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6, 2000 April, 2000

Highlights—October 4, 2014

  • International Business Times:

    Amid Global Push, IBM Has Shrunk Its U.S. Workforce By Half Since 2000. By Paul McDougall. Excerpts: IBM’s employs about 430,000 workers worldwide. It stopped providing country-specific figures after 2009, but a group that is looking to unionize the tech giant maintains that, after several years of annual layoffs, IBM will have less than 80,000 workers stateside following the Lenovo sale. ...

    In 2000, before the .com-fueled tech bubble burst, IBM maintained 153,587 workers in the U.S. It was also the last year in which it saw a year-over-year increase in its domestic headcount.

    IBM since the mid-1990s has been aggressively expanding operations in low-cost countries and regions like Brazil, Eastern Europe and Asia—most notably in India, where tech salaries are less than half of what prevails stateside. Estimates put IBM’s headcount on the subcontinent as high as 150,000—or roughly double the number of workers it employs in America. That’s up from about 50,000 a decade ago.

    “The notion of IBM as an iconic American tech company is passé,” said veteran industry watcher Rob Enderle, principal analyst at The Enderle Group. “It remains iconic but this is a company that can shift resources globally at a moment’s notice.” ...

    IBM executives have defended the company’s paring of U.S. jobs and overseas expansion by noting that it needs to control costs while building a presence in the world’s hottest growth markets. In the most recent second quarter, IBM reported revenues from Asia-Pacific markets of $5.3 billion, more than a fifth of its total Q2 sales of $23.9 billion.

    Critics say IBM is merely engaged in labor arbitrage, seeking skilled tech workers at the lowest possible cost regardless of location and impact on local communities. “This is about shifting work and cutting costs,” said Lee Conrad, a spokesman for Alliance at IBM, the pro-union group. “IBM will never again be the big powerhouse in the U.S. that it once was for employment.”

    An IBM spokesman dismissed the claim, calling the Alliance “an ad hoc group that doesn’t represent the workforce at IBM.”

  • The Register:

    Lenovo to finish $2.1bn IBM x86 server gobble in October. A lighter snack than expected – but what's a few $100m between friends, eh? By Brid-Aine Parnell. Excerpts: Lenovo will finally get to close the deal on IBM’s x86 server division on 1 October – after slicing a few hundred million off the price tag.

    The Chinese tech firm will finish the acquisition with a closing purchase price of $2.1bn, which is a little lower than the original $2.3bn price tag because of a change in the valuation of Big Blue’s server inventory and deferred revenue liability, Lenovo said. ...

    As part of the server biz deal, Lenovo will also partner up with Big Blue on storage and software, becoming a reseller of IBM products including Storwize, LTO, Smart Cloud and Platform Computing.

  • Seeking Alpha:

    The Investment Contest Of The Century: Warren Buffett And The Stock Market Go Toe-To-Toe Over IBM. If IBM's current 2015 EPS Roadmap is extended to become IBM's 2020 EPS Roadmap, this could easily become IBM's lost two decades.

    There are four investors in a corporation: customers, employees, shareholders and the society they cohabit: customers invest in products and services; employee-owners invest their time and skills; shareholders invest their money; and society governs the corporate rules of engagement.

