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6, 2000 April, 2000

Highlights—July 27, 2013

  • I, Cringely: The New IBM — vampires in our midst. By Bob Cringely. Excerpts: A memo went out this week to managers in IBM’s U.S. Integrated Technology Services division requiring that future use of additional sub-contract (1099) workers must be approved in advance by a director or vice president. This includes coverage for sick days and vacations, not to mention inevitable customer emergencies. The memo further required that the renewal of any ongoing 1099 contracts include an across-the-board 10 percent reduction in labor rates to IBM. While this may not sound like news, inside ITS it has great meaning since the company has already been cut to the bone. There are, for example, reportedly two remaining IBM experts on HP-UX, HP’s version of Unix. Yet IBM supports customer running HP-UX. What happens when those systems go down? Nothing without first getting an IBM VP out of bed.

    But wait, there’s more! Last week IBM reported earnings. Sales were down but profits were up and the stock rose as a result, but why? Quarter after quarter with the exception of one over the last two years, IBM’s sales go down yet profits go up taking the stock with it. This can’t go on forever. Efficiency is a wonderful thing, but continually dropping sales is a deadly trend. Yet still the stock goes up. That’s what former Federal Reserve chairman Alan Greenspan back in the 1990s called “irrational exuberance.” I say it is Wall Street happily accepting the idea that IBM is eating itself and has decided to eventually die. ...

    The real story of what’s going on here is easy to understand if you just read the comments from any of my recent IBM columns. IBM is cutting costs to maintain profits in declining markets at the expense of customer service. Throw-in regular repurchases of shares and IBM management can keep playing this game of earnings-per-share for another decade against a dwindling pot of shares. Wall Street has to know this, but the important news here is that Wall Street doesn’t care.

    This news — in this case the news behind the news — is already factored into Wall Street’s expectations. Alas, it isn’t factored into the expectations of IBM’s own employees, however, who have been deliberately kept in the dark by management. ...

    IBM management either can’t be bothered to explain the truth to its employees or maybe they feel the overall company would be hurt by a dose of corporate honesty. But honesty is the best corporate policy, so I can only conclude IBM simply doesn’t give a damn about its people.

    If there’s a secret to what’s happening here, a key bit of information that helps make sense of it all, it’s this: It used to be that almost nobody got rich working at IBM, but that has recently changed — for some. IBM salaries were always good and perks were great, but unless your name was Watson you didn’t retire from IBM big rich. But that was then. Sam Palmisano, who pretty much created this current debacle as IBM CEO, retired with a reported $160 million. You can bet current IBM CEO Ginni Rometty aims to do the same or better.

    Vampires have taken control of IBM and Wall Street not only doesn’t care, it is rewarding such behavior by bidding-up the stock. What’s happened here is the rise of trading at the expense of investing. Traders care about the price, not the company. They may not even know what the company does, simply because management decisions and policies won’t likely have any direct effect over the seconds, minutes, or hours these traders are holding the stock.

    In one sense it would be stupid for IBM management not to recognize this and behave exactly as they are doing. They’ve been dealt a crappy hand by cascading bad decisions from executives now long gone. I get that. What I don’t get is IBM management’s determination to lie to employees or at least keep them in the dark about the Big Picture.

    These are no longer employees, just food.

    Selected reader comments follow:

  • Reuters: Amazon vs IBM: Big Blue meets match in battle for the cloud. By Alistair Barr. Excerpts: The tech industry maxim that "no one ever got fired for buying IBM" is a testament to how Big Blue has been the gold standard in computing services for decades.

    But IBM faces an unlikely challenger in Amazon.com Inc , the e-commerce retail giant that is becoming a force in the booming business of cloud computing, even winning backing from America's top spy agency.

    After years of being dismissed as a supplier of online computer services to startups and small businesses, Amazon Web Services (AWS) beat out International Business Machines this year to snag a $600 million contract with the Central Intelligence Agency. ...

    When AWS won, IBM protested, triggering the report by the GAO. The agency recommended in June that the CIA re-do some parts of its contract negotiations, giving IBM another chance.

    But the GAO also stated that AWS's offering was superior.

    "In every technical criterion Amazon out-scored IBM, one of the most sophisticated and capable IT companies in the world," said Carlos Kirjner, an analyst at Bernstein Research.

    The CIA had "grave" concerns, according to the GAO report, about IBM's ability to provide "auto-scaling," a feature that automatically adds or removes computing power in response to applications use.

    "Auto-scaling is very complex and there are not many cloud providers that can do it well, but Amazon is great at it," said Kyle Hilgendorf, a cloud computing analyst at Gartner. "I don't think anyone thinks IBM has a better cloud service."

    • No, Bob, the employees are not food, they’re fertilizer.
    • Your friend's company was sacrificing one business to invest in a new business. The big difference with IBM is they are not really investing in anything new. As the company shrinks there will be nothing to pick up the load. All that profit is going into stock buybacks, executive compensation, etc. None of it is going into any business, today’s business or a future business.
    • It’s a plain old insider gutting, every C-level employee is hitting the safe going to the bathroom and coming back. I think we can go so far as to say there IS no IBM there, anymore. just like RCA and Philips TVs, Polaroid cameras, and pick-your-toolmaker, somebody overseas on whatever island was above water Tuesday is cranking out tinny, creepy stuff and has licensed a formerly big name to put on the front. the execs of the formerly big names shuttle between offsites and high-level review meetings, and wouldn’t know when to spit if they ever got tied up, tossed in a car trunk, and taken to a manufacturing plant for a walk-around.
    • The whole company is big o’ mess. Apparently not happy with 2Q results, more draconian cost cutting and hand wringing has ensued. So, lets see if shedding thousand of employees off the US payroll actually helps 2013.
    • Robert X. Cringely: I don’t typically chase readers but every time I write an IBM column I get a big spike. What this tells me is that there is sincere (even frantic in some quarters) interest in this topic. It’s just a train wreck to me and I can’t look away. With each new data point I think what’s obvious to me will become obvious to everyone, yet it doesn’t seem to work that way. I’ll dial-back on IBM, I guess, but insiders keep calling me.
    • Bob – don’t dial back!!! As others have said – those of us still here on the inside of IBM need voices like yours to get the message out that this once great company is rapidly spiraling down the toilet. If folks actually read the 2Q2013 earnings report as opposed to just reading some of the puff pieces in the media the scales should fall from their eyes as their realise the numbers are truly appalling. As a long time insider I expect IBM will have another near-death experience within the next few years – maybe it’ll pull out the other side – sadly though a lot of honest hard working IBMers will lose their jobs and financial security in the process.
    • DO NOT DIAL BACK BOB!!! Lord knows, God knows, we need to hear honest opinions regarding IBM and other companies. This financial engineering is VERY close to killing IBM’s revenue in a big way. When THAT is recognized, as well as the deplorable morale of the employees, by the market, the stock will plummet and there will be a changing of the guards similar to the changing of the guards from Akers to Gerstner, but for different reasons, but the RESULTS will be the same. May we see some real divine intervention to get IBM back on a more honest, growth and investment and EMPLOYEE beneficial track and away from this TOXIC financial engineering nonsense.
    • Bob please keep writing about IBM. Your blog is one of the few places where anyone does any critical thinking about IBMs strategy. Internally there is almost no mention of the 2015 roadmap, IBMers come here to get the real story. I also think the bigger picture is important, a once great American company destroying itself.
    • I’m a retiree and heard trumpeting of the number of patents each year. The problem IBM has had since the Palmisano is believing that patent quantity has any relevance to quality. Many of the patents would likely be disallowed if challenged in court. In addition IBM has severe problems in actually utilizing those patents in products in the current risk adverse environment. Until IBM can get those patents into new and improved products they are really nothing more than Wall Street marketing hype.
    • Regarding the patent portfolio… An IBM CEO once joked — “good ideas do not come out of IBM research, they escape.” We can’t blame the gifted people who work in IBM research. The problem is IBM is managed by sales people. They simply do not understand or would appreciate a new idea for a product or service. They see things only in terms of what they can sell.

      Guess what? IBM is selling less every quarter. There is nothing in the product pipeline that would stir up a lot of new business. When you have nothing substantial in your product pipeline then you have to retain your existing customers and business. IBM isn’t doing this.

      Customers are an excellent source of information and ideas for new products and services. Guess what? IBM is not listening to them. IBM’s increasingly bad service is dominating their conversation with the customer.

      It is sad. IBM is truly managing by the numbers. Number of patents. Earnings per share. Increasing profit from existing businesses. Make those numbers better. Ignore the other numbers that warn you of future problems.

    • If only IBM Research was as productive as they were 20 years ago – these days it’s just nothing more than a numbers game with little more than paper ideas being patented. The research @ IBM has all but disappeared with all the cuts to the labs. and continuous mismanagement.

      Seems the only “growth” division at IBM is Marketing (the Dept. Of Lies and Propaganda) – they after all have to “try” and peddle ice to the Eskimos and very skeptical and wary Eskimos at that.

      But it is interesting to notice that Band 10 and higher level employees have just been moved around and reassigned since the July 12 cuts, but few if any layoffs to them. Seen that in lots of places in IBM – the clueless and do nothing management just divide and hide, but the productive employees get poor reviews and the axe. At some point, you get what’s coming to you Big Blue Thought Retards – payback !

    • You are hitting the nail on the head from an outsider looking in. Most people come to work not knowing if they will have a job in the near future – morale in the toilet.
    • Please don’t dial back on your assessments of IBM, you speak what some of us feel. Shit on the rank and file , reap the rewards they have afforded you – that has been the motto since four fingered Lou ran off with our pension. Our own fault though, we sit and take it and wait for the next blow, hoping its not a direct hit.
    • Bob, Lord knows, God knows, your commentary hits the nail on the head. This is a very sad story at IBM…My sympathy goes out to all the honest, decent, high morale, righteous, hard working and professional IBMers who have been laid off by the many thousands over many recent years in the US and other countries due to NO fault of their own. All in order to make profit numbers for Wall Street and keep the stock elevated. This financial process/engineering model is just about out of gas, based on how the revenue keeps getting worse and worse and worse.
    • Once one gets their head around the fact that IBM has decided to become Wall Street’s bitch rather than actually making new things that businesses want to buy, everything makes sense. As long as the EPS hits the target, Wall Street doesn’t care what happens long term. That’s the fundamental problem. No one cares about the long term any more nor do they care about how the results are achieved. The stock market is full of folks who want to be rich this quarter, not 10 years from now. Those in the know will ditch their stock and walk away with millions. The only time people will care is when it all finally blows up (Enron, Mortgage/banking melt down are good examples). The current mode of operation is simply not sustainable over the long term.
    • The hardware people at IBM, at least the ones I know, realize full well that hardware is a dying cash cow business at IBM. They are intelligent people, and besides management has said exactly that, in addition to selling PC business, Printer business, Disk drive business, etc etc. That, and squeezing the employees started under Gerstner who was dealing with the absolutely idiotic management of John Akers and some of his predecessors.
    • Watching Ginni give her “new values” pitch to employees. I suddenly had a flashback, she looked and sounded like a female version of Max Headroom http://www.youtube.com/watch?v=cYdpOjletnc
    • LeBlanc was right about Pure being a big flop. I left IBM a couple years ago after watching the leadership morph into a bunch of MBA cronies who spent most of their time building spreadsheets of the next wave of layoffs. It was rather sickening. But the flop of Pure can be traced back to how this sad leadership gang viewed I/T skills (or lack thereof.) Since they had no technical skills to speak of, and surely didn’t understand the technology of the day, they never understood what it takes to be a good I/T practitioner with the ability to support commercial customer portfolios in a meaningful and value-based fashion.

