentation from IBM stating the change. I simply received the check. I was happy to leave IBM with any separation package. Dotsy.

  • Yahoo! IBM Employee Issues message board: "The Resource Actions have started." by "gallantgj". Full excerpt: We just were told that two LST (Long Term Supplementals) are done in the next two weeks. Pretty sure that low level management had no choice. Probably just the start of more in STG.
  • Yahoo! IBM Employee Issues message board: "Re: The Resource Actions have started." by Lee Conrad, President, Alliance@IBM. Full excerpt: CTG contractors in Burlington have also been terminated.
  • Yahoo! IBM Employee Issues message board: "IBM Leadership at the top?" by "trexibmer". Full excerpt: When IBM stock hit all time high where was Ginni's praise for the employees?

    When IBM management blows the 1Q2013 she then beats up on the powerless employee. 24 hour turnaround time with Global time differences? Good luck when you have to engage all the project leads, FLEs, FLMs, perhaps middle management (2nd line, Director) PEs, SDMs, DPEs and change management channels to execute for the client.

    Abysmal leadership by this CEO: she was riding the wave and it is crashed onshore now. LIFE IS NOT GOOD at IBM. Hasn't been for a long, long time.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: THE IBM FIRINGS and attrition will continue until morale and output improve" by "bk2006pc". Full excerpt: Two simple questions: 1. Why any IBM employee should call him/herself IBMer? 2. Why any IBM Employee should put more than 40Hrs/week (i.e. unpaid over time?) I did that mistakes but IBM forced me out at age 57. IBM CEO did not considered my thousands of hours overtime and my dedicated "IBM first" service records!! My two cents to current IBM employees - Work hard for 40 hours/week and go home and spend time with your family or friends. Do not worry about IBM once you leave your office. Live within your means, top off your 401K and IRA. Have a plan B ready and second source of Income. IBM is not father's company.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: THE IBM FIRINGS and attrition will continue until morale and output improve" by "ibmretiree2006". Full excerpt: It is absolutely hilarious that Ginnie talks about not moving fast enough. It is the levels upon levels of approvals needed that bring deals to a grinding halt. And the grunts who put the contracts together are shorthanded because of all the RAs! Nice talk Ginnie but how about some actual action. Flogging a reduced set of employees will not get it done. Perhaps an RA for management would be a better move!
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: THE IBM FIRINGS and attrition will continue until morale and output improve" by "hdman501". Full excerpt: 'd be inclined to get on board with this, but since they keep stealing my pension and offer crap for medical, its taken the wind out of my sails.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: THE IBM FIRINGS and attrition will continue until morale and output improve" by "echohotelwhiskey". Full excerpt: I mentioned to several of my friends still at IBM that I wished they could tell her they will work as fast as IBM is doing in getting their matching 401(k) money to them.
  • I, Cringely: The Decline & Fall of IBM. By Bob Cringely. Excerpts: That’s a pretty dramatic headline, don’t you think? It’s also the title of an eBook about IBM I will put on sale here about six weeks from now. IBM is in trouble, you see, serious trouble caused primarily by executive corrosion from within. Not only did Big Blue miss its earnings target last quarter for the first time in years, if the rumors I am hearing are correct the company’s primary response will be to screw U.S. employees even more than they have already.

    The rumor I’ve heard is that IBM, which not long ago changed its 401K contribution policy to push what had been a biweekly payment into an annual one right at the end of the year, may have decided this year (and in the future?) not to make any 401K contribution at all. Since IBM’s U.S. employees can divert up to eight percent of their gross compensation into the 401K and IBM has traditionally made a comparable matching payment, this possible change in compensation policy could save the company close to $1 billion.

    In one sense one might ask what’s wrong with that? Companies have to do what they have to do in this economy and workers sometimes suffer. But for IBM it indicates the company is getting near the bottom of its bag of tricks for maintaining earnings growth toward that ambitious 2015 goal of $20 per share. Management seem to be down to three ideas to improve the numbers: 1) savage the 401K plan; 2) sell the low-end server business to Lenovo for a reported $2.5 billion, and; 3) expect a miracle called PureSystems.

    Change is inevitable in any business, but at IBM the policies and policy changes are particularly opaque. They are handed down from on-high by a management generally out of touch with reality, yet simultaneously determined to share as little information as possible with employees. At least that’s the way it appears to me. ...

    Internally IBM’s culture is a lot like USA society in the 1950′s and early 1960′s. There was an implicit trust in the government back then and we accepted the answers we got from Washington. Most of the IBM community has been conditioned not to think and to accept whatever they are told by management. If the server business is sold most will naively accept whatever explanation is offered. They won’t know this is just one of many businesses that could be sold for the corporation to make its numbers.

    Selected reader comments follow:

    • I’m not sure where you got that 8% number Bob– I’ve been contributing north of 10% for years. Other than that I think you’re spot on. There’s a sense of malaise and unease around IBM that is different than the “management is out to get me” paranoia that’s been around now since Palmisano initiated this nonsense of whacking people simply to satisfy that Jack Welch ‘relative contribution’ monster. When the 2015 plan came out a lot of wags, me included, said the only way to satisfy it was to whack every IBM US employee. I’m retiring at year end (I’m one of those who took the Transition to Retirement bait) but I don’t see any way there’s not a flood following me out the door in ’14, and not a voluntary flood either.
    • The match program is for 6% match maximum (1% auto contribution, 5% match if the employee puts in at least 5%), but I honestly don’t think there’s a limit on how much you can contribute to your 401K as long as you’re within federal limits. I don’t know where the 8% number is coming from, Mr. Cringely.

      Otherwise, this post is very accurate. Especially this quotation: “[Policy changes] are handed down from on-high by a management generally out of touch with reality, yet simultaneously determined to share as little information as possible with employees.” It’s this approach that is a HUGE problem and it’s destroying US morale.

      I understand that business changes are inevitable; you have to grow revenue and continuously balance the books, but why can’t you be at least partially transparent about what you’re doing and why? Be up front that you’re cutting the US workforce to drive a larger business strategy. Be honest that you don’t even know how to solve the problem of growing revenue and you’re going to try a lot of different approaches and hope one sticks.

      At the same time, IBM seems to have this ridiculous expectation that employees should be loyal. They are fairly disgruntled when critical talent (like myself) leaves for a better opportunity. Oh, sorry, were you being loyal to me when you, without any notice, walked a team of contractors out the door without transitioning their projects, so now the regular employees are picking up the pieces because you didn’t think you needed a plan? Were you being loyal to me when you cut the 401K match program and vehemently denied layoffs are coming? Were you being loyal to me when you assured me that you’re not sending US jobs to Asia and Africa, but did it again and again and again?

      There is also a lot of mindset that “this is how it is everywhere. This is the best company in the world to work for so just suck it up.” Yeah, that’s why I found a great job with a company that is focused on investing in its US workforce to grow US revenue.

    • I love hearing from you guys who have left IBM and have found better jobs elsewhere. My level of misery at IBM after 26 years has reached an all time high. The morale could not be worse in my area. I don’t know a single colleague who is happy.

      I am really sick of the off-shoring and constant threat to my employment and wondering if the next layoff will finally include me. I am sick of working with incompetent resources overseas and the inefficiency and frustration of it all.

      I am sick of arrogant upper management and their stupid ideas which they force down our throats to make their bonuses (e.g., GenO, Liquid Portal, Career Point, etc.). I’m sick of the fact that there is never a kind word said to any of us anymore – forget awards, forget bonuses, forget pay raises. We don’t even get a verbal “good job”. IBM clearly wants us gone. Come on, IBM, pull the trigger. I’m tired of it all.

    • Each quarter, for many years, we sellers read the IBM executives blog stating about how well we have done and how much there is to do for the next quarter. Doesn’t management realize that, after a while, IBMers in STG stop reading these blogs because they are written to the same formula quarter after quarter?

      How does IBM expect sales to increase as they fire their sellers and support staff? Oh, yeah, social media, including Twitter, will be the next wave of selling eliminating face to face customer and seller contact. What IBM management does not realize is that to sell high value (i.e., profit) hardware customers still want to look a sales person in the eye to confirm trust and competency.

      Why did IBM miss its numbers? Because social media did not deliver on its hype to be the new wave of selling replacing those previously fired sellers.

    • Can IBM’s second quarter 2013 earnings be good? I would think not since employees are now spending time trying to figure out whether they are going to be fired. Since IBM management is smart enough to understand this impact on employee productivity they will probably fire more than normal in any quarter to try to right the ship quickly.
    • I’ve worked for IBM for … well, forever (a little over 30 years). I’m in STG (server product development). For a number of years now, it’s felt like we’re working for a bankrupt company. You want to be good stewards of the “stockholder’s company”, but it’s been carried to an extreme where it significantly impacts morale and our ability to get our jobs done.
    • You mean like not plowing when it snows, have employees vacuum their own cubicles, and removing cups from the water fountain to pinch pennies?
    • Gotta love those IBM commercials with the “I’m an IBMer” catchall at the end. Question to the IBMer in the commercial: OK, your an IBMer, but for how much longer? IBM treats employees as widgets. Executives (or IBM Director and above) are the only entitled ones that IBM consider human beings.
    • IBM used to talk about it’s people being its greatest asset. Then the yearly employee survey disappeared. Then everything down to pencil erasers needed business justification and 3 levels of approval before final SVP approval. Then, the “thank you” gift program where peers can send small gifts to others for their achievements only had napkins with the IBM logo on them (sarcastic but not too far from the truth), which ultimately became and eHallmark card type of recognition program. Then the internal IT helpdesk disappeared and what remains is that after a few days tickets automatically close because “multiple attempts to contact you were attempted with no response”. Then, during yearly reviews you are reminded you are getting a low rating because of what happened 2-years ago by a set of first line managers that are told what to say by their second line and HR. And if you pushed back on your manager, they had the ability to rewrite the review to make some “clarifications”. One would think all of the above is a little stretching; alas it is FACTUAL.

      With all of the great things that IBM had at its disposal, it has created generations of IBM’ers that for the most part are in survival mode now. While there are many individual managers who excel and truly care of customers, shareholders and employees…they are dwarfed by the majority of folks who talk-the-talk and do not walk-the-walk. IBM leadership as a whole continues to fail in small ways every year and maybe…just maybe…the cracks are beginning to show.

      Note to Ginny…to what end is simply achieving the EPS numbers when clients and employees are treated the way they are? IT is a complex business, no doubt. However, when a company as old as IBM cannot make it in the top 100 of all respected companies in the world, and IBM claims to be a global company, all that experience and chatter just seems to be superficial and stems from arrogance; and others are beginning to take notice.

    • In 2007, IBM made about 7500 people from the IT world, take a 15% pay cut in lieu of overtime. This happened after the courts in California, made them pay 56 million to the workers that were forced to work, without any compensation for the extra hours worked. Based on rough calculations, that 15% pay cut translated into about 70 million dollars in savings for IBM, a year. They did pay some overtime, which I believe was charged to the customer. But then restrictions were imposed on paying the overtime. There are currently, a lot of IBMers that are living with that 15% pay cut, forced on them by the IBM management.