    • IBM's customers are disgruntled and IBM knows it. As I covered in a previous article IBM dropped from its 2008 IBM Annual Report that simplifying and streamlining its internal processes had improved client satisfaction.
    • Customers are tired of it taking too long to propose, prototype, price or even renew an IBM software solution. Simplicity sells; complexity impacts revenue and profit.
    • Customers are exhausted by the cost of maintenance and integration nightmares of upgrading IBM's middleware software. IBM has in many ways created the cloud market through its own lack of integration, poor ease-of-use and hidden long-term costs of software maintenance. IBM has raised these costs so high that the cloud is a viable cost-effective solution for many - - even if it might not be secure enough.
    • Customers are fatigued by IBM's internal corporate policies that destroyed a professional sales organization — one that in the past provided timely and insightful solutions. IBM tells its sale force to sell solutions, yet its own internal practices have resulted in a customer-facing employee turnover percentage that would embarrass a fast food restaurant.
    • There are no more true-blue IBM accounts. IBM's greatest moat — its customer relationships — has been drained and its outer walls — its technology — are now under attack. ...
    • IBM's employees are disengaged and IBM knows it. As I covered in a previous article, IBM highlighted for seven straight years that it was simplifying and streamlining its internal processes. It claimed it was improving sales force productivity, even though revenue per employee — the primary measurement of sales force productivity — has been flat for more than two decades.
    • IBM's sales force is not engaged. IBM's employee-owners are doing their best, but the corporate leadership treats them paternalistically — creating dependence by restricting their responsibilities, abilities and freedoms. IBM makes all decisions for them and their managers. Expense not revenue is at the heart of every decision. The IBMer of today is transaction oriented — tell me what to do and I will do it because performance doesn't really matter. The word THINK is a lost memory.
    • The last IBM Global Pulse Survey to measure employee morale was done in late 2010. It was not an easy read for someone that cares about IBM. Evidently few ask to see the data as even the Harvard Business Review publishes articles as if it were a positive (How IBM Is Changing Its HR Game); which it wouldn't do if anyone saw the actual data. IBM gathered the data and promptly deposited it in the nearest trash bin. Now it doesn't even bother gathering the data.
    • IBM's human resource organization over the last fifteen years has been nothing but the right arm of finance. Gallup's research in the State of the American Workplace has shown for decades that disengaged employees impact a corporation's bottom line. A 2010 update, entitled Employee Engagement and Earnings Per Share, documents the impact on earnings per share. Human resources needs to carry this article into its meetings with finance. Their failure to stand up for the IBM employee has cost IBM at least $156 billion over the last fifteen years.
    • IBM employees are disengaged and discouraged, and IBM doesn't care.
    • IBM's shareholders are hesitating and IBM knows it. IBM is no longer an invest-and-forget stock. It is high risk. ...
    • IBM's market value will regain its steady advance when: dissatisfied customers become satisfied; disengaged employees, re-engage; hesitant shareholders regain their trust; and finally, when IBM again understands that it is a member of the society it depends on for existence.
    • Until then IBM has proposed you judge it by a different metric — earnings per share. You will have to decide if focusing on a single metric is either good business or sound investing.

    Selected reader comments follow:

    • As I have stated so many times, I was an IBMer for over two decades and finally left after mucho disgust, watching the mid-senior level execs' disdain for any employee below director level. I had new hires ask me point blank 'why does management hate me so much?' Talk about a caustic work environment.

      You are correct in saying 'until management corrects the morale issue, nothing else will be fixed.' Those spewing 'shareholder value' and 'IBM is undervalued' dogmas simply do not know the lay of the land as viewed from within. If Ginni and her c-suite team do not right the ship from a 360 degree stakeholder perspective, those dogma spouters will inevitably see the internal reality go external.

    • John, Regarding the "Buffett effect on the share price", I am positively correct and you know it. The stock started going up recently after Buffet disclosed buying additional shares, following a couple of quarters during which he acquired minimal number of shares. After the news of his purchase evaporated, the stock price returned to stagnation.

      Regarding "Buffett's dilemma of owning IBM", you know as well as I do, that the minute he makes any negative comment about IBM leadership or sells any of his shares, there will be a drop in price. And we know it would be difficult to sell this many shares incognito. If like many of us do think IBM needs leadership change, he needs to mount a clandestine operation to have them replaced or else, share price could go in any direction. Not sure he would like that uncertainty. Does not seem to be his style to interfere anyway.

      Regarding the share buy-back program, I was reading an interesting article in The Economist of September 13-19 Business section and the damage it can do to a corporation's future when buy back is excessive. According to their article, IBM had the 3rd largest share repurchase program (in $$) of $100+ billion between 2004-2013, as shown in their chart, representing 64% of cash flow from operation. Add the dividends to that number and that does not leave much to reinvest in such a large business. Only ExxonMobil and Microsoft repurchased topped them in dollars, but it represented 45% and 50% of their cash flow, respectively. The only other large organization repurchasing more as a % of cash flow, was CISCO with 69%. And we know how well they are doing as a company and how well their stock has performed, although if I am correct, they are still flush with cash. Doesn't that tell us something?

