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Highlights—June 18 , 2005
- Yahoo! message board
post by Janet Krueger regarding payouts in the Cooper v. IBM lawsuit. Excerpt:
...you can request an estimate of what your payout will be in
each of the three possible outcomes by sending a letter requesting it
to: Douglas R. Sprong;
Korein Tillery, LLC;
P.O. Box 4310;
Fairview Heights, IL 62208. Include your name, address, and social security number. If you have
other questions, put them in as well. You will get a prompt reply, and
it will not have any impact on the settlement amount.
- Yahoo! message board post by Janet Krueger: Is
the Cooper settlement fair?. Excerpts: My answer to whether I think the settlement is fair
is posted on the FAQ file I
have been referencing people to at
Q: How can I judge whether the settlement is fair? It
seems very small... A: Please bear in mind, as you do your analysis, that it is
not illegal for
companies to reduce future pension earnings -- it is only illegal if they do so
in an age discriminatory way. Much of what IBM did was inherently unfair, but
NOT age discriminatory, so the likelihood that any federal judge would have
forced IBM to restore the prior plans is extremely unlikely. One example of an
unfairness relates to early retirement subsidies, the extra value that IBM had
in their plans that made an immediate annuity worth more than the age 65
annuity. Since early retirement subsidies are not protected, it was legal for
IBM to provide opening balances that were equivalent to your age 65 annuity.
only part of the 1999 cash balance conversion that Cooper v IBM found to be
specifically illegal was that extra money was added to the opening balances of
younger employees, and not older employees -- this is the "Always Cash Balance"
issue referred to in the settlement that IBM is appealing. Cooper v IBM also
found that the accruals added to the account in subsequent years was
discriminatory -- again, it was not illegal that those accruals were
substantially lower than they would have been under the prior formula; it was
only illegal that younger employees were receiving higher accruals for
message board post by Janet Krueger: Are the legal fees fair, and who is paying them? Excerpts:
Q: Why are the Plaintiffs' attorneys for this lawsuit receiving so
A: If there had not been a settlement or a judgment against IBM, the plaintiffs'
attorneys would have gotten nothing. 3 law firms have dedicated thousands of
hours over the last 5 1/2 years to this lawsuit, and will have to dedicate
thousands more in order to win the appeal. Additionally, they have hired expert
actuaries, staff, researchers, law clerks, and legal secretaries and paid court
fees for dozens of motions and filings. Without that effort, the plaintiffs
would only be getting what IBM decided to cut their pensions to! The fee
requested in the settlement agreement is lower than that recommended by the
Q: Why doesn't IBM have to pay the Plaintiffs' attorneys, instead of
deducting the fees from the settlement?
A: All of the settlement money comes from the defendant (IBM). Some of it gets
paid out to the plaintiffs, and some of it gets paid to the plaintiffs'
attorneys. It is all reported as 'settlement money'. While it feels like the
plaintiffs are losing part of their fees to pay the attorneys, IBM is actually
making the payment.
message board post by Janet Krueger regarding the Out of Blue Age Discrimination lawsuit.
Full excerpt: I attended the "Out of Blue" lawsuit informational meeting in
Rochester on Friday night.
The legal team has a web page at http://www.out-of-blue.com and
can be reached at 1-800-482-0958.
There are 10 named plaintiffs in the lawsuit, and about 200 unnamed
members. The lawsuit is a collective action, not a class action,
which means it only covers those who specifically 'opt in', or who
affirmatively join the lawsuit. Members of the lawsuit were
dismissed from IBM between July 7, 2001 and May 4, 2005 and were
over age 40 at the time they were dismissed.
If you were dismissed before July 7, 2001, you could still contact
the legal team to find out if you would be eligible -- you might be
eligible if you timely filed your own age discrimination charge from
the EEOC after you were dismissed or if you did not sign the waiver
not to sue and did not collect severance pay.
IBM revised the waiver people have to sign in order to collect
severance pay the day after the Thomforde decision was reached, so
if you were dismissed from IBM after May 4, 2005, you may not be
eligible to participate if you signed the waiver; but you can still
call the 800 number and discuss your circumstances.
The lawsuit is making two sets of claims against IBM relative to
their treatment of older workers during lay-offs:
- Disparate impact: It appears a higher proportion of older
employees are being laid off than younger employees.
- Disparate treatment: IBM discriminates against older employees
in a number of ways, such as:
- pension calculations, as evidenced by Cooper
- retirement savings
- medical savings accounts
- college recruiting
- age-based statements
- refusal to hire older applicants
- superior performance of older, laid off workers
If the lawsuit is won, damages will be determined individually,
based on front pay and back pay that has been lost, bearing in mind
that each individual had the duty to mitigate the situation. If the
lawsuit is settled, a formula for dividing the settlement has been
pre-determined and is part of the contract you would sign to
participate. If you have questions, and think you might be interested in
participating, call the 800 number listed above for more information.
message board post by Janet Krueger. Excerpt: I would recommend that anyone
who hasn't been tracking
Dave Finlay's analyses read his "Once Upon a Pension"
story that was posted back in June 2000: http://www.cashpensions.com/onceuponapension.htm.
