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Retirees, Vendors, Contractors, Temps, and Active Employees are all eligible to become members of the Alliance.
- Wall Street Journal: GM's
Decision to Cut Pensions Accelerates Broad Corporate Shift. Benefits Curb Follows Path of Other Companies On Worker
Guarantees. The End of Retirement? By David Wessel, Ellen E. Schultz and Laurie McGinley.
Excerpts: General Motors Corp.'s move to dilute salaried workers' pensions and make them shoulder more medical
bills in retirement is a milestone in the erosion of a deal big American companies struck in the prosperous years
following World War II: They promised to provide loyal employees with a comfortable retirement free of worry about
running out of savings due to old age or ill health.
"Our employer-based social-welfare system is collapsing," says Alicia Munnell, director
of Boston College's Center for Retirement Research. "GM itself is not a big deal. It's GM on top of Verizon and
IBM" -- which both recently froze some of their pension plans -- "and then there's everything that's happening
in weak companies like airlines." [...]
International Business Machines Corp. last month told 117,000 workers in U.S. defined-benefit
pension plans that they will stop earning additional benefits after 2007, saving the Armonk, N.Y., company more
than $2.5 billion over five years. And in December, Verizon Communications Inc., New York, announced it was freezing
the pensions of 50,500 managers, saving $3 billion in the coming decade. Workers at both companies still will
get pensions at retirement but won't accrue benefits with additional years on the job. Circuit City Stores Inc.
and Sears Holdings Corp. have done the same. [...]
Health-care systems in some countries, such as the United Kingdom and Canada, are financed
through general tax revenue. In Germany and several other European countries, all employers and employees pay
for health care through a payroll tax. The per-person health-care tab is smaller, and the systems provide universal
aren't singled out as a separate category," Mr. Hoskins says. "They are part of the pool of workers. That
provides certain advantages, because you can spread the cost between the active and inactive, and the sick and
the healthy. You are spreading the risk so it doesn't fall so heavily on any one employer." (If link is broken,
view Adobe Acrobat version [PDF--58KB]
- Yahoo! message board post: "Sam's
Pension" by "ibmmike2006". Excerpts: You can find this information in the IBM
Stockholder's 2005 Proxy statement on Page 20 in the table 2 Supplemental Executive Retention Plan (SERP) chart. http://www.ibm.com/annualreport/2004/annual/proxy.shtml
links to: ftp://ftp.software.ibm.com/annualreport/2004/2005_ibm_proxy.pdf
It appears Sam will be making $5 million at age 60 to get his $3.8 million a life pension
or $10,000 a day projected based on 2004 wages. He could, if the board grants him increases, as much as $8.125
million a year pension or $22,265 a day pension for life. Let's hope the IBM board of directors acts responsibly
and keeps Sam's pension to $10,000 a day. Boy would I feel ripped off if he was getting $22,265 a day. I figured
that, if Sam were to retire at age 60 with 35 years of IBM service and get the $8.125 million, he would probably
live to age 85 and receive over $300 million in that 25 years of retirement from his SERP defined benefit pension
Oh, only $165,000 annually comes out of the IBM pension trust fund per a law
from Congress, the rest will come out of the Company profits and General Fund annually. Of course, with the freezing
of the IBM pension trust fund, that should be no problem. The surplus money that will not go to regular IBM retirees
cost of living adjustments can be funneled out of the IBM Pension Trust fund to pay for Sam's pension because
there will be enough Trust surplus to fund the IBM profits and General Fund to pay for Sam's non-qualified SERP
from the interest in the $48 billion IBM pension trust fund. That coupled with raising health insurance premiums
retirees have to pay annually, should do the trick.
- BusinessWeek: K
Street's Heavy Hitters. The top 20 companies with in-house lobbyists. Excerpts:
These are the companies that employ the greatest number of in-house lobbyists on issues involving the federal government,
according to the Web site www.lobbyists.info, which tracks lobbying data.
(Editor's note: IBM is listed in third place in terms of the number of government lobbyists).