    • The point Pete made about employee morale is real. I experienced it first hand in the last 3 years of my career spent at IBM. My company was acquired by IBM in 2010. While the morale problem I observed was IBM US, I can also say that IBM was far from being revered as an employer in India, this coming from our own India employees before the acquisition was complete.

      BTW, as I have stated before, I do not have any gripe about how IBM treated me, while I was there or when I retired. I see problems as an investment potential with what I observed. I also made serious IBM investment through my transferred 401K and was excited when Buffett invested the same year as my transfer. I held this investment until May 2014.

      I think Pete and others (like myself) are bringing serious potential risks that all investors should analyze for themselves.

      If you think that share buy-backs create more value than investing in new development and innovation, not treating its employees (main assets) in a manner conducive to increase productivity/creativity, being stuck into cumbersome internal processes that stifle everything... and I could go on.

    • While the rank and file are being systematically slaughtered like cattle taken to market, the exec population is corporate cronyism at its finest, lining each others pockets and shuffling each other around in 'fabricated positions' to preserve their state of affairs. They know it's near the end, so they're scavenging the carcass while there's something left to scavenge.
    • I very recently lived within arm's reach of IBM's Research Triangle Park campus. Just driving by, it had a surreal sense of 'what used to be', and not 'what is to come'. Perhaps the signage was just too outdated or the streets too quiet. An anecdote to be sure, but sometimes a book may be judged successfully by its cover, too.

      Regarding their financials, from what I have read elsewhere, my impression is that they are achieving earnings per share and other financial metrics through capital manipulation, and not organic sales growth. Buying back shares and selling off business units versus seeing sales grow from superior product mix and outstanding customer orientation are two different paths to the same short term outcome, but yield two very different long-term outcomes. At some point, in the first case, the mast you have been hacking at to patch holes in the ship can no longer hold up a sail.

  • WRAL TechWire:

    Lenovo commits to hiring IBMers in x86 deal but no guarantees. By Rick Smith. Excerpts: More than 7,000 IBM employees, including some 2,000 based in Research Triangle Park, will be transferring to Lenovo as the $2.1 billion deal for IBM's x86 business closes this week, a senior Lenovo executive said Monday morning.

    However, there are no guarantees going forward.

    Gerry Smith, executive vice president of Lenovo Group and president of Enterprise Business Group and Americas Group who will oversee the combined server businesses of Lenovo and IBM, said in a conference call that Lenovo would stand by stated previous commitments to hire all IBM workers. ...

    Parker also reiterated Smith';s comments about jobs. "What decisions will be made over time is not known," Parker said, noting that decisions will be made about driving sales, growing revenues and finding efficiencies.

  • The Register:

    So long Lotus 1-2-3: IBM ceases support after over 30 years of code. One of computing's first killer apps bites the dust. By Iain Thomson. Excerpts: On Tuesday, with no fanfare, IBM closed the last chapter in the life of one of the most iconic early computer programs, Lotus 1-2-3, when it withdrew support for the final build of the software.

    IBM Lotus 123 Millennium Edition, IBM Lotus SmartSuite 9.x, and Organizer have now officially all passed their end of life support date and, according to IBM's website, "No service extensions will be offered" – not that anyone is seriously using the spreadsheet any more.

    It's a sadly muted end for what was, at one time, the world's premier spreadsheet. Lotus 1-2-3 was one of the first applications that made IBM's original PC a serious business tool, but it fell by the wayside due to poor coding decisions, failure to adapt, and the crushing tactics of Microsoft.

  • Glassdoor IBM reviews. Selected reviews follow:
    • “A very complex organization that is more inwardly than outwardly focused.”

      Former Employee — Associate Partner I worked at IBM full-time for more than 5 years.

      Pros: A number of opportunities, especially international. Technology expertise world class, as expected. Many of the people who work there are top notch in more ways than just their expertise.