      That very year, LEAN or Six Sigma methodology was launched and people were laid off left and right. Work did not get done and contractors were hired to compensate for the loss of trained manpower. Many of the ex-IBMers were brought back as contractors. All these gimmicks, to only trick the stockholders and Wall Street.

      Sam Palmisano took 170 million dollars as his Golden Parachute payment! As it is, he made about 35 million dollars a year in salary and bonuses. The general worker in the IT support wing, gets little or no raise at all. I know of people who have gone without any raises for over 6 years!!! With the 401K payments pushed to the end of the year, it means less money in the pockets, month to month anyway. And if any worker is laid off before December 31st, IBM stands to ‘save’ all that money, to pay its executives!! How long can this go on?

    • Cringley, you obviously have many credible sources, and yes, IBM is in a state of decline.

      North American workers are treated badly. The focus is on outsourcing to folks in India who probably make less than McDonald’s employees. How can IBM in conscience outsource marketing and social media to India when those jobs clearly involve English Language skills that people on another continent don’t possess.

      Meanwhile Gini Romney gets a bonus of 40 million and IBM employees will get lay-off slips. It’s a very sad decline, but one that is inevitable if the company doesn’t start treating their employees better, and become INNOVATIVE again. At this point, IBM employees should be job hunting. The company has NO loyalty to them.

    • Exactly what I did after 2+ decades of watching the madness and reading very legible hand writing on the wall, Therefore I decided to resource-action (fire) IBM after finding a much better job, one where the company actually cares about the employees (appreciation days, picnics, gift-card giveaways, focus groups on how to make the place better.) At first I was shocked but then realized I had been at IBM way too long and had basically forgotten what a healthy company was like. We also get a 2-for-1 match on our 401K distributed into each paycheck, not held hostage until the end of the year in some slimy bait-n-switch move, probably dreamed up by ole Randy-Mac himself.

      The company is a shell of it’s former self, driven by executive greed and the maniacal paradigm of ‘maximize shareholder value’ at the expense of employees and clients, while at the same time benefiting mostly executives. But worse these same executives have, as Bob states, corroded from the inside due to being completely out of touch with the realities of the business. Most of them are not technology savvy, they are finance beans at best. Not a good mixture for innovating a computer company onto the next big technology wave.

      If you can, get out as fast as possible. I can assure you the world outside those blue walls is much more appealing on so very many levels. I was pleasantly surprised and have not looked back, other than to read some of my former co-workers posts and realize that it’s only getting worse.

    • Got out two years ago myself; there is really no other option. Forget the Quixiotic IBM Alliance/union effort: IBM has kennels of lawyers, endless piles of cash, and a vast pool of foreign resources they are all too willing to use. Fighting to bring a union into a work environment in which management is dedicated only to “shareholder value” is hopeless, and a waste of your life. If you are talented, there are plenty of other good companies out there; why give your services to a greedy, incompetent company?

      Everything Bob and others detail here is accurate. For the vast majority of IBMers, life at IBM has become career suicide and financially unsustainable: they have gutted training and benefits; pay increases are a thing of the past (I made 5% more than my starting salary in 10 years, despite growing my skills and responsibility); outsourcing and layoffs have destroyed morale. No one is happy. Almost everyone on my project was actively seeking new jobs.

      The main thing to remember is that they have been jacking up stock price through cost cutting and acquisitions, not through innovation or growth (unless you call such financial tactics innovation) and have no intention of changing course. With the executive compensation and incentives so heavily weighted by stock value, the company has simply become a oligarchy with a very short vision of the future. When things really get bad, they will cash in and move out, leaving the remaining employees and shareholders with crumbs.

  • Yahoo! IBM Employee Issues message board: "Preemptive Departure?" by "grifster97". Full excerpt: I'm thinking about leaving IBM but before making such an important decision, would appreciate the thoughts of those who have done this or those who maybe are also considering it right now.

    In a nutshell, I'm in my late 40's now with 15 years at IBM. Always a 2+ rating but especially in recent years, never quite feel safe here. Like a lot of us, I've known several older more experienced IBMers throughout my career who have been blindsided with layoffs and I wouldn't wish that on anyone.

    I have good experience & skills and feel like I could find a comparable position at another company. I understand that being the new guy someplace also has its risks so I'm unsure what to do.

    Outside of compensation, vacation, benefits, etc., what other things do you think I should consider before I jump? Retirement, 401k, and anything else you think is important. Thanks!

  • Yahoo! IBM Employee Issues message board: "Re: Preemptive Departure?" by Paul Sutera. Full excerpt: I would say that layoffs are coming within 30 days. You might get a small severance or possibly 6 months pay. You also might get a year of extra medical. So you can use your time while employed to look for another job. If you get one, make the leap. If you don't keep looking and if you lose your job at IBM, you will get 30 days still inside the company, plus some severance, given your years of service. And IBM pays into Unemployment insurance so you would get that too if you got caught up in a "resource action". Given that the mass firing has been promised for this quarter, if you get "selected" you won't have to wait too long, and you can make the leap with a better cushion.
  • Yahoo! IBM Employee Issues message board: "Re: Preemptive Departure?" by "maxxcurrey". Full excerpt: I left a couple years ago with 13+ years and it was the best decision I could have made.

    Do not get caught up with the supposed benefits and your age, although both have some effect.

    Basically, I went to a small company, the vacation is more, the benefits are better, no BS PBC garbage, real work-life balance in that when one is on vacation/weekend it is understood that is YOUR time. The culture, rather than mouthing performance encourages it with action and company-paid training. IBMers w/o a union work 'at will', never forget that, you have no real rights at your job. I have a written contract, I cannot just quit, I must give three months notice, but my company has the same requirement to give me three months notice. IOW, I have a normal employee/employer relationship, not like that of a serf to master, which is the new 'IBM way'.

    I can only encourage IBMers to either organize or leave in droves. Sitting around waiting for the axe to fall until IBM finds some cheap labor country replacement for you is just wasting your time.

    The 401K can be stolen at any time, there is no more IBM pension, the rest of the 'benefits' are only for the top dogs in reality. Talk to some current IBM retirees at your approximate level and ask them how IBM continues the screw job into retirement on their health 'benefits'.

    Again, organize or leave is really the only two logical choices IMHO.

  • Yahoo! IBM Employee Issues message board: "Expense Reimbursement after Termination" by "qazmlp000". Full excerpt: After I was terminated, per IBM direction, I filed expense report for business expenses relating to my IBM work - both to my Amex charge balance and cash reimbursement (e.g., per diem)

    Many days and weeks pasted by, I have not heard from anybody and HR could not tell me where/when my expense is to be reimbursed.

    An experience in dealing with reimbursement? I know I can go to court but want to get this over asap. As Amex is chasing after me for the corporate card balance and I need my own money back also, and soon.

    This is very frustrating and I can not believe this is the company I knew.

    Thanks for any comments and experience.

  • Yahoo! IBM Employee Issues message board: "Re: Expense Reimbursement after Termination" by "rk4877". Full excerpt: I am not sure how you could have submitted expenses after you left because your IDs and access should have been revoked.

    Unfortunately, you are going to have to reach out to your old manager. There is a process-- I forget what it is called-- where they can get expenses processed: a check cut to you for the cash and an auto-payment to AMEX. I know it exists because I did it for an employees that left before his TEA was processed. He got back to me two months after he left telling me that AMEX wasn't paid and he was incurring late charges. That was back in 2011. I had to go to some online process, which sent him the check and took care of AMEX. It would make it easier if you have a copy of the expenses report submitted. I have since jumped ship, so I can't look for the tool!

    Don't let your old manager off the hook-- they can resolve this.

  • Yahoo! IBM Employee Issues message board: "Re: Expense Reimbursement after Termination" by "leftymcgee". Full excerpt: Here's the current process for reimbursing AMEX and/or the employee for unpaid expenses post leaving IBM:

    Contract your former manager and let him/her know that you have unprocessed expenses. Tell them you want a HARDCOPY TEA FORM to complete. The manager should be able to get the form pretty easily (by calling the ESC/Expense prompt)

    Once you receive the hardcopy expense report - complete it, sign and return to your manager via soft copy WITH YOUR RECEIPTS!!!! You will need your receipts in order for this to processed. I believe an AMEX statement will do - but not sure.

    Once your manager receives it, he/she needs to print it and sign it, then scan/send soft copy along with your receipts to IBM travel.

    Once IBM Travel receives it, they will manually input it and cut a check to AMEX / Employee. Make sure you note your Amex number/old serial on the Hardcopy form.

    We used to be able to go into APU and cut a check for the employee and / or directly to AMEX. But, due to audit concerns they removed that option and nobody can submit a check request for an ex-employee for expenses.

    Hope this helps.

  • Yahoo! IBM Employee Issues message board: "Re: Expense Reimbursement after Termination" by "qazmlp000". Full excerpt: I appreciate all the responses which are really helpful.

    I have indeed submitted HARDCOPY paper following the procedure - however, nobody from IBM can tell me when I will receive the check, and where it is - other than submitted to travel. weeks, and months passed by.

    looks IBMers handling my paper may be moving faster (after thinking fast today off course) after the first quarter!

    Thank you again.

  • IT News (Australia): IBM threatened to "walk" on QLD payroll project. By Charis Palmer. Excerpts: An IBM executive threatened the tech giant would walk off the job if Queensland Health “went legal” over alleged contract breaches, the inquiry investigating the failed project has heard. The inquiry yesterday heard of a meeting called to discuss disputes about the project’s scope and the withholding of payments for work already undertaken by IBM.

    “It was a tense relationship at this stage, the state (had) withheld money, IBM was wanting that money to be paid, there was disputes about scope, things weren't going particularly well,” Mallesons lawyer John Swinson told the inquiry. ...

    Swinson yesterday testified the meeting became quite hostile, and IBM executive Bill Doak suggested IBM could shift its focus to resolving legal disputes, rather than working on the project. “It was a veiled threat that IBM would stop work if it didn’t get its way,” Swinson told the inquiry.

  • Binghamton (NY) Press & Sun-Bulletin: 600 workers remain at Endicott Interconnect. Document reveals measures taken to keep company afloat. By Steve Reilly. Excerpts: In one of his last actions as CEO of Endicott Interconnect, Jay McNamara disclosed the company shed hundreds of employees in recent months and is at risk of filing for bankruptcy due to a lawsuit over its corporate jet.

    In a signed declaration filed in federal court four days before his April 12 retirement, McNamara broke months of silence about workforce reductions at the company.

    “EIT has been involved, for months, in efforts to restructure its financing so as to produce a positive cash flow and allow it to remain in business and continue to employ its employees, currently numbering approximately 605,” McNamara wrote.

    he privately-held company, which was estimated to have employed 1,100 workers as of late 2012, has been one of Broome County’s most significant employers since acquiring former IBM Corp. operations in Endicott in 2002. ...