- AlterNet: Trouble in Cubicle Nation. By Joe Robinson. While big business racks up historic profits, workplace
life is becoming more unbearable for the people who make the products and services. Excerpts: It was a great year
for labor -- if you worked at a call center in India, made your living as a CEO or sold real estate to big-box stores.
But deep in Cubicle Nation, the average American worker remained on a fast track to the Industrial Revolution, with
soaring workweeks, declining wages, and health, pension and vacation benefits vanishing faster than you can say
Add to the siege outsourcing, cutbacks, the dismantling of ergonomics rules and forced overtime
-- all while business is racking up historic profits, the most in 75 years -- and even a nearsighted dingo could see
that the trends are unsustainable for families, personal health, company medical plans or an informed and involved
citizenry. And completely unnecessary.
As all the productivity research shows, we can get the job done without finishing ourselves
off. So let's fire some of the worst habits that got us here and ring in resolutions for a sane workplace in 2006...
- New York Times: Benefits
Go the Way of Pensions. By Eduardo Porter and Mary Williams Walsh. Excerpts:
For those who were counting on G.M. to care for them for life, the company's recent moves to pare back, in different
ways, the pension and health benefits of union and nonunion retirees amount to a breach of a promise that was at
the core of the nation's labor relations for much of the post-World War II era: workers would give their productive
years to the company; the company would care for workers when they got old.
"The thing that annoys me about G.M. is that when I retired I had a letter that said
I would receive health care for life at no cost," said Chester Clum, 79, a former sales and service manager at
G.M. who retired in 1981 after 38 years of service. "They never brought up that they could change that at will." [...]
Companies have also noticed that, in many cases, offering a secure retirement package is no
longer essential to attract formidable younger talent. I.B.M. found this out after closing its pension plan to
new hires in December 2004. It hired about 7,500 employees last year, and observed that none of them seemed perturbed
to be getting a rich 401(k) plan instead of the pension plan that was closed to them. [...]
Given all the flux in today's corporate environment, many workers — especially younger
ones — are rolling with the punches. According to a survey in 2004 by the Employee Benefit Research Institute,
only 5 percent of workers consider retiree health care to be their most important benefit, and only 4 percent put
a defined-benefit pension at the top of the list. And 9 percent put either of these benefits in second place.
- "west_coast_retired_guy" comments. Full excerpt: It would have more interesting to see how many of those
which were offered a job by IBM and then turned it down did so at least partly due to IBM's lack of a defined
benefit program. By only referring to the opinions of those that actually took the job (it must be noted that
their statements may not be accurate in any case), they've heavily biased the result.
Times have changed a lot since I was last looking for a job, but I know I did pick the company
I went with to a large extent due to its very rich defined benefit program and other health and 401K benefits (a
much better 401K than even IBM's new one--they had a 4 to 1 match on the first 3% of your contribution along with
a better health plan and defined benefit program than IBM had even in 1991), since these benefits were heavily tax
advantaged and very meaningful to me at my then age.
If a company is essentially only hiring young employees, I accept that few will pay much
attention to a defined benefit program. But if you're trying to hire older professional workers, its going
to make a significant difference to most of them.
- Yahoo! message board
post by "Mike
Germano". Full excerpt: You don't get it. It's a con game. The economy is doing
great everywhere except where you are, so you figure your area must be an exception. But, in reality you have plenty
of company in areas with people who are not doing well. The GNP is doing well between large corporations, war chest
spending, and the very rich reaping big dividends, so the per capita as an average looks and sounds great looking
at the big picture. Meanwhile a bit lower to earth, local and state taxes keep going up to cover federal mandates
and other shortages to the states and costs in general are going up. People are being outsourced and getting re-employed
at lower wages. Personal debt and bankruptcies are increasing at alarming rates and personal savings are non-existent.
The only "savings" for the future people have are their pensions, 401(k)s and IRAs and those are in in
the gun sights for the next round of pillaging. So, yes, the economy is getting much better, but the peasants have
to watch the big party from outside in the cold since they can't afford the price of admission.
- Yahoo! message board
post by Janet Krueger. Full excerpt: You left out the people who are actually
doing things outside these boards. Yes, I know you don't believe they exist, but that's ok; your cries of doom
aren't making them stop!