      Cons: Still too much management dead wood. Decreasing revenue. Laying off intellectual muscle. You are always 60-90 days away from getting "resource actioned" (laid off) at any given time. Customers often overwhelmed by sales team "show of force" (too many sales people at meetings).

      Advice to Senior Management: IBM needs organizational innovation more than it needs technology innovation. Organizational arrogance is still a problem, especially in sales.

    • “IT Nightmare”

      Current Employee — Computer Specialist in Denver, CO. I have been working at IBM as a contractor for more than 3 years. Pros: I no longer work there. Cons: IBM has the worst management I've ever seen in my life. Advice to Senior Management: Quit your day job!
    • “Mixed feelings”

      Current Employee — Advisory Software Engineer. Pros: Great people in the research, good work/life balance. Cons: Although you think of IBM as a tech company, great majority of people are non-technical (sales etc). The best people are not going to IBM recently but to other companies.
    • “Low morale, high-stress environment”

      Current Employee — Systems Administrator. I have been working at IBM as a contractor for more than 5 years. Pros: Started off OK with decent pay, and pretty good employees and managers, telecommuting is great. option is great. Cons: Massive lay-offs every year (of both contractors and regular IBMers) leaves everyone stressed and morale incredibly low. Incompetent management. Pay freezes, furloughs, unpaid overtime. Extreme pressure to meet deadlines without compensation, and while understaffed, some teams by 50%. Advice to Senior Management: Treat your employees and less like resources!
    • “Heading in the wrong direction”

      Former Employee — Senior Project Manager in Somers, NY. I worked at IBM full-time for more than 10 years. Pros: Work/life balance. Peers are professional and good to work with. Cons: Too driven on quarter goals and making cuts to achieve them in light of long term strategy. Advice to Senior Management: Think longer term strategies.
    • “Too much bureaucracy”

      Current Employee — Technical Lead in Guadalajara, Jalisco (Mexico). I have been working at IBM full-time for more than a year. Pros: It is a good company to learn, a bunch of education available and great co workers. You have good benefits like home office. Cons: It is hard to have salary raises, they talk a lot about 'visibility' however that implies talking too much about your work when it is supposed to be a responsibility of management to notice it. It is even harder to talk about your job when you are a technical guy and your manager isn't.
    • “Walked away with tremendous exposure and opportunity but with a new found understanding for politics and bad management”

      Former Employee — Watson Sales and Strategy in New York, NY. I worked at IBM full-time for more than a year.

      Pros: Watson has phenomenal technology that inspires with a brilliant team you work with everyday. Market demand pushes opportunities into the door more than the company can handle which is a good problem to have.

      Cons: Bureaucratic and Political. Too few leaders and too many authoritative managers that cannot lead. Culture is trying to change and be more like Google and Apple but slow to move ahead.

      Advice to Senior Management: Focus on client relationships, team relationships, and building an environment where public and corporate pressures on numbers do not negatively impact the dynamics.

    • “Good benefits and great work life balance. Not a great work environment”

      Former Employee — Consultant in Washington, DC I worked at IBM full-time for more than a year.

      Pros: Good benefits, good work life balance. Except to get what you would get at any large American corporation. The benefits are good, the network is large, there are opportunities to work remotely.

      Cons: No training, not great work environment, no mentorship. IBM is a factory for entry level work. Tons of people leave after a year or two in the organization. The people that stayed for longer in the consulting world were not very happy at the company and they showed it. It was hard to find people who had been there for an extended time and were happy with their jobs. I didn't know any.

      Advice to Senior Management: Create career pathways. Get people on remote consulting projects more involved with other people. Assist with B-school payments so people are incentivized to come back.

    • “Employees are fleeing this company”

      Current Employee — Anonymous Employee.

      Pros:

      • Flexibility to work at home
      • Teammates are very talented and experienced
      • Lower level managers are supportive of your career goals.

      Cons:

      • IBM does not live by its 3 values. The company's only value is EPS (Earnings per Share)
      • Routine layoffs, pay cuts, furloughs, and benefit reductions in every division regardless of performance. When company is doing well these actions do not disappear.
      • Internal systems and software are poor for an established technology company
      • Very difficult to transfer internally as there are always hiring freezes
      • No perks. Need funding approvals to flush the toilet!