He does a superb job of explaining the sequence of
plan changes IBM implemented during the 90s and
showing their impact.
As you read, remember that the Cooper lawsuit only
made claims against things done in 1995 and 1999 --
changes implemented before then were outside the
statute of limitations. (This means charges against
the 30 year service cap could not have been included,
even if there was a legal theory that would conclude
such a cap is age discriminatory.)
message board post by Janet Krueger. Full excerpt: I just started an interesting
I went into my copy of RetireQ; RetireQ is the spreadsheet Dave Finlay put
together to show what our pension benefits would be under each of the Retirement
plans IBM has offered since 1991.
I varied my birth date in 5 year increments, to find out what the impact
pension changes would have been on someone similarly situated to me who had been
5 and 10 years younger, and 5, 10, 15, and 20 years older. I didn't go back to
15 years younger, as I don't believe it is reasonable to assume IBM could have
hired an 8 year old to do the job I started in; even 10 years younger is
I've now got the start of some numbers that can tell me if the settlement
fair, for me, personally. Remember, the lawsuit is not about what my pension
would have been had IBM not changed it, and had I decided to work for IBM until
age 65. It is about the fact that someone younger than me, but similarly
situated, would have received more from IBM's actions, and been hurt less.
In the process, I was able to verify another observation -- someone older
me, but similarly situated, would also have received more from IBM's actions and
been hurt less -- the discrimination was definitely focused on baby boomers,
although IBM would probably say they did that for economic reasons, as there
were more of us in the work force so they saved the most by hurting us!
I'll upload a spreadsheet with my analysis sometime this weekend; in the
interim, if you want to check out the data so far, I've uploaded my 7 starting
pages to the files area of this board in a file named RETIREQ5_JANET_Varying_Ages.pdf
first page is data based on my actual birth date.
message board post by "ibmmike2006". Full excerpt: If you read the document
that was sent, Kathi Cooper will receive
$40,000 for the "hell" she has gone through out of the settlement.
I think, the 240,000 IBMers should cough up a $10 bill each and thank
these two courageous women, Janet and Kathi, for what they have done.
Not to dismiss the thousands of supporters who were out there, but it
is nothing compared to being in the fray with name and reputation on
It would be an ideal world if somehow, someway, the 240,000 could get
back some of the $600 Million Gerstner walked away with and put in his
bank. We all know that IBM stole more than they will be paying back.
What kind of value or price do you put on human misery IBM has caused?
- Yahoo! message board post by "David Lohman": Overtime
excerpt: We were recently told in a department meeting that we are now expected
to work an hour overtime for every every hour of nonbillable time
claimed. In other words, any time claimed to VACATION, Personal
Choice Holidays, Education, Illness, etc. must be matched by overtime.
Is this legal?
Is it limited to Global Services - Americas?
How do other members feel about this?
- "rufus2002d" comments. Full excerpt: My understanding is that Global Services is the
only division that requires "billable hours" and utilization targets.
Our target for this year is 2,080 hours. (you can see your "annual target hours" in
your PD tool profile - it's the first time I have seen this in print)
It forces employees to work x% overtime every "working week" to make up for
vacation, holidays, etc.
Sure it's legal if you are salaried (exempt).
Unless you have a contract that states otherwise.
- "dave49_98" comments. Full excerpt: Welcome to IBM Global Services. Not only do you have
to make up
vacation hours, we were told to bill 44 hours, a 10% premium of
overtime each week.
- "informixgoob" comments.
Full excerpt: You've got to be kidding... 2080 = 52 weeks x 40 hours per week. So
they are expecting you to bill time even when businesses are closed on
holidays like Christmas, Thanksgiving, 4th of July, etc? Leaving aside
the ethics (or lack thereof), is that even legal?
comments. Full excerpt: You have to calculate how many hours overtime per
week you have to work, based
on vacation time,etc. to make up for the time you take off. In other words,
if we have 2 days off for Thanksgiving, those 16 hours must be made up some
other time. For folks with 5 weeks vacation, the personal choice days, and paid
holidays, you basically have to work the equivalent of a 6 day work week (and
more, if the job dictates it).
Yes, it's legal. Yes, it stinks.
- "ibmoptioneer" comments. Full excerpt: The problem is that IBM is trying to fool customers
they deliver great service when their people are too tired and under
Recently, an IDC report about services warned companies that bought
services that buying services from any company that provided
resources with over 85% utilization targets was in effect, taking too
many chances and should consider other services suppliers. IDC is now
developing a new report that will make some of the services firms
like IGS look very bad indeed, if not encourage you choose other
vendors for services.
Have patience, the lid is about to blow here. Make a point to try to
get these claims and requirements from management in writing. Ask to
have your utilization as part of your PBC. Then you'll have the
evidence so when the backlash in the market starts happening, you'll
be able to show it to clients who ask.
Not only does IGS have allegedly exorbitant rates, they offshore and
subcontract without the client's knowledge and they have too tired
personnel with little or not training on some deals. We won't talk
about client intellectual property "acquisition" or forcing employees
to stay in cheap hotels to make more profits on the expenses when
they aren't billed actual.