      Their thought has been for quite some time ‘we can just pull any schmoe off the sidewalk, give them a two week cursory training class, and they will be just fine for the job.’ Unfortunately you know how that ends. With Pure, they are trying to sell appliances that ‘run themselves’ and to you customer, ‘you can just get rid of your expensive technical folks LIKE WE DID. Doing so will save you lots of money, ha, ha, ha.’ Thankfully most savvy customer understand the value a strong technical I/T team brings to the table and how critical they are to the business.

      This brings me to something I learned recently from a business partner. A company bought some IBM gear and to reward them, IBM gave them a PURE machine. Customer didn’t want it but IBM insisted. What happened? That PURE machine is sitting in the corner, powered off. Customer’s angle ‘I have the technology I want and the team in place to support it, I don’t want your appliance that YOU say will save my world and my bottom line.’ Therein lies the PURE flop and my guess is this same dynamic is occurring in many shops across the land.

  • Albany Times-Union: IBM layoffs a sign of flux. Job cuts don't dampen rumors that firm may sell some factories .By Larry Rulison. Excerpts: IBM says it spent $1 billion during the past few months laying off workers — including more than 1,000 in the Hudson Valley and Vermont, which forms the nexus of the company's computer chip business.

    It is unclear if any laid off IBM workers were at the College of Nanoscale Science and Engineering where Big Blue employs hundreds and participates in partnerships developing the next generation of chips and chip manufacturing.

    However, the job cuts, which took place in Poughkeepsie as well as in East Fishkill and in Essex Junction, Vt. outside Burlington, represent one-third of the job cuts that IBM made in the U.S. as part of a dramatic "workforce rebalancing" that helped to drag down its profit for the quarter to $3.6 billion — a 12 percent decrease from the same period in 2012.

    Both the East Fishkill and Essex Junction locations are home to IBM's two main computer chip factories. Because of that, the large layoffs there do nothing to extinguish recent rumors that IBM may be interested in selling factories, or fabs, to another company.

    IBM is one of the most secretive companies in the business, and declined comment on this story because it doesn't discuss staffing details. However, the state of Vermont recently got IBM to admit that 419 employees in Essex Junction were being let go, about 10 percent of the workforce there. Vermont Labor Commissioner Annie Noonan said the state has connected with at least 350 of them to try and get them new jobs.

  • Forbes: VMTurbo's Tripling Revenues Are IBM's Loss. By Peter Cohan. Excerpts: For 20 years running, IBM has been proud to lead the global pack in annual patents — generating 6,478 in 2012, alone, during which the $105 billion revenue company spent $6.3 billion on R&D.

    But its interest in turning those patents into new products is muted enough that IBM loses frustrated talent. And that may be one reason why IBM is shrinking at 3%, despite demand that’s growing at 4.7%.

    IBM is pleased with the cash it hauls in from licensing those patents. According to an IBM spokesperson, Mike Fay, “Our patent leadership supports innovation in our offering portfolio, freedom of action to support our clients around the world and has historically contributed about $1 billion a year in IP based technology licenses and Joint Development Agreements.”

    Fay declined to comment on IBM’s outflow of talent — noting IBM’s ”employee information isn’t public.” Really? One public example of IBM’s lost talent is Shmuel Kliger – he earned a PhD in Computer Science from Israel’s Weizmann Institute – who was employed at IBM’s T.J. Watson Research Center when his IBM boss and her now ex-husband persuaded Kliger to bolt with them to start a company.

    How so? In 1993, Kliger joined his boss, Shaula Alexander-Yemini, and her now ex-husband, Columbia University professor, Yechiam Yemini, at their “event automation and real-time network systems management software” start-up, System Management Arts (SMARTS), because he could not see how his research for IBM was ever going to turn into a product that people would use.

    As Kriger explained in a July 22 interview, “I did not have the patience to do all the maneuvering up and down all the layers of IBM’s management needed to turn a patent into a new product that IBM would sell.”

    In addition to losing Kliger, Alexander-Yemini’s departure was even more costly. Before launching SMARTS, she was the Senior Manager for Distributed Systems Software Technology at T.J. Watson, “where she received an IBM Outstanding Innovation Award for Optimistic Recovery for Fault Tolerant Distributed Systems.” ...

    While VMTurbo’s investors will benefit from Kliger’s commercializing great ideas, its lack of comment makes me wonder whether IBM views the loss of Kliger and Alexander-Yemini as a beneficial expense reduction or a loss of talent that could have generated new products to reverse its market share slide.

    A reader comment follows:

    • The IBM of today shares several characteristics with the IBM in the early 90′s when Gerstner was hired. In both cases there is a lack of will to take risks. Risk is required if you wish to develop new products and markets. There are multiple reasons for this but I primarily attribute the problem to two things. The first being the exponential growth in the management layers from the time of Gerstner's retirement. The second is an executive team dead set on driving EPS to the 2015 target to the point that nothing else matters.

      When Gerstner was hired I had nine layers of management between myself and the CEO. Every VP was a fiefdom more interested in itself than the company as a whole. When Gerstner retired I had 5-6 layers of management depending upon my department. At the time I retired three years ago I had eleven layers of management to the CEO. All of these layers did nothing more than isolate those higher up from the business and customers. It also keeps them from understanding the business that IBM is in by the time each layer launders the information provide by those below it. To try and get funding for something that might fail, as any new product might, was near impossible as each layer was more concerned about preserving themselves as opposed to trying to create new revenue. Cross organization cooperation suffers as you have to get more layers to buy in.

      The singular focus to the 2015 EPS target and the financial manipulation is gutting the company of its best talent. Between the RA’s, stagnant pay and lack of upward mobility many of best folks, young and old, leave to go other places. The result is a loss of people to help develop the new hires and a loss of talent in the pipeline. As most innovation happens by employees with some experience this disruption of the talent pipeline is detrimental to creating new markets and products.

      IBM needs to refocus on organic revenue growth and quit picking arbitrary EPS targets as their goals. They need to recognize that the falloff in revenue is a direct result of their actions and take steps to correct it by flattening the company and cultivating an environment that encourages reasonable risk taking. If they don’t they will continue to lose talent such as Dr Kliger and not attract the new Kligers needed to go forward.

  • Yahoo! IBM Employee Issues message board: "Re: IBM Demographics" by "anotheribmer321". Full excerpt: I'm mid-30s and have been with IBM for 4 years. The reason the length of tenure is short is by and large IBM does not care to groom employees for advancement.

    I looked at a position which I have experience doing at IBM, posted as 2 levels above the band I'm in and was told the best I could expect was moving up one band and a maximum increase of 5%.

    That doesn't cut it. Why would I make the effort to learn a new role and take on more responsibility for 5% now and, if the last few years are any indication, very little in the way of annual increase.

    The worst part is IBM would gladly pay fair market rate to someone coming from the outside. Because of the banding/PBC system, they artificially restrict earnings for dedicated employees.

    Which leads to far less-dedicated employees. It's idiotic.

  • Wall Street Journal MarketWatch: Will IBM sell its low-cost server business? Commentary: Investors were hopeful it would have sold by now. By Therese Poletti. Excerpts: Last quarter, International Business Machines Corp. investors got their hopes up — after the company’s first earnings miss in 32 quarters — on reports that the tech giant was in talks to sell its low-margin standard server business to Lenovo Group Ltd.

    But those hopes are dashed, for now. IBM told analysts on Wednesday during its earnings conference call that it was unlikely to be able to offset a $1 billion restructuring charge with the sale of a big business, one that weighs down the company’s overall profit margins.

    “We had said that the second-quarter workforce rebalancing charge would be offset by a future divestiture gain, and frankly, as we look at it now, we are in active discussions but....on a time line basis unlikely that it would close in 2013,” IBM Chief Financial Officer Mark Loughridge, told analysts on Wednesday. ...

    Lenovo, which bought IBM’s PC business in 2005, way before the PC business began to slow down, was balking at IBM’s price for a business which sells lower-cost servers designed around Intel Corp. chips. Analysts estimate that this so-called commodity portion of IBM’s hardware business generated $4.7 billion in revenue in 2012. So Lenovo’s wish to pay about $2.5 billion clearly irked many on the Big Blue side of the negotiating table and it created a “huge gap” in the talks.

    Now, many are wondering what kind of impact the reports of the talks may have had on IBM’s business itself, and whether Lenovo is even still interested. Loughridge’s statement that IBM is still in “active discussions” did not really soothe investors, with the implication that nothing will happen this year. That would imply that IBM is looking for another buyer but it might be tough.

  • Information Week commentary: IBM's Future Growth: Details Shrouded. IBM second-quarter earnings rise but revenues slide, raising questions about where IBM will find next waves of growth. Some cloud, big data and Watson numbers stay hidden. By Doug Henschen. Excerpts: For the three months ended June 30, IBM reported a year-over-year revenue decline of 3% to $24.9 billion. Nevertheless, the company managed to ring up an 8% non-GAAP increase in quarterly earnings. It even raised revenue expectations for the full year by 20 cents.

    At first blush, the earnings figures were pleasing to investors, but "all in" data calculated based on generally accepted accounting practices included a $1 billion "workforce rebalancing" charge that sent quarterly earnings per share down 13% year over year.

    Workforce rebalancing is a euphemism for layoffs pursued most aggressively in Europe and also in declining pockets of IBM's services, hardware and software businesses. IBM does this sort of rebalancing every year, but it packed this year's moves all into one quarter after reporting disappointing first quarter results

    IBM does a great job of financial engineering and taking "tough-minded action," as CFO and senior VP Mark Loughridge put it during a conference call with financial analysts. But taking measures to ensure profitability can't hide anemic growth in some segments and fairly dramatic declines in others. ...

    IBM's services business (including Global Business Services and Global Technology Services) declined 1% year-over-year in the second quarter. Loughridge noted a healthy backlog of services business and stressed that results improved over the previous quarter. But here, too, you're left wondering where the growth will come from as the mainstream packaged app market moves toward cloud-based services and away from on-premises systems integration and consulting.

  • Bloomberg: IBM Judge OKs Foreign Bribe Settlement Two Years Later. By Tom Schoenberg. Excerpts: International Business Machines Corp. (IBM)’s two-year-old settlement of accusations of bribery in China and Korea won federal court approval as the company faces new scrutiny for possible payoffs in other countries.

    U.S. District Judge Richard Leon in Washington yesterday signed off on the $10 million agreement between IBM and the U.S. Securities and Exchange Commission initially submitted in March 2011. Leon refused to approve the deal until the company agreed to file reports to him and the regulator on its possible wrongdoing.

    During a 10-minute hearing, Leon said he’s satisfied IBM “has learned its lesson and is moving in the right direction to ensure this never happens again.” If there’s another violation over the next two years, “it won’t be a happy day,” he told company officials in attendance.

    The approval comes almost three months after IBM disclosed that the Justice Department is investigating whether it violated the Foreign Corrupt Practices Act in connection with contracts in Poland, Argentina, Bangladesh and Ukraine. IBM said in an SEC filing it was notified of the probes by the department in April and asked to provide information on its global anti-corruption compliance program. IBM said it was cooperating.

    Of at least 34 foreign bribery settlements the SEC reached with companies since 2010, only two others failed to win judicial sign-off in less than three months. ...