    Tax breaks. EI was formed in 2002 when elected officials and local business leaders became concerned that IBM Corp.’s microelectronics division would leave the area. A sudden departure would have cost the region 4,000 jobs and left IBM’s 4.1-million-square-foot production facility vacant.

    In a deal brokered by officials including Sen. Thomas W. Libous, R-Binghamton, and then-Gov. George Pataki, local entrepreneurs formed EI and purchased 62 buildings on the campus for $65 million, agreeing to invest another $35 million in improvements.

    As part of the deal, IBM leased back 1.4 million square feet to house 2,000 remaining workers there. ...

    Endicott Mayor John Bertoni said he met early this month with EI executives and is trying to be optimistic about the company. He was unaware of the number of employees that had lost jobs until contacted Wednesday regarding the court document.

    After reviewing McNamara’s court document, Broome-Tioga Federation of Labor President Lee Conrad said the company’s former employees “are walking the streets looking for a job while the EI executives fly on a leased jet.”

    “The company clearly has taken workers and taxpayers for a ride,” he said, “but not on the jet and not in a good way.”

    Selected reader comments follow:

    • Retired? He should have been fired! He needed a jet why? When will we start holding CEOs accountable? Every other job has some minimum expectation of achievement.
    • Typical "entitlement attitude" of corporate America: I deserve a private jet even though my company is having cash flow problems. There is NO law against it other than someone with a CONSCIENCE would get rid of the jet and cancel all the trips that would cost the company tens of thousand of dollars. All we can hope for is that he and people like him are sent straight to hell when they get to the Pearly Gates.
    • Again and again these scenes play out yet it's allowed to happen. Fire the workers, destroy their families but don't give up your luxuries.
    • Traveled to places including the Cayman Islands, the Bahamas and the Dominican Republic... let's see.. off shore banking where millions are stashed for "retirement"... Vacation play ground and finally, a place with no extradition.. Uh huh... And those being let go could not be counted? No one said anything?
  • Yahoo! IBM Employee Issues message board: "Re: 600 workers remain at Endicott Interconnect" by "shobuz99". Full excerpt: This whole outcome is not a bit alarming or surprising to me. What bothers me the most, though, is that the taxpayers of Broome County and NY State wanted to believe George Pataki, Tom Libous, Bill Maines, Jim Matthews, Jay MacNamara, James Orband, and the rest of the Huron Crime Family when they said that they would "save" the jobs and continue the "reputation" of this area's most famous employer--IBM.

    It appears that their "invisible" new outfit and new management to "develop technology for the defense industry", and all the grand plans to bring in "state of the art" ideas to Endicott Interconnect and make Huron Campus a "leader" in the high tech industry, has somehow evaporated. Who knew? Lots of people knew. But they didn't speak up. This area became paralyzed by fear, anxiety, and desperation.

    The working people of Endicott's former IBM were tossed into the wind. And, to add insult to injury, IBM left a very large toxic chemical soup underneath some of those 62 IBM buildings as well as underneath nearly 500 residents homes. There were people that opened their mouth and spoke up.

    Of course, they were accused of being malcontent and in the minority. Those that raised their voices were shouted down and dismissed; even vilified by their 'friends' and family, in some cases.

    That is typical of a large community of people that have had their "American dream" ripped out from underneath them, their prized neighborhood polluted beyond normal habitation. That's what people do. They stand around during the parade of the new emperor of the business world, and they marvel at the beauty and the splendor of the Emperor's new clothes....until someone in the crowd stands up and shouts, "Look! The Emperor has NO CLOTHES!!!" A gasp is made by the great multitudes. One by one, each person secretly sees the truth; but they are still sorely afraid of opening their mouth. And so it goes, in slow motion; an eleven year parade of silent bystanders feigning their joy and applauding with only a few claps. Welcome to the machine.

    Welcome to the corporatocracy of the 21st century.

    Just like the Borgia Crime family of the Catholic Church in the 14th century. Some things never change.

  • WBNG (Binghamton, NY): Department of Labor 'looking into' EIT layoffs. Excerpts: The New York State Department of Labor says it's looking into recent layoffs by Endicott Interconnect Technologies to see if it violated disclosure law.

    The Worker Adjustment and Retraining Notification (WARN) Act requires companies to disclose major layoffs early to employees and the public.

    The law stipulates companies must provide 90 days notice to employees in the event of a plant closure or mass layoffs. A "mass layoff" is defined as a reduction of 33 percent of a company's workforce. The number must be at least 25 people. If a company lays off 250 or more workers, it must also provide 90 days notice according to the WARN Act. ...

    All former EIT employees are encouraged to visit the New York "One-Stop" employment centers for job counseling. There are two "One-Stop" locations in the Southern Tier, one in Binghamton and another in Owego. ...

    McNamara said in the statement if the company loses and is forced to pay more than $11.5 million in restitution, the entire company could be at risk for bankruptcy. County Executive Debbie Preston's office was asked for a comment on the lack of public communications involving layoffs from EIT. The county executive's office had no comment. EIT was unable to be reached for comment for this story.

  • Yahoo! IBM Employee Issues message board: "IS Cloud Computing Now Cannibalizing the IBM Portfolio Just Like with Microsoft" by "bobsutton203". Full excerpt: Much has been discussed about cloud computing impacting Microsoft's de facto monopoly on PCs software because the PC storage and compute cycles migrate to the cloud and require a much reduced and robust internet access device to the point that MS now calls itself a device and services company not a software company.

    Is the same thing starting to happen to IBM in the sense that a lot of IBM revenue is Enterprise strategic outsourcing and running customer server farms. As the customer adopts cloud computing most of those customer server farms disappear over time and turn into commodity services and storage in direct competition with Amazon, Google and MS cloud services running massive matrixes of commodity hardware servers many running free open software.

    If true than most of the IBM portfolio is now headed to the same low margin commodity status they have been shedding over a decade leaving them with consulting, highly competitive commodity cloud services and some splinter hardware segments like mainframes some still running patched 50 year old application software that customers cannot afford to reverse engineer to modern tech.

    If you combine this IT cloud tech mega trend with IBM liquidation strategy of low cost labor arbitrage of US and EU high cost labor supplemented by stock manipulation using buybacks to boast EPS you have a very dim outlook because your top line revenue is now declining at the same time the strategy of high cost labor is running out of headcount to eliminate with declining margins to fuel buybacks.

  • The Register (UK): IBM CEO Rometty swaps heads of strategy and servers. Musical boardroom chairs – possibly related to x86 server and other spinoffs. By Timothy Prickett Morgan. Excerpts: Ginni Rometty, who has been CEO at IBM for a year and a half, is making two big changes in the upper echelons of her management teams; she is swapping the head of corporate strategy and the head of its Systems and Technology Group, and it is presumably to get better results than IBM showed in its first quarter of 2013 in its systems, storage, and chip businesses.

    The very small game of musical chairs may also have something to do with a rumored spinoff of all or a portion of IBM's System x x86 server business to Chinese PC and server maker Lenovo Group. IBM has not confirmed or denied those rumors, and Lenovo merely said to the Hong Kong Exchange where its stock trades that it was in talks with someone to possibly buy something.

    Rometty announced the executive changes in an email sent out on Wednesday, and it sees Rod Adkins, who has been running the Systems and Technology Group (well, sort of, and El Reg will explain in a moment) for several years, exchange jobs with Tom Rosamilia, who has worked for Adkins running IBM's System z mainframe and Power Systems businesses. This is what the email to IBMers from their CEO said...

    The question now is precisely what is IBM going to do with Systems and Technology Group. Officially, with Steve Mills being in charge of the combined Systems and Software Group – a combination IBM usually ignores even though it was done nearly three years ago – he is presumably deciding what IBM needs to do to bolster its Power Systems business and spin off what are presumed to be unprofitable x86 servers to Lenovo or someone else.

    Selected reader comments follow:

    • She is inept. Period. First Sam, and now Ginni are screwing up the company. EPS increase is not due to operational efficiency. It is due to aggressive stock buy back and very very aggressive cost cutting. The cost cutting include not approving business essential items such as pencils (!) and monitor for programmer to do the work. Employees has to buy stationary etc. using own money. Lot of good people are leaving the company, only dead-wood that nobody would want runs the company.
    • Buy your own pencil is all over USA. Do a quick search on IBM union and you'll find all those stories. Additionally, employees in services (GBS, GTS) are required to record billable hours greater than 2000. Do the math (and factor in travel time, vacation, sick days, holidays) and quickly it is apparent that the management is asking employees to lie in their time sheets and over charge the clients.
    • Don't forget that IBM recently gutted 401k (retirement) offering.
    • Same here - I'm based in NY and had to purchase monitor and notebook by myself in order to be able to do my work. The IBM provided equipment was nearly 6 years old. The office chair I'm sitting on is 30 years old (manufacturing date is printed on the bottom). Approx. 3-4 years ago they stopped cleaning offices. You are sitting in dirt except you buy cleaning materials and stay after work to clean up. They also removed every 2nd light bulb to save energy - and bear in mind the offices have no windows. This goes further ... offices are literally falling apart. IBM fixes/maintains mainly entrance areas. In my building the hallway to the meeting rooms that are frequented by customers are maintained. Other parts look like an abandoned factory building with for instances water leaking in, rodents and missing floor elements.
    • I work for IBM STG in RTP, NC. I have to provide all of my own office supplies - pens, pencils, paper, white board markers, you name it. I only have a monitor on my desk for my laptop b/c I snagged it from someone who left the company. I have a friend that moved from STG to SWG, and she told me that there are office supplies available there. So, preferential treatment for the money makers. It also shows in our offices...SWG has clean, modern facilities. STG is in dirty, cockroach-ridden buildings, with System x in the worst of the worst. I second the comment above about the desk chairs, etc. It is shameful.
  • Wall Street Journal: Face-Off on Visas Pits U.S. Against India. By Dhanya Ann Thoppil, Sean McLain and Danny Yadron. A fight is brewing between Washington and New Delhi over provisions in the U.S.'s draft immigration bill that could hobble Indian outsourcing firms' businesses in the U.S.

    The proposals, which include cutting back sharply on the number of foreign workers these outsourcing companies can send to their U.S. offices, have won broad support from rival U.S. technology firms, including International Business Machines Corp. and Accenture, lobbyists say.

    India's $110 billion IT industry, which performs back-office tasks such as software programming, makes about half its revenue from the U.S.

    Indian companies such as Infosys Ltd., Tata Consultancy Services Ltd. and Wipro Ltd. have set up large U.S. offices to be closer to clients, staffing the sites overwhelmingly with Indian expatriates, who earn significantly less than their American counterparts. ...

    The bill doesn't name countries. But Indian outsourcing giants sponsor more than half the 65,000 skilled-worker permits, known as H1-B visas, that the U.S. issues annually to workers with at least a bachelor's degree. ...

    Many of these firms have as much as 80% of their staff in the U.S. on H1-B and other visas. The draft legislation, which is being debated in the Senate Judiciary Committee this week, would prohibit companies with more than 75% of their employees in the U.S. on such visas from bringing in additional workers. That figure would fall to 65% within a year, and in the years after that the limit would be 50%.