Congress has been hijacked by corporate lobbyists who have convinced many of our senators
and representatives that the only way to 'save' our voluntary American pension system is to weaken ERISA (the
Employee Retirement Income Security Act) to a level that allows corporations to do anything the please to our
pension trust funds.
Since we do not have large amounts of funds at our disposal, the only way to counteract this
insanity is with our voices and our votes.
Have you written a letter to the editor of your local paper within the past month? Have you
written to your representative and senator in Washington? Have you called and left a phone message about how angry
you will be if they make it possible for companies like IBM to legally reduce the pension checks of their retirees?
If the answer to any of those questions is no, then there is something you could do that would
be much more constructive than spreading the message of the old prophet in Ecclesiastes to these boards... Following
are the talking points I recommend using when you ACT:
- We are concerned about upcoming pension legislation in both houses of Congress as it could seriously hurt workers.
We want Congress to strengthen ERISA pension protections, not weaken them.
- Early retirement subsidies, once
vested, and especially once being collected, need to be fully protected.
- Plans that are underfunded need
to be fixed by forcing companies to increase their contributions to those plans, NOT by forcing them to cut
benefits to current and future retirees.
- Do not reduce the size of a lump sum distribution that can be offered
in place of a promised annuity. Make sure the promised annuity stays an option.
- Strengthen plan termination
rules so that excess funds have to be used for the sole benefit of plan participants and cannot be returned
to the company or to the corporate executives.
- Currently, neither the house nor the senate bill retroactively
legalizes cash balance conversions. We will be outraged if we lose a large share of the Cooper settlement because
Congress retroactively legalized what IBM did. If Congress must legalize cash balance conversions, they should
include all of the protections for older employees that are in the senate bill.
- Washington Post: Health
Savings Accounts Aren't Immune to Risk. By Albert B. Crenshaw. Excerpts:
But while costs to employers may be restrained, it remains to be seen whether the plans truly curb overall costs.
That is because they have another, less obvious feature: risk shifting. In traditional health insurance, the insurer
-- or the employer, which is actually the insurer in the case of most large companies -- picks up most of the costs
after a typically modest initial deductible is satisfied. [...]
Then, too, there is the question of how much tax-preferred savings Americans can afford. Already
we have 401(k) plans and IRAs for retirement and 529 plans for education, which, fully utilized, allow families
to put aside tens of thousands of dollars into deductible or tax-free accounts. Indeed, the total of possible tax-preferred
savings far exceeds many families' entire income, let alone the amount they can afford to save.
On the other hand, HSAs clearly make sense for healthy, well-paid workers, especially young
singles. They offer another tax benefit that, over the years, could really add up if the owner is healthy enough to
avoid tapping it.
- USA Today: Health
accounts would eat up savings. Costing $59B over five years, accounts offset
changes to Medicare. By Julie Appleby. Excerpts: President Bush's proposal to expand tax-free health savings accounts
would cost the U.S. Treasury $59 billion over five years, more than offsetting the savings he seeks from limiting
the growth of Medicare. Bush promoted health savings accounts in his State of the Union speech last week to help
control growing health care costs. [...]
Critics, including the Consumers Union, say the accounts benefit mainly the healthy and wealthy
and could drive up costs for others. The $59 billion cost estimate has raised concern among some conservatives who
support the accounts. Joseph Antos of the American Enterprise Institute said he likes the idea. But “to me,
that's a considerable amount of money,” he said. “This is a more expansive proposal in terms of committing
federal resources to health care than one could have anticipated from the State of the Union address.”
- Chicago Tribune: Bush's
Rx for insurance: Buy your own. By John McCarron. Say good-bye to your
group health insurance. OK, maybe not right away. Your employer may stick with your plan for a few more years.
Don't toss out that health-care card just yet. But if you've been following the business news lately, and if you
paid close attention--very close attention--to President Bush's State of the Union address, you may hear a distant
knell for the way most Americans get their health insurance. [...]