    In the final judgment Leon signed yesterday, IBM agreed to make annual reports to the judge and the SEC describing its efforts to comply with the FCPA. The company also agreed to immediately report to the SEC and the court “upon learning that it is reasonably likely” IBM violated the FCPA in connection with improper payments to foreign officials or any fraudulent books and records.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: From the Alliance" by "ibmretiree2006". Excerpt: IBM was once the gold standard. Then slipped to the silver standard. Then slipped to the bronze standard. And now is the lead standard of corporations. You imply that all corporations are as sleazy as IBM but that just ain't so. There are hundreds of fairly large companies who treat employees with respect. They pay fair wages for a fair days work. They grow their business profits thru innovation, hard work, thoughtful leadership and treating employees like human beings, not resources. And they are not there to segregate the company population into wealthy executives and enslaved employees. So, the nonsense that IBM "has to" do what it does is just encouraging the awful leadership!
  • Glassdoor IBM reviews. Selected reviews follow:
    • Need to improve a lot if IBM want to maintain brand image” Senior Software Engineer (Current Employee), Mumbai (India). I have been working at IBM full-time for more than 3 years. Pros: Brand company One of few companies that allows you to move across disciplines. Cons: It is employer centric; does not focus on growth & improvements for employees. Lengthy organization hierarchy & very difficult for band progression. Like government organization, management doesn't care about employees. Partiality between employees as per bands. Worst appraisals. Salary below industry standard; salary structure is confusing, most part of salary will be variable which end up in lowest take home. Very expensive insurance; very limited medical benefits. Repeated, unwanted processes. Bery limited or no onsite exposure. Bad canteen facility with expensive low quality food; no transportation. Does not provide allowances as per industry & brand standard. Lot of cost cutting. No library, no gym, no coffee machines!!, no fun activities. No face-to-face required training; rather focus on lot of useless time waster training. Never felt like working in Brand company!! Advice to Senior Management: Please treat all the IBMers equally. Improve facilities & other things if you say it is brand. Try to maintain standard if IBM wants to survive its brand image. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Got me to where I am today” IT Project Manager (Former Employee), Raleigh, NC. I worked at IBM full-time for more than 10 years. Pros: Great work life balance; great educational opportunities; great options for moving around and increasing your experience in many parts of the organization. Cons: Layoffs expected every 6 months or possibly quarterly; don't expect to be there for very long anymore. Working there and retiring from there is a thing of the past. Advice to Senior Management: Attracting good talent will be difficult going forward since there is no job security anymore. Yes, I would recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Good working environment, VERY LOW PAY” Project Manager (Current Employee), Columbia, MO. I have been working at IBM full-time for more than 3 years. Pros: Great coworkers, great environment, great manager, good benefits and training. My manager is very understanding of compensatory time and family time. A lot of great professionals working at this office. Cons: VERY LOW PAY; Chances of advancement are slim compared to other companies doing similar work. The pay is very low; a project manager can start at 45K, some make 65K or a little more. The industry standard is around 85K for the level of experience IBM has in this center. Advice to Senior Management: Start paying salaries that conform to industry standards. Stop hiring low pay workers in other countries and bring jobs back to the USA; third world country employees are inefficient and can barely speak English. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Short term job is OK” Senior Software Engineer (Current Employee), Rochester, MN. I have been working at IBM full-time for more than 10 years. Pros: Excellent people to work with. Challenging job assignments. You get to work with a lot of modern technology Cons: Management is brutal towards employees. Yearly layoffs that are random cuts no matter how good you are ( e.g. really good developer was promoted one month, laid off two months later). Very cheap company (e.g. no budget for training/education, laptop upgrade only every 5 years). Very short term vision for management focus on expense reduction (e.g. hardware is not provided to test software because it is too expensive). Pay and benefits are below average. Advice to Senior Management: Current short term focus on stock price, expense reduction, and outsourcing to Asia will destroy this company in the long run. A real vision is needed from upper management, beyond stock price appreciation. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • A lot of work well rewarded, great management and team to work with.” Anonymous Employee (Former Employee). Pros: A company that has been there for a long time and that has adapted to the changes to keep the business going. Great team to work with. Cons: I have had the chance to be in a good unit that works well together, besides the occasional late nights, there is not much to complain about considering what's going on with other industries. Advice to Senior Management: Keep up the good work and communication at all levels is key.
    • American companies are different than Canadian companies.” Anonymous Employee (Former Employee). I worked at IBM full-time for more than 8 years. Pros: Fantastic co-workers and good benefits. Cons: Bureaucratic and out of touch with employees. Advice to Senior Management: Take a closer look at the middle management layer. There is a lot of fat to be trimmed. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Company still trying to find its way on positive work environments” Anonymous Employee (Current Employee), Research Triangle Park, NC. I have been working at IBM full-time for more than 10 years. Pros: Salary, ability to get ahead, flexible work schedules, paid vacation, ability to work from home, generally promotes from within, on-site gym. Cons: Overtime, employee ranking, traditional retirement plans no longer exist, buildings are empty as most people choose to work from home, cubicles with no privacy in the office, food at the cafeteria costs are high, parking is a long walk to the building, acquired company employees are frequently put in management slots without understanding the job. Advice to Senior Management: Try to copy some of the perks of the better companies to improve the environment. Even something as simple as free sodas would go a long way. No, I would not recommend this company to a friend. I'm optimistic about the outlook for this company.
    • “IBM Senior Management no longer values the individual or customers. Avoid at all costs.” Anonymous Employee (Current Employee). I have been working at IBM full-time for more than 10 years. Pros: *Work from home; *Management is hands off; *Can't say much more for the positives, honestly was a stretch to put the above down. Cons: *Management is dishonest; *No Career Growth; *Draconian treatment of employees; *No respect for the individual, or work life balance. Advice to Senior Management: Forget about the EPS target (also known as "Roadkill 2015"), and return to investing in our employees and customers. Short term personal gain for the executives should not be the primary concern for IBM...in fact it will be the death of an American Icon if not corrected very quickly. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Poor salary and talent retaining for such a big company” Project Manager (Current Employee). I have been working at IBM full-time for more than 7 years. Pros: Great global experience and access to knowledge bases. You will be amazed by the level of details on processes and complex internal networks and bureaucracy. Cons: Poor salary, poor retaining methods, too many layers of approvers for simple processes discourage employees and potential customers of moving forward. People managers are not fully skilled and demotivate people by treating them with no respect. Advice to Senior Management: IBM can be one of the greatest companies in the world, but without investments on employees, it will be outrun. Again. No, I would not recommend this company to a friend
    • A company that respects individual's own values” Managing Consultant (Current Employee), Beijing (China). I have been working at IBM full-time for more than 3 years. Pros: IBM set the role of work and life integration, which greatly release the flexibility of work place and time. It uses the target driven role to manage the employees' performance by setting a complex site of processes. Cons: You need to accept that your vacation might be interrupted by the calls from your managers and your clients as IBM set business first role. Advice to Senior Management: IBM managers, overall, are well trained. Yes, I would recommend this company to a friend.
    • Great foundations—not somewhere I would want to be for a long time” Client Executive (Former Employee), Melbourne (Australia). I worked at IBM full-time for more than 7 years. Pros: Great place to learn your "craft". Develop some brilliant skills. Some amazing people to work with. Cons: Not a great environment for young female high achievers. If someone fails...they generally get promoted. You come out with a slightly warped view of the industry. Advice to Senior Management: 1. Don't see young achievers as a threat...they make you look good! 2. Please stop promoting those who don't achieve to management positions...it causes point 1! 3. Stop assuming customers want to talk to you simply because you are from IBM! No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • A company in turmoil; looking for a direction.” Engineering Manager (Current Employee), San Jose, CA. I have been working at IBM full-time for more than 10 years. Pros: Good people still there. Has great market and product visibility. Cons: Lack of stability. Recent layoffs have really hurt the business—not sure of the future. Focus is on short term results only. No looking to the future. Yes, I would recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Good place for an internship, not good for a career.” Advisory Software Engineer (Current Employee), Durham, NC. I have been working at IBM full-time for more than 10 years. Pros: Pay and benefits is competitive. It's a good opportunity for interns or contractors who are not looking for permanent employment.

      Cons: Always worried about layoffs regardless of performance. Resource actions occur regardless of whether we meet our sales and profit goals.

      Cost-cutting is ridiculous. Hardware for developers is underpowered and must last for a minimum of 4 years. You are not allowed to purchase and use your own hardware either. It's very difficult being productive with the resources given.

      Perks have long ago been eliminated...you have to even pay for coffee through vending machines.

      Employee morale is awful. Many high-performing employees have left for other opportunities, taking valuable knowledge with them. Software quality is suffering, and many customers are dissatisfied.

      The general mood is that upper-management does not care about their employees at all, and only see us as numbers in an expense column. Nothing is more important than profit margin targets. Even declining revenue doesn't seem to be concerning. It feels like IBM executives are engaging in a pump-and-dump scheme. Long-term viability of the company seems uncertain.

      Advice to Senior Management: Stop using marketing lingo and spin on employees when taking away perks and benefits. We're smart people and can see through the lingo. It comes off as insulting to our intelligence.

      Be honest about what your intentions are. If you're planning on eliminating your permanent U.S. headcount by 2015, tell us so that we can look for other opportunities.

      No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.