    IBM and Accenture declined to comment.

    The U.S. firms are seeking to hire more foreign workers for high-skilled jobs but face a visa shortage because of competition with Indian firms. ...

    Sen. Richard Durbin (D., Ill.) said in response that the situation was an abuse of the visa regime. "Most people would think, well, Microsoft needs these folks," he said. "And they'd be shocked to know that most of the H-1B visas are not going to companies like yours. They're going to these outsourcing companies."

  • Glassdoor IBM reviews. Selected reviews follow:
    • Not good for Sales and Marketing Roles” Current Brand Sales Specialist in New Delhi (India). Pros: -Good work environment; -Flexibility; -Work from home options -;Good Incentives. Cons: Unrealistic targets; -Mismatch in authority responsibility relationships; -Structure not defined clearly leading issues like some people are over burdened with work and some are having fun; -Expensive products not feasible for Indian subcontinent as the stress is more on TCA and less on TCO; -Highly rigid processes and procedures leading to lost opportunities; -Extremely inefficient services team leading to customer dissatisfaction and lack of repeat business. Advice to Senior Management: No organization is perfect however, given that we are talking about IBM with such comprehensive offerings we must definitely be more efficient and effective in capturing the markets. The stress should be on retaining the customers whom we are losing on a day to day basis.
    • “Great company if you don't care about raises or advancement” Current Solution Architect in Boston, MA. Pros: Ideology on working from home, immediate & extended team has great culture, flexibility of hours based on client need, health care 100% paid for employees, training programs are mandatory and frequent comparatively. If you have the drive to learn on your own, IBM offers plenty of opportunity to learn from some of the best in their fields of expertise. Cons: Getting a raise takes an Act of Congress, they will cap your income even if you exceed expectations, sending feedback to management is like talking to a post, much more internal paperwork/processes than I'd ever experienced at 4 other firms (3 large 1 small), too much middle management. Advice to Senior Management: Take care of your all-stars or they go play elsewhere. If a job offer to someone with a number that they will be paid if they meet/exceed expectations, don't short-change them when they hold up their end of the bargain. Try not to impose internal processes for the sake of filling out paperwork and bean-counting. If the #s are coming in as expected or higher, leave your worker bees alone.
    • Learn a lot get paid a little” Current Financial Analyst in Rochester, MN. Pros: Great people to learn and work with (peers). Cons: Little pay and pay scale is not based on merit. You could be doing a job that is complex and time consuming and the guy across the hall watching movies gets paid the same amount. What a joke! Advice to Senior Management: Pay your talent! Require managers to actually understand the roles they are responsible for. Not just take care of the HR responsibilities.
    • Good place to start a career” Former Product Manager in Research Triangle Park, NC. Pros: Worked with very smart people, got to do a lot of different things. If you keep moving around you can do almost anything. Cons: They have constant layoffs. The internal workplace productivity products are not what is out on the market. Constantly cutting cost to the detriment of the employees/ Advice to Senior Management: In the past if you did a good job you were employed, now you treat your employees like tools.
    • Brand Sales Executive” Current Brand Account Executive. Pros: IBM has a well known brand and lots of resources to tap into. Salary & benefits are OK compared to other smaller technology companies I have worked. Cons: Highly matrixed bureaucratic organization that has lost track of what is important. As a software sales executive there is constant threat that the services side of the business can take over your business. Many of the field sales team has lost the art of sales and just rely on IBM brand to close business. Advice to Senior Management: Pay more attention to building systems and processes that are more flexible to the individual employees. Also replace Lotus Notes
    • Up and Down, depends a lot on project and management” Current Employee. Pros: Salary, benefits, holidays/time off, many projects, smart people, lots of opportunities. Cons: Corporate culture, had 8 or 9 different managers, executives out of touch, management disaster, money hungry, everyone is a "resource", easily replaced, no work/life balance at all. Advice to Senior Management: Pay more attention to your employees, they are the life of the company!
    • Great work life balance. Slow to change” Current Senior Software Engineer (B7) in Dublin (Ireland). Pros: The work life balance is great. You can organize your working times (within reasons) around your family/personal need. Working from home is accepted if the job gets done all the same. Cons: The company counts every cent they spend. A part for the salary and the usual benefit (VHI, pension and so on) employees won't receive any other benefits. Sometimes even getting the essential (like a good chair or a monitor) requires lot of time and lot of pushing. The company is huge and teams more often than not spread around the word, so you might end up being the only person in your office to be working on a given project. This does not facilitate good team behaviours and engagement. Advice to Senior Management: Change change change!!
    • Worst job ever” Current Senior Project Manager in Santiago (Chile). Pros: Working in IBM looks good on you and your resume, that's all the pro. Cons: Heavy work load. 90 hours week. No overtime. They re-negotiated the salary once i was working here and cut me 25%. Heavy organization problems. Low payment for the job. Advice to Senior Management: Listen to the people, and solve their issues. A happy worker its a good worker, not otherwise.
    • Strong short-term focus on financial results” Former Product Manager in San Jose, CA. Pros: Good opportunities to change jobs within the company, but mostly laterally. Cons: Short-term focus on delivering financial results makes it difficult to get job done (e.g., due to travel restrictions etc.). Company culture is very much influenced by that with less on a focus to provide a good working and learning environment.
    • Former Software Developer (Consultant) - Public Sector” Former IT Consultant in Bethesda, MD. Pros:
      • -Challenging projects with unique opportunities for employees to develop their skills
      • Smart, friendly, and knowledgeable colleagues
      • Excellent benefits (dental/health/vision insurance, awesome 401(k), discounts on many 3rd party products and services and many more)
      • Excellent work/life balance (very flexible work environment; probably, this is the biggest + )
      • Massive technical resources for employees to grow their skills (e/g. online technical library (Books 24x7), workshops, classes, etc)
      • Tons of different projects and it is usually fairly easy to switch between projects, so you won't get bored


      • Promotions are extremely slow or non-existence
      • Performance reviews are ridiculous and your work will be compared with the rest of the people in your level (no matter how hard you work on a project, you could still get a low rank and no raise)
      • Too much bureaucracy
      • If you are thinking about getting your master/PhD, Tuition Reimbursement is like lottery, you sign up and pray to get it
      • Absolutely no innovation; if the current solution works, DO NOT TOUCH IT kind of mindset. Hence, the management is very resistance to new ideas.

      Advice to Senior Management: INNOVATION left IBM, bring it back please.

    • Not the best place to work...” Current Employee. Pros: Your cv will thank you. Cons: Bureaucratic, old boys club, people are simply numbers. Old boys' network mostly. Advice to Senior Management: What's happened to respect for the individual?
    • Global and Cutting Edge experience” Current Human Resources. Pros: Global nature of work, diverse, leader in staff functions. Cons: Very long work hours, focussed highly on cost containment.
    • All about bottomline!” Current Engagement Manager in San Jose, CA. Pros: Good laid back culture, growth opportunities, exposure to new technologies and clients from different industries. Cons: Low on salary, very minimal to no bonus, compensation structure sucks after you have been there for a while. Advice to Senior Management: Treat people as assets and invest in their compensation!
    • IBM is going on almost 2 years of flat/falling sales; the reaction is to invest less and push harder” Current Business Development Manager in San Jose, CA. Pros: smart people, many of whom do care about relationships and doing the right thing for the client.

      Cons: It's a financially driven organization and we are absolutely feeling the pain of not growing the top line. They compensate by squeezing more costs out (our salaries) to grow the bottom line. Many of my peers have had salary roll backs in the last many years as sales objectives are nearly impossible to make.

      Advice to Senior Management: Wake up and smell the social/digital/mobile/cloud. It wasn't until 2013 you started to even use this terminology in your communications; face it, your business strategy is a fail, and after 7 straight quarters of falling sales, its time to make some admissions. Blaming this last quarter on poor sales execution is insulting....you've squeezed so much investment and compensation out of the operating model that we've become transactional focused (surprise!)

    • Started out great...then went off a cliff” Former Senior Software Engineer and Architect in Austin, TX. Pros: When I first started working at IBM I worked with amazingly smart people who mentored and helped me grow professionally and academically. I was allowed a flexible schedule to be able to continue going to school and finish my MSEE and start on my PhD.

      However, IBM began to pigeon hole me and would not allow me to do new work and I was stuck on a project that I wasn't able to get out of or attempt to correct some problems since it could slow down the rate at which new features were being added.

      Cons: -Messing with benefits constantly; -Salaries are low; -Raises are non-existent; -Ability to move jobs within IBM is meager at best despite what they tell you.

      Advice to Senior Management: Be honest and trust your employees, no one trusts you because you've had a history of very bad decisions that are seemingly at odds with IBM's supposed values and traits.

    • Growth is not in the US, so the US is not a great place to be in IBM” Former Sales in New York, NY. Pros: - Bright people trying to do their best for their products, services and customers; - Honest and hardworking employees; - Some thoughts of the positive IBM heritage still there, even though that part of the company is long, long gone.

      Cons: IBM is in a significant cost reduction mode, which makes being there very bad; in the US, the brand is being milked while the company hangs on to whatever customers it has and does anything and everything possible to cut costs—mgt decisions are based one one thing only, which is stock price/options; - So OK place to invest, but not to be/work; - Very difficult processes to get things done to serve/support customers; - Products not competitive/high cost; - Work is increasingly delivered by subs, which means value add is smaller than ever; - Bard to win deals with high margin/overhead on a sub when you're competing against that same firm (or others) bidding; - Difficult (as always) to integrate solutions across service lines, which is one of the only ways IBM is competitive; - Seems that there are now more people not competent than competent, which makes it an uphill battle; - No desire at all on mgt part to have satisfied customers—simply not important, so if it's important to you, that's a conflict; - US morale, especially in sales, is terrible (also true in delivery); - Many looking to leave; Mgt under severe pressure every day, which drives low morale; - Not a single thought past the end of the current week/quarter, so directionality isn't there.

      Advice to Senior Management: None. Go to eastern Europe or AP if you want growth or a good experience with the IBM brand.

    • Good Work Environment, Bad Growth Opps” Current Rational Solution Architect in Miami, FL. Pros: Good Environment to work in. People are helpful. Lots of smart resources to tap into. Most employees can work from home Cons: Growth opportunities are very limited. Management concerned about the bottom line and not so much in career development. Lots of cookie cutter approaches within the various service lines
    • IT Specialist” Current IT Specialist in Raleigh, NC. Pros: Parts of the company are great to work. Avoid GBS and GTS. Cons: Little to no career growth. Especially in GBS. Advice to Senior Management: Reduce layers of management. Customers are not willing to pay for your 15 levels of management
  • Alliance for Retired Americans: Friday Alert. This week's articles include:
    • Grand Bargain: A Possible Scenario
    • Tell Your U.S. Senators to Co-Sponsor the Resolution Opposing the Chained CPI
    • House Democratic Caucus’ Seniors Task Force Re-Launches
    • Senate Votes to End Air Traffic Controller Furloughs; Other Sequester Cuts Remain
    • Scams are tied to Confusion over Health Care Reform
    • Alliance Leadership Travel
    • Did You Know…
  • Washington Post: Study: There may not be a shortage of American STEM graduates after all. By Jia Lynn Yang. Excerpts: If there’s one thing that everyone can agree on in Washington, it’s that the country has a woeful shortage of workers trained in science, technology, engineering and math — what’s referred to as STEM.

