Globalfoundries, owned by an investment arm of the government of Abu Dhabi, made an offer that was rejected by IBM as too low, said the people, who asked not to be identified because the negotiations are private. James Sciales, a spokesman for IBM, and Kevin Kimball, a spokesman for Santa Clara, California-based Globalfoundries, both declined to comment on speculation.
The breakdown of the talks is a setback for IBM Chief Executive Officer Ginni Rometty as she attempts to meet 2015 earnings goals by shedding less profitable units and reversing nine straight quarters of revenue declines. Globalfoundries, which has its own plant in New York state, had placed little or no value on IBM’s factories because they are too old, the person said.
A selected reader comment follows:
You would think IBM would learn after Lenovo walked away from the sale of Intel/AMD servers (system x) the first time. IBM was asking $6.5 Billion, and not for all of the system x business, but subsequently Lenovo got it all for $2.3 billion. Now the Lenovo deal is hung up with CFIUS review and Global Foundries just walked.
I bet both sales were booked in the RoadKill 2015 strategy. Poor Ginni, everything is falling apart on hers and Sammie baby strategy. I see some shorts in the crystal ball for IBM.
GlobalFoundries announced the hires Wednesday, hailing the three as "industry veterans" who would help the company ramp up its operations at the plant, called Fab 8.
The background is that the two companies were reported to have been negotiating a deal to transfer IBM's chip manufacturing operations to Global. The Poughkeepsie Journal has reported that the deal hit a snag. But that has not stopped GlobalFoundries from trying to get hold of chip talent from IBM. And it leaves unanswered all questions about the future of the East Fishkill IBM plant and its workers.
The hires were announced by Tom Caulfield, Global's senior vice president and general manager of Fab 8, himself a former IBMer.
The hires were Mark Dougherty, who comes from the East Fishkill site where he worked on unit process development; George Jordhamo, who worked on radio frequency and silicon germanium chip specialty products; and Debra Leach Riell, who has been director of IBM's microelectronics production procurement. Riell's LinkedIn page identifies her as a Dutchess resident. Jordhamo has connections both at East Fishkill and Burlington.
Lyndsay Kirkham, an editor and freelance web developer in Toronto, had her birthday lunch ruined on Monday as she listened to the 'Big Blue' suits explain that they don't hire young women because 'they are just going to get themselves pregnant again and again and again'.
Ms Kirkham, a mother to five-year-old Aodhan, wrote: 'These executives are so comfortable in the sexism that they are openly sharing. Wow. My disbelief is tempering my anger. #IBM.'
Ms Kirkham had just sat down to lunch at the Richtree restaurant in Toronto with her son and her son's father, when she heard two men at the table next to her being 'obnoxiously loudly and belligerent' about their hiring strategies. ...
An IBM spokesperson told MailOnline: 'The views expressed in this reported conversation have nothing to do with how we operate our business in Canada or anywhere else. IBM does not tolerate discrimination of any kind.'
It has been a pretty crappy company to work for, with all the cost cutting and layoffs. I was being put on the RA list despite having a 2+ PBC and getting rave reviews from the account team that I worked with. After I got off the RA list, they took me off the account and gave me some back office process job to do.
I heard of a job opening and pursued it (non-IBM). They made me an offer and it sounds like a job I am really going to enjoy. Working with local clients, working with them on solutioning, and implementation. It is a bump in pay. It is local travel. It is getting out of my home office on some days. It is still work at home flexibility. It is working with a local manager instead of IBM, where you never meet your manager.
Considering the events and current IBM climate, I need a change of scenery (and this came up). I would be an idiot not to grab it, so I did and we will let the chips fall where they may. I hope I enjoy it and find it fulfilling.
IBM's current choice is Roadmap 2015 vs. employment growth. Our former colleague chose their employer elsewhere. If I were a recent hire I, too, would question long term IBM employment, I mean, it is either having an IBM career or long term employment, period. Does long term employment exist for you elsewhere?