    • Project Manager” Project Manager (Current Employee), Boulder, CO. I have been working at IBM as a contractor for more than a year. Pros: There is always contract work available. Cons: There is no employee appreciation. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Great experience, but executive direction is driving morale into the ground.” Senior Project Manager (Former Employee), Ottawa, ON (Canada). I worked at IBM full-time for more than 10 years. Pros: Lots of opportunities in seeking out whatever interests you. Plenty of training and volunteer opportunities. I have learned a lot while I was there. Cons: No longer a fun environment. Upper management is tight lipped regarding layoffs citing that discussions about staffing numbers hurts their competitiveness in the market...just an excuse to keep the employees in the dark. Advice to Senior Management: Be truthful to your employees about resource actions. Not saying anything before and after is crippling your employee morale. Yes you may be one of the biggest company in the world and have plenty of people who (mis)guide you, but there is more to life than the almighty dollar. Definitely felt like a number at the end at that executives only answer to Wall Street... quite sad. I feel sorry for those who are left behind...because their time will come; it's only a matter of when. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Challenging... but successful!” Sales Executive (Current Employee). I have been working at IBM full-time for more than 10 years. Pros: Working with very smart people. Cons: Company doesn't spread the fruits off success with employees...only the very top employees are financially benefiting from one of the best corporate turnarounds in American business. Advice to Senior Management: Great Sales people are financially motivated. It is a travesty not to pay the sales execs who tee up all the Services opportunities; anything for Signings. Account movement and unreasonable twice a year quota increases negate equitable pay for performance! Yes, I would recommend this company to a friend.
    • Right Hand doesn't know what the Left is Doing” Marketing Manager (Former Employee), San Francisco, CA. I worked at IBM full-time for more than a year. Pros: The benefits are great and were definitely the best I've had of any of the companies I've worked. The last couple of managers I had were very nurturing and allowed me to work at own pace. Cons: The tools and applications are not user friendly. Ordering seemingly mundane items can be a chore which eats up your time and you feel like you've wasted your day. Processes and procedures can be poorly written and lack transparency. Advice to Senior Management: Better onboarding, assign a work buddy or have a checklist of things to do when starting a new role. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • IBM is a solid company with good benefits and competitive pay.” Senior Contracts Manager (Current Employee), Bethesda, MD. I have been working at IBM full-time for more than 8 years. Pros: Flexibility in work location, many employees work remotely. Cons: They say they are committed to work life balance but I did not experience that in action. You are required to be available to work at many times that interfere with off-time and vacations. Yes, I would recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • IBM going down hill fast...” Senior Financial Analyst (Current Employee). I have been working at IBM full-time for more than 10 years. Pros: Work from home; lots of vacation time when you have been there 10 years; occasional comp time; lots of sick time should you need it. Cons: High stress; high attrition rate in Finance and never backfilled so work gets piled on to those that are left; no raise 10 out of 15 yrs; horrible pay; 401K change this year to not get paid until Dec 31 and need to be employed on Dec 15 in order to get it. Bonus structure gets worse it seems every year—supposed to be profit sharing and even with company having record profits our bonuses do not go up. No career path anymore. Advice to Senior Management: Need to start focusing on the employees especially once the economy turns around. It seems that the company is more concerned about stock holders or bottom lines than their employees and it is sad to see. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Overall, satisfactory. The company is so big that you feel as if you simply are just a number. Not much development.” Business Analyst (Former Employee), Houston, TX. I worked at IBM full-time for more than 10 years. Pros: Good benefits. Good work/life balance. Company has unlimited training resources at your disposal if you are in selected fields only, however. Cons: Feel just like a number. If not a research scientist or in sales, you feel as if your contribution is not worth much. Advice to Senior Management: Try to develop "all" of your people, not just a select few. Yes, I would recommend this company to a friend.
    • OK Company to work for” Staff Software Engineer (Current Employee), Foster City, CA. I have been working at IBM full-time for more than 7 years. Pros: Depending on the group, it might be 9 to 5 kind of a job. Cons: Pay wise not much. Absolutely no perks. Kitchen is always empty. Management folks tend to grow up more than engineers. Yes, I would recommend this company to a friend. I'm optimistic about the outlook for this company.
    • Enjoyed my career at IBM, was able to move around to several different projects.” Advisory Software Engineer (Former Employee), Littleton, MA. I worked at IBM full-time for more than 10 years. Pros: Many different projects and opportunities to move around. Many experts in different area, from whom help is often given freely. Flexible work hours. Cons: Ratings/reviews seem to make it necessary to compete with co-workers, with emphasis on visibility to management. Trend seems to be moving jobs overseas, reducing US workforce. Cuts are often across the board, so many very good employees being let go. Most projects end up being teams in multiple locations around the world, making collaboration difficult to match up work schedules. Advice to Senior Management: Pay more attention to collaboration of employees, and not just "leadership by presentations". Yes, I would recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • no ethics to find and no ethics to develop” Senior Managing Consultant BD9 (Former Employee), Melbourne (Australia). I worked at IBM full-time for more than 8 years. Pros: diversity of staff, office locations, not worrying about anything except own KPIs. Cons: no career without sleeping your way up, or complying with the IBM way. Advice to Senior Management: get real. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • It's all about cutting cost to hit 2015 Roadmap target” Sales (Current Employee), Sydney (Australia). I have been working at IBM full-time for more than a year. Pros: Some good, intelligent people and solutions. Flexible working locations. Strong channel focus. Cons: Too many processes, most people lazy. Company moves very slow. Lacks creativity. IBM first, then then the client. Takes forever to issue pricing to client. Advice to Senior Management: Invest in your people, not billions in R+D. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
  • Glassdoor IBM Canada reviews
  • New York Times: Big Data Analysis Adds to Guest Worker Debate. By Quentin Hardy and Somini Sengupta. Excerpts: Although certain kinds of engineers are in short supply in the United States, plenty of potential candidates exist for thousands of positions for which companies want to import guest workers, according to an analysis of three million résumés of job seekers in the United States.

    The numbers, prepared by a company called Bright, which collects résumés and uses big data tools to connect job seekers with openings, enter a contentious debate over whether tech companies should be allowed to expand their rolls of guest workers. In lobbying Congress for more of these temporary visas, called H-1B visas, the technology industry argues there are not enough qualified Americans. Its critics, including labor groups, say bringing in guest workers is a way to depress wages in the industry. ...

    Bright is based in San Francisco, and it makes money in part by placing qualified candidates with recruiters and, according to Mr. Goodman, employs workers using H-1B visas. “We’re Silicon Valley people, we just assumed the shortage was true,” Mr. Goodman said. “It turns out there is a little Silicon Valley groupthink going on about this, though it’s not comfortable to say that.” ...

    For the study, Bright looked at the job categories for which firms applied for H-1B visas, and then, looked at résumés of job seekers in the United States whose résumés matched those same categories. ...

    The Senate immigration bill, passed last month, nearly doubles the number of H-1B visas that companies can seek every year. Industry lobbied heavily for it, bulldozing efforts to add language that would force companies to try to hire an equally qualified American first. The House is mired in arguments over what kind of immigration legislation it can pass. Technology industry groups are lobbying members of the House for a substantial increase in H-1Bs, among other things.

    Outsourcing companies, mostly from India, have lately sought the largest chunks of H-1B visas. Companies like Tata Consultancy Services and Wipro bring thousands of temporary workers, mostly from India, and place them for short-term projects in a variety of American industries, from banks to technology firms like Microsoft and Oracle. H-1B visas are also used by graduates of American universities who are hired by companies in the United States.

    The age of workers, which the study did not look at, may also play a role. Experienced American workers tend to be older in an industry that prizes youth. A study conducted by a Seattle-based company called Payscale found that among 32 technology companies surveyed, only six had a work force with a median age over 35. At Monster, the job search portal, the median age was 30; at Google, 29; and at Facebook, 28. The median age of American workers over all is 42.3 years old, according to the Bureau of Labor Statistics.

  • New York Times: Three Men, Three Ages. Which Do You Like? By Michael Winerip. Excerpts: It turns out that a young Max and a middle-aged Max can get away with saying things that an old Max cannot.

    At least that is the conclusion of a new study by Princeton researchers aimed at measuring age discrimination, one of the toughest forms of workplace bias to prove.

    The subjects of the experiment — 137 Princeton undergraduates — were shown a video of a man who would be their partner in a trivia contest. His name was Max, he was white, neither handsome nor ugly, wore a checked shirt and said he was from Hamilton, N.J.

    What the students did not know was that there were actually three different versions of Max, being played by different actors, 25, 45 and 75 years old.

    Each Max adhered to the same script with one exception. When describing himself, half of the time the Max character said he was the kind of person to share his wealth with relatives (the compliant Max); and the other half of the time, Max said he felt no obligation to share (the assertive Max).

    The students were then asked their opinion of Max. For those who saw the 25- or 45-year-old Max, it made no difference whether he was compliant or assertive. But students who saw the 75-year-old actor gave the assertive Max a high negative rating. ...

    “If you want to be an aging gray panther, and speak your mind to your manager, that’s fine,” said Susan Fiske, a Princeton professor and a co-author of the study with Michael North, who recently completed his Ph.D. “But expect consequences.” ...

    There is little doubt that such discrimination exists. When an older man or woman is laid off, it typically takes two to six months longer to find a new job than it takes younger workers, according to the Bureau of Labor Statistics. And the new job is likely to pay considerably less. ...

    Winning an age discrimination lawsuit has become much harder since a 2009 United States Supreme Court case, Gross vs. FBL Financial Services. Before that, the employee had to show that age was a factor contributing to the layoff. Now, the employee has to show that age was the determining factor leading to the layoff, a much tougher standard.

    “Plaintiffs’ attorneys have told us that they will not take age cases anymore because of the Gross decision,” says Laurie McCann, an attorney with AARP.

  • New York Times: Cries of Betrayal as Detroit Plans to Cut Pensions. By Steven Yaccino and Michael Coooper. Excerpts: Gloria Killebrew, 73, worked for the City of Detroit for 22 years and now spends her days caring for her husband, J. D., who has had three heart attacks and multiple kidney operations, the last of which left him needing dialysis three times a week at the Henry Ford Medical Center in Dearborn, Mich.

    Now there is a new worry: Detroit wants to cut the pensions it pays retirees like Ms. Killebrew, who now receives about $1,900 a month.

    “It’s been life on a roller coaster,” Ms. Killebrew said, explaining that even if she could find a new job at her age, there would be no one to take care of her husband. “You don’t sleep well. You think about whether you’re going to be able to make it. Right now, you don’t really know.” ...

    Kevyn D. Orr, the city’s emergency manager, has called for “significant cuts” to the pensions of current retirees. His plan is being fought vigorously by unions that point out that pensions are protected by Michigan’s Constitution, which calls them a contractual obligation that “shall not be diminished or impaired.” ...

    Many retirees see the plan to cut their pensions as a betrayal, saying that they kept their end of a deal but that the city is now reneging. Retired city workers, police officers and 911 operators said in interviews that the promise of reliable retirement income had helped draw them to work for the City of Detroit in the first place, even if they sometimes had to accept smaller salaries or work nights or weekends.

    “Does Detroit have a problem?” asked William Shine, 76, a retired police sergeant. “Absolutely. Did I create it? I don’t think so. They made me some promises, and I made them some promises. I kept my promises. They’re not going to keep theirs.” ...

    When the small city of Central Falls, R.I., declared bankruptcy in 2011, a state law gave bondholders preferential treatment — effectively protecting investors even as the city’s retirees saw their pension benefits slashed by up to 55 percent in some cases. ...

    Michael Wells, 65, retired in 2011 after working at the Detroit Public Library for 34 years. He said he still owed close to $100,000 on his house in Detroit, which was appraised recently at $25,000. “I’m totally underwater here,” said Mr. Wells, who is one of the plaintiffs in a union-backed lawsuit to stop the city from filing for bankruptcy and from reducing pension payments.

    He said he viewed the pension as part of the overall pay he was promised. “It’s deferred income,” he said. “Had I not had a pension, perhaps I would have gotten several dollars an hour more and that would be O.K. I would have taken that money and invested it in some kind of mutual fund or stock.”