    President Obama has said that improving STEM education is one of his top priorities. Chief executives regularly come through Washington complaining that they can’t find qualified American workers for openings at their firms that require a science background. And armed with this argument in the debate over immigration policy, lobbyists are pushing hard for more temporary work visas, known as H-1Bs, which they say are needed to make up for the lack of Americans with STEM skills.

    But not everyone agrees. A study released Wednesday by the left-leaning Economic Policy Institute reinforces what a number of researchers have come to believe: that the STEM worker shortage is a myth.

    The EPI study found that the United States has “more than a sufficient supply of workers available to work in STEM occupations.” Basic dynamics of supply and demand would dictate that if there were a domestic labor shortage, wages should have risen. Instead, researchers found, they’ve been flat, with many Americans holding STEM degrees unable to enter the field and a sharply higher share of foreign workers taking jobs in the information technology industry. (IT jobs make up 59 percent of the STEM workforce, according to the study.)

    The answer to whether there is a shortage of such workers has important ramifications for the immigration bill. If it exists, then there’s an urgency that justifies allowing companies to bring more foreign workers into the country, usually on a short-term H-1B visa. But those who oppose such a policy argue that companies want more of these visas mainly because H-1B workers are paid an estimated 20 percent less than their American counterparts. Why allow these companies to hire more foreign workers for less, the critics argue, when there are plenty of Americans who are ready to work? ...

    The tech industry has said that it needs more H-1B visas in order to hire the “best and the brightest,” regardless of their citizenship. Yet the IT industry seems to have a surprisingly low bar for education. The study found that among IT workers, 36 percent do not have a four-year college degree. Among the 64 percent who do have diplomas, only 38 percent have a computer science or math degree.

  • Employee Benefit News: PBS special slams 401(k)s. By Gillian Roberts. Excerpts: A PBS documentary airing on Frontline Tuesday, called The Retirement Gamble, says most 401(k) programs are “lousy.” The program, written and produced by Martin Smith, shows numerous people worried about their various states of retirement saving. Many of the experts interviewed say 401(k)s are a favorable choice for the industry, including brokers who sell them as middlemen. However, they say they are no longer advantageous for the people who actually use them, citing excessive fees and lack of clear guidance amongst other things. ...

    "What happens in the fund business is the magic of compound returns is overwhelmed by the tyranny of compounding costs,” John Bogle, founder of The Vanguard Group, tells Smith. ”It's a mathematical fact — there's no getting around it. Why we don't look at it, too bad for us." Smith then looks at his own 401(k) for these costs and finds “all sorts of products with different kinds of fees.” He says broker fees are buried within as well.

    “There’s nothing against the law about it,” says Jason Zweig, an investing columnist for The Wall Street Journal, referring to brokers in the piece. “But it is a sort of a ‘you scratch my back and I’ll scratch yours,’ kind of arrangement.’ If you sell our funds, you’ll get a portion of the revenue we earn, through selling them through you.”

  • InvestmentNews: Brokers slammed in PBS documentary. 'The Retirement Gamble' blames reps — and the actively managed funds they hawk — for putting retirement savers at risk. By Jason Kephart. Excerpts: The struggles Americans face in saving for retirement are blamed largely on financial advisers in a PBS documentary aired Monday night.

    In “The Retirement Gamble,” a new film for PBS' “Frontline” series, producers point to the fees investors are charged in their 401(k)s — largely made up of mutual fund fees and commissions — as the biggest obstacle standing in the way of being able to save for retirement.

    “The 401(k) is one of the only products Americans buy that they don't know the price of it,” says Teresa Ghilarducci, an economist at The New School. “It's one of the products Americans buy that they don't know its quality. It's one of the products Americans buy that they don't know its danger.”

    Advisers are blamed for steering investors into high-fee investments such as actively managed mutual funds in order to boost their own income. Helaine Olen, author of “Pound Foolish: Exposing the Dark Side of the Personal Finance Industry” (Portfolio Hardcover, 2012) says the term “financial adviser” means almost nothing. “It could be a financial planner,” she says. “Or it could be a broker that is a salesman.” ...

    John Bogle, found of The Vanguard Group Inc., speaks of his concerns about possible arrangements between fund firms and the reps who sell their products. “The brokers are getting a little religion here,” he says. “They're saying, 'Why should I distribute your funds unless you pay me to? You get these big management fees — I want some of it. You're getting plenty. Give me some.'” ...

    The failure of actively managed mutual funds, which have an average expense ratio of 1.3%, to consistently beat their index is also highlighted. “It has been proven right year after year because it can't be proven wrong, Mr. Bogle said. "It's a mathematical certainty.” ...

    Wall Street Journal columnist Jason Zweig says, “One of the ultimate dirty secrets of the fund industry is, a lot of people who run other fund companies own index funds in their own accounts and don't talk about it — unless you put a of couple beers in them.”

  • New York Times: Telling the Difference Among 50 ‘Senior’ Financial Credentials. By Ann Carrns. Excerpts: Say you’re a 70-year-old retiree, and you’d like some help managing your finances. Should you hire an adviser who is an A.R.A., an A.R.P.C., a C.S.A. or a C.R.F.A.?

    Good luck figuring what any of that means. Right now, older Americans looking for financial guidance encounter professionals using a bewildering array of letters after their names. There are more than 50 “senior certification” designations now in use, according to a new report from the Consumer Financial Protection Bureau’s Office of Older Americans. ...

    The designations are meant to persuade potential clients that the adviser is an expert in helping older people with their financial decisions, but requirements for obtaining the various designations vary widely. The alphabet soup is confusing, and can leave older adults more vulnerable to bad advice and even outright fraud, the report says.

  • New York Times: Budget Negotiating Chip Has Big Downside for Old and Poor. By Tara Siegel Bernard. Excerpts: President Obama has put Social Security on the table in an attempt to reach a bipartisan agreement on the federal budget deficit, a move that would hit the program’s beneficiaries when they are at their most vulnerable.

    The president has proposed slowing the rate at which benefits increase over time, a change that would ultimately hit the oldest of the old, often single women, many of whom have probably exhausted any other savings. Many members of this group also face higher health costs, have little hope of working again and often live without the support of a life partner.

    But advocates for retirees say that what is perhaps the most frustrating about all of this is that Social Security, which is self-financed through payroll taxes, does not contribute to the deficit. Yet it is being lassoed into the broader debate. ...

    Workers who retired at age 65 would receive 3.7 percent less in benefits after 10 years than they would under the current system; after 20 years, 6.5 percent less; and after three decades, 9.2 percent less, according to calculations by the Social Security Administration. ...

    This is not a popular move. According to a recent ABC News/Washington Post poll, 51 percent of respondents opposed changing the way Social Security benefits are calculated so that benefits increase at a slower rate, while 37 percent supported such a change (11 percent had no opinion). The survey said there were no partisan differences, but among people 65 and older opposition was 64 percent.

    The “three-legged stool” of retirement — that is, pensions, savings and Social Security — has already become more of a lopsided two-legged stool, because pensions have been waning for years. And the Social Security leg is providing most of the support for many retirees: about 43 percent of single people and 22 percent of married couples rely on the benefits for more than 90 percent of their income, the Social Security Administration says. More than half of couples and 73 percent of singles draw more than half their income from the program. ...

    Social Security advocates say there are a variety of other ways to strengthen the program that would not be as burdensome to retirees. Currently, employees and employers each pay 6.2 percent on the first $113,700 of earnings (self-employed people must pay the entire 12.4 percent). Eliminating the cap on which earnings are taxed would eliminate about 88 percent of the current shortfall, according to the Social Security Administration.

  • USA Today: Retirement and health care: Concerns are off the charts. By Rodney Brooks. Excerpts: "I've seen people pay as much as $5,000 to $15,000 a month for their medical care in retirement," says Katherine Dean, national director of wealth planning for Wells Fargo Private Bank.

    According to the Employee Benefit Research Institute's annual survey, more than half of retirees surveyed this year are not confident that they have saved enough to pay their medical expenses during retirement.

    EBRI says the average 65-year-old couple in retirement should expect to pay $163,000 in out-of-pocket expenses for health care, excluding long-term care. And even then, they have only a 50% chance of covering their actual costs. Add to that the annual rate of inflation for medical expenses of 5% to 7% for health care expenses.

  • Financial Times: US Senate plans crackdown on visa ‘abusers’. By Anna Fifield. Excerpts: IT outsourcing companies that rely heavily on foreign workers will face tough new rules under proposed immigration legislation being considered in the Senate, which wants to crack down on “abusers” of the H-1B highly skilled visa system.

    Much of the immigration reform debate has centred on the need for more skilled engineers and scientists to help US companies innovate, with Silicon Valley leading the charge.

    But official figures show that the leading recipients of H-1B visas are IT outsourcing companies, most of them based in India.

    “These companies are using this visa programme to undercut the American worker and undercut American companies hiring American workers,” says Ron Hira, an outsourcing expert at the Rochester Institute of Technology, and the son of Indian immigrants.

    Data from the Citizenship and Immigration Service show that the largest recipient of H-1B visas last year was Cognizant, an IT outsourcing company based in New Jersey but which has more than two-thirds of its 150,000 employees in India. It received 9,281 H-1Bs last year.

    Next were Tata, Infosys and Wipro, all IT outsourcing companies based in India, with 17,373 visas between them. In total, the top 10 companies received 44,000 H-1B visas – more than two-thirds the number available. The figures were first reported by Computerworld magazine.

    The companies use H-1B visas in two main ways: to staff jobs that must be done in the US, such as IT support for the financial services industry in New York, with cheaper, foreign workers; and to bring in workers to learn skills before rotating them back to India, often to train others there, a practice known as “staff augmentation”.

    A lot of these IT firms bring someone over here for three years and then they ship them back and bring in someone new, like on a conveyor belt,” he says. ...

    Mr Hira contends that many of the top H-1B employers have no intention of ever applying for green cards that would enable their workers to become permanent residents and make a lasting contribution to the US economy. He notes that Accenture, which received 4,037 H-1Bs last year, applied for only eight green cards.

  • USA Today: Retirement and health care: Concerns are off the charts. By Rodney Brooks. Excerpt: "I've seen people pay as much as $5,000 to $15,000 a month for their medical care in retirement," says Katherine Dean, national director of wealth planning for Wells Fargo Private Bank.

    According to the Employee Benefit Research Institute's annual survey, more than half of retirees surveyed this year are not confident that they have saved enough to pay their medical expenses during retirement.

    EBRI says the average 65-year-old couple in retirement should expect to pay $163,000 in out-of-pocket expenses for health care, excluding long-term care. And even then, they have only a 50% chance of covering their actual costs. Add to that the annual rate of inflation for medical expenses of 5% to 7% for health care expenses.