      Advice to Senior Management: You have lost the trust of customers and employees. It's too late to repair the damage. A senior leadership change is needed.

    • "Different divisions are like different companies”

      Current Employee — Director in New York, NY. I have been working at IBM full-time for more than 10 years.

      Pros: Lots of opportunity to move to new assignments and shift career paths over time. Great maternity and part time programs. Colleagues are mostly knowledgeable and competent, with some exceptions of course.

      Cons: Executives from different parts of the company don't always cooperate, causing conflict and chaos with plan churns. Performance measurements are frequently out of employee's control, and ratings (and bonuses and raises which are based on this) don't typically reflect the hard work that is done to keep slower growth or declining businesses viable.

      Advice to Senior Management: Need some new SVPs who collaborate and cooperate better to integrate across divisions, product lines and services. Not rewarding top performers in poorly performing businesses makes it very easy for them to leave only to hurt the business more.

    • “Fantastic Company”

      Former Employee — Project Manager in Austin, TX. I worked at IBM full-time for more than 8 years.

      Pros: IBM was a fantastic company to work for and provided plenty of opportunity for skills development, learning, and career growth. It also seemed to me that employees got out of IBM exactly what they put into it. Some just coasted along and got "average" performance reviews for average performance. But for those who really want to feel like they are making a difference and want to expand their career, IBM will support them full stop. NOTE: This review is based on my work with Software Group within IBM, which tends to be much more progressive and faster paced than other groups.

      Cons: The growth of my career and opportunities for development were directly proportionate to how progressive and open minded my direct manager was.

      Advice to Senior Management: Processes and policies are the cornerstone to any solid company. Continue to ensure they don't get in the way of employees being able to create and innovate.

    • “IBM losing its way with weak executive team (as the talented and old guard move on)”

      Current Employee — Anonymous Employee I have been working at IBM full-time for more than 3 years.

      Pros: It is a company that you could work at for a life-time, as long as you keep your nose clean and your opinions to yourself... ensure that you are very politically aware and make your line management look good.

      Cons: The business has become FAR too political given cut-backs to resources across the board, especially with weak performance from the 'Systems & Technology Group' and downturn in IGS signings/renewals. The BEST caliber of executive management has left IBM to work for other transformative or startup companies, leaving a layer of less effective sales managers and sales operations running the business.

      Advice to Senior Management: Honesty and transparency with employees.

    • “OK for a first job out of college, but I know much better opportunities are out there”

      Current Employee — Senior Consultant in Washington, DC. I have been working at IBM full-time for more than a year. Pros: High paying, met a lot of great people, good vacation time but hard to use it. Cons: Management needs work. It's hard to see the impact or appreciation of your day-to-day efforts.
    • “The only down side is no merit pay increase nor bonus”

      Current Employee — Project Manager. I have been working at IBM full-time for more than 3 years. Pros: Work from home 100%, great boss, great training programs. Cons: No pay increase nor bonus despite a stellar review. This was because the company didn't achieve its revenue target. Advice to Senior Management: Keep good people their merit increases despite target misses. Bonuses should be withheld if targets aren't achieved.
    • “It use to be a good company to work for.”

      Current Employee — Anonymous Employee. Pros: IBM is a large company that is financially stable and services all aspects of the IT business. Cons: There is no work-life balance at IBM these days. They have forgotten what the company was built on. They have cut out all the perks and are only interested in earnings per share. Advice to Senior Management: IBM needs a new CEO.
    • “A once great company being destroyed by terrible leadership”

      Former Employee — Executive Manager in Boulder, CO. I worked at IBM full-time for more than 10 years.

      Pros: When I started at IBM it was an amazing place to work. Great group of extremely dedicated talented and driven people. Superb, world-class education available to all employees, great culture, IBM had the world by the tail. That all changed when Sam Palmisano took over as CEO in 2001.