New on the Alliance@IBM Site
  • Job cuts have begun. So Far in North America:
    • BT/IT CIO Enterprise Transformation: 4
    • Corporate Marketing and Communication: 83
    • GBS AMS Commercial Delivery: 27
    • GBS AMS IBM Global Account: 123
    • GBS CS Financial Services Sector: 14
    • GBS CS Industrial Sector: 32
    • GBS PS Business Analytics: 39
    • GPS Solutions and Delivery: 116
    • IBM S&D Communications Sector: 3
    • ISC Engineering: 75
    • ISC Sales Transaction Support OIST: 70
    • Research: 65
    • S&D Global Techline and Channel Technical Sales: 9
    • SO Delivery HQ Cloud Development and Delivery: 40
    • SO Delivery Integrated Competencies: 46
    • SO sectors (GSSR): 31
    • Software Group Collaboration: 115
    • Software Group East Region Sales: 40
    • Software Group Industry Solutions: 126
    • Software Group Information Management: 137
    • Software Group Marketing: 222
    • Software Group NA Software Sales: 63
    • Software Group Rational: 59
    • Software Group Security: 22
    • Software Group Tivoli: 98
    • Software Group WW Services and Education: 22
    • STG Advanced Microelectronics Solutions: 114
    • STG Burlington Semiconductor MFG and Development: 93
    • STG Burlington Site Operations: 8
    • STG Cloud Systems SW Development: 70
    • STG Competitive Lab and Technical Sales Centers: 35
    • STG Electronic Design Automation: 106
    • STG High Speed links, Cores and Memory: 67
    • STG IBM I Development: 60
    • STG ISV Global Support: 35
    • STG Lab Services and Tech Training: 52
    • STG Operations and Transformation: 34
    • STG Power Software Development: 64
    • STG Pureflex & System X Software Development: 32
    • STG Semiconductor Research and Dev: 165
    • STG Server & Storage Engineering System Test: 97
    • STG SSE Intellectual Property: 64
    • STG Storage (ISSA): 41
    • STG Storage Systems Development: 121
    • STG Strategic Initiatives: 8
    • STG System Z Software Development: 45
    • STG Systems Solutions Dev: 56
    • STG Systems Technology Development: 24
    • STG Test Site Design: 59
    • STG Worldwide Client Care: 30
    • STG WW STG Tech Support: 65
    • SWG Application and Integration Middleware: 86
    • Total cut so far: 3312
  • Job Cut Reports
    • Comment 07/19/13: Canada, Toronto area. 2 full timers in my group. Package given 2 weeks a year, but I do know once the lawyers come to the pictures, they pay much more. -John-
    • Comment 07/20/13: Hi, I need to understand how IBM COBRA works. Because per IBM separation package i worked for 10 years so i should get health insurance for next 6 months same rate when i was at ibm. But then i got new package about COBRA my rate sky rocketed. For example i was paying about 500/mo for my EPO plan, now it shows me 1560 for three people. Its not what the separation package says. If anyone gives me more info that would be great help. Thanks -XIBMer-
    • Comment 07/20/13: does anyone know what the date, in Ontario, when IBM is required to pay RA'd employees the separation package? Not knowing whether this was a "termination" or "separation", I believe we are still bound by the labour code, "Termination pay must be paid to an employee either seven days after the employee is terminated or on the employee's next regular pay date, whichever is later." -Ontario Employee-
    • Comment 07/22/13: ex-PwC person. affected by 2011 RA. got credit for the entire duration (PwC+ibm - uninterrupted). but it took a lot of time and effort. needed to speak with manager probably 10 times and with HR multiple times. they needed pbc employment letter, and the employment letter that was issued when PwC was acquired by ibm (2002). this 2002 letter is the most important one as this one mentions the continuity of employment. also, 'about you' in bluepages should mention the actual IBM joining date (date of acquisition) along with the PwC joining date in a separate field. -ex-pwc2-
    • Comment 07/22/13: My separation medical worked like this: six months covered by"transition" medical at same rate prior to separation (IBM continues contributing) which is the subsidized group rate, then 12 months of COBRA at a much higher rate (IBM no longer contributes) which is the full group rate. After the 18 months (6 + 12) I must switch to a private, individual plan. -COBRA Kai-
    • Comment 07/23/13: Severance Pay in Ontario Handed in all my assets and sites the paper work on June 18 th it is July 23rd and no severance payments yet ! I called IBM HR and was told it won't be paid until AUGUST 16 !!! How is this legal ?? What can I do to get paid immediately -Anonymous-
    • Comment 07/23/13: Disrespect for the individual seems to be one of the new IBM Values -Anonymous-
    • Comment 07/24/13: Corporate audit in Toronto. Top performers quitting. Blind eye was turned for misconduct all these years. Who will get the hook? -SC-
    • Comment 07/24/13: Anonymous in Ontario: I know in the USA severance payments are strictly at the discretion of the terminating employer. There is no law saying a terminating employer has to even offer severance payment. In Canada it is *probably* the same. IBM can delay or even deny severance, even if already agree to. A severance agreement is not a termination contract! -Anonymous2-
    • Comment 07/24/13: If you are reading this and you still work at IBM, I can't emphasize enough that you need to be prepared to be cut. Take the Alliance's advice and have all of your information from w3 in order (salary & job history), contact emails for references, complimentary emails saved/printed, etc. The ThinkPad belongs to IBM and they can seize it with no warning. Do not keep your personal information on there and do frequent back-ups and keep those at home. I was just "terminated" with no warning and my computer was seized immediately. I was top talent designated with high performance ratings, so it can happen to anyone. Be prepared! Trust no one. -BlindsidedinRTP-
    • Comment 07/24/13: I too am in the same boat with respect to my severance payment (Canadian employee) . IBM has not yet paid out the amount agreed upon even after receiving the signed paper work over a month ago . So much for treating people with dignity. I would have thought more of IBM. Might make am interesting local news story though :) -Anonymous in Ontario-
    • Comment 07/24/13: If you were terminated in Ontario, you have two options if you didn't signed the offer and legal release. You can hire a lawyer or file an Ontario Employment Standard Act claim. Termination pay is due "either seven days after the employee is terminated or on the employee's next regular pay date, whichever is later." (http://www.labour.gov.on.ca/english/es/pubs/guide/termination.php) To have the Ministry of Labour investigate your claim, you can start the process here: (http://www.labour.gov.on.ca/english/es/topics/esclaim.php) You are no longer an employee of IBM. Stop being a push over. Fight back. -EPS victim #199-
    • Comment 07/24/13: Contractors being cut in Canada. Managers got the request from high up Wednesday last week to provide the names by the next morning. Last day for these contractors is Friday next week. I do not have a total. Also extra furlough days being asked for the contractors still here (now 3 weeks to do before the end of September). It does not matter if it is a regular or a contractor, in the end it’s less people to do the work. Account teams are putting new processes and training to reduce the quantity of failed changes. Nobody wants to admit that it’s fragmentation (aka Global Delivery & GDF) and reduced headcount that causes the dismal quality of changes from some teams. -CANanonymous-
    • Comment 07/24/13: Another few axed in Dubuque. Some top performers and some legacy IBMers. PBC score has nothing to do with the layoffs. I think they are random. I can tell you most of my team did not see this one coming. Guy was promoted to team lead in less than a year and thought IBM was the best thing since sliced bread. Today he sings a different tune. Do not drink the kool-aid people, it's poison. -johnny2times-
    • Comment 07/24/13: Laptops taken away in Toronto corporate audit. Buzz is getting around the site. For years the LDR team has reported high results, paid out under PSP plan... Why blame the reps? Blame the senior management who accepted the results, reviewed it, ranked it and paid out on it. Wonder how long it will take people to "lawyer up" -SC-Comment 07/25/13: Summarizing Ginni's new IBM Practices presentation to employees this morning. "Customers FIRST, Everyone else Second, Employees Last." -OldTimer-
    • Comment 07/25/13: According to a lawyer, IBM is only required to pay the severance / separation minimals at the time of termination. But they are not even doing that. The suggestion was to file a grievance with the Labour Board. -Ontario Employee-
    • Comment 07/25/13: Grievance filed with the labour board in Canada as well as with Service Canada as the Record of Employment has to by law be provided within 5 days - IBM does not plan on sending it until all final payments are made ! I encourage all Canadian Ex-Employees to file as well or you will be waiting another month -Anonymous-
    • Comment 07/25/13: To the surprised folks that get RA'ed you need to understand the termination selection has little to nothing to do with performance or local management. The financial folks have a dollar amount that each organization must reduce their headcount by. They provide a list of the employees that will allow the organization to make this number. While there is some selection flexibility as to which employees are on the final list that decision is typically made at 3rd line and above. The only way you can change this is to have a contract that spells out fair and reasonable rules for RA'ing people. Without this you are doomed to the same process quarter after quarter. -anonymous_retiree-
    • Comment 07/25/13: I was really impressed with the 1-3-9 Ginni presentation today. I loved the tone, message, and spirit displayed... and if IBM were a non-profit that was doing good for mankind and the world, then maybe I could buy-in. BUT, IBM is a for-profit and while my standard of living has decreased about 20-30% in the past decade working here, a few at the top, who are unable to grow revenue, are getting rich beyond belief. So while Ginni and her team want us to do group hugs, sing Kumbaya, and show up for work with a smile, I am in total Stage 1 Maslow Safety & Security mode melt down.

      Note to Ginni - send some of your execs to a Organizational Behavior 101 course and learn about Maslow Hierarchy and ask the professors about the likelihood of IBM thriving by continually using gimmicks to take away employee benefits while putting employees last.

      I have a suggestion that might change my attitude. How about you and your executive team work for $1 a year until you return IBM to consistent revenue growth! -At The End-

    • Comment 07/26/13: Update to my previous post on IBM total population in USA. Of the 88,150 total population there are 6,853 vendors, 12,087 contractors and 2,959 supplementals. That means regular IBMers is at 66,251. -BlueBlood-
    • Comment 07/26/13: I have not been RAd (yet) but the situation at IBM is unbearable and we are all affected by the recent June and ongoing-cuts. We already work 60+ hrs/week and are now asked to pick up even more work. People morale is low, they are leaving on their own, retiring, so even more work is on our shoulders now, which means more people will leave ... how can this be good for our customers??? I can't even do my work properly because there is not enough time in the day. -tired.and.angry-
    • Comment 07/26/13: Resource action in the UK - Confirmed by Management as part of the wider project mercury Looking for 270 out of a population of 1850. Voluntary requests apparently exceeded the requirements but only few were given out so that the remainder of the targeted groups could be cut. No regard given to business requirements. Straight ranking exercise, draw a line, bin those below the line -Redundant-
    • Comment 07/26/13: Around 20 people were let go in Algorithmics (Risk Analytics), Toronto, in June and July. That's approximately 5% of the workforce. -Just another IBMer-
    • Comment 07/26/13: More job cuts happening in Boulder Global Delivery Framework. Contractors will be effected this go around around and be notified July 31st, their last day! IBM regs will be hit a little later. Happy to be on my way out... -p-
    • Comment 07/27/13: So according to the 1-3-9 presentation, every meeting should start with a story. I've lost 75% of my team. I don't have time to tell or listen to stories. That's my story and I'm sticking to it. -anonymous-
    • Send the RA pack to ibmunionalliance@gmail.com so we can validate and count the number of workers fired. Names are confidential.
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • New York Times: Files Suggest a Graft Case in China May Expand. By David Barboza. Excerpts: A few weeks ago, when Chinese investigators raided a small travel agency in this fast-growing city, they came upon something startling.

    The agency appeared to be using fake contracts and travel invoices to help executives at the British pharmaceutical giant GlaxoSmithKline bribe doctors, hospitals, foundations and government officials, Chinese authorities said. ...

    But documents obtained by The New York Times show that in the last three years at least six other global pharmaceutical companies, including Merck, Novartis, Roche and Sanofi, used the same travel agency to make arrangements for events and conferences. ...

    The scandal has battered the reputation of GlaxoSmithKline, which is also known as GSK. At a news conference last week, investigators likened the British drug maker to a boss in a criminal organization. They said it used the travel agency to bribe officials in hopes of illegally increasing drug sales and raising the prices of its products in China. ...

    According to the authorities, Glaxo has used 700 travel and consulting firms and spent nearly $500 million on conferences since 2007. Some travel agencies helped Glaxo executives commit fraud, the government asserts. But investigators have named just one: Shanghai Linjiang International Travel Agency.

    The government said the Linjiang agency did very little booking on its own and mostly acted as a “money platform” that allowed Glaxo to create a huge slush fund.

    According to the government, the travel agency was handling about $16 million worth of Glaxo business a year, but seemed to be doing very little work. The government also said Mr. Weng had said that several other foreign drug companies were also “involved” in such actions, though he did not elaborate. ...

    On Thursday, a handful of employees could be seen at the office of Shanghai Linjiang International Travel Agency in a modest building in Shanghai, but they declined to talk to visitors. Neighbors said they noticed the Linjiang staff was busy shredding documents, some of which could be seen piling up in hallway trash bags.

  • Washington Post: How a secretive panel uses data that distort doctors’ pay. By Peter Whoriskey and Dan Keating. Excerpts: When Harinath Sheela was busiest at his gastroenterology clinic, it seemed he could bend the limits of time.

    Twelve colonoscopies and four other procedures was a typical day for him, according to Florida records for 2012. If the American Medical Association’s assumptions about procedure times are correct, that much work would take about 26 hours. Sheela’s typical day was nine or 10. ...

    This seemingly miraculous proficiency, which yields good pay for doctors who perform colonoscopies, reveals one of the fundamental flaws in the pricing of U.S. health care, a Washington Post investigation has found.

    Unknown to most, a single committee of the AMA, the chief lobbying group for physicians, meets confidentially every year to come up with values for most of the services a doctor performs. ...

    But the AMA’s estimates of the time involved in many procedures are exaggerated, sometimes by as much as 100 percent, according to an analysis of doctors’ time, as well as interviews and reviews of medical journals. ...