New on the Alliance@IBM Site
  • Job Cut Reports
    • Comment 04/19/13: STG System x here, last three "1" ratings not that it makes a damn to anyone here or for any reason for that matter. Been a member on and off for years and made some half ass efforts in recruitment. I'm done halfassing it and have a plan for renewed recruiting efforts. Maybe it's not too late... I've been wanting to leave for years but don't think I would make as much somewhere else but really haven't invested much effort looking, so that's obviously my new project! I am honestly invigorated by this and am looking forward to seeing how it plays out, getting the boot may be the best thing that's ever happened to me, who knows I honestly don't care. Good thing Sam got his new office and daily stipend, who's going to pocket the 6% of everybody's salary who gets the can between now and 12/15 for the 401k heist? That deal is freakin criminal. Stand and be counted lets stick it to the man this is the last stand for me!!! I'll be recruiting new members and getting the word on the BS out to my representatives, what else needs to be done? Irritable Bowel Maker -StrikeNow-
    • Comment 04/19/13: GDF runs too top heavy. I have never seen a place that needs so many managers and leads per account. 7 non-priv users giving orders, 2-3 priv users doing the actual work. Guess who is getting paid the least? My opinion is to clean house in the GDF starting at the top, they would save a bundle. Or continue with the same business model and lose money every year. And it's also funny to see that the "Blue Coat" security is only installed on the priv users workstations. In other words, the leads and managers can surf the web all they want. What else they going to do all day? Look at cirats that are past due? Close em then you useless tools, quit bothering a sys admin with BS biotch work. -marymoon-
    • Comment 04/19/13: to ex-GDFer: it has become more of a laughing stock than anything. The roundtable discussions are my favorite. Trying to watch a second line manager tell you that you that the contractors are not making 3 times your salary when you know darn well that they are because you are friends with most of them. Looks like some IBMers are opting to quit for 30 days then get hired back on as a contractor at fair market value wages. (Another thing the SLM's are denying in the roundtable meetings) Can only laugh at this point. -trainkeptrolling-
    • Comment 04/20/13: Looks like the titanic has hit the iceberg. I am really surprised by CFO saying we didn't expect and saw this coming...wrt China and STG...REALLY?? What are all the strategy folks and execs doing everyday? -Titanic-
    • Comment 04/20/13: UH OH. Ginni missed her numbers. Wall Street is not happy with her. Guess who is expendable and a throw away commodity to make the numbers this quarter. Not the poor performing executives. Not the poor performing managers. You are. You who didn't bother to organize and get an employment contract.

      You, as usual, are the trash to be thrown out to make things look pretty again. Aren't you tired of it yet? Have you noticed that one year you are the best of the best. Top dog. The cream of the crop. Naturally you are soooo good IBM could never get along without you so your safe. Right? No need to spend a whopping 15 bucks a month on Union Membership. You can spend that 15 buying the boss a coffee at Starbucks and showing him or her what a real ass kissing looks like.

      This year your department has to make cuts. Suddenly you're the cream of the CRAP. The boss will not even return your calls or answer your Emails. You show up with that caramel frappuccino with a dash of cinnamon and someone else is already there with one. Not good. You're yesterday's news and on your way out the door and there is no time left to do anything about it. A lot of you are about to feel this way. Not all of you bought the boss coffee, but rest assured it would not have helped as the example shows. Only a Union contract would have helped. Remember that those that are left after this round of firings without cause. Take action. Live Better. Work Union. -Exodus2007-

    • Comment 04/21/13: @StrikeNow-- From my experience, the go getters in IBM-IT won't come to this site until they are desperate, thus after they get their lay off notice. Then they will cry and dance the dance of misery begging you and others for support. However, it will be too late after getting their 30 day notice. You can't change things when you are not employed, so stand up now or take the fall. -Sleeping-IT-Workers-
    • Comment 04/22/13: To Titanic - Some proof IBM's execs knew exactly what was coming: all the RAs for the year are to be moved into this quarter. That means most of the work to identify those to be roadkilled must have already been done; you can't cut (likely) thousands of people without a lot of preparation. So my bet is, the plans to accelerate RAs into this quarter were in place for some time. -GladImOut-
    • Comment 04/22/13: These quarterly results and the revealing disclosures of layoffs to come show that IBMers are about to have a very bad year, perhaps as bad as 2009. Get the word out NOW about the Alliance. If you are coming to this site, reading the postings and getting information, share it with others. There are people without the info, the history, the context. Talk to each other before it is too late. -HURR DURR-
    • Comment 04/22/13: Q. "What are all the strategy folks and execs doing everyday?" A. Exercising stock options, going on cruises, vacations, and hitting golf courses. Working? Why bother. Blame the grunts and underlings. -anon2013-
    • Comment 04/23/13: Job cuts under way. Contractors and regs will be hit in the GDF Happening now and next week. Contractors Will be required to work 36 hours a week going forward. -getting out-
    • Comment 04/24/13: Despite being RA'd in 2012 I still come to this site periodically to see how much the Alliance has grown. Unfortunately I see a lot of former colleagues frustrated, angry, and in need of venting. I understand these feelings, as I have been there and left. The best advice I can give to everyone is convert anger and frustration to positive power. Join the Alliance. Spread the word. Update your resume. Use the job training reimbursement program as much as possible. And Join the Alliance! -NoLongerBlue-
    • Comment 04/24/13: If a group of workers organize to demand fair compensation, it is called "communism". If a group of executives organize to buy politicians and manipulate markets, they call it "capitalism". IBMers: Understand yet? -You_have_rights_IBMers__use them!-
    • Comment 04/24/13: I just learned today that all of the contractors and long term supplementals at the Burlington, VT plant are getting let go. I've worked with some of these people for years and they are IBMers to me just as much as anyone else is. -ConcernedIBMer-
    • Comment 04/25/13: Ginny, you will not read this but your minions will. Both you and Sam were delivered a goal of providing $20 per share by 2015, by any means possible. In the early days, hiring US workers gave you a short term gain. You counted on less prepared and very lesser paid 3rd world countries to make up difference. The result is you can't tell 9 "third world people" to make a baby in a month. But that has been the plan. Now you posted your angry Hitler diatribe.

      Guess what? For the past 5 years, you forced all your talent, did not give raises or bonuses and hoped people would believe the lie "we award our top performers". What was not said but realized is those words meant you screw over 95% of the company. Is thus fixable? No, you will march IBM into Betamax, and since you have treated 95% of your workers with work harder, MANY other industries are more than happy to take them and give raises and bonuses. Unless you change your ways, IBM will go the way of Betamax, and honestly you know that, and like Sam, just looking to get as much as you can before you bail out. -Anonymous-

    • Comment 04/25/13: Kudos to our Indian colleagues for speaking their mind from the Times of India article. To blame 434,000 and say IBM is SLUGGISH: look at all the management layers and bureaucracy that is this IBM? And what are you going to do about it Ginni? Just blame the troops and give them 24 hours "to get it all engaged". You should be ashamed to brow beat us! It's going to be interesting for Rometty come the stockholder's meeting next week. See how she has master the new elephant dance. Of course she will announce a increase in dividend and then a stock buyback and then a worldwide RA. That silicon metal Watson could figure that one out Ginni. Find real ways to not cut costs and drive revenue. so get to work Ms. CEO! You got until June 30, 2013 to figure it out and execute without executing employees with job cuts. -Anon2-
    • Comment 04/25/13: This is simple people. You can blame your frustration on the people responsible for building the sales pipeline. Without a strong sales pipeline you cannot sell, and thus cannot make revenue. There is a team in Markham, Canada of 200+ employees and more in Dallas, Atlanta and other parts of the U.S. whose sole mission is to build sales pipeline for the company. This team steals 100’s of million in pipeline from other parts of the business and called it their own. They even have a team that overwrites the originator of the pipeline revenue with members from their own team. And the most interesting part - this lead development team was the only team that made all their metrics for the 12 quarters in a row. And yes, that included Q1 when the rest of the business did horrible they had an amazing quarter achieving all metrics. It is sad and embarrassing how deprave this company has become. They are eating away at themselves. -Toronto Employee-
    • Comment 04/26/13: looks like all the cost cutting tricks have been played and Ginny has resorted to reprimanding 434K employees to act faster...new rule...if a customer has a question, ibm must respond in 24 hrs...ha ha ha ha ha he he he ho ho ho..I feel especially sorry for PM's who are going to be caught directly in the middle of that...bet all departments will be required to build tracker spreadsheets to measure efficiency for the 24 hr response new rule... -glad i am gone-
    • Comment 04/27/13: Ms. IBM rookie CEO: if you can't get an answer back to the client in 24 hours "engage management". Do you know what they call IBM employees who engage management in a near crisis? An instant PBC 3 performer and likely RA candidate to be a former IBMer. You are better off engaging management as union personnel on behalf of a corporation's client in an IBM crisis. That's how union secure well being for their members: a go between between worker and management. -da_facts-
    • Comment 04/27/13: Pat, Lou, Sam, Ginny: IBM CEOs only interested in themselves and their families. Could care less about the IBM worker. They walk away with millions. IBMers get the shaft. We need a union to stop this madness. Join the union -ANA-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Washington Post Wonkbook: Ready for Obamacare Rashomon? By Ezra Klein and Evan Soltas. Excerpts: Did you read Sarah Kliff and Sandhya Somashekhar’s story on Maryland’s CareFirst BlueCross BlueShield plan — so many capital letters! — which is saying it’ll raise premiums by 25 percent under Obamacare? Well, you should. It’s a great piece. And it’s a great topic with which to introduce a game that we’ll be playing a lot over the next few years: Obamacare Rashomon.

    Take Kliff and Somashekhar’s story. Here’s the question: Is the rate hike a good thing? A bad thing? Or no thing whatsoever? If the question sounds absurd to you, then, once again, you need to read the story.

    The explanation for why it’s a bad thing is the easiest, and most obvious: Premiums are going up. That is, by any definition, a bad thing.

    But look at why premiums are going up. It’s not because of paperwork, or waste and fraud, or even more generous benefits. “The company expects a huge influx of sick people that will drive up costs, according to its filings with the Maryland Insurance Administration,” report Kliff and Somashekhar.

    Taken at face value, CareFirst BlueCross BlueShield is saying that there are a lot of sick people in Maryland who are currently locked out of the individual insurance market because they’re sick. Now, because the government won’t let insurers turn sick people away or price them out, they’ll be able to get insurance. Yes, that’ll drive up average premiums, but isn’t getting sick people insurance the whole point? This is just another way of saying covering everyone costs money — and that, of course, is what the law’s subsidies are there to cover.

    Or perhaps CareFirst BlueCross BlueShield is simply full of it. This is their opening bid to Maryland regulators, who can — and very well might — reject it. Perhaps they’re just starting high with the expectation that they’ll be forced lower. Or perhaps they’re just starting high in the hopes regulators will agree to it and the company can pocket the profits. Notably, insurers in Vermont and Rhode Island have also released their starting bids, and they didn’t foresee anything like this kind of a rate hike. ...