- Yahoo! message board post by "drbeaker2": Did
Someone Die & I missed
the Funeral? Excerpts: I was very busy for the last few days, talking to the half-dozen IBM
friends I know who have just gotten "laid off" (oops, I mean who were
just last week offered a package, sorry) at IBM's Silicon Valley Lab
(SWG, Rational, etc.) in San Jose. The people remaining in the same
depts are working 60 or more hours a week now, but there just suddenly
isn't enough work for these people that I know to do.
Their projects were "cancelled" 2 months ago, and they couldn't
new jobs inside IBM, while other people in the same dept are working
very long hours. Just as new hires and new contract people (who will
not have pensions, etc.) are about to come in. I'm told that an
estimated 100 of the over 1500 people of IBM SVL are in the same boat.
So many are in the same boat at the same time, that the 12 people I
know are all being given 60 days (not the normal 30 days) to decide
whether to take the offered package. And of course, they know that
they really don't have a choice about the package. I mean, their
offices, desks, and PCs have new-hires and new contractors waiting to
It didn't seem to matter what the last performance rating was for
these people. Some excellent and highly skilled people are being
asked to leave. They were assigned to small special projects last
year, while doing the same work as other people in the same dept.
Then suddenly those special projects were all cancelled about 2 months
ago. And of course, you have to know that these people were not able
to find other jobs inside IBM. No hiring manager would even talk to
them, return e-mails, schedule an interview, etc. They were marked to
be let go, and "find another job yourself inside IBM, we can't help
you" was a cruel 2-month joke on these IBM employees.[...]
We are watching another wave of long-term and perfectly good IBM
employees (with pensions) being fired and replaced with new IBM
employees with no experience and fewer skills being hired to replace
them, at a much lower salary and of course, no pension at all, and no
matching 401-K money for their first 12 months.
In the meantime, IBM's customers are worried, and getting poor
service. Customers are dropping IBM products, and no one inside IBM
seems to know what is happening. There are no longer the skills or
interest in selling products to new customers, or keeping existing
The number one priority inside IBM today is to replace all current
employees who have a pension to save a few bucks. While the business
goes down the drain.
For years now, I've been watching a great company eat it's seed corn,
and get sick. And now the patient has taken a big turn for the worse.
- In a Yahoo!
message board post, "madinpok" responds to this comment from a retiree:
Maybe I don't understand IBM's position... I am sure that financial folks at
IBM would be happy not to pay a penny toward my health care costs whether I'm 65 or not. However,
I assumed they are obligated in some way to do so. I would be interested to know what exactly is
the obligation or if they can simply turn their back and let us walk the plank. Full excerpt:
Unfortunately, IBM has no legal obligation whatsoever to provide
any medical coverage to retirees of any age. So yes, they can
turn their backs and provide nothing if they choose to do so.
While IBM once provided the same level of coverage that employees
received for the rest of your life at no cost, they no longer do that.
Over the years, they have been providing less and less medical
coverage to retirees. New employees coming into IBM will get
absolutely nothing in medical benefits when they retire (if they
last that long).
- Raleigh News & Observer: Employer
as shape-shifter. IBM's layoffs follow bulking up to 329,000 last year. Excerpts: Following IBM's employment patterns
could give you whiplash.
A year ago, the company -- one of the Triangle's biggest employers -- touted aggressive hiring
plans. It said it would hire 15,000 workers in 2004 to take its worldwide work force to the
highest level in 13 years. It ended the year with 329,000 employees.
Now, it's in the midst of laying off as many as 13,000 of them.
The company is reducing its staff to improve decision making and lower expenses. In the Triangle,
IBM laid off 300 within the past two weeks. Its Triangle payroll, because of layoffs and other
actions, is the lowest in a decade.
- Washington Post: Human
Toll of a Pension Default. By Dale Russakoff. Excerpts: "Like
Enron, workers' lives and retirements have been ruined," Sen. Charles E. Grassley (R-Iowa)
said last week. "But unfortunately, this time it's perfectly legal." In e-mails to Miller
that his staff is posting online, and in interviews, United retirees recounted stories of job-hunting
in their sixties and seventies, facing medical costs they no longer can afford, uprooting families
to move to lower-cost communities, selling dream retirement homes and losing money they had counted
on to support elderly parents. [...]
PBGC Executive Director Bradley D. Belt said in an interview that United
is only the latest -- and largest -- illustration of what ails the federal pension protection system:
It allows companies to drastically underfund pensions, and even to disguise the problem. Defaults
have so escalated in troubled sectors of the economy, Belt said, that the PBGC now is on the hook
for $450 billion in pension obligations, compared with $50 billion only three or four years ago.
In three years, it has gone from having a $7 billion surplus to a $23 billion deficit. Without
changes to the 30-year-old pension protection system, he said, the PBGC could itself become insolvent.
- Excite: IBM
Opens Fifth Software Center in India. Excerpt: IBM Corp. on Tuesday
opened its fifth software development center in India and announced plans to hire 1,000 programmers
in the new center by the end of 2005.
"We are very excited by the skills and talents and the productivity that come from our team
in India," Frank Kern, IBM's vice president for Asia-Pacific said, inaugurating the center
in the southern Indian city of Hyderabad.