    If the time estimates are to be believed, some doctors would have to be averaging more than 24 hours a day to perform all of the procedures that they are reporting. This volume of work does not mean these doctors are doing anything wrong. They are just getting paid at the rates set by the government, under the guidance of the AMA. ...

    It turns out that the nation’s system for estimating the value of a doctor’s services, a critical piece of U.S. health-care economics, is fraught with inaccuracies that appear to be inflating the value of many procedures:

    To determine how long a procedure takes, the AMA relies on surveys of doctors conducted by the associations representing specialists and primary care physicians. The doctors who fill out the surveys are informed that the reason for the survey is to set pay. Increasingly, the survey estimates have been found so improbable that the AMA has had to significantly lower them, according to federal documents. ...

    “What started as an advisory group has taken on a life of its own,” said Tom Scully, who was Medicare chief during the George W. Bush administration and is now a partner in a private equity firm that invests in health care. “The idea that $100 billion in federal spending is based on fixed prices that go through an industry trade association in a process that is not open to the public is pretty wild.” ...

    This point system is critical in U.S. health-care economics because it doesn’t just rule Medicare payments. Roughly four out of five insurance companies use the point system for the basis of their own physician fees, according to the AMA. The private insurers typically pay somewhat more per point than does Medicare. ...

    The median salary for a gastroenterologist was $481,000 in 2011, according to data from the Medical Group Management Association. By contrast, the median salary for a pediatrician was $204,000 and that of a general internal medicine doctor was $216,000. Those kinds of disparities are leading medical students away from primary care, critics say.

  • Washington Post: Did you know the federal government thinks doctors can work 50-hour days? By Sarah Kliff. Excerpts: Most Wonkblog readers, I would imagine, have a sense that our health care system doesn’t work quite perfectly. One major source of that dysfunction is a secretive committee that sets prices for a $2.7 trillion industry. Meet the American Medical Association’s Relative Value Update Committee. ...

    Here are six of the details that jumped out at me in reading the two pieces:

    • Thirty-one people meet in private, once every three years, to determine the entire country’s health care prices. The Relative Value Update Committee (the RUC, pronounced “ruck” by health wonks) has members that represent various medical specialties. In 2013, they gathered at a hotel in Chicago, and went about their business of setting price data for one of the country’s largest economic sectors. ...
    • The American Medical Association spends $7 million developing these prices. Medicare has a half-dozen, part-time workers to review the data. The RUC does not have the final say in medical prices; once they have determined the relative value of procedures, the MRIs and heart stents and hundreds of other things, Medicare reviews their findings. But they don’t have much manpower in this area. “The government has about six to eight people reviewing the estimates provided by the AMA, government officials said, but none of them do it full time,” Whoriskey and Keating write. ...
    • Medical productively and technology keep increasing. But, for some reason, so do health care prices. The RUC has been seven times as likely to raise estimates of work values rather than lower them, according to Whoriskey and Keating’s analysis. ”Between 2003 and 2013,” they write, “AMA and Medicare have increased the work values for 68 percent of the 5,700 codes analyzed by The Post, while decreasing them for only 10 percent. ...
    • The economists who created the RUC now think the RUC works horribly. William Hsiao, a Harvard economist, makes an appearance in both pieces as one of the godfathers of the RUC system. The idea, when it started back in the late 1980s, was to create a “rational” system for setting Medicare prices, which had begun to grow wildly. ...

      The Bush administration, skittish of anything resembling government price setting, rejected the idea of establishing an independent council of advisers within the government. Instead, in 1991, they gave the task to the most powerful interest group in the industry, the AMA (which had, of course, graciously offered its services). “And that was the point where I knew the system had been co-opted,” Hsiao told me. “It had become a political process, not a scientific process. And if you don’t think it’s political, you only have to look at the motivation of why AMA wants this job.” ...

    • Doctors tell the RUC how valuable their work is. In a way, it makes sense to ask doctors how much work it takes to practice medicine; they probably have the best first-hand knowledge of what happens when they perform a heart surgery or a colonoscopy. But surveying doctors on how difficult their work is to set medical prices creates every incentive for doctors to overestimate their value.

      “These specialist societies get their data from surveys of their own membership—a group of people who stand to gain directly and materially from making a procedure seem as difficult, time-consuming, and stressful as possible,” Edwards writes.

  • New York Times: What Makes U.S. Health Insurance Exchanges So Complicated. By Uwe E. Reinhardt. Excerpts: There is much coverage and commentary on news Web sites about whether the health insurance exchanges called for in the Affordable Care Act will be ready by Oct. 1 for enrollment by individuals seeking health insurance in the nongroup market. Insurance bought there takes effect on Jan. 1. I sense that many of those commenting would like the exchanges to fail.

    Why is setting up these exchanges so difficult? After all, they are not a novel invention. The eHealthInsurance.com Web site, for example, has since 1997 functioned as an electronic exchange for private health insurance products sold in the nongroup United States market. ...

    More relevant as a model in this context might be the health insurance exchanges in several European countries that operate social health insurance systems with multiple competing private insurers — Germany, the Netherlands and Switzerland prominent among them.

    Let us therefore pretend that we are residents of Switzerland and rummage around in a Swiss health insurance exchange.

    All Swiss residents are required by federal statute to purchase insurance coverage for a common, comprehensive benefit package prescribed in the statute. Individuals buy that coverage on health insurance exchanges whose architecture is broken down by canton and that facilitate easy comparisons of the community-rated premiums charged by the competing private insurance carriers active in the individual’s canton. ...

    Private insurers in Switzerland are not allowed to earn profits on the common, comprehensive, social-insurance benefit package they cover, but they can earn profits on the supplemental benefits.

    The Swiss company Comparis, a general insurance broker, among other exchanges operates one for health insurance, and it is available in English. ...

    Swiss insurance exchanges seem quite simple and user friendly. Presumably, no one needs the assist of an insurance navigator to work through this Web site.

    So why can’t the insurance exchanges under the Affordable Care Act be as simple as those in Switzerland? Why would it take almost three years to set up the American exchanges? And why will American buyers of health insurance need specially trained navigators to help them navigate these exchanges?

    There are several reasons.

    For one, the exchanges are but one small component of America’s highly complex health insurance system and must be stitched smoothly onto its many facets — a challenge that would be just as demanding for anyone proposing to move toward universal health insurance coverage through private insurers, even in the absence of deliberate attempts to sabotage the effort. ...

    Finally, the Swiss exchanges need to feature premiums only for exactly the same health benefits. Individuals have a choice only over the deductible in the policy. The Affordable Care Act does specify the basic benefits that must be covered, which each state can translate into its own basic benchmark package. There will be four levels of covered benefits (bronze, silver, gold and platinum) that are likely to differ mainly by the degree of cost-sharing (deductibles, co-payments and co-insurance). But some variation of covered services around the state benchmark package nevertheless will be possible within the same actuarial value of a policy, adding some complexity. ...

    Americans insist on choice and pluralism among insurance products, enabling them to find coverage they believe will fit their personal needs. That choice, desirable though it may be, comes at a stiff price, with two dimensions.

    First, it adds considerably to monetary outlays on administrative functions, which in the United States run about twice per capita what they are in other countries. And to make careful and responsible choices takes a great deal of a person’s time.

  • The Journal News: Medical bills: Baffled consumers seek help as rising costs vary widely among hospitals. By Jane Lerner. Excerpts: Every month for the past eight years, Ellen Buczkowski has gone to a Rockland hematologist’s office for an infusion of medication that she has needed since her spleen was damaged by illness.

    Weeks later, the Stony Point resident gets a flurry of medical bills and statements.

    Until recently, her doctor charged about $500 for a treatment, with Medicare paying $216.82. Her share, once she met a small annual deductible, was $50.70 for the treatment plus $60 for her 40 mg dose of gamma globulin.

    In January, she went to the same doctor in the same office for the same treatment. This time the bill was a whopping $19,235.07. Medicare paid $2,623.16. Her share: $655.80.

    The staggering increase wasn’t the result of some technological breakthrough or new medical complication.

    Rather, her hematologist sold his practice to Nyack Hospital. As a result, Buczkowski’s treatment was billed by the hospital, not the physician.

    “But it was the same treatment,” she said. “What could explain the difference? This is highway robbery. It’s unconscionable.” ...

    When Eastchester bankruptcy lawyer David Babel opened his practice 25 years ago, medical expenses were rarely a cause of a financial breakdown. Now, it’s common, he said. A study in the American Journal of Medicine showed that medical bills were the cause of 62 percent of personal bankruptcies.

    “People come in who have insurance or they are underinsured, or they thought they had insurance but because of marital difficulties they may no longer be covered, or they are forced to undergo medical treatments, and they just can’t pay the bill,” Babel said.

    Often people try to keep up with payments, but the large and unexpected expenses wreak such havoc with their finances that they have no choice but to consider bankruptcy, he said. “The hospital creditors come after them. They hound them until they can’t take it anymore,” Babel said. “They can’t sleep at night.” ...

    Medical bills have become so confusing that an increasing number of people are doing what Dieckman of Pleasantville did when he was trying to decipher his mother’s health-care expenses: hire an expert.

    “Figuring out your medical bills has become as complicated as doing your taxes,” he said. “You need an expert.” ...

    Gross estimates she finds mistakes or overcharges in 80 percent of the medical bills she analyzes. For Dieckman, that meant several hundred dollars in savings. ...

    A common ploy involves charging multiple times for the same item or service, she said. Others include concealing low-cost items behind high-tech names.

    One of her favorites includes $12 for a “mucous-recovery system” — also known as a tissue.

  • Washington Post: Hospitals are quitting a key Obamacare cost-control program. By Sarah Kliff. Excerpts: Back in 2011, officials at Seton Health Alliance were anxious to change the way its doctors delivered health care. The Austin-based hospital system didn’t want to get paid just for the sheer volume of surgeries and patient visits their doctors delivered.

    Executives wanted to try something new: They wanted Medicare to pay them for taking better care of patients.

    Seton Health also wanted to move as quickly as possible. So in December 2011, it became a Pioneer Accountable Care Organization, one of 32 health systems across the country that would — as the name implies — pioneer value-based care, and get paid for hitting certain quality metrics.

    “It was appealing to us because it was the first opportunity and the first start date for one of these programs,” Greg Sheff, the group’s chief medical officer, said. “We really believed in it.”

    Seton invested millions moving to a value-based system. It hired new nurse coordinators, to ensure patients got higher quality-care and installed new data systems that made it easier for doctors to talk to one another.

    This all makes the next twist in Seton’s story a bit of a surprise: It has decided to leave the ACO program, switching to a separate federal program with a bit more flexibility–and no financial downsides if quality does not improve.

  • The Century Foundation: The Troubling Rise of Freestanding ERs. By Alejandro Perez. Excerpts: When legislators envisioned the ACA, they pictured moving toward an ideal health care system, one where unnecessary ER visits would be eliminated, and where everyone was insured and had access to the care they needed. Policymakers involved in health reform know that treating non-emergencies at ERs is extremely wasteful. A study from 2009 showed that ER visits mostly consisted of Medicaid and uninsured patients—namely, people who often had difficulty accessing primary medical care. Providing better access to care for these groups so that they no longer clogged the ER was one important goal of the ACA.

    While some states are working hard to improve access to primary care through the opening of the insurance exchanges, the health care system is still evolving, and market forces still can lead to the development of more costly forms of treatment. One form that recently has seen explosive growth is freestanding ERs. ...