So the race is on to limit corporate exposure to runaway health insurance costs. And sure
enough, President Bush has a plan. In his address, the president said government has a responsibility to "help
people afford the insurance coverage they need." The way to do that, his aides later explained, is to "level
the playing field" so folks who buy their own insurance get as good a deal as folks who join their company's
plan. Sounds reasonable. But details of the proposal, released by the Treasury Department, are causing quite
a stir among the fraternity of insurance wonks who understand the implications. [...]
Bush would let that family sock away $10,500 per year tax-free. Moreover, they could claim
a tax credit equal to 15.3 percent of the amount they deposited. But it gets sweeter. If the worker buys his
own high-deductible insurance policy, rather than one offered at work, the premiums he pays would be fully tax-deductible
and eligible for the 15.3 percent tax credit. [...]
So what's wrong with this picture? What's wrong with encouraging workers, and their employers,
to opt out of group insurance and go it alone ... with large amounts of help from Uncle Sam? Plenty, according to
the Center on Budget and Policy Priorities, a Washington-based think tank. You can read its analysis online (www.cbpp.org),
but an abbreviated list of horribles goes like this:
- If, as expected, the healthiest and wealthiest leave the group insurance pool, premiums will shoot up for the not-so-healthy
and not-so-wealthy. That's if they can find a plan that will take them. What insurance company is going to want your
diabetic wife or disabled child?
- If, as expected, small-business owners, many of whom earn too much to qualify for a tax-deductible IRA, opt for
the Bush HSA, which has no income limits, won't many owners simply do away with their company's group plan altogether?
What's good for the boss must be good for the workers, right?
- If, as the free-market theorists predict, people with high deductibles "shop around" for bargain health
care and forgo "unnecessary" care, how are folks to decide what and when care is necessary, much less
where they'll get the most for their money? Surf the Internet? Thumb the Yellow Pages? So much for your primary-care
physician and his or her trusted referral network of specialists.
No, what we have here is another Texas "two-fer," a combo better than $3 gasoline and lower taxes on
capital gains. What we have here is the fig leaf behind which corporate America will walk away from group health insurance,
along with the sweetest tax shelter ever invented for the fortunate few with six-figure incomes. RIP, group health
- Yahoo! message board post by "ibm_r_crooks". Excerpt: Take a look at the picture on
the Jobs at IBM web site http://www-1.ibm.com/employment/ That picture tells you all you need to know about Diversity at IBM.
Male OK Female OK Asian OK African OK White OK Middle Eastern OK Over 40. Forget about it. (Heck, none of the women
in the picture look over 30)
- Yahoo! message board
post by "gp1200x". Excerpts: There are many in my group (25-30 years) that
will be leaving soon since most do not want to hang on once they can find a way to leave. I left last month and
found out two more longtime co-workers I knew left...all before hitting the 30 year mark. I am curious to see what
happens to IBM in 5 years when most of the large group hired in the late 70s start leaving.
IBM has increased utilization and quotas to a point where it is physically impossible to meet
the goals even working overtime and weekends. They didn't cut salaries for many the last few years but raised the
bar to the point where you had to work extra hours every day and put in time on the weekends just to get the work
done. I billed customers more than 2000 hours last year and was basically asked to bill even more. So any vacation
time and holidays usually had to be made up at night or weekends to meet the quota (most travel time I had to eat).
It's getting worse every year and young workers will put up with it for only so long before they find another opportunity,
and IBM is going to have little to fall back on now that they angered the long time employees.
Out of the 12 hires that I know of over the last 5 years, only 1 is left. I think IBM will
eventually be comprised of short timers. I am curios to see what happens to the company when times get rough again
since since there is no loyalty anymore to IBM.
- Yahoo! message board post: "Boehner Rents Apartment Owned by Lobbyist in D.C." by "fhawontcutit".
Excerpts: Boehner was Chairman of the House Education and Workforce Committee. Here is the "fact sheet" on
HR2830 which Boehner helped push through. "Fixing
Outdated Pension Rules to Strengthen Worker Retirement Security, Protect Taxpayers".