- InformationWeek: Midcareer
Crisis. By Marianne Kolbasuk McGee. Excerpts: After
putting in 20-plus years at AT&T Bell Labs and then Lucent Technologies in demanding positions
such as being the architect of a computing environment used by 6,000 software developers, who
could blame Straka if he had looked forward to mixing work with a little more pleasure time as
he entered the zenith of his career? Instead, he felt compelled to accept an early retirement
package in July 2001, when Lucent, like other telecom-equipment suppliers, retrenched in the
wake of the Internet and telecom-industry bust. He didn't want to leave but worried that his
pension benefits would be a lot less lucrative if he stuck it out and then later became a victim
- CNN: An
immodest proposal, by Mark Shields. Excerpts: The captains of American
corporate life could learn much about how real leaders treat their troops from the captains and
the lieutenants of the United States Marine Corps.
The Marine officer looks out first for his men, making sure that they have food to eat and a
place to sleep. When deployed, the Marine officer waits at the end of the mess line until all
the PFCs and corporals under his command have been fed. Contrast these unselfish military values
with self-concerned CEOs who make sure their companies set aside millions of dollars for their
own personal pensions, while they and their companies fail to fund the pension guarantees they
have made to their employees.
Many of United's 121,000 current and former employees will have their
promised pensions cut in half. Imagine the anguish and the anxiety they must endure. Imagine
their fury when they remember that just before the airline went into bankruptcy, United gave
CEO Glenn Tilton an iron-clad $4.5 million pension.
The airline skies are very friendly indeed to the top brass. Delta Airlines, which is expected
to follow United into pension default, while laying off thousands of employees, scrimped
to set aside $4.5 million in a pension trust for CEO Leo Mullin.
Six months before US Airways filed for bankruptcy, the airline thoughtfully provided a most
golden parachute of $15 million for CEO Stephen Wolf. [...]
Here is one immodest proposal: Before the working families of America have
to take over the responsibility for fulfilling a company's broken promises to the workers whose
productivity and loyalty made that company profitable, it will be illegal, under criminal penalty,
for such a company to award or for any executive of that company to receive any bonus or pension.
Is it too much to ask that the barons of the boardroom share just a little bit in the sacrifice
and pain that the flight attendants, the machinists, pilots and the baggage handlers are
forced to bear? The Bush administration has fought tooth and nail to enact new laws to punish individuals
who go through bankruptcy, but it has expressed not even the mildest dissatisfaction with CEOs whose
cashmere pockets are lined as the companies they run jettison their obligations to their own workers
and instead require ordinary citizens -- most of whom do not have employer-provided pensions -- to pay
the companies' bills.
- Denver Post: Capitalist
risk falls on workers' backs. By
John Aloysius Farrell. Excerpts: Our economic system is built on risk. It's the soul of capitalism.
It's the price of freedom.
You decide to start a business. Investors loan you money. You hire workers. You reap the rewards.
But there are downsides to risk. Capitalism requires losers. Maybe there is a recession. Maybe
the scalawags in Washington plunder the treasury. Maybe your business model stinks. [...]
And the Senate Finance Committee heard last week how loopholes in federal
pension laws have let high-risk companies shortchange retirement plans, endangering "guaranteed" benefits
for thousands of workers and raising the specter of a taxpayer bailout.
Senators on the panel heard from Jayme Manley from West Chicago, Ill., who has worked as a United
Airlines flight attendant for more than two decades. Like thousands of colleagues, she may
lose half or more of the pension she's been counting on.
"I am a 46-year-old woman," Manley wrote."I am a wife. I am a mother of four young children.
I am a daughter of a proud World War II and Korean War veteran. ... I am honest, hard-working, faithful.
I am college-educated, community-oriented and family-driven. I am 'the girl next door.' I am exactly
what United Airlines sought when hiring me as a flight attendant 21 years ago.
"I am their past, but also United Airlines' future. I am a promise broken. I am despair."
Jayme is not alone. Nor is United a special case.
A new study of 5,000 U.S. families by Peter Gosselin of the Los Angeles Times demonstrates how
business and government are increasingly shifting economic risk to the backs of working families,
who are finding it harder to bounce back from the inevitable consequences.
I suppose I'm Pollyanna to suggest we're in this together, that promises should be honored,
and risk - and sacrifice - fairly distributed.
United chief executive Glenn F. Tilton doesn't seem to see it that way. At the Senate hearing, he was
asked why he has not pared back his own $4.5 million retirement package.
Sen. Ron Wyden, D-Ore., suggested that Tilton's deal was evidence of "a double standard."
No way, Tilton replied. It was simply a promise United made when he was hired. The company guaranteed
Why, he had earned it through decades of hard work.
Just like Jayme Manley.
- New York Times: One
Nation, Uninsured. By Paul Krugman. Excerpts: Harry Truman
tried to create a national health insurance system. Public opinion was initially on his side:
Jill Quadagno's book "One Nation, Uninsured" tells us that in 1945, 75 percent of Americans
favored national health insurance. If Truman had succeeded, universal coverage for everyone,
not just the elderly, would today be an accepted part of the social contract.
