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Highlights for week ending November 8, 2003
Call to Action from Janet Krueger:
Lately, Congressional conference committees seem to be taking more
and more liberties with the people's will as they supposedly 'merge'
house and senate bills together -- instead of just compromising with
language that comes from one bill or the other, they seem to think
they have the freedom to completely throw language out that appeared
in both bills, or create new language that appeared in neither.
There will be a conference committee working on the treasury
appropriations bill -- even though both the house and the senate
bills include language prohibiting the treasury from legalizing cash
balance plans, the conference committee may delete the language --
note the letter from ERIC, URL below, asking them to just that!
Please call your representatives and senator on Monday morning and
explain just how unacceptable this would be -- they need to know we
are still watching closely. Thanks,
- ERIC: Remove
Sanders and Harkin Amendments from Conference Agreement on Transportation/Treasury
Appropriations Bill (H.R.2989).The ERISA Industry Committee (ERIC) sent
letter [PDF] to Sen. Richard Shelby and Rep. Ernest Istook (chairmen of the House
and Senate Transportation - Treasury appropriations
subcommittees) urging deletion of the Sanders and Harkin amendments from the conference
agreement on the Transportation/Treasury appropriations bill (H.R. 2989). On September
9, Rep. Bernie Sanders (I-VT) attached an amendment that would prohibit the Treasury
Department from taking any action to overturn the Cooper v. IBM decision. The amendment
was approved 258-160. On October 23, Sen. Tom Harkin (D-IA) attached an amendment to
the Senate version of the same bill that would prohibit any funds being used to complete
action on the IRS's proposed age discrimination regulations affecting hybrid and other
pension plans. The Subcommittees currently anticipate completing work on a conference
agreement by next Wednesday, November 12.
- Carl Lackey comments.
Full excerpt: This might be the time to explain to newcomers here just who ERIC
(ERISA Industry Committee ...Representing the employee benefits
interest of the nations largest employers) really is...in very plain
ERIC is a business ...a special interest Lobby Group focusing their
efforts in pleasing Big Business. When they accomplish certain tasks
in the interest of many large corporations, those corporations "reward" the
lobby group with cash. Those companies frequently "provide seed money" for
campaign funds, and huge bonus fund payments for "appropriate voting".
One of the more effective strategies of this group is to sneak
amendments into bills at the last minute. Indeed they did this with
both the house and Senate versions of the Medicare Drug bill, and
accomplished it without a reading on the floor. This is part of why
many legislators are responding so well to our pressure regarding that
issue. (Bill S.1 Section 631)
In the referenced letter about HR 2989 regarding CB pension plans, the
language "strongly urges" means that there is lots of campaign money
at risk. Again, a sneaky technique that steps around the normal
process is being used. If they win, we lose... big time.
Immediate action is required by us ASAP and don't procrastinate. Bury
their phone lines, please. Find numbers here:
Australian IT: IBM
adds 10,000 jobs this year. Excerpt: The Communications Workers Association's
Alliance for IBM, an organisation seeking to unionise IBM workers, has called IBM's hiring
hide thousands of firings in the past two years.
"What a PR scam," said alliance spokesman Lee Conrad. "We are looking at this
The allure of sending some software development and services work to countries with lower wages
than the US will be tough to resist, according to analysts and investors.
Starting wages for a computer programmer in India are $US5000-$US7000 a year, compared with
$45,000-$75,000 in the US, said Forrester Research analyst Stephanie Moore.
"At least 50 per cent of the new jobs will be in low-cost countries," Ms Moore says."India
is so strong right now because the cost is low and the quality is unbelievably high."
Mr Palmisano visited India in May, the first time the head of IBM had visited the country.
- Janet Krueger explains how IBM's
Future Health Account works. Excerpt: 1) It is not vested—IBM can make it completely
disappear at any
point in time.
2) There are no actual accounts set up for it, nor an actual fund.
3) If it does stay in place, it is IBM script—you can only buy
health insurance from IBM, and only for whatever IBM wants to charge.
4) At prices being charged retirees for their health insurance, once
you start using the account to buy insurance, it will be used up in
less than 5 years.
5) Of course IBM has been doubling the cost of retiree health
insurance each year, so by the time you retire, it may not even buy
a year's worth of insurance.