Note the following:
"The bill helps resolve legal uncertainty to ensure hybrid plans such as cash balance pensions, which
offer portable benefits that allow workers to earn more generous benefits steadily throughout their careers, remain
a viable part of the defined benefit system."
I guess the rules that protect against age discriminatory cash balance plans are the "outdated pension rules" that
Boehner felt needed to be fixed.
- Bloomberg: U.S.
Health-Care Cure Isn't Tax Breaks. By John Wasik. Excerpts: It's clear that unless
the U.S. health-care system is repaired and brought under control, companies and individuals alike won't be able
to afford medical care, and U.S. companies will be even less competitive in a global marketplace. And the myth
that ever-higher spending on health creates a better quality of medical care isn't accurate, either. The U.S. system
is the world's highest-spending per capita, at $6,280 in 2004. Yet it ranks 33rd in total quality, according to
the Geneva-based World Health Organization. That's two places above Cuba.
- New York Times: Will
Your Money Last? Excerpts: Americans spent more than they made in 2005, sending
the personal savings rate into negative territory for the first time since 1933. Government and business should
be alarmed. Many Americans do not seem to believe they are living beyond their means, as long as the value of their
houses are rising. But spending freely while the house appreciates is not saving for the future. It is betting
that boom-time gains will last indefinitely. They will not. Meanwhile, traditional corporate pension plans are
disappearing; half of the people with 401(k)'s have saved less than $20,000; and about one-third of households
have saved nothing for retirement.
- Computer Business Review: IBM
ramps up outreach to Russian developers. Excerpts: According to Cathy Mandelstein,
IBM director of developer relations, interest is huge. "We began conducting briefings last year and saw turnouts
as high as 500 to 750 developers at each session, which was very high," she said. IBM plans to target 65 cities
across Russia and work with 400 universities in curriculum development, focused heavily on open source. It already
has an innovation center in Moscow that has worked with roughly a hundred partners to port and localize software.
- Daniel Gross, A Moneyblog: Bushonomics. Excerpts: The death knell for the traditional company pension
has been tolling for some time now. Companies in ailing industries like steel, airlines and auto parts have thrown
themselves into bankruptcy and turned over their ruined pension plans to the federal government. Now, with the recent
announcements of pension freezes by some of the cream of corporate America - Verizon, Lockheed Martin, Motorola and,
just last week, I.B.M. - the bell is tolling even louder. Even strong, stable companies with the means to operate
a pension plan are facing longer worker lifespans, looming regulatory and accounting changes and, most important,
heightened global competition. Some are deciding they either cannot, or will not, keep making the decades-long promises
that a pension plan involves.
And here’s the kicker: For many workers, the movement away from traditional pensions
is going to be difficult. Already there are signs that people are retiring later, or taking other jobs to support
themselves in old age. Participation in a pension plan is involuntary, but most 401(k) plans let employees decide
whether to contribute any money - or none at all. Research shows that many people fail to put money into their retirement
accounts, or invest it poorly once it is there.
Even skillful 401(k) investors can be badly tripped up if the markets tumble just at the time
they were planning to retire. Mr. Schieber of Watson Wyatt ran scenarios of what would happen to a hypothetical man
who went to work at 25, put 6 percent of his pay into a 401(k) account every year for 40 years, retired at 65, then
withdrew his account balance and used it to buy an annuity, a financial product that, like a pension, pays a lifelong
He found that if the man turned 65 in 2000 he would have enough 401(k) savings to buy an annuity
that paid 134 percent of his pre-retirement income. But if he turned 65 in 2003, his 401(k) savings would only buy
an annuity rich enough to replace 57 percent of his pre-retirement income.
When a company switches from a pension plan to a 401(k) plan, the transition is hardest on
the older workers. That is because they lose their final years in the pension plan - often the years when they would
have built up the biggest part of their benefit. They then start from zero in the new retirement plan.
Jack VanDerhei, an actuary who is a fellow at the Employee Benefit Research Institute, offered
a hypothetical example. If a man joins a firm at 40, works 15 years, and is making $80,000 a year by age 55, he might
expect to have built up a pension worth $16,305 a year by that time, Mr. VanDerhei said. If he keeps on working under
the same pension plan, that benefit will have increased to $27,175 a year when he retires at 65.