      Cons: Sam destroyed the company via lack of vision, extremely poor leadership, and excessive cost cutting. IBM internally is now a terrible place to work, with constant layoffs and a culture of fear and intimidation. They are so tied up in their own bureaucracy that they can't get anything done quickly. Many of the superb employees have left and those that are left are afraid to do anything for fear of losing their jobs.

      Advice to Senior Management: The company needs someone like Lou Gerstner back at the helm. Gini Rommetti is just a "yes (wo)man" for Sam and is not strong nor innovative enough to lead the company out of the dire straits they're in.

    • “Lots of changes over 30 years...at this point ZERO work life balance”

      Current Employee — Program Manager in Southbury, CT. I have been working at IBM full-time for more than 10 years. Pros: Great people, great opportunities, very committed people especially in the US and Europe, endless challenges and opportunity. Cons: Work/life balance, nothing is ever enough, always something more can and needs to be achieved, always dangle the carrot but never the reward behind it...non-existent raises. Advice to Senior Management: Listen to employees, don't always listen to middle-management. They are only concerned about upward movement of their own career.
  • Alliance for Retired Americans Friday Alerts. This weeks headlines include:
    • Thousands of Alliance Members Join Tele-Town Hall Calls with Candidates
    • Koch Sisters Video Refutes Misinformation about Social Security
    • Koch Brothers, Walton Family Get Several Spots near Top of Richest Americans List
    • Pennsylvania Alliance Members Speak as Part of Minimum Wage Campaign
    • Activists Collect 500,000 Petitions in order to Keep Social Security Offices Open
    • In Case You Missed It: Wednesday was International Day of Older Persons
New on the Alliance@IBM Site

Job Cut Reports

  • Comment 09/27/14:

    Don't be suckered into taking the IBM CAMSS Challenge for 9,600 Blue Points. If you don't pass, you will be candidate for 10% pay cut. -Anonymous-
  • Comment 09/27/14:

    Funny to read these statements here: http://www.computerworld.com/article/2683239/ibm-cuts-pay-by-10-for-workers-picked-for-training.html The "funny" part here is that on the one hand side IBM tells people to educate more, to be better, and reduce salary for that. On the other hand side I heard from colleagues that their expected utilization was not reduced, expecting that they take the education in their spare time. Come on Ginni ... do you think IBMers are still having "passion" for that type of business? Do you want to win deals with such a crew? OK ... I assume you are gone after 2015 anyway. -oliverro-
  • Comment 09/28/14:

    Repurchase of $14 billion in shares annually from 2010 through 2013. Now imagine instead of buybacks, no layoffs, cost of living raises for all, bi-weekly 401k match, and some real employee education. Happier employees, happier customers, higher stock price. With a union contract this would have been possible. -BeenAroundTheBlock-
  • Comment 09/29/14:

    You don't actually GET the 9,600 Blue Points for taking the SSCAM "Challenge". You are entered into a drawing to WIN the 9,600 Blue Points. Cheap sneaky bastards. -LifestylesoftheRichandSlimy-
  • Comment 09/30/14:

    IBM cutting workers pay by 10% for training. Gee, I wish all of you who got 'selected' for this had Lotus Notes mail evidence from your manager's saying you were denied training when you signed up for up the training in the not-to-distance past. Then if you release the notes maybe the word is out on this IBM sham pay cut and soon to be RA'd ploy. Any union would back for signing up for job training. -did_U_save_R_U_brave?-
  • Comment 09/30/14:

    In Microelectronics, things are not good. The time may be ripe for a vote. Rumors abound regarding the sale of the division with unknown consequences. In East Fishkill, managers are leaving the company en-masse. Employees are leaving. "Dear Colleague" letters appear in my inbox on a weekly basis. Years of personnel recruitment efforts are vanishing before our eyes. Morale is horrible. It wasn't this bad in '93. It is very bad. When directors and middle managers resign, things are not good. From my observation and in my opinion, a significant majority would have no problem approving CWA representation. Now is the time. -Anonymous-

    Alliance reply: You are spot-on...except for one detail: We (CWA) need to *prove* that a majority (51% or more) have signed up or signed cards in favor of a union. We need to *prove* it to the National Labor Relations Board. That's federal law and we MUST obey it or we cannot request a union election any other way. Problem: We (CWA) don't have 51% or more of the IBM workers (non-management) signed up for the Alliance@IBM CWA Local 1701. We've preached this and reiterated this point, over and over and over and over, for 15 years. When IBMers realize that they have the power to make this happen, that's when it will happen. If you support a union for IBMers then do your best to organize your co-workers and tell them what we've said here. It's up to you and all the supporters and members of Alliance@IBM to get this message out. We will continue to do the same as long as possible.

