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for week ending November 16, 2002
- Binghamton Press & Sun-Bulletin: EIT
lays off 200. Two weeks after taking over Endicott site, IBM successor
slices managers, engineers.
Excerpt: "Friday was the first and last pay day for 200 workers at
Endicott Interconnect Technologies. The successor to IBM announced Friday
that it laid off 10 percent of its work force -- primarily in management
and engineering -- to streamline operations and improve profitability.
Cuts had a minimal impact on production workers, said James J. McNamara
Jr., Endicott Interconnect president and chief executive." ... "Many
community members say they've lost trust in state officials as a result
of the Endicott Interconnect layoffs. 'I believe the politicians knew
this was happening and did nothing to stop it,' said Lee Conrad, an Endicott-based
organizer for Alliance@IBM, an effort to unionize IBM workers. 'We need
to hold all of them accountable because jobs are being lost, not being
created, after all of their numerous promises and electioneering grandstanding.'
In July, Gov. George E. Pataki told hundreds of IBM employees and community
leaders that 4,000 Endicott Interconnect and IBM jobs at the Endicott
plant would be protected and would remain in Endicott for at least the
next 10 years." If link is broken, view
Adobe Acrobat version [PDF--164 KB].
- Binghamton Press & Sun-Bulletin: 'We
were never really given a chance'. Decision shatters good feelings at
. Excerpt: "Joseph Sanderson had heard so many rumors about possible
layoffs at Endicott Interconnect Technologies that he didn't even bother
to pack a lunch or punch into work Friday. David Askew came out of the
facility with box in hand, waved goodbye to his workplace, and walked
two miles to his home on Hill Avenue in Endicott, as he'd done for many
of the 26 years he worked for the company. And only a week after Vic Furman
told the Press & Sun-Bulletin that EIT would prosper, the newly laid-off
employee said he doubts the company will survive. While rumors about the
impending cuts circulated among Endicott Interconnect employees in recent
days, the news was still hard to accept. 'We were never really given a
chance,' Sanderson said. 'This was really hanging in the air.' Sanderson
had a feeling that it would be his last day with the newly formed Endicott
Interconnect, after two weeks with the company and almost 29 years with
IBM Corp. If link is broken, view
Adobe Acrobat version [PDF--144 KB].
- Binghamton Press & Sun-Bulletin Editorial: Unpleasant
'surprise'. Excerpt: "A 10 percent cut in its work force was
not what the community was expecting from Endicott Interconnect Technologies
-- especially not just two weeks after the company opened for business
at the former IBM site. Company officials said the 200 layoffs, primarily
in management and engineering, are necessary to streamline operations
and improve profitability. The rhetoric is familiar -- it's been used
here and in communities across the nation many times -- and may indeed
be accurate. But the timing stinks, in two ways."
... "If the work force was too large or expensive to begin with,
why the charade? The answer is distressingly obvious: Politics. The company
leaders obviously didn't want to give Gov. George E. Pataki -- or any
of the other state or local officials who took part in the Grand Announcement
when the company was formed -- a black eye before the Nov. 5 election.
None of those state or local officials was visible at EIT on Friday when
the discarded employees were leaving. They never are around when the news
is bad." If link is broken, view
Adobe Acrobat version [PDF--54 KB].
- Binghamton Press & Sun-Bulletin: Platsky:
Cut of mid-level managers streamlines operation. Excerpt: "Those
affected by Friday's action are not in a forgiving mood. They are unwilling
to accept that the cutbacks are in the best interest of the company.
Many feel a sense of betrayal in their enthusiasm for a new start with
this IBM successor company. Other workers believe they were fed a line
of false promises when the deal to sell the IBM-Endicott site to local
investors was announced in July. 'This is greed with a capital G,' said
Mike McKercher, who spent 26 years with IBM and two weeks with Endicott
Interconnect. 'I walked by Thomas Watson's picture and you can see tears
running down his (face)'."
If link is broken, view Adobe Acrobat
version [PDF--62 KB].