But if instead when the man turns 55 his company freezes the pension plan and sets up a 401(k)
plan, the man will get just the $16,305 a year, plus whatever he is able to amass in the 401(k). It will take both
discipline and investment skill to reach the equivalent of the old pension payments in just ten years, Mr. VanDerhei
We're in the midst of (1) a giant cram-down, in which companies are simply walking away from
promises they've made to workers; and (2) what amounts to a giant experiment that 401(Ks) will be successfully
retirement-planning vehicles. Combined, they are making people feel more financially anxious--no matter what the unemployment
rate alleged tells us about the job market.
- Washington Post: Bush's
Social Security Sleight of Hand. By Allan Sloan. Excerpts: If you read enough numbers, you never know what you'll
find. Take President Bush and private Social Security accounts. Last year, even though Bush talked endlessly about
the supposed joys of private accounts, he never proposed a specific plan to Congress and never put privatization
costs in the budget. But this year, with no fanfare whatsoever, Bush stuck a big Social Security privatization plan
in the federal budget proposal, which he sent to Congress on Monday. [...]
Then he seemed to be kicking the Social Security problem a few years down the road in typical
Washington fashion when he asked Congress "to join me in creating a commission to examine the full impact of baby
boom retirements on Social Security, Medicare and Medicaid," adding that the commission would be bipartisan "and
offer bipartisan solutions." But anyone who thought that Bush would wait for bipartisanship to deal with Social
Security was wrong. Instead, he stuck his own privatization proposals into his proposed budget.
- New York Times: Ford
Offers Severance Option to Workers. Excerpts: Ford Motor Co. is offering buyouts
of $100,000 each to workers who lose their jobs to plant closures if they agree to give up all benefits except
their pensions. The severance option is among five being proposed to workers as Ford moves ahead with its plan
to close 14 plants by 2012, a move that will affect roughly 30,000 employees. [...] Under Ford's current agreement
with the UAW, which expires in 2007, the company can't permanently lay off workers without continuing most of their
pay and benefits. [...]
Besides the $100,000 buyout, other offers include a tuition reimbursement program, two early
retirement programs and a preretirement leave program for those just short of the 30 years needed to retire.
Workers opting for the tuition program will receive up to $15,000 per year for four years along with medical
benefits and half their regular pay. [...]
The first retirement option, for workers 55 and older who have 30 or more years of service,
offers $35,000 and full retirement benefits to those who retire immediately. The second retirement option, for workers
55 and older who have 10 or more years of service, offers a lifetime fixed income that is lower than that offered
through the regular retirement program. The preretirement program, for workers with at least 28 years of service,
offers those who agree to take leave 85 percent of their pay until they reach the 30-year mark.
- Communications Workers of America: Medicare
Drug Scam Revealed. Excerpts: The Medicare drug benefit
introduced January 2006 is shaping up as the single most cynical scam perpetrated by the Bush administration and
GOP lawmakers on American consumers, according to many health care professionals. Designed to provide relief to senior
Americans from rising prescription drug costs, the measure has turned into a boon for drug makers and health insurers.
Immensely profitable pharmaceutical companies are reaping billions in subsidies from taxpayers to provide the benefit.
The legislation also complied with drug industry demands that Medicare be prohibited from
negotiating with manufacturers for lower drug prices, the only program in which the federal government is prevented
from using its huge buying power to negotiate pricing with vendors in order to save taxpayers' money.
Among those helping the industry pass the bill was Rep. Billy Tauzin (R-Louisiana), whose
committee on energy and commerce oversaw Medicare. After the bill passed, Tauzin soon quit Congress to become
president of the Pharmaceutical Research and Manufacturers of America, big Pharma's Washington lobbying group,
at a huge salary. The program's implementation, meanwhile, was handed over to commercial health insurance companies
to administer the government program for a profit with indifferent oversight from the Bush Administration. [...]