6) If IBM lays you off before you turn 55, you get nothing at all.
- Wall Street Journal (October 25, 2001): Retiree-Medical Plans Are Transformed
Into Source of Profits by Sears, Others, by Ellen Schultz. View Adobe Acrobat version [PDF--119
KB]. Excerpts: The rule also offered companies a way to arrange their financial statements
so that retiree-benefit programs actually became new profit centers.
Employers and benefits consultants have received heat recently for turning
pension plans into sources of corporate income. Now, the transformation
of retiree-medical programs into opportunities to bolster earnings
demonstrates that these companies and their outside advisers possess
multiple subtle methods to squeeze profits from their current and former
This latest corporate maneuver was made
possible by Financial Accounting Standard
106. Accounting authorities required that
large companies adopt the rule by 1993. At a
time when medical-cost inflation was running in double digits, the rule was
supposed to force companies to acknowledge the potentially huge retiree-
Using Trust Funds to
Pay Retiree Benefits. ... The seeds of the retiree-health windfall for many companies were
in the late 1980s, when the Financial Accounting Standards Board, the
accounting industry's rule-making body, began to develop standards for
reporting retiree-health obligations. Major companies, such as General
Electric Co. and International Business Machines Corp., played an active
role in the process, suggesting ideas to the accounting board. Companies
showed the board computer simulations of how various proposals would
affect corporate bottom lines.
" comments on IBM's changes
to its retirement medical plan. Full excerpt: There is no doubt in my mind many retirees will
be priced out of
needed medical care, especially if you are still lucky enough to
still have a living spouse. This reduction in needed medical care
will not only reduce our quality of life, but will also shorten it.
The sooner we die, the sooner we will be off IBM's pension rolls,
saving them additional money. I worked for IBM for 40 years, of
which about 35 were great. It was a family oriented company where
honesty and respect for each other was number one. I still remember
being told about the deferred compensation we would receive in the
form of lifetime medical after 30 years of service. Passing this 30
year mark was a real milestone to be proud of. Then, new management
came in, and all promises were considered null and void. For many,
it was too late to plan for this major medical expense just before
retirement. The IBM we once knew and trusted is now gone. We can't
even talk to a live IBM person about our problems anymore. The
Fidelity Investment "Firewall" took care of that.
- St. Paul Pioneer-Press: Growing
force fights threat to pensions. Excerpt: When Jim Norby says
there's a war going on out there, he doesn't mean the battle against terrorism. He's talking
about a war against much of corporate America. For Norby, the battle is against large corporations
trying to curb retirees' pensions and health
care benefits. Norby, who splits his time between residences in Pelican Rapids, Minn., and
Palm Desert, Calif., is the president and principal spokesman for the National Retiree Legislative
... Now its membership is approaching 2 million, most of them members of affiliated associations
representing retirees from about 20 large corporations. Increasingly, the network is also reaching
out to the baby boom generation. Hundreds of members — typically
in their 50s, but some in their 40s — are active IBM workers. They are concerned about that
company's attempt to trim their pensions. The network is a creature of far-reaching changes
in the "social contract" between
corporations and their employees. ... Resistance to these plans has led the network into an
alliance with IBM employees, galvanized by anger over the way the company's cash balance plan
is slashing the pensions it promised to longtime employees. Former IBM-Rochester employee
Janet Krueger has been a leader in challenging the plan, in litigation working its way through
system. The IBM workers' cause has won backing from two congressmen with widely divergent
political beliefs: Republican Gil Gutknecht, a conservative, from Rochester, Minn., and independent
Bernie Sanders, a socialist, from Vermont. If link is broken, view Adobe Acrobat version [PDF--30
- news.com.au (Australia): Westpac's
IBM staff to strike. Excerpt: IBM Global Services employees who support Westpac's national
computer system in Sydney have vowed to continue industrial action over working conditions.