- Linda Guyer comments "There were about 200 people unwillingly
shuttled out the door in Endicott on Friday. Right away the Alliance
office phone begins ringing with ex-employees wanting a reference for
a lawyer to sue IBM for age discrimination. This has been happening
all year. I cannot tell you how many emails I've received with the same
question, from all over the country" Read
- Wall Street Journal: Information
Technology Moving Toward 'Commoditization'. Excerpts: "Information
technology experts say consolidation forced by ever-cheaper products
and the adoption of industry standards are coming as their industry
struggles to redefine itself in the midst of its two-year depression.
Douglas Elix, a senior vice president at International Business Machines
Corp.'s (IBM) Global Services unit, said Friday that 'it's time for
our industry to grow up' and adopt standards much as other mature industries
have done to the benefit of businesses and consumers. He told several
hundred corporate information officers at Forrester Research Inc.'s
annual Executive Strategy Forum that about 40% of all IT spending now
is wasted on integration of disparate manufacturers' hardware components
and software." ... "In addition, Forrester analysts estimate
that 3.3 million IT jobs will leave the U.S. to foreign countries by
2015, as companies find it cheaper and just as efficient to have a variety
of IT work done offshore - such as software programming done in India,
China and Russia. Forrester, a Cambridge, Mass., a technology-research
firm said that 'a growing base of companies are shifting a range of
IT, back office, customer service and sales operations offshore to cut
their costs by upwards of 50%.' The lost wages associated with those
positions will go from $4 billion in 2000 to $136 billion in 2015, Forrester
said in a new report. The huge cost savings are the motivation. 'The
cost of an entry-level programmer in China is 30% to 50% less than one
in Tokyo, London, or Chicago,' said Forrester. Low cost bandwidth and
a huge increase in capacity means that firms can ship huge volumes of
scanned documents overseas cheaply, while standardized business software
applications make it easier to hand work off to workers in other countries,
- New York Times: When
Options Rise to Top, Guess Who Pays. Excerpt: "Joseph R. Blasi
and Douglas L. Kruse, professors of human resource management at Rutgers,
examined stock option grants and shareholder returns at the 1,500 largest
American companies from 1992 to 2001. They found that companies dispensing
significantly larger-than-average option grants to their top five executives
produced decidedly lower total returns to shareholders over the period
than those dispensing far fewer options. As for the notion that options
are primarily a rank-and-file perquisite — and that abandoning
them would hurt lower-level employees — the study instead confirmed
what many investors have suspected: in recent years, most options have
gone to top executives." ... "Carol Bowie, director of governance
research services at the Investor Responsibility Research Center in
Washington, says investors have rapidly become wary about stock options.
'At the very least, options tended to promote a short-term focus,' she
said, 'and at worst, they promoted fraudulent activity to manipulate
earnings.'" ... "'Anyone who claims there hasn't been a systematic
corruption of business as usual using the legal system as a front, compensation
consultants as handmaidens and corporate human resources staffs as lackeys
doesn't understand what's gone on'."
speaks of a rumor he's heard about Hitachi's benefits versus IBM's.
Excerpt: "Rumor has it the IBMers who have been exposed to the
proposed retirements benefits offered by Hitachi are stunned by how
good they are. Allegedly the medical is MUCH better, the other bennies
are about the same, and the retirement benefits are extremely good,
much , much better than IBM. "
- USA Today: Above-it-all
CEOs forget workers. Excerpts: "But for all of the truly selfish
examples of CEO behavior, the worst offense is how out of touch many
corporate leaders have become with the people they purport to lead.
It is especially galling that it comes as the economy scrapes along,
earnings lag and firms lay off workers and reduce operations. The real
challenge for CEOs today is to close the gap that increasingly separates
them from their employees. From 1985 to 2001, workers' pay rose by 63%.
CEO pay rose by 866%. In 1985, CEOs were paid about 70 times what the
average worker was paid. By 2001, CEOs were making 410 times what the
average worker made. It's hard to name a newspaper or business magazine
that hasn't produced a roll call of CEO shame, top dogs who paid themselves
top dollar while their companies have gone to the dogs." ... "If
you work for a living, here's a question you should ask yourself: Do
you think of yourself as a 'headcount'? Even the term is an insult.
'Headcount reduction' is the kind of phrase CEOs use to avoid looking
the truth in the eye: To cover up for their own performance, they're
willing to sacrifice others. It happens all too often -- but not at
the great companies.