But Truman failed. Special interests, especially the American Medical Association and Southern
politicians who feared that national insurance would lead to racially integrated hospitals,
Sixty years later, the patchwork system that evolved in the absence of national health insurance
is unraveling. The cost of health care is exploding, the number of uninsured is growing, and
corporations that still provide employee coverage are groaning under the strain.
So the time will soon be ripe for another try at universal coverage. Public opinion is already
favorable: a 2003 Pew poll found that 72 percent of Americans favored government-guaranteed
health insurance for all.
But special interests will, once again, stand in the way. And the big debate among would-be
reformers is how to deal with those interests, especially the insurance companies. These companies
played a secondary role in Truman's failure but have since become a seemingly invincible lobby.
A system in which the government provides universal health insurance is
often referred to as "single payer," but I like Ted Kennedy's slogan "Medicare for
all." It reminds voters that America already has a highly successful, popular single-payer
program, albeit only for the elderly. It shows that we're talking about government insurance,
not government-provided health care. And it makes it clear that like Medicare (but unlike Canada's
system), a U.S. national health insurance system would allow individuals with the means and
inclination to buy their own medical care.
The great advantage of universal, government-provided health insurance is lower costs. Canada's
government-run insurance system has much less bureaucracy and much lower administrative costs
than our largely private system. Medicare has much lower administrative costs than private
insurance. The reason is that single-payer systems don't devote large resources to screening out high-risk
clients or charging them higher fees. The savings from a single-payer system would probably
exceed $200 billion a year, far more than the cost of covering all of those now uninsured.
- Wichita Eagle: Firm
alleges bias in Onex deal. The sale of Boeing Wichita forced
too many people over 40 out of their jobs, a lawyer contends.
By Molly McMillin. Excerpts: A Wichita law firm notified Boeing Co. and Onex Corp. this week that it
plans to file a class-action lawsuit alleging age discrimination by the companies.
The letter alleges the sale of Boeing Wichita's commercial aircraft division and the formation
of Mid-Western Aircraft Systems, the temporary name of the new company, has "targeted
and led to the illegal displacement of individuals above the age of 40." [...]
letter to Boeing and Onex advises them to preserve all relative documents, specifically those "contained
under the 'M' drive of Boeing's current computer system and any systems that may be created
as a result of a change of ownership."
It also asked that any documents regarding "Project Lloyd," Boeing's code name
for the sale, and documents regarding the negotiations, studies, surveys, statistics, case
studies and surveys regarding the sale or the issue of reducing costs dating from the year
1999 be reserved. After job offers or rejection letters went out to Boeing employees, "we
received so many phone calls," Lawrence said. It was impossible to meet with everyone,
he said, so the firm held a meeting on June 4.
About 100 people attended, he said, more than the 30 to 50 Boeing employees he had expected.
- Los Angeles Times: Was
Enron Just a Dream? By Jonathan Chait.
Cox will return the SEC to its lax old ways.
Excerpts: Remember Enron? In calendar years, the scandal occurred just three years ago, but in political
time it's been eons. Back then, in the wake of news reports showing how Enron had fleeced its
investors and put its employees at risk, the public was up in arms.
"Suddenly there may be a political price to pay for not acting," the New York Times
reported. President Bush professed "outrage" over the scandal and declared support
for reforms. Those days are long over. Today, all the pressure comes from business lobbyists
who chafe at tough new restrictions and the Securities and Exchange Commission breathing down
their necks. They yearn for the good old lax pre-Enron days. And Rep. Christopher Cox (R-Newport
Beach), Bush's nominee to head the SEC, is just the man to give it to them.
The second rationale, offered with a somewhat straighter face, is
that Cox is (in Bush's words) "a champion of the free-enterprise system." This
description reflects a common confusion between support for free enterprise and slavish espousal
of anything businesses desire, which may or may not have anything to do with free markets.
[...] How does it help the "free market" to let companies deceive their shareholders?
It doesn't. Economists understand that markets are inefficient when one party has reason
to believe that the other is withholding crucial information. (That's why many car buyers
steer clear of the used car market.) The same problem applies to capital markets when investors
can't be sure that management is leveling with them.
Bush, apparently, doesn't see it that way. In fact, according to his former Treasury secretary,
Paul O'Neill, Bush asserted in one meeting that post-Enron uncertainty in the markets was
caused by "SEC overreach."
So, in Bush's way of thinking, the problem wasn't that executives were getting away with
too much, it was that they were getting away with too little. If that is indeed what's
ailing the economy, then the appointment of Cox is an excellent cure.
|Vault Message Board Posts
Needed for BCS Success"
by "Tweetie_Bird". Excerpts: As I leave BCS for another firm. I can now say unequivocally
that one thing outsiders cannot fathom about many successful IBMers (in BCS or in other
parts of IBM) is their unique ability to be negative yet succeed in business.
The schizophrenic ability is one that can be only developed in the poisoned atmosphere
of IBM. The ingredients for this were created many years ago by the Darwinian Roman
Gladiator environment set up by the then IBM management. Eventually, the customer/client
became irrelevant, but winning the intellectual battle was all that mattered.