    As a business model, these freestanding ERs seem like a boon for whoever owns them. One article cites that ER reimbursement for a sprained ankle can be $700, three or four times what it would cost at an urgent care or primary care clinic. Part of the reason freestanding ERs are so lucrative is that they charge insurers with the prices of a normal ER, including the facility fee that most hospital ERs charge to make up for the cost of being open 24-hours-a-day, among other things. With such profit margins, it isn’t hard to see why these freestanding ER’s are so popular, even in areas such as Houston, where presumably there is plenty of urgent and primary care available to users. Strategic locations in affluent neighborhoods seem to be the name of the game for freestanding ERs, as hospital systems, doctors, and other owners compete to treat wealthy, privately insured patients.

  • Washington Post opinion: Thanks to Republican intransigence, it’s all about 2016 now. By Matt Miller. Excerpts: No, what finally made me lose it was House Republicans’ warped obsession with Obamacare. This fixation showcases so many noxious traits simultaneously that it reveals the ultimate character of the caucus.

    At bottom, Obamacare is a moral assertion that it is wrong when a wealthy nation has 50 million people without health insurance, when medical bills are a leading cause of bankruptcy for families and when millions of luckless souls are unable to get coverage because they have preexisting conditions. The House GOP today says these are not real problems.

    Obamacare addressed these problems with precisely the mechanism that conservative thinkers and Republican policymakers favored (subsidies to buy insurance from competing private carriers with a requirement that everyone be in the insurance pool). Yet the House GOP effectively has said: Even if you adopt the approach our party favors for a problem we used to say was real — a problem that our presidential nominee addressed successfully in his state — we still can’t be with you. We have to damn you as un-American. We have to deceive the public about your aims and methods. We have to do everything in our power to stop you from using our preferred approach to bring a measure of security to the middle class.

    It’s the most perverse, irredeemable bait-and-switch since Lucy pulled the football away from Charlie Brown. Even Lucy didn’t do it 39 times.

    I’ve long been a critic of the House GOP. But something in their poisonous Obamacare stance has made me snap. It’s one thing to think you can’t do business with these people. It’s another to realize these people aren’t operating in the same moral and economic universe. ...

    After eight years of Obama, 20 million Americans who want full time work won’t be able to find it; the United States will be more unequal than at any time since the 1920s; there will be less upward mobility in the United States than in most of Europe; 1 in 5 children will live in poverty; our school rankings will continue to slip internationally; poor children will still be assigned to the worst teachers and most rundown facilities in the country; 12,000 Americans will still die each year from gun violence; college will be less affordable and student debt higher than ever; half of all jobs will pay less than $35,000 a year; the wealthiest 400 Americans will have more assets than the bottom 150 million combined; our top banks will be bigger than before, and powerful enough to fight off rules meant to prevent a repeat of the financial meltdown; we’ll spend a third to twice as much per person on health care than other wealthy nations without better results; health insurance premiums will consume a third of the average family’s income; carbon emissions will continue to rise toward levels most scientists say threaten the planet; most Americans won’t be saving nearly enough to maintain their standard of living in retirement; and politicians will spend half their time groveling for cash from the 1/20th of 1 percent of Americans who bankroll their campaigns.

    Nothing Obama says anymore can change any of this. Nor can 2014, because the smaller, whiter midterm electorate favors the House GOP.

  • Washington Post: The royal birth cost $15,000. The average American birth is billed at $30,000. By Sarah Kliff. Excerpts: Rosenthal wrote a lengthly, excellent article for the Times last month detailing the extremely high costs of giving birth in the United States compared with most other developed countries.

    The $15,000 figure comes from estimates of how much one would have to pay to deliver in the Lindo Wing of St. Mary’s Hospital, where the Duchess of Cambridge gave birth to a son on Monday. This is expensive for the United Kingdom, but, here in the United States, it would actually be a pretty great deal!

    “The average total price charged for pregnancy and newborn care was about $30,000 for a vaginal delivery and $50,000 for a C-section,” Rosenthal reported, “with commercial insurers paying out an average of $18,329 and $27,866.” That data comes from a Truven Analytics report that recently looked at the high cost of pregnancy in the United States. ...

    What drives our high pregnancy health costs? One factor Rosenthal hits on is our billing system, where each item — no matter how tiny — gets billed to the patient. In other countries, doctors receive a flat fee for the mother’s care.

    “Only in the United States is pregnancy generally billed item by item, a practice that has spiraled in the past decade, doctors say,” she wrote. “No item is too small. Charges that 20 years ago were lumped together and covered under the general hospital fee are now broken out, leading to more bills and inflated costs. There are separate fees for the delivery room, the birthing tub and each night in a semiprivate hospital room, typically thousands of dollars. Even removing the placenta can be coded as a separate charge.”

  • Boston Globe: "Best" health care in the world? You judge... by John McDonough. Excerpts: The two most influential Americans trying to block implementation of the Affordable Care Act have a clear reason for doing so. U.S. House Speaker John Boehner calls our health care system "the best health care delivery system in the world." U.S. Senate Minority Leader Mitch McConnell says we have "the finest health care system in the world." Who would want to mess with that?

    Who indeed?

    Take a look at the chart below which was published in the July 10 2013 issue of the Journal of the American Medical Association in an important and under-reported article, "The State of US Health, 1990-2010 Burden of Diseases, Injuries, and Risk Factors" (available free). ...

    Shorthand: green indicates better performance, yellow average performance, and red worse performance. The U.S. has the highest number of reds and the lowest number of greens of any nation in this selection of nations belonging to the Organization for Economic Cooperation and Development (OECD).

    The good news is that, between 1990-2010 (from 75.2 to 78.2 between 1990-2010), the U.S. has seen improved outcomes on life expectancy and other important health indicators. The bad news is, our rate of improvement is among the worst of all leading industrialized nations, and dropped from 18th to 27th in age standardized death rate between 1990-2010. Here is the article's conclusion: ...

    "The United States spends the most per capita on health care across all countries, lacks universal health coverage, and lags behind other high-income countries for life expectancy and many other health outcome measures. High costs with mediocre population health outcomes at the national level are compounded by marked disparities across communities, socioeconomic groups, and race and ethnicity groups. Although overall life expectancy has slowly risen, the increase has been slower than for many other high-income countries. In addition, in some US counties, life expectancy has decreased in the past 2 decades, particularly for women. ...

    Because the U.S. spends as much as 50% more per person on health care than the average of our leading peer nations, we might expect to do better or at least as well as our international peers. Not so.

    "Finest" and "best" health care system in the world? Not even close.

  • The Incidental Economist: The state of US health ain’t so good. By Aaron Carroll. Excerpts: So how did we do compared to other countries? Not well. Between 1990 and 2010, among the 34 countries in the OECD, the US dropped from 18th to 27th in age-standardized death rate. The US dropped from 23rd to 28th for age-standardized years of life lost. It dropped from 20th to 27th in life expectancy at birth. It dropped from 14th to 26th for healthy life expectancy. The only bit of good news was that the US only dropped from 5th to 6th in years lived with disability. ...

    Things don’t look so good for the US. There’s an awful lot of red there. A little bit of yellow. One green. Best in the world, my ass.

    Some of you will feel the urge to blame this on the racial or ethnic makeup of the US. I encourage you to look at the variety of causes of years of life lost. They don’t favor just one group. They’re all over the place. And we do pretty badly in most of them. ...

    What we have here is a prioritization issue. We spend a lot of time worrying about colon cancer. It’s ranked 11th in 2010. We spend a lot of time worrying about breast cancer. We have walks, and ribbons, and whole months dedicated to it. It’s ranked 13th. Prostate Cancer? Men are obsessed with it. It’s ranked 27th. But more years of life are lost to lung cancer than to prostate cancer, colon cancer, and breast cancer combined. Ischemic heart disease causes four times as many years of life to be lost each year as prostate cancer, colon cancer, and breast cancer combined. Stroke is 3rd. COPD is 4th. Traffic accidents are 5th. Suicide is 6th. None of these things get the national attention, or resources, that they deserve.

    We could have the best health care system in the world. We’ve got the money and the necessary pieces to get really, really good outcomes. But we need to be much smarter about it if we’re going to do so.

  • New York Times: Republican Health Care Panic. By Paul Krugman. Excerpts: Yet even as Republican politicians seem ready to go on the offensive, there’s a palpable sense of anxiety, even despair, among conservative pundits and analysts. Better-informed people on the right seem, finally, to be facing up to a horrible truth: Health care reform, President Obama’s signature policy achievement, is probably going to work.

    And the good news about Obamacare is, I’d argue, what’s driving the Republican Party’s intensified extremism. Successful health reform wouldn’t just be a victory for a president conservatives loathe, it would be an object demonstration of the falseness of right-wing ideology. So Republicans are being driven into a last, desperate effort to head this thing off at the pass.

    Some background: Although you’d never know it from all the fulminations, with prominent Republicans routinely comparing Obamacare to slavery, the Affordable Care Act is based on three simple ideas. First, all Americans should have access to affordable insurance, even if they have pre-existing medical problems. Second, people should be induced or required to buy insurance even if they’re currently healthy, so that the risk pool remains reasonably favorable. Third, to prevent the insurance “mandate” from being too onerous, there should be subsidies to hold premiums down as a share of income.

    Is such a system workable? For a while, Republicans convinced themselves that it was doomed to failure, and that they could profit politically from the inevitable “train wreck.” But a system along exactly these lines has been operating in Massachusetts since 2006, where it was introduced by a Republican governor. What was his name? Mitt Somethingorother? And no trains have been wrecked so far. ...

    Over all, then, health reform will help millions of Americans who were previously either too sick or too poor to get the coverage they needed, and also offer a great deal of reassurance to millions more who currently have insurance but fear losing it; it will provide these benefits at the expense of a much smaller number of other Americans, mostly the very well off. It is, if you like, a plan to comfort the afflicted while (slightly) afflicting the comfortable.

    And the prospect that such a plan might succeed is anathema to a party whose whole philosophy is built around doing just the opposite, of taking from the “takers” and giving to the “job creators,” known to the rest of us as the “rich.” Hence the brinkmanship.

    So will Republicans actually take us to the brink? If they do, it will be crucial to understand why they would do such a thing, when their own leaders have admitted that confrontations over the budget inflict substantial harm on the economy. It won’t be because they fear the budget deficit, which is coming down fast. Nor will it be because they sincerely believe that spending cuts produce prosperity.

  • New York Times editorial: The War Over Health Care Exchanges. Excerpts: To their shame and discredit, Republicans are trying to block efforts to inform people about the law and are using scare tactics to keep them from enrolling. The Republican mantra is that the nation will face economic and medical catastrophe — a “train wreck,” they say — unless health care reform is stopped in its tracks.

    Their tactics are despicable. When Kathleen Sebelius, the secretary of health and human services, revealed that she was talking with the National Football League and other athletic organizations about ways to inform their fans about insurance on the exchanges, the two highest-ranking Republican senators wrote a threatening letter that caused the league to back off. ...

    In virtually no case do Republicans ever mention that millions of people who lack health insurance or have lousy policies could obtain comprehensive coverage on the exchanges and that most of them would qualify for federal subsidies to lower the cost.

    Many states, mostly governed by Republicans, have refused to set up their own exchanges and have left the job to the federal government. (Many states also have refused to expand their Medicaid programs to cover more of the uninsured, but that is a separate issue.) ...

    In the meantime, Republicans in the Senate are threatening to oppose any spending bill that provides a single cent toward health care reform, a threat that could shut down the government this fall. House Republicans are planning their own draconian cuts in funding to carry out the law. The Republicans’ determination to destroy health care reform has become an obsession that, if successful, will deprive millions of Americans of health insurance they need and want.

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: U.S. Weighs Inquiry Into Big Banks’ Storage of Commodities. By Gretchen Morgenson and David Kocieniewski. Excerpts: A tactic devised by Goldman Sachs and other financial players that has inflated the price of aluminum — and ultimately cost consumers billions of dollars — is coming under federal scrutiny.