About 40 Finance Sector Union (FSU) members, who provide computing services that support Westpac's
branches, credit cards and internet banking, will continue rolling strike action during the
fortnight. FSU NSW/ACT branch secretary Geoff Derrick said when Westpac outsourced the work
in 2000, IBM Global Services promised to preserve members' existing employment conditions. "All
they want is to have IBM promise to keep what they (the employees) have already got," Mr
Derrick said. Staff rosters, meal breaks and travel allowance were among issues of concern,
- CNN: IBM caught up in Korea raids. Excerpt: Prosecutors searched offices of the South Korean
arm of U.S. computer giant IBM Corp. this week to investigate allegations that the company bribed
South Korean government officials, a local newspaper says.
- Forbes: IBM Chief's $200 Million
Bet. Excerpt: Intel Chairman Andrew Grove isn't the only business leader worried that the
U.S. is losing its grip on tech leadership and innovation. IBM Chief Executive Samuel Palmisano
is troubled too, and he's putting up $200 million of IBM's money to help the U.S. get through
what he characterizes as a "critical moment." ... Intel Chairman Andrew Grove isn't
the only business leader worried that the U.S. is losing its grip on tech leadership and innovation.
IBM Chief Executive Samuel Palmisano is troubled too, and he's putting up $200 million of IBM's
money to help the U.S. get through what he characterizes as a "critical moment." ...
The $200 million will be spent to train 100,000 IBM employees to
compete for "high-skill jobs" like services, middleware and Linux systems. These jobs,
he says, may otherwise have gone outside U.S. borders to countries like India, South Korea and
are rapidly "replicating the structural advantages that historically have made the U.S. the
center of innovation."
- Forbes: Ex-IBM worker in
Calif. tells of chemical exposure. Excerpt: A 73-year-old former IBM
factory worker at the center of a landmark cancer lawsuit against the company told a court
on Wednesday that she was regularly exposed to a thick, pungent-smelling chemical coating
while working at a
plant making computer disks. Taking the stand at a California court in the heart of Silicon
Valley, Alida Hernandez, who blames exposure to toxins for her breast cancer diagnosis in
1993, said full-body protective
garments, known as bunny suits, provided by IBM failed to keep out the chemicals she worked
with. "You could see the brown coating on the bunny suit," Hernandez, the first person
to testify in the case, told the jury. "It would go through my brassiere and get on my skin.
It would go through the bunny suit and get on my arms." ... Lawyers for IBM said Moore smoked
cigarettes for nearly a decade and had been exposed to chemicals in his earlier work on a
farm and at a gas station.
- KOTV Channel 6 News (Tulsa, OK):
IBM lays off some Tulsa employees.
Excerpt: An IBM spokeswoman does confirm that about 40 workers were laid off. But one of those
workers says it was the way they lost their jobs that has them doubly upset. The worker told us their
jobs are being moved to India. What's more, the worker says employees here trained their Indian counterparts,
in other words trained the people that are taking their jobs.
- National Retiree Legislative Network (NRLN): NRLN
Members Write Letters to Editors. Excerpt:
Many of the things happening to America's retirees are unethical, immoral, and, if not illegal,
certainly represent breaches of moral obligations. Just a few years ago these acts would
have been unthinkable. As the national president of the Lucent Retirees Organization advocating
of 127,000 retirees, their spouses and dependents, I believe there are several questions
millions of retirees need straightforward answers about from President Bush, and our Congressmen
and Senators. ... Congress seems to support corporations no matter what they take away from
people who were made commitments for lifetime pensions and health care. Many employees were
even induced to retire with dollars paid out of pension funds. Once they retire, then the takeaways
begin, not only for them but also for those who have been retired for years.
- NRLN Newsletter: A View from Washington.
Excerpt: Next, let’s get serious about how we communicate with our elected representatives. I’ve
become increasingly convinced, over the last few months, that Congress knows what our problems
are and, furthermore, they know how to fix them. They have, unfortunately, to date, chosen to follow
the dictates of the lobbyists employed by our former employers. Individual Congressmen have made
many excuses as to why they can’t go along with our requests for support. What they really
have been telling us is that they would rather take the money support from the business interests
rather than our voting support. There are exceptions, of course. This is an obvious generalization.
But, the point is, that the above is true for the vast majority of our elected representatives.