    (Quick digression: This was always the best argument for the public option: It would’ve created a benchmark plan against which private insurers could be judged. CareFirst BlueCross BlueShield has an incentive to argue for a high premium so they can make more money. The public option wouldn’t have had that incentive. If there was a significant spread between the public option and the private insurers, that would be a signal that either the insurers were less efficient, or they were juking the numbers. But there is no public option, and so we just need to wait for experience and competition to deliver that information. Digression over.)

    None of this talk of premium hikes, by the way, takes into account subsidies. This is an individual-market insurance plan that will be offered on the exchanges. But most people on the exchanges are getting some level of federal subsidy. So will the average person be paying more after accounting for the rate hike and the subsidies? Or will they be paying much less? It’s hard to say.

  • Washington Post: No, Congress isn’t trying to exempt itself from Obamacare. By Ezra Klein. Excerpt: There’s a Politico story making the rounds that says that members of Congress are engaged in secret, sensitive negotiations to exempt themselves and their staffs from Obamacare.

    Well, they were secret, anyway.

    The story has blown up on Twitter. “Unbelievable,” tweets TPM’s Brian Beutler. “Flat out incredible,” says Politico’s Ben White. “Obamacare for thee, but not for me,” snarks Ben Domenech. “Two thumbs way, way down,” says Richard Roeper. (Okay, I made the last one up).

    If this sounds unbelievable, it’s because it is. There’s no effort to “exempt” Congress from Obamacare. No matter how this shakes out, Congress will have to follow the law, just like everyone else does.

  • The Commonwealth Fund: Large Shares of Adults Are Uninsured or Underinsured in the Nation's Largest States. By Sara Collins, Ruth Robertson, Petra Rasmussen, Michelle Doty, and Tracy Garber. Excerpts: A new report released today by the Commonwealth Fund finds that in 2012 an estimated 84 million people did not have health insurance for the full year or were underinsured―and thus unprotected from high out-of-pocket medical costs. Based on the Fund’s 2012 Biennial Health Insurance Survey, the analysis also found that millions of U.S. adults are struggling to pay medical bills and avoiding timely health care for financial reasons. ...

    Nearly half (46%) of adults ages 19 to 64 nationwide either had been uninsured for a time last year or were underinsured. In Florida and Texas, more than half (53% and 54%) of adults were either uninsured during the year or underinsured (Exhibit 1). Adults in these states were at greater risk of being uninsured or inadequately insured than California and New York adults (42% and 43%). In Texas, 40 percent of adults reported being uninsured for some time during the year, compared with 31 percent in California and New York. ...

    Cost is a substantial obstacle to Americans’ ability to secure timely health care. In the survey, two of five (43%) adults, or 80 million people, said they had not filled a prescription or pursued needed care because the cost of doing so was too high. As with medical bills or debt, Florida stood out for having the highest rates of forgoing care because of the cost, with fully half (51%) of adult residents saying they had not gotten care for that reason. Still, nearly half of adults in both New York (48%) and Florida (47%) pointed to financial reasons for avoiding health care. And while adults in California reported these problems at slightly lower rates, they fared no better than adults nationally.

  • Kaiser Health News: New Health Exchanges Unlikely to End Insurance Monopolies in Some States. By Christine Vestal, Stateline. Excerpts: In Alabama, if you get your health insurance through your employer and you lose your job, you quickly realize there aren't a lot options for purchasing coverage on your own. Blue Cross and Blue Shield of Alabama has had a virtual monopoly in the state since the Great Depression, and today it covers a whopping 89 percent of Alabamians. ...

    The lack of competition in nearly a dozen states could present problems when the insurance exchanges that are part of the Affordable Care Act launch in October. The exchanges are supposed to give Americans who do not get health insurance from their employers the opportunity to choose from an array of private insurance plans. The idea is to generate competition between insurers that will lead to lower premiums. ...

    But in states with a dominant insurance carrier, competition and lower prices may not arrive for quite some time.

    A recent analysis by the American Medical Association found that a single insurance company held 50 percent or more of the market in nearly 70 percent of local markets nationwide. And in 30 states, a single insurance company covers more than half the people who purchase insurance individually, according to the Robert Wood Johnson Foundation.

    The dominance by a single insurance company is particularly pronounced in Alabama, Hawaii, Michigan, Delaware, Alaska, North Dakota, South Carolina, Rhode Island, Wyoming and Nebraska.

  • Physicians for a National Health Program: Insured but unable to afford health care. Affordable Care Act will leave tens of millions underinsured, facing choice between ‘life or debt,’ say Journal of General Internal Medicine editorialists. Excerpts: In an editorial responding to a new study on skimpy health insurance among low-income, insured Americans, two policy experts review extensive data showing that tens of millions of insured Americans have grossly inadequate coverage, and that the problem of underinsurance is growing.

    The editorial in the Journal of General Internal Medicine (JGIM) was approved by the journal's editors for publication on today's date and will appear on its website next week. The text of the editorial is available here (PDF). ...

    “Obamacare is lowering the bar for health insurance,” said Dr. Himmelstein, a professor of public health at the City University of New York and primary care doctor. “The new coverage sold through the insurance exchanges will leave many families paying 40 percent of their health costs out-of-pocket even after they’ve laid out thousands for premiums. And the administration is allowing states to institute co-payments under Medicaid, even for the poorest of the poor.”

    Himmelstein continued: “Under the ACA a 56-year-old making $46,100 will pay a premium of $10,585 for coverage through the exchange and still face up to $6,250 in co-payments and deductibles.”

    Dr. Woolhandler, the lead author of the editorial who is also a physician and professor of public health at CUNY, said: “Over the past 25 years the financial protection offered by health insurance has steadily eroded. The consequences are grave, not only financially but also medically. For instance, we know that heart attack patients who face high co-payments delay coming to the ER, threatening their lives.”

    Woolhandler and Himmelstein (who also serve as visiting professors at Harvard Medical School) were co-authors with Elizabeth Warren of a widely cited study that showed that illness and medical bills contribute to 62 percent of personal bankruptcies; most of the medically bankrupt were insured. Sen. Warren played no role in the JGIM editorial.

    “Obamacare is making underinsurance the new normal,” said Woolhandler. “It will reduce the number of uninsured from 50 million to 30 million, but the new coverage is full of holes. Americans deserve the kind of first-dollar, comprehensive coverage that Canadians already have. But that’s only affordable under a single-payer system that cuts out the private insurance middlemen.”

  • The Charleston Gazette, courtesy of Physicians for a National Health Program: Physician says Affordable Care Act an 'experiment' that will fail. By Lori Kersey. Excerpts: "People will not be able to afford the health insurance that they're being pushed to buy," Dr. Andrew Coates, president of Physicians for a National Health Program (PNHP), said during a visit to West Virginia on Thursday. "And when they do buy it, it won't be good enough to cover health-care calamity."

    Under the ACA, health insurance premiums and deductibles will not be affordable, Coates argued.

    "I think it's a big experiment to drive people to [the health insurance] marketplace but the health insurance marketplace hasn't worked for years now and I don't see any evidence that's going to change," he said. ...

    Instead of the Affordable Care Act, which would potentially expand Medicaid to millions of low-income Americans, Coates is campaigning for expanded Medicare for all Americans. That would include an expansion of what Medicare covers. For instance, dental care should be covered, he said.

    Research shows that this would actually help provide comprehensive care to everybody and also reduce costs, Coates said. He argues that by eliminating private insurance and using a single-payer model, the United States could save more than $400 billion a year used for paperwork. ...

    Coates said the single-payer system differs from socialized medicine because private physicians would care for patients. The U.S. Department of Veterans Affairs, in which the federal government owns the hospitals and pays the medical staff, is a better example of socialized medicine, he said. "The veterans administration is working very well," Coates said. "Being under public control is a very good thing. The attention that Congress puts in to improving the quality of care for veterans is completely appropriate."

  • US News & World Report: How to Do Your Homework on Health Care Reform. By Philip Moeller. Excerpts: The Kaiser Family Foundation closely tracked the push for health care reform and has produced the most informed and clearly accessible materials about the new law. This is not an advertisement for Kaiser. But any consumer who wants to understand the law should go to school at the Kaiser health reform site.

    Here, you can see a graphic timeline of when key provisions of the new law take effect, with links to the provisions. Individual states play a key role in expanded health insurance availability, primarily through state insurance exchanges and individual state decisions about whether and how to adopt the law's enormous expansion of Medicaid. Kaiser provides state-by-state reports on these and other state health initiatives.

    Kaiser also has a 10-question Health Reform Quiz. Your answers will provide a quick guide to what you know and, more likely, don't know about the law. ...

    The reality, as outlined in a recent paper from Kaiser, is that "consumers do not understand their health insurance coverage—including benefit limits and exclusions, network designs, and cost sharing features." They don't know how to evaluate insurance choices, either, or how to resolve problems when health claims are denied or where to turn for help. ...

    The law provides federal insurance subsidies through these exchanges. The subsidies are tied to consumers' incomes as a percent of federal poverty levels or FPLs. These FPLs rise a lot for bigger families, and large households earning close to $100,000 can still qualify for subsidies. So, it will benefit even middle-class consumers to learn about the new law.

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 Editorial: Corporate Donations and the S.E.C. Excerpts: The Supreme Court’s Citizens United decision that triggered an avalanche of corporate political spending also contained a proposal for greater public disclosure from corporations that would prefer to write their checks in the shadows. Transparency, the court advised, would let voters decide for themselves “whether elected officials are ‘in the pocket’ of so-called moneyed interests.”

    Since that 2010 decision, corporate and Republican opposition has snuffed out Congressional attempts to require donor transparency and accountability. All the more compelling then that the Securities and Exchange Commission, following an impressive petition campaign, is considering a regulation mandating that publicly traded corporations disclose all their political donations to their shareholders. ...

    The fury of the opposition is already evident as trade associations like the United States Chamber of Commerce issue alerts to members that free speech rights are about to be trampled. Not according to Justice Anthony Kennedy in Citizens United, who noted that “shareholder objections raised through the procedures of corporate democracy” would provide accountability by companies now free to hide donations through trade associations.

  • Smirking Chimp: Deficit Falling Even More Dramatically, Few Know It. By Dave Johnson. Excerpts: Austerity is beginning to hit and the economy is slowing as a result. The most immediate effect is that flights are delayed, but unemployment checks are smaller and there are fewer things We the People do to make our lives and economy better — also called “government spending.” But hey, as Dean Baker writes in, Deficits Are Bad and the Sun Goes Around the Earth,
    …many people can profit from slow growth and high unemployment. The after-tax profit share of GDP is at its highest level more than 60 years. For those who own lots of stock and are at the top of the income ladder, times are good. These people may see efforts to lower unemployment as posing a risk. With lower unemployment workers may be able to get a larger share of productivity growth. This may be good for most of the country and mean increased economic growth, but it would mean less for the one percent.