Offer a party of business people and the IBMers (ex or active) will unconsciously seek
themselves out and sometimes even isolate themselves. Being in IBM is like being a
battered wife. Most will be great business people when not talking about IBM, but most
will consider it therapeutic to criticize IBM. Most IBMers character is weakened (or
better described as channeled) when IBM is brought up. Very much like a child who has
been abused will act when other people talk about a pleasant youth. The pain and environment
is so unbelievable that few can free themselves from being negative. [...] So a successful
criteria for many IBMers is to be completely living a lie, acting positive and cheerful
to your superiors, yet dying on the inside, waiting for an anonymous forum or a group of friendly
IBMers to share their abuse with.
sinking the ship" by "I_Been_Mugged". Full
excerpt: Forget raises, NONE in 4 years - I was recently put on the 30 day termination
list- extended for 30 days - billable for 110% on a great client - offered to come back
as subcontractor at higher rate - How can we make the numbers when accountants are running
me see if I understand you" by "Dose of reality". Full excerpt:
You are filling a role on a project that is expected to continue and you were terminated?
What was the reason given for your termination - performance?...skills obsolescence?
I don't get it.
Were you offered a position as subcontractor - through IBM or independently, or are
you just hoping to do that?
In the meantime, there are dozens of BCS jobs posted on a number of search engines.
I guess the key qualification for new or continuing employment at IBM is staff ignorance
about what they get in return, so that we can manage to get more from you in good faith
than what we return to you in compensation and reward.
Method behind the madness", humor by "Dose of reality".
Full excerpt: NEW YORK, N.Y.(Bigblueballoon.com) - IBM will reduce its workforce by
an unprecedented 120 percent by the end of 2005, believed to be the first time a major
services firm has laid off more employees than it actually has. IBM’s stock price
soared more than 12 dollars on the news. The reduction decision, announced Wednesday,
came after a year-long internal review of cost-cutting procedures, said IBM BCS head
cheerleader GR. The initial report concluded the company would save $6.8 billion by eliminating
20 percent of its 320,000 employees.
From there, said GR, "it didn't take a genius to figure out that
if we cut 40 percent of our workforce, we'd save $13.6 billion, and if we cut 100 percent
of our workforce, we'd save $34 billion. But then we thought, why stop there? Let's
cut another 20 percent and save $40 billion. "We believe in increasing shareholder value,
and we believe that by decreasing expenditures, we enhance our competitive cost position and
our bottom line," he
IBM plans to achieve the 100 percent internal reduction through layoffs, attrition and early
retirement packages. To achieve the 20 percent in external reductions, the company
plans to involuntarily downsize 70,000 non-IBM employees who presently work for other companies.
"We pretty much picked them out of a hat," said GR. Among
firms IBM has picked as "External Reduction Targets," or ERTs, are Quaker Oats, AMR
Corporation, parent of American Airlines, Lockheed, Boeing, and Charles Schwab & Co. IBM's
plan presents a "win-win" for the company and ERTs, said GR, as any savings by ERTs
would be passed on to IBM, while the ERTs themselves would benefit by the increase
in stock price that usually accompanies personnel cutback announcements.
"We're also hoping that since, over the years, we've been really helpful to a lot of
companies, they'll do this for us kind of as a favor," said GR.
Legally, pink slips sent out by IBM would have no standing at ERTs unless those companies
agreed. While executives at ERTs declined to comment, employees at those companies
said they were not inclined to cooperate.
"This is ridiculous. I don't work for IBM. They can't fire me," said Kaili Blackburn,
a flight attendant with American Airlines. Reactions like that, replied GR, "are not
Inspiration for IBM's plan came from previous cutback initiatives,
said company officials. In January of 2003, for instance, the company announced it
would trim 30,000 jobs over the next year. However, just two months later,
IBM said it had already reached its quota. "We were quite surprised at the number of employees
willing to leave IBM in such a hurry, and we decided to build on that," GR said.
Analysts credited GR’s short-term vision, noting that the announcement had the desired
effect of immediately increasing IBM's share value. However, the long-term ramifications
could be detrimental, said Bear
Stearns analyst Beldon McInty. "It's a little early to tell, but by eliminating all
its employees, IBM may jeopardize its market position and could, at least theoretically,
cease to exist," said McInty.
GR, however, urged patience: "To my knowledge, this hasn't been done before, so let's
just wait and see what happens."
|Coverage on Social Security Privatization
- Washington Post: Senators
Consider Boosting Retirement Age. By David Espo. Excerpts: Work till
you're 69 before getting full Social Security benefits? That's one possibility _ for Americans
who retire two decades or more into the future _ as Republicans on a key Senate committee
review suggestions for improving the program's solvency.
on the Alliance@IBM Site:
- In My Opinion: For
Middle Class, Retirement Pillars Are Tumbling. By
CWA President. Excerpts: A potentially huge crisis looms. Of all the existing defined benefit
pension plans, 75 percent are under-funded - lacking the assets to pay out their benefit
obligations. The reason, writes UCLA professor Katherine V.W. Stone, commenting on United's
plight in the Washington Post: "In the stock market boom years of the 1980s and
1990s, the funds became so flush that United, like many large corporations with surpluses
in their pension plans, diverted some of the money earmarked for pension contributions
to dividends, executive mega-salaries and general operations. Now after five years of
stock market decline...." You get the picture.