    The Commodity Futures Trading Commission has taken the first step in an examination of warehouse operations that are controlled by Goldman Sachs, Glencore Xstrata, the Noble Group and others and used to store vast amounts of aluminum. The operations were the subject of an article by The New York Times that was published on Sunday. ...

    The call comes as a Senate committee prepares to open hearings on Tuesday on how Wall Street has extended its reach beyond banking and into global markets for essential commodities. The panel is expected to focus on how banks have taken advantage of loosened federal regulation to buy warehouses, pipelines, oil tankers and other infrastructure used to store basic goods and deliver them to consumers. ...

    Goldman has exploited industry pricing regulations set by the London Metal Exchange by shuffling tons of aluminum each day among the 27 warehouses it controls in the Detroit area, The Times reported on Sunday. The maneuver lengthens the storage time and generates millions a year in profit for Goldman, which charges rent to store the metal for customers, the investigation found. The C.F.T.C. issued the notices late last week, and it was unclear on Monday whether the agency or other authorities would open a full-fledged investigation into banks’ activities. ...

    The delays at Goldman’s Detroit-area warehouses, which are owned by a subsidiary, Metro International Trade Services, make aluminum more expensive nearly everywhere in the country because of a formula used to determine the cost of the metal on the spot market. The delays are so long that Coca-Cola and many other manufacturers avoid buying aluminum stored there. Nonetheless, they still pay the higher price. ...

    Wall Street’s maneuverings in the commodities markets have added many billions to the coffers of investment banks like Goldman, JPMorgan Chase and Morgan Stanley, while forcing consumers to pay more for gasoline, electricity and a wide range of products, from cars to cellphones. In the last year, federal authorities have accused three banks, including JPMorgan, of rigging electricity prices, and on Monday JPMorgan was working to reach a settlement that could cost it $500 million. ...

    For much of the last century, banks were barred from owning nonfinancial businesses, and vice versa. These restrictions were weakened or lifted during the 1990s, when Congress allowed banks to expand into storing and transporting commodities.

  • Huffington Post: Why Dodd-Frank Will Not Succeed At Fixing Wall Street (In 1 Chart). By David Winograd. Excerpts: Based on this chart, we'd say that the banks are working a lot harder on financial reform than the reformers. The result: Not a lot of financial reform. ...

    Big banks have met with industry regulators nearly three times a day since Congress passed the Dodd-Frank financial reform bill in 2010, according to a new report from the Sunlight Foundation, a non-profit that focuses on government accountability. ...

    Goldman Sachs and JPMorgan had the highest number of audiences of any Wall Street institution over the three year period.

    Political observers point out that the practical effect of financial industry lobbying has been to water down important provisions of the law before they are implemented. Jesse Eisinger of Propublica says this is especially true for provisions like the Volcker Rule, which separates a bank’s consumer lending and proprietary investing divisions. Meanwhile, implementation of other provisions have been delayed.

  • New York Times: House G.O.P. Sets New Offensive on Obama Goals. By Jonathan Weisman. Excerpts: Congressional Republicans are moving to gut many of President Obama’s top priorities with the sharpest spending cuts in a generation and a new push to hold government financing hostage unless the president’s signature health care law is stripped of money this fall. ...

    In the Senate, Republicans are circulating a letter to Senator Harry Reid of Nevada, the majority leader, warning they will not approve any spending measure to keep the government operating after Sept. 30 if it devotes a penny to put in place Mr. Obama’s health care law. Signers so far include the No. 2 and No. 3 Republican senators, John Cornyn of Texas and John Thune of South Dakota, as well as one of the party’s rising stars, Marco Rubio of Florida. ...

    Republicans are open about their intentions to target the president’s priorities. The House transportation and housing bill for fiscal 2014 cuts from $3.3 billion to $1.7 billion the financing for Community Development Block Grants, which go mainly to large cities and urban counties for housing and social programs, largely for the poor. That level is below the number secured by President Gerald R. Ford when he created the program — without adjusting for inflation.

    Republicans are open about their intentions to target the president’s priorities. The House transportation and housing bill for fiscal 2014 cuts from $3.3 billion to $1.7 billion the financing for Community Development Block Grants, which go mainly to large cities and urban counties for housing and social programs, largely for the poor. That level is below the number secured by President Gerald R. Ford when he created the program — without adjusting for inflation.

  • New York Times editorial: Abandoned in Indian Country. Excerpts: It’s an old American story: malign policies hatched in Washington leading to pain and death in Indian country. It was true in the 19th century. It is true now, at a time when Congress, heedless of its solemn treaty obligations to Indian tribes, is allowing the across-the-board budget cuts known as the sequester to threaten the health, safety and education of Indians across the nation.

    Many Republicans have lately taken to dismissing the sequester as a mild headache for a country that needs to tighten its belt. They are willfully averting their eyes from Indian reservations, where the cuts are real, specific, broad and brutal. The victims are among the poorest, sickest and most isolated Americans.

    The sequester in a nutshell? “More people sick; fewer people educated; fewer people getting general assistance; more domestic violence; more alcoholism,” Richard Zephier, executive director of the Oglala Sioux Tribe, recently told Annie Lowrey of The Times. ...

    In signing treaties with Indian nations in return for land, the federal government promised a wide array of life-sustaining services. One of the most important is the Indian Health Service, which serves about two million people on reservations and is grossly underfinanced even in good times. It routinely runs out of money halfway through the year. Though Medicare, Medicaid and veterans’ health were exempted from sequestration cuts, the Indian Health Service was not. It stands to lose about $228 million in 2013 from automatic sequester cuts alone, out of a $4 billion budget. That will mean 3,000 fewer inpatient admissions and 800,000 fewer outpatient visits every year.

    On the Pine Ridge Indian Reservation in South Dakota, the tribal police force, facing cumulative budget cuts of 14 percent, or more than $1 million, has let 14 officers go. Its nine patrol cars are already pitifully inadequate for policing a 2.8-million-acre reservation plagued by poverty, joblessness, youth gangs, suicide, alcoholism and methamphetamine addiction. The tribe is cutting a program that serves meals to the housebound elderly. Its schools and Head Start program are cutting back. On a reservation with a chronic and worsening shortage of homes, where families double up in flimsy trailers without running water or electricity, a housing-improvement program with a 1,500-family waiting list was shut down. There were 100 suicide attempts in 110 days on Pine Ridge, officials there said, but the reservation is losing two mental-health providers because of the sequester. ...

    The next time any Republicans get pious about their party’s respect for life and the rule of law, someone should ask: What about Pine Ridge?

  • Conde Nast Traveler, courtesy of the Huffington Post: How the Super-Rich Travel. True tales from travel agents to the ultra-wealthy. Excerpts:

    As part of a $2.5 million, two-week birthday romp through southern France that a Los Angeles man threw for his wife and 30 of her friends, 20 vintage cars from all over Europe were imported to Provence for a road rally through the Bandol wine region. The road was closed to the public for the 90-minute race, and at one of the pit stops the birthday girl's favorite chef from Los Angeles served snacks. Other highlights included a six-night sailing on a luxury cruise ship and a private cooking lesson with a two-star Michelin chef. -Lia Batkin, In the Know Experiences (212-776-1784) ...

    For a diversion during a $500,000 three-day holiday to Ireland, a family of five had a Celtic village, complete with thatched-roof roundhouses and silversmiths, constructed at Lismore Castle. Entertainment included jugglers, fiddle players, a sword fight, and a private fireworks show. -David Tobin, Dream Escapes (44-845-260-1085) ...

    For a 50th-birthday celebration, a Canadian woman surprised her husband with a trip to Brazil. Birthday festivities -- for some 30 guests -- included a private dinner on Sugarloaf Mountain and joining in the winners' parade during Carnaval. Price tag for the week: approximately $800,000. -Martin Frankenberg, Matueté (866-709-5952)

  • New York Times editorial: The Middle Class at Center Stage. Excerpts: President Obama needs to change the subject to have a successful final term, and he announced on Wednesday, in forceful terms, that he intends to do just that. In a speech in Galesburg, Ill., he said his highest priority for the next 1,276 days would be rebuilding a middle class that has been battered by globalization, technological change, and the concentration of wealth at the highest levels. ...

    The fundamentally American idea that hard work leads to success, he said, has been undermined by an inattention to education and decades of government policies that favored only the rich. While income of the top 1 percent nearly quadrupled from 1979 to 2007, there has been almost no change in the typical family’s income.

    And he wasn’t shy about pointing directly at Republicans who have made the problem worse by cutting spending when the economy needs new investments and by damaging the nation’s credit by threatening not to pay the government’s bills. The “meat cleaver called the sequester,” he said, has cost jobs, hurt the military and retarded progress in science and medicine. ...

    These ideas were good when he first proposed them as part of the American Jobs Act, and they remain essential ingredients of long-term economic growth. They are not “stale” and “tired,” as Republicans charged; they are familiar only because they remain unfulfilled. The hard-right that controls the Republican Party never really cared about the content of his proposals, anyway. It reflexively opposes whatever he supports. ...

    He issued a clear challenge to his opponents: If you have better plans for strengthening manufacturing and improving the prospects of struggling families, let’s hear them. But, so far, Republicans have clung to an agenda of less: cutting taxes, cutting spending, cutting regulations and cutting any program that benefits those on the lowest rungs.

    “Repealing Obamacare and cutting spending is not an economic plan,” he said. “But if we’re willing to take a few bold steps, if Washington will just shake off its complacency and set aside the kind of slash-and-burn partisanship that we’ve just seen for way too long, if we just make some common-sense decisions, our economy will be stronger a year from now.”

  • New York Times: SAC Capital Is Indicted, and Called a Magnet for Cheating. By Peter Lattman and Ben Protess. Excerpts: Calling SAC “a veritable magnet of market cheaters,” federal prosecutors announced criminal charges against the hedge fund on Thursday, a rare move against a large company that could threaten its survival. The authorities argued that the firm and its units permitted a “systematic” insider trading scheme to unfold from 1999 to 2010, activity that generated hundreds of millions of dollars in profit for the firm, owned by its founder, the billionaire stock picker Steven A. Cohen.

    The indictment offers the most detailed account yet of SAC’s inner workings, citing e-mails indicating that Mr. Cohen and other top executives failed to prevent possible insider trading. In one e-mail about the technology company Sun Microsystems, an SAC analyst informed Mr. Cohen that, “My edge is contacts at the company and their distribution channel.” In an instant message, an employee informed Mr. Cohen that he planned to bet against Nokia’s shares and then apologized for being “cryptic,” explaining that SAC’s compliance chief “was giving me Rules 101 yesterday — so I won’t be saying much.” (Mr. Cohen never responded to the message.) SAC, the indictment says, also recruited employees who possessed what the fund called “an edge,” including one trader who was fired from another hedge fund on suspicion of insider trading. ...

    At the height of SAC’s powers in 2006 and 2007, Mr. Cohen is reported to have earned about $900 million each year, helping to give the firm a certain mystique. But it also generated whispers about whether the fund routinely crossed the line.

    The indictment paints Mr. Cohen and his staff as promoting a culture of lax compliance and crooked morals. In one example, an SAC employee forwarded an e-mail to Mr. Cohen in which a prospective hire was praised for his access to industrial companies. The message described him as “the guy who knows the quarters cold, has a share house in the Hamptons” with a senior executive at a big industrial company. ...

    The charges will not necessarily destroy SAC. One option for Mr. Cohen would be to shut down SAC and open up a family office that manages his own personal fortune. But the S.E.C. could seek to have him barred from stock trading for other investors for life.

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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