I have no animosity towards IBM. I want them to do well. The best way I could help the big picture was to leave. My IBM stock will be worth more the more people leave. That is all the executives care about and it is true, so I think they are doing the right thing to let the company contract for a while... Please stop asking this question of how to retain employees. It is like a politician lie hiding what the real goals are at a high level. The goal is to reduce costs rapidly to make the ratio look good for 2015 road map. All other goals are 2ndary or even 3rdary if that is a word...
If you want dedicated employees you must respect them for what they are and not treat them like inventory to be kicked around.
The bottom line is until the share holders figure this out and the stock price falls no change at the employee level will ever happen and when IBM falls everybody will loose and there won't be any dedicated employees to save the day.
Performance related schemes have been shown to have the opposite effect to that desired across virtually every company that has tried it.
Look back at how IBM related to its employees and at the same time how the employees related to the corporation. There was, I believe a common sense of working together, of sacrifice made from both ends, in order to maximize the success of both the corporation and the employees. There was a strong safety net in place to support the employee; the employee in turn would bend over backwards to keep that safety net in place; it was a win-win for both the in-the-company (and not to mention the third stakeholder, the stockholder).
There was never any asking the question "What can IBM do to retain its employees, especially the recent hires". The answer was already known, it was practiced day in and day out, it was not just the culture but the DNA of the company.
Thomas J. Watson's book "Father, Son, and Company" would be a good place to begin reading about some of this. I recommend it.
I fear IBM has already hit the iceberg but the passengers are mostly unaware. The crew (i.e. employees) are fearful. The passengers (i.e. stockholders) are calmly eating their sirloin steak dinner...since fillet mignon is no longer on the menu...but the ship is already sinking and there are only enough life boats and vests for the executives.
Second, IBM will also reduce their workforce in the SW and Services industry by heavily leveraging automation and advanced IT solutions.
Lastly; IBM can continue to service their current customers and new customers remotely from any country in the world. So, they will also follow to lowest cost.
It's pretty clear that IBM is now becoming a pure financial analysis and investment company that is only interested in providing the maximum gain to their stockholders, executives, and board members. Unfortunately, this will be their demise as only innovation breeds successful businesses today. IBM has lost sight that it's only people that can innovate, not machines. Machines can only replicate what people create. So, their is a new generation with a new game and a new set or rules in town.
Companies like Google, Amazon, Facebook, Netflix, Yahoo, Apple, Samsung, and many more to some that will dominate the IT industry through " INNOVATION ". Again, more than ever, a successful company's most valuable resource has always been its people. Today, this is even more important.
It's way too late for IBM to "reinvent itself". The pace of change has quickened and it's too late to catch up. So everyone should stop fantasizing that somehow IBM can now change direction. They are about 2-3 years too late!
I still work closely with IBM and continually see them plagued by the same problems. It is so frustrating, but maybe this is inherent to any 300,000+ person company. Ironically, I still feel loyalty and feel like I am more effective in helping them compete by working outside the company.
Employees are being laid off in the USA also to have their jobs moved to other regions. I think that IBM will have trouble keeping new hires because it will only take a few years before they see what they are in for in the long haul.
I think the days of staying with IBM for 30 years is over. There will be some but for the most part, most will only say 5-7 years as IBM HR has predicted. All the retirement policies are geared around the 5-7 year mark. IBM has made it clear, they don't want long term employees. Just my two cents.
Giving tiny token raises at best...and giving them once or twice in ten years or so appears to be the current IBM norm. This default behavior for the considerable majority is guaranteed to plant seeds of profound discontent. Sticking with the party line that "IBM pays for performance" is far worse, as this sets management formally against employees, essentially implying, "you got no raise because you are not good enough, or are substandard." Now, the manager is in a place of constant criticism of the employee—essentially making the case year round to justify the end of year result of, "no raise for you, just like the last xx years..."
IBM does a LOT to convince itself that salaries are competitive. It's just not so. An educated IT professional can find and interpret salary data for their field/job function as readily as HR can. For much of the last five-seven years or so, IBM has had to do some pretty fair spin to make their assertion match statistical reality. In the end, it's an argument about industry average" — where there is nothing like average industry skill or workload in IBM. As a PM, I daily operated at a skill set vastly beyond what the average PM would even understand, let alone operate effectively at; my PM peers all did the same. I was simply never close to a reasonable wage for the seniority of the work. Again, this was not just me: almost everyone I knew...and I knew many dozens of people after 17 years, could say the same about every point I have stated here.