Organizations such as Southwest Airlines will do whatever it takes
to keep from laying off their people, because they genuinely believe
that their workers set them apart. Loyalty is a two-way street: Employees
who feel valued work harder, are more productive and give better service
to customers, who come back for more. The strong loyalty that Southwest
Airlines shows to its people is only one of the reasons the airline
has not only weathered the current economic downturn, but also has managed
to turn hard economic times into a strong competitive advantage. While
the other airlines are battling bankruptcy, Southwest is profitable.
- Reviews of Lou Gerstner's book Who Says Elephants Can't Dance?:
- "rosiethemba" writes to Money Line's Lou Dobbs asking why
he didn't ask Lou Gerstner some "tough" questions. Read
Rosie's questions... (highly recommended)
provides his own assessment of Lou Gerstner's tenure as IBM CEO.
Excerpt: "Gertsner gleaned $120,000,000 million Stock Options in
2001 alone. An example of his methods is in 2001, that year, he announced
to IBM employees how difficult a year it was going to be for the company
and that he would not take a salary increase along with his 20 executives.
He sent a message to the employees to NOT expect a wage increase. His
salary and bonus in the shareholders report were listed at $12,000,000
and the combined salary and bonus of his 20 executives about the same.
Combined, in 2001, Gerstner and his executives cashed in $240,000,000
million in stock options. A really tough year for IBM executives, NOT,
but for the employees with Sweat Shop mandatory 10% plus Overtime for
Exempt employees, it was a tough year."
- Debunking the
Myth of a Desperate Software Labor Shortage. Testimony to the U.S.
House Judiciary Committee
Subcommittee on Immigration. By Dr. Norman Matloff, Department of Computer
Science, University of California at Davis.
- Washington Alliance of Technology Workers: Supreme
Court refuses to hear appeal of Microsoft ‘permatemp’ settlement.
- Washington Post: R.J.
Reynolds Accused Of Money Laundering. Suit Also Alleges Smuggling of
Cigarettes to Iraq. Excerpts: ""The lawsuit alleges a
vast conspiracy in which R.J. Reynolds Tobacco Holdings Inc. and its
subsidiaries set up special operating units to help launder money for
criminal organizations, using special accounting methods, offshore tax
havens and false invoicing. In exchange, the suit says, the criminal
groups pushed Winston and Camel cigarettes into markets the company
was seeking to penetrate and helped RJR increase its profit margins
by accepting sales and credit terms that paid far more than those for
legitimate customers. The 144-page complaint, filed on Oct. 31 in the
Eastern District of New York, alleges that RJR executives 'at the highest
corporate level' made it 'part of their operating business plan to sell
cigarettes to and through criminal organizations and to accept criminal
proceeds in payments for cigarettes by secret and surreptitious means.'
In a statement, RJR called the lawsuit 'absurd' and said the company
and its subsidiaries 'operate their businesses in a legal, responsible
manner. The plaintiff's allegations that any of these companies were
either involved in or aware of money laundering, conspiracy or any other
illegal activities are unfounded.' ... "The suit also alleges that
Iraqi President Saddam Hussein and his son, Uday, reaped millions of
illicit dollars from the sale of cigarettes in Iraq by RJR, as did the
Kurdistan Worker's Party (PKK)..."
- New York Times Editorial by William Safire: You
Are a Suspect. Excerpt: "If the Homeland Security Act
is not amended before passage, here is what will happen to you:
Every purchase you make with a credit card, every magazine subscription
you buy and medical prescription you fill, every Web site you
visit and e-mail you send or receive, every academic grade you
receive, every bank deposit you make, every trip you book and
every event you attend — all these transactions and communications
will go into what the Defense Department describes as 'a virtual,
centralized grand database.' To this computerized dossier on your
private life from commercial sources, add every piece of information
that government has about you — passport application, driver's
license and bridge toll records, judicial and divorce records,
complaints from nosy neighbors to the F.B.I., your lifetime paper
trail plus the latest hidden camera surveillance — and you
have the supersnoop's dream: a 'Total Information Awareness' about
every U.S. citizen. This is not some far-out Orwellian scenario.
It is what will happen to your personal freedom in the next few
weeks if John Poindexter gets the unprecedented power he seeks."
If link is broken, view
Adobe Acrobat version [PDF--15 KB].