    Deficit Falling, Few Know. In February I posted Deficit Is Falling Dramatically, But Only 6% Know That,

    There is no deficit problem. The deficit is down about 50 percent as a share of gross domestic product just since President Bush’s fiscal year 2009 deficit and is falling at the fastest rate since the end of World War II. Yet the Washington debate is about how and where to cut us back into recession. Why?
  • Why the 'Spreadsheet Scandal' Should Kill Obama's Social Security Cut. By Richard Eskow. Excerpt: A recent "Spreadsheet Scandal" has rocked the economics world. It also seems to have eliminated the last remaining technical argument in support of the president's "chained CPI" Social Security cut.

    Not weakened it. Eliminated it.

    I believe the president proposed the chained CPI in good faith. I don't know if the same can be said about his campaign pledges on that subject, but I think he genuinely believed these cuts were needed. I think his economic advisors thought they were doing the right thing by proposing them. And I think that this now-discredited spreadsheet helped convince them.

    Why do I think so? Because I had a run-in with the president's top economic official on this very subject back in 2010, and his position seemed to be strongly influenced by that spreadsheet and the economists who created it.

    I hadn't thought about that exchange for a long time. But last night I was catching up on this scandal when it struck me: That's why they're doing this.

  • New York Times: Restyled as Real Estate Trusts, Varied Businesses Avoid Taxes. By Nathaniel Popper. Excerpts: A small but growing number of American corporations, operating in businesses as diverse as private prisons, billboards and casinos, are making an aggressive move to reduce — or even eliminate — their federal tax bills.

    They are declaring that they are not ordinary corporations at all. Instead, they say, they are something else: special trusts that are typically exempt from paying federal taxes.

    The trust structure has been around for years but, until recently, it was generally used only by funds holding real estate. Now, the likes of the Corrections Corporation of America, which owns and operates 44 prisons and detention centers across the nation, have quietly received permission from the Internal Revenue Service to put on new corporate clothes and, as a result, save many millions on taxes.

    The Corrections Corporation, which is making the switch, expects to save $70 million in 2013. Penn National Gaming, which operates 22 casinos, including the M Resort Spa Casino in Las Vegas, recently won approval to change its tax designation, too.

    Changing from a standard corporation to a real estate investment trust, or REIT — a designation signed into law by President Dwight D. Eisenhower — has suddenly become a hot corporate trend. One Wall Street analyst has characterized the label as a “golden ticket” for corporations. ...

    One of the bedrock principles — and the reason for the tax exemption — was that the trusts do not do any business other than owning real estate.

    But bit by bit, especially in recent years, that has changed as the I.R.S., in a number of low-profile decisions, has broadened the definition of real estate, and allowed companies to split off parts of their business that are unrelated to real estate. ...

    Steven Rosenthal, a staff member at the Joint Committee on Taxation during the 1990s and now a visiting fellow at the nonpartisan Tax Policy Center, said that the trend raises questions about the purpose of corporate income taxes at a time when there are so many ways around them. The conversions are one of many strategies that businesses use to avoid paying the corporate tax rate of 35 percent.

    “What is there about a business owning real estate that suggests we should not tax them?” Mr. Rosenthal said.

  • New York Times: S.E.C. Is Asked to Require Disclosure of Donations. By Nicholas Confessore. Excerpts: A loose coalition of Democratic elected officials, shareholder activists and pension funds has flooded the Securities and Exchange Commission with calls to require publicly traded corporations to disclose to shareholders all of their political donations, a move that could transform the growing world of secret campaign spending.

    S.E.C. officials have indicated that they could propose a new disclosure rule by the end of April, setting up a major battle with business groups that oppose the proposal and are preparing for a fierce counterattack if the agency’s staff moves ahead. Two S.E.C. commissioners have taken the unusual step of weighing in already, with Daniel Gallagher, a Republican, saying in a speech that the commission had been “led astray” by “politically charged issues.” ...

    In response to the growing pressure, House Republicans introduced legislation last Thursday that would make it illegal for the commission to issue any political disclosure regulations applying to companies under its jurisdiction. Earlier this month, the leaders of three of Washington’s most powerful trade associations — the U.S. Chamber of Commerce, the National Association of Manufacturers and the Business Roundtable — issued a rare joint letter to the chief executives of Fortune 200 companies, encouraging them to stand against proxy resolutions and other proposals from shareholder activists demanding more disclosure of political spending.

    Tax-exempt groups and trade associations spent hundreds of millions of dollars on political advertising during 2012 elections, but they are not required to disclose their donors. Evidence has mounted that a significant portion of the money came from companies seeking to intervene in campaigns without fear of offending their customers, their shareholders — or the lawmakers they target for defeat. ...

    While both liberal and conservative tax-exempt groups were active during the 2012 election — spending at least $300 million, according to the Center for Responsive Politics, a watchdog group — the biggest and best-financed groups have tended to back Republicans. ...

    The trade associations lining up in opposition to the rule amount to a roll call of the most politically influential — and highly regulated — industries in the country. They include the American Gaming Association, the National Retail Federation and the National Mining Association. ...

    In seeking greater disclosure to shareholders, many of the advocates are citing an unlikely source: the Supreme Court’s decision in Citizens United, written by Justice Anthony M. Kennedy. In clearing the way for unlimited corporate expenditures in campaigns, Justice Kennedy suggested that “shareholder objections raised through the procedures of corporate democracy” could provide accountability for the new political powers.

  • Financial Times: Call in the nerds – finance is no place for extroverts. People attracted to the riskier areas of the sector are those least suited to it. By Sarah Gordon. Excerpts: There is a compelling body of evidence suggesting that the people most likely to go into the riskier areas of financial services are precisely those least suited to judging risk. Susan Cain’s recently published book Quiet cites a series of studies that suggest that extroverts tend to be attracted to the high-reward environments of investment banking, deals and trading. And, troublingly, these outgoing people also tend to be less effective at balancing opportunity and risk than some of their more introverted peers.

    Ms Cain tells the story of Vincent Kaminski to show what can happen to a business when aggressive risk-takers enjoy too high a status relative to more cautious introverts. Mr Kaminski served as managing director of research for Enron, the energy company that filed for bankruptcy in 2001. In that role, he repeatedly tried to sound the alarm about the company entering into business deals that, he thought, threatened its survival. When his superiors would not listen, he refused to sign off on these transactions. The consequence? He was stripped of his power to review company-wide deals.

    As the financial crisis began to flower in 2007, Mr Kaminski was interviewed by the Washington Post. He warned that the “demons of Enron” had not been exorcised. In particular, he complained that many who understood the risks that the US banks were taking were ignored because of their personality style. He said: “The problem is that, on one side, you have a rainmaker who is making lots of money for the company and is treated like a superstar, and on the other side you have an introverted nerd. So who do you think wins?”

  • Washington Post: As economy recovers, the richest get richer, study shows. By Michael A. Fletcher. Excerpts: Wealth inequality widened dramatically during the first two years of the economic recovery, as the upper 7 percent of American households saw their average net worth increase 28 percent, while the wealth of the other 93 percent declined, according to a report released Tuesday.

    The study by the Pew Research Center underscored other data showing that the economic growth that has followed the Great Recession has benefited mainly those at the top. The uneven recovery has only accelerated a decades-long trend of growing wealth inequality in the country, despite rising popular and political awareness of the dynamic.

    From 2009 to 2011, the average net worth of the nation’s 8 million most-affluent households jumped from an estimated $2.7 million to $3.2 million, Pew said. For the 111 million households that form the bottom 93 percent, average net worth fell 4 percent, from $140,000 to an estimated $134,000, the report said. ...

    The biggest difference between the most-affluent group and everyone else, Pew said, is that the wealthiest households have their assets concentrated in stocks and other financial instruments, while others’ wealth is concentrated in their homes. ...

    “It has been a very good recovery for those at the upper end of the wealth distribution,” said Paul Taylor, executive vice president of the Pew Research Center and co-author of the report along with Richard Fry, a senior research associate. “But there has been no recovery for the lower 93, which is nearly everybody.” ...

    Although Obama won the election, many of the tax and other policies aimed at addressing the complex causes of inequality have not been passed by Congress. Those that have become law so far have done little to close the gap.

  • Smirking Chimp: Congress Acts In Hours For Affluent, Ignores People In Need. By Dave Johnson. Excerpts: There was a flaw in the “sequester” — it hit some people who are not poor. The sequester budget cuts caused delays for business travelers (and members of Congress) and the Congress acted in hours. Meanwhile the elderly, poor, homeless, disabled, hungry and unemployed experience dramatic cutbacks. And 750,000 layoffs in 2013 will result.

    The sequester is forcing dramatic cuts in Head Start, Meals on Wheels, Children’s Health Insurance Program, Homeless housing program, Legal Aid, Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), unemployment checks. Too bad for them.

    But Congress acted in hours when business flyers faced some flight delays.

    Business flyers faced delays on Monday, made noise on Tuesday, legislators thought heard it Wednesday and Thursday: Senate votes unanimously to fix FAA furloughs, Friday: House passes bill to end FAA furloughs, now goes to Obama to sign.

    Not just affluent business flyers, CEOs, too. Reuters: Congress passes plan to ease flight delays,

    They had also faced anger from airline CEOs whose companies had mounted a grassroots campaign through a website called dontgroundamerica.com, encouraging Americans to send messages to Congress and the White House.
  • New York Times editorial: Congress Rushes to Aid the Powerful. Excerpts: Congress can’t pass a budget or control guns or confirm judges on time, but this week members of both parties found something they could agree on, and in a big hurry: avoiding blame for inconveniencing air travelers. The Senate and House rushed through a bill that would avert furloughs to air traffic controllers, which were mandated by Congress’s own sequester but proved embarrassing when flights began to back up around the country.

    Then lawmakers scurried out of town, taking a week’s vacation while ignoring the low-income victims of the mandatory budget cuts, who have few representatives in Washington to protest their lost aid for housing, nutrition and education. Though they are suffering actual pain, not just inconvenience, no one rushed to give them a break from the sequester, and it is clear that no one will.

    Catering to the needs of people with money, such as business travelers, is the kind of thing the country has come to expect in recent years from Congressional Republicans. But Democrats share full responsibility for this moment of cowardice. The Senate version of the bill passed by unanimous consent. That means not a single Democrat opposed bailing out travelers while poor kids are getting kicked out of Head Start or nutrition programs. ...

    In the House, only 29 Democrats voted against the gift to travelers, which was made possible by switching some funds for airport improvement into the controllers budget. One of the few willing to brave the Republican attack machine was Steny Hoyer, the Democratic whip, who said he could not support repealing a piece of the sequester while preserving its harmful impact. “Seventy thousand children will be kicked out of Head Start,” he said. “Nothing in this bill deals with them.”

    Delays in air travel annoy the kind of people who can inundate Congress with angry letters and e-mail messages. They also afflict lawmakers themselves. But cutting rental vouchers and jobless benefits affects only the voiceless. The more special-interest exceptions that are carved out of the sequester, the more the rest falls on the backs of those who can neither bear it nor stop it, promising many more years of hard-hearted cuts.

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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