This has been hard lesson for me to learn over the last few years.
| Coverage on H1-B and L1 Visa and Outsourcing Issues
- Representative Bernard Sanders (Independent-Vermont): Free
Trade Means America’s Biggest
Export is its Jobs. Excerpts: Unsurprisingly, proponents of an unfettered free-trade seem
unwilling to admit the error of their ways. This group, which includes virtually all
of corporate America, every major editorial board, as well as Presidents George H.W.
Bush, Bill Clinton,
George W. Bush and Ronald Reagan, has told us for decades how many new jobs free trade
would create here at home. Now the evidence is in and guess what — they were dead wrong.
The exact opposite is true. ... So free trade has not only cost us our textile industry,
our shoe industry, our steel industry, our tool and die industry, our electronic industry,
our furniture industry and many others but will now cost us millions of high tech jobs
as well. The United States needs to have a strong, positive relationship with China, but that
not mean allowing corporate America and its supporters in the White House and Congress
to destroy the American middle class by making jobs America’s No. 1 export. If we continue
to force American workers to “compete” against desperate people throughout the
world, American workers will continue to lose.
- Salon.com: Want
to stop your job from being outsourced? Join a union.
At least one systems administrator has had enough: It's time to hit the picket line. Excerpt:
When I was a kid, my dad's pager was the least favorite item in our house. When he
was on-call, my family couldn't go to dinner or a movie or Grandma's house, for fear
that the contraption
would go off and call him away to the office. When it did go off, and there weren't
many weekends when it didn't, my dad would trudge to the phone, speak into it using
loud and profane
words, and then, if needed, put on his coat and shuffle off to the location of the
latest emergency. Things got so bad, I seriously considered running over his beeper
with my neighbor's
Big Wheel. Was Dad a doctor, volunteer fireman or paramedic? Nothing of the sort. He
was in I.T., before the term "information technology" ever existed. As a mainframe
technician, he would be called in at a moment's notice to replace a defective board
or swap large DASD
units in order to keep a customer's big iron running. Although he endured many lost
weekends and dirty looks from his wife and children, he did so knowing that his sacrifices
would be rewarded with overtime pay, at time-and-a-half
rates on many occasions. His sacrifice enabled my family to live a comfortable middle-class
existence and provided my brother and me with quality college educations. In fact,
of us have followed in his footsteps, working as system administrators to pay the
- Salon.com: Gone
in the blink of an eye. Berkeley researchers declare 14 million U.S. jobs are at risk
of being outsourced. Excerpt:
The report highlights in bright color two pressing questions. In this century, will Silicon
Valley become the faded symbol of a race-to-the-bottom global job market in the same
way that Flint, Mich., and its fading car-manufacturing factories did in the last?
Or, will globalization
bring new opportunities to developing economies that desperately need them? Salon spoke
with Bardhan on the phone from his office in Berkeley, Calif., about the implications
has for the U.S. labor market and the world. If link is broken, view Adobe Acrobat version
- WashTech News: IT
Workers Protest Offshoring at Boston Executive Forum. Excerpt: High-tech
workers concerned about the offshore outsourcing of U.S. jobs conducted a sidewalk protest
October 27 at a Forrester Group conference titled "Extending your business reach using
the Internet." The
Internet is used extensively in offshoring. Picketing on the sidewalk in front of the
Westin Copley Hotel, protestors armed with signs and leaflets called for corporations
and government to stop offshore outsourcing, which they
say is damaging the U.S. economy. WashTech/CWA members and supporters handed out leaflets
and talked to people about the more than three million jobs that are predicted to move
out of the country in the next 10 years.
This week on the Alliance@IBM
- San Jose Mercury News: Valley
paying close attention as worker safety case begins. Plaintiff win could spark similar
suits. Excerpt: Opening statements in a closely watched
trial that could have major implications for Silicon Valley tech companies began Tuesday
with attorneys painting dueling portraits of corporate defendant IBM. While Richard Alexander,
attorney for two workers suing their former employer, portrayed IBM as a company with
little regard for the health and well-being of its employees,
company attorney Bob Weber argued that IBM is a model for worker safety and has aggressively
worked to provide safe environments for its workers. The suit, which contends IBM hid
knowledge of unsafe working conditions from employees, is the first of more than 200
similar claims to go to trial. The outcome will be closely
watched by the tech industry because a ruling for the plaintiffs could set a precedent
and open up a flood of similar lawsuits.
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