  • Comment 10/01/14:

    'Blue Points" are not what they seem. You have to pay a tax on the points and in the US it is 25 cents per points. Once you accept the points, the tax is automatically deducted from you pay. So with 9600 points, you would pay a tax of $2400. If you look at the catalog, almost all of the items that you can purchase with your "points" are worth less than the tax you paid to get the points. Shame on IBM even offering this great deal. -Anonymous-
  • Comment 10/01/14:

    Why doesn't the Alliance try to segment the IBM population to achieve the 60% needed for a union? That is an achievable goal within Microelectronics/STG, but not within IBM as a whole. If the Alliance tried to unionize IBM division-by-division, it would have a lot better chance of succeeding. -RA'd in 2014-

    Alliance reply: We have attempted that in Fishkill and in Vermont and at some stand-alone sites. We haven't gained enough verifiable support. And what we mean by verifiable support is workers taking the step of joining the Alliance in any of our 3 membership categories. We can't base support on wishful thinking.

  • Comment 10/01/14:

    IBM used to pay for training and even encouraged employees to take courses to stay current with their technical skills. Employees even were paid 100% of their pay when taking IBM Education courses. IBM management's decision for a 10% education pay cut is foolhardy. OK, IBM management when you go to the hollowed grounds of the Armonk MDC you should also be getting at least a 10% pay cut too! Not only new IBM manager training but the experienced ones too that never see a PBC 3 just because they are IBM management and "better" than the PBC 2+ or higher employee (double standard). -WatsonTraining?-
  • Comment 10/01/14:

    "Years of personnel recruitment efforts are vanishing before our eyes. Morale is horrible."

    Dear Anonymous in Microelectronics. I'm the author of one of those Dear Colleague letters. IBM Micro is losing talent so quickly that I wonder if they will be able to deliver the chips for the the next series of mainframes after this current batch. Sam and Ginny may have killed the the goose that lays the golden microprocessors that enable the big iron mainframes for Big Blue. I agree with you. IBM Micro is being hit by many self (IBM corporate) inflicted wounds.

    • The uncertainty of the future of the division after IBM announced that they wanted to get rid of it.
    • The numerous pension decisions including the 2007 decision to freeze the plan for the 2nd choicers.
    • Understaffed, no bonus, little or no salary plan.

    Unlike the rest of IBM (average tenure about 5 ears), Micro has a large fraction of the employee population that are retirement eligible and are 2nd choicers. These employees realize that once they hit 30 years they are effectively throwing away that pension check each month unless they get a job somewhere else and retire from IBM, leaving a skills vacuum in their wake at Micro. Many, many more employees are just fed up with the poor morale, constant feeling of dread and seeing the purchasing power of their annual wages falling each year. They have decided to act with their feet and leave.

    I've been a paying member of Alliance for years. If all those Micro employees who are leaving now had taken the action to be Alliance members before they got so fed up that they took the action to leave IBM Micro then things might be different. -BFL-

  • Comment 10/01/14:

    In the latest pure evil Dr. Evil initiative by IBM, employees won't get the vouchers to go get their flu shots at the local CVS, Rite Aid, etc. I would have the option of taking a half day to drive to the IBM location at a specific date/time, or paying for it myself. So now they are compromising employee health, and of course it will end up costing the company more when people get the flu and are out a week. Just another attempt to push people out so they don't have to provide a package. -Low Morale-

IBM Retiree Issues

  • Comment 09/29/14:

    I recently retired after 33 years as an SSR. I took a medical plan that was over 800 dollars a month, just for me using my FHA. I am using 100% of my funds to pay for it. Luckily, my wife's plan will pick me up when she retires and my money in the FHA runs out, which will be before I an able to take Medicare. Worst case scenario, if my wife's plan changes, is take a subsidy from Obamacare to pay for my insurance since my so called pension put me in the poor ranks. -Use Your FHA or lose it-
  • Comment 10/01/14:

    I retired in 1991. My pension has virtually remained unchanged. Is there any hint of a cost-of-living increase anytime soon? -Rocco Trapasso- Alliance reply: None that we are aware of at this time. You retired from the "OLD" IBM, when they still 'respected' their employees and when the old "defined pension" plan *may* have had COLA stipulations. Not so anymore. IBM has forgotten about you and tens of thousands of other IBMers that retired before Lou Gerstner took the CEO helm and began firing IBMers, on a yearly basis. I'm sorry that IBM has treated you so badly. If it's any comfort, you are not alone.
  • Comment 10/01/14:

    To -Use Your FHA or lose it- Thanks for posting. I will soon retire and was curious about the cost of medical for just me and how long FHA would last. You said $800 a month. Were there other plans offered at lower costs? -soon2retire-
  • Comment 10/01/14:

    To -soon2retire-: The low cost plan was about $600.00 with a high deductible, meaning that you would pay the first $1000.00 or more, before your insurance would kick in, with the exception of preventive care. This also included your medicines that would come out of the $1000.00 before they paid anything. I am on an in network Aetna Plan which means I can only used Aetna but I have no deductible. There was a low deductible plan, $650.00 and it paid in and out of network, but its cost was over $900.00 and you still had to come up with the first $650.00.

    Each plan has different out of pocket max. You can also used your own money to supplement the cost coming out of your FHA, in increments of 10 percent. In my case 50/50 would have meant I paid $400.00 and $400.00 comes out of your FHA, which would allow your FHA to last longer, but remember, the FHA is not guaranteed. Also you can change plans during the enrollment period each year. Hope this helps. -Use Your FHA or lose it-

  • Comment 10/01/14:

    To -soon2retire- Regarding planning for use of FHA (Future Health Account) to pay pre-Medicare insurance coverage from IBM as a retired single person, I opted for the 2014 IBM Medium Deductible PPO insurance plan at $710.23 per month. If I recall correctly, there was a better IBM plan (Low Deductible PPO) at about $800 per month, and there was a worse IBM plan (High Deductible PPO) at about $600 per month. But I don't remember the High and Low Deductible plan premium costs exactly and I can't look it up since IBM removes the details from Fidelity Netbenefits website after the enrollment period ends. These costs might be age and location dependent, so I will mention that I lived in Vermont (05403) and was age 60 for most of 2014. The costs above do not include Vision or Dental plan options.

    Note that the lowest premium cost plans (named "high deductible", both with and without HSA) do not provide "creditable coverage", so if you choose one of those plans then the premium cost of Medicare Part D (i.e. drug insurance) will be permanently higher when you transition to a Medicare "Part D" Prescription Drug Plan (PDP) at age 65. So the year you turn 65 (and perhaps the year before that?), you may want to avoid the IBM High Deductible insurance plan in order to avoid the permanent annual premium penalty that the US government mandates. I don't know how big the penalty is.

    Besides premiums and deductibles, a key difference between the 2014 IBM plans was the maximum benefit limits imposed on drug coverage. The Low Deductible PPO plan had no drug coverage benefit limit (i.e. unlimited), the Medium Deductible PPO plans had $2500 benefit limit, and the High Deductible PPO plan had $1000 benefit limit. So for catastrophic drug coverage (in case of heart disease or cancer or something like that which requires expensive drugs for a long time), the more expensive "Low Deductible" plan provides more prescription drug protection. -Paul Bergeron-

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.

This site is designed to allow IBM Employees to communicate and share methods of protecting their rights through the establishment of an IBM Employees Labor Union. Section 8(a)(1) of the National Labor Relations Act states it is a violation for Employers to spy on union gatherings, or pretend to spy. For the purpose of the National Labor Relations Act, notice is given that this site and all of its content, messages, communications, or other content is considered to be a union gathering.