The whole compensation thing is so important to showing appreciation, and to rebuilding a healthy dynamic between management and contributors again. You simply cannot keep chiseling down people's salaries relative to changes in the cost of living, year after year, and add insult to injury by keeping a management culture of blame and criticism for the employee's "yet again a 2 review...no raise for you" position. The toxicity just builds up, not only on a one-to-one relationship between manager and employee, but across the team, and surrounding organization.
(If management really still thinks that *vast* numbers of employees do not talk extensively about salaries, about how many years since their last raise, the size of those raises, and the criticism used to justify any given employee's "2" rating...well, that's just painfully naive. Such management behavior, widespread, over time, impacting a vast majority...of course people talk freely! That's just human nature.)
Sadly, I expect nothing will change. IBM resolved all the employee survey criticisms about workload, grueling schedule, and no raises in years when IBM was obscenely profitable by getting rid of the surveys. They will resolve the current level of issues by getting rid of the employees that complain too much—and the cycle will continue.
I, much like many posters here recently left. I am thankful for the training I got there, the skills I learned as it prepared me for my next opportunity. I was always a top contributor on my team and even on my last day was helping a colleague close a deal and my manager put together a loss report. The draw to learn new skills and challenge myself was too strong, I could not keep doing what I was doing any longer.
I got the feeling that if I wanted to move to sales or Global Services that the door would have been open, but I had no interest, so I was stuck moving up in an organization I was not interested in, and that offered limited earning potential and few opportunities to use the gifts I felt I had to offer.
I appreciate every minute I worked at IBM, and I wear the "Former IBM'er" tag with pride, but I hope that those doors of opportunity will open again for young people who are joining the IBM team.
There were business model changes. There was also mismanagement from the top down. The focus became pure business school based numbers management. There was lip service to the previous culture, but there was also a marked turn in senior management attitude toward employees. There was talk of employees feeling entitled and of employees having to 'raise the bar' on their performance. The relationship became more adversarial than collaborative.
At the same time, senior executives chose to raise the boundary of delegation vertically in the organization, undermining first, second, and third line management's ability to manage employees other than mechanically within the system. So, we now have a 'place to work' attitude with employees instead of a 'member of the company' attitude. I can't think of a single manager in the last 15 years who could, off the top of their head, explain to an employee (without a high BS quotient) how their job contributed to the well-being of IBM.
If an employee doesn't feel like a contributing member of a company and doesn't have a clear understanding of how their work contributes to the company every day, they will only stay as long as they are learning new things and being engaged by the technical work. When that stops they leave.
These brand-name companies have all moved part of their pension obligations off their books and into annuities run by insurance companies.
The move, called de-risking, requires companies to pay a lump sum to purchase a group annuity from an insurance company. The insurer then takes over the retirement payments, wiping troubling and erratic pension obligations off the books of the purchaser. ...
Now that the stock market is roaring and interest rates are expected to increase, buying annuities to get rid of pension obligations is becoming less expensive. That means interest in de-risking is rising. A recent survey of 182 companies by Prudential found that 53 percent of them have either transferred defined benefit pension liabilities to a third-party insurer or “are likely to” in the next two years. That is a sharp increase from a 2010 survey. ...
The Pension Rights Center, which pushes for better retirement security, worries that converting pensions to insurance annuities could open retirees up to new problems. Often, when a company transfers a pension to an annuity it also offers retirees the option of a lump-sum buyout, a move that is cheaper for companies than buying an annuity.
Those buyouts are often attractive to retirees who can get their hands on as much as hundreds of thousands of dollars at once, but few are prepared to invest the money in a way that will make it last a lifetime. Advocates also worry that annuities are not backed by a federal agency such as the Pension Benefits Guaranty Corp., which insures private pensions. In comparison, annuities are backed by state associations.
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