Of course the executives who apparently failed to foresee that markets
go down as well as up, who raided their workers' pension plans while mismanaging their
companies to the point of collapse, have done okay themselves. As United CEO Glen Tilton
tries to shed his commitment to employees, he retains his own $4.5 million pension trust.
The fact that union workers have deferred wage gains for years to win
health and retirement security gets lost in the storyline about industries handicapped
by their "generous" benefits.
In every round of bargaining, CWA members and others have to fight to keep these benefits.
Of course, Social Security becomes ever more important as corporate America demolishes a
major pillar of middle-class retirement security, the pension. And now President Bush
wants to chop that crucial pillar as well. Amazingly, Bush's plan for "reforming" the
system would be worse than doing nothing at all. [...]
The projected shortfall in Social Security can be resolved through gradual
and modest increases in contributions to the trust fund that fall mainly on wealthy individuals
and corporations. For instance, at least half the funding deficit would be erased by
raising the income ceiling for Social Security contributions from the current $90,000
to $140,000-well above the income of most working people, and within the means of high-earners.
For example, last year, Verizon CEO Ivan Seidenberg had paid off his Social Security obligation
by 3 p.m. on Jan. 2 (based on straight salary, no perks).
Here's when other CEOs of CWA employers hit the $90,000 pay mark: For GE head Jeffrey Immelt,
1 p.m. Jan. 3; for Disney/ABC Chairman Michael Eisner, 3 p.m. Jan. 3; and for Delphi
CEO J.T. Battenberg III, 9 a.m. Jan. 7.
Is it too much to ask the Seidenbergs and Eisners and other high-income-earners to contribute
a few more workdays to preserve our most successful and critically important social
- Alliance@IBM: Attention IBM employees: IBM
is blocking e-mail to and from the Alliance@IBM e-mail address firstname.lastname@example.org from
inside the company. Please send your job cut information and other correspondence from
your home e-mail. You can also contact us the following ways: Phone 607 658 9285 or Fax
607 658 9283.
- IBM Pension
Lawsuit FAQ about Cooper v IBM,
Updated 6-2-05. Excerpt: Below is a list of frequently asked questions about the class
action lawsuit against IBM's 1995 and 1999 pension plans. The answers are my personal
opinions, have not been verified with either IBM or plaintiffs’ counsel, and
should not be construed as legal advice.
On July 31, 2003, a federal district court judge ruled in favor of the employees in
this case. IBM will appeal portions of the ruling.
On September 28, 2004, IBM and the legal team on Cooper v IBM announced that an agreement
had been negotiated that settles some of the claims and set the amount of damages that
IBM will pay to the class if IBM's appeal of the district court's age discrimination
rulings is unsuccessful.
Click on any question to jump to the answer. Or scroll down and read them all.
Action Tool Kit. Along with the CWA
Job Survival Kit, here are
some resources you can use
when challenging or questioning a company policy, procedure or practice.
- Reduction in Workforce actions (RIF)...
- Escalations, Appeals and Skip level meetings...
- Implied contracts vs. Employees at Will...
- In General...
Cuts Status & Comments
Page. Excerpts: Job cuts are coming. Information needed:
What is Your location?
How many job cuts at your location?
What locations are cutting jobs?
Name of Division and Business Unit?
Some sample submissions follow:
- Comment 06/12/05: At SVL it appears that there were several 'oldies' that
wanted to retire anyway so they welcomed the package, but because of age discrimination laws
they had to throw in a few younger ones to offset the numbers. This is tragic. -Anonymous-
- Comment 06/12/05: Thanks to lack of any feedback from management this only
comes from the rumour mill. Word in the UK is that despite many EOIs being accepted by IBM
take up was not as hoped so the UK will see involuntary cuts in July. numbers unclear. -Anonymous-
- Comment 06/12/05: Look for a job within IBM within a 30 day timeframe.
Just who is IBM kidding? Skills rebalancing my foot. It is all about $$$. -Anonymous-
- Comment 06/12/05: IBM Global Services in Kansas - Promised something
but giving something else. Forget promise, They are not laying off people because
they have to give severance package. They are putting Visa Candidates in such a legal
difficulty, many of them are forced to leave their jobs. IBM is not renewing the
H1 Visa's, Took all the Green Card Processing documents from Sprint. Now THEY Deny
to process Visas as well as Green Cards. IBM probably should write a IBM 101 ways
of letting people go without have to laying them off document. -Anonymous-
- Comment 06/14/05: I'm in SWG, in the DR division, and we've had
serious clamp downs on funding, headcount reductions, and expenses. One guy got forced
into retirement already, and our business has unusually slowed down for this time
of year. It is REALLY slow. I've already been telling people since the beginning
of the year that the direction of the company is suspect, and with the Forbes article,
it somewhat validated my opinion. At any rate, you need contraction before growth
can occur in a monster company like this, and it looks like we're heading for a contraction,
or Palmisano is a business genius (or real lucky) and heads the company in a necessary
direction for growth. Either way, it's owed to the stakeholders -- by definition
of being a public company. Anyhow, I'm glad I'm young, no family, and no responsibilities
but myself. I know better now to stay in I/T and big corporations. Time for a career
- Comment 06/14/05: Concerning the offer of allowing 30 days to find
a job: IT WILL NOT HAPPEN. ANY manager that offers a position to ANYONE on an RA
list will be terminated. Let me repeat: Anyone on an RA list will not be offered
another position in the company. -Anonymous-
- Comment 06/15/05: A heads up to folks who have been 'surplused'
and have aspirations of returning to IBM as a contractor or supplemental and using
the job board to search for open positions and get rehired -- the system has been
locked to exclude all nonregulars. And you can't use an IBM friend's to search, either,
because you need to complete a skills profile first before you can view details on
matches (and perhaps call the hiring manager). So make the most of those 30 (actually
20, counting weekend) days you have left....good luck... -Anonymous-
- Comment 06/15/05: I was supposed to be laid off on June 8th, but
my manager could not get his "meeting" sorted out properly that day. Then
I was told "the meeting has to be done" on Friday. On that Wednesday and
Thursday, I was at a major client representing IBM. When that client got told through
an email that I would not be coming back, they looked up my home phone to call me
to see if I was ok.
It is a relief of sorts, in a very grim way, to see that I was not the only person
let go, and from the sound of it, they may be another wave coming along as well.
All I can say is that the severance pay was decent - 5 months of salary - one
month for each year and 4 months of DBM.
Hugs and best wishes for everyone else caught in the Romper Room mirror layoffs.
- Comment 06/15/05: I hope that people will start to use the actual
location of where they are being laid off from. I know I can't be the only one that
has no idea what half these acronyms being thrown out actually are located. Please
state the city/state you are in.
Latest news in Endicott Printing Division is that Monday we will be told what is
going on after weeks of rumors....I pray that it is not as bad as we hear it will
- Comment 06/15/05: I am another software group marketing professional
over 40 victim of the recent resource action in Cambridge Mass. -Anonymous-
- Comment 06/15/05: Noticed that IBM stock price is at a long time
low; guess the market does not believe that layoffs are good business either.-Anonymous-
- Comment 06/15/05: I am in Charlotte, NC; I only know of two others
names besides myself that have been laid off; those two work out of Lexington, KY.
I've heard that 4 people were let go in Mechanicsburg. -Anonymous-
- Comment 06/15/05: East Fishkill. 5 managers have been re-assigned
due to letting many employees work 8hr shifts while paying them AWS night shift premiums.
The managers and employees were NOT let go but rather "hidden" into other
- Comment 06/15/05: Updated numbers appear to be 70 people at Rational
and 80 people at Lotus. The majority of people riffed appears to be over 40 and bands
8 & 9 -Anonymous-
- Comment 06/16/05: Received an email from HR in the UK yesterday
telling me my job is safe because I am in a global centre of excellence, still feel
very sad when I read of the pain my brothers are suffering in the US, perhaps some
of it is survivor guilt. -Anonymous-
- Comment 06/16/05: Those who came to IBM as part of an acquisition
beware - some, like those in Lotus have two "hire" dates. One date (service
hire date) that corresponds to the date they were hired by Lotus. Certain benefits,
such as vacation, are calculated based on that date. The other is what they call
the "effective hire date", which is when Lotus went from a subsidiary to
a division of IBM. My group (most of which was laid off) just found out that their
severance is based on the "effective hire date" - so they are just finding
out that their severance is significantly less than they thought. The last lay off
used the service hire date. -Anonymous-
- Comment 06/18/05: I am... was... on a virtual team... no specific
location. We had 5 people cut (all over 40 and most 50+ with many years experience).
Others, more fortunate and/or political than me, "somehow" were able to
move over to other groups like the day before... we were supposed to know about the
RA. Supplementals and Contractors stayed.??
Adding insult to injury, I was reporting to a manager that was previously a peer.
This person had taken credit and received an award for work not performed solely
by them. Everyone knew.
Adding this RA to a current divorce situation.. I cannot believe my company has
ended up like this. It is so sad. -Anonymous-
- Comment 06/18/05: 150 Jobs were transferred from IGS BCS to a company
called One1. Most of the jobs = The Educational Ministry Account in Jerusalem. Employees
were given a very decent severance pay - 2 months of salary + two months for each
year of service and 4 months of DBM. Also, employees will continue to work for One1
for the same pay and benefits. Also, around 30 older employees (over 55 years old)
were offered the "Package". -Anonymous-
- Comment 06/18/05: The actual number of people surplused in Corporate
CIO is 60 people which I believe is 20% of the organization. Even for those who can
retire with full benefits, it's an ugly way to leave IBM. It certainly points out
that IBM now only considers people as things...which you only have to treat as well
as the law requires. Very sad for those of us who joined IBM 30+ years ago and know
what working for IBM once meant. more...now IBM -Anonymous-
- Comment 06/18/05: Hey all. Those who had been told that he or she
will be laid off and are within Lotus Division located in RTP, look up job reference
006260 especially anyone with some portal or java experience.
Just a FYI -Anonymous-
- Comment 06/18/05: The information provided by an HR rep about when
those laid off from the Lotus division were officially hired and upon which severance
is based was wrong - fortunately. They are using the service hire date. -Anonymous-