Taxpayers, of course, are left holding the bag for what is now estimated to be a $700 billion
program. The Bush administration sold the Medicare drug bill to Congress in 2003 by estimating its cost at less than
$400 billion over 10 years. Scarcely a month after its enactment, the White House issued a new estimate: $535 billion.
It soon came to light that Richard Foster, Medicare's chief actuary, had known of the higher estimate, but had been
threatened that he'd be fired if he warned Congress before the vote.
- ZD-Net India: India fastest
growing market for IBM. Excerpts: IBM India on Thursday said that it
had recorded a stupendous 55 per cent in its topline growth in 2005 as against 45 per cent recorded in 2004, making
this the fastest growing region for IBM. However, it declined to reveal specific financial figures. Dataquest reported
a turnover of Rs 4,219 crore for IBM in 2004-05. Going by the, IBM's turnover in Indian during calendar 2005 should
be around $1.5 billion. The company added 16,500 people during 2005, taking its India strength to 38,500. With this,
IBM's workforce in India is its second largest in the world, after that in the US.
According to industry estimates, close to 50 per cent of the workforce is in business transformation
outsourcing, a practice which IBM ramped up by acquiring Daksh during early last year. [...]
"India is also a major hub for IBM, along with China and Brazil, in housing major global
delivery centres as its drives down costs and adds value for its global customers," added Annaswamy. The launch
of the Application Management Services centre in Hyderabad, infrastructure management facilities in Bangalore, India
Research Lab in Bangalore and IBM Daksh centres in Pune, Chandigarh and Kolkata have underlined IBM's India focus
and growing business strength.
|Vault Message Board Posts
- "Other options" by "wonderaboutibm". Full excerpt: But you have not considered reinvestment in the business
(considering the cost to IBM of stock buybacks). Using any reasonable return on capital rate over the past
ten years, that net 67b has present value closer to 100b. In terms of magnitude, that's more than IBM's
annual revenue and double the total pension fund balance (that IBM claims is too expensive to bear.) In
BCS, there has been virtually no training or professional development since 2001. That would have eaten
only a small portion of the 67B thrown at Wall Street, and its ROC would have met IBM financial requirements.
But instead, IBM has weakened its BCS workforce -- and therefore its business fundamentals -- all at the
alter of stock buyback. And to look at the numbers, the buybacks, if anything, are accelerating. The buybacks
no longer even inflate the stock price, though they are probably propping up the price in its present narrow
about investing in" by "Dose of reality". Full excerpt: ...people, "our
most valuable asset"?! This is a services business - shouldn't we invest in our service providing
capabilities? That's not too much of a stretch is it? Although technically you can't capitalize investments
in people, from a cash flow perspective, you can perform the same kind of racking and stacking CAPEX analyses.
How about asking these kinds of questions:
- If we invest another $250 million in annual compensation & benefits of the top 10,000 performers, how
much incremental revenue and GM will they produce?
- How much will we save in recruiting & resource ramp
up costs? (How about 75k average salary times 25% recruiting/ramp up cost times 7500 employees = $140mm?)
- What is the impact from increased productivity and utilization?
- How many fewer under water projects
will we have?
- How much more repeat business will we get?
- How many clueless BD resources can we
- What capabilities do we lack? What kind of industry, application or technical expertise is
the market willing to pay for?
The repurchase decision resulted from a lack of imagination and business acumen. It is the corporate equivalent
of buying a money market fund in an equity bull market!
for a Heavyweight" by "Tom Musto". Full excerpt: As Jackie Gleason tells Anthony
Quinn - "We can't make money winning any more so we might as well make some money on the losing." The
Blue Pig only makes money for its Mafia. The rest of us have to play the short side of the market. Telling
the facts on this board helps get the truth out about IBM. The spinmeisters like IGSFinance are treading
awfully close to Enron-style lawbreaking. Remember the flak Old Project Manager got last year for telling
the truth about the Sprint Deal? Now that the contract is on the skids does anyone hear those apologists?
As Ryan hurst says "Who's stupid now?"
is a heavyweight not a heavyweight?" by "Dose of reality". Full excerpt: That's
what happens when deal-makers, soap salesmen, and FUMU's are consistently selected for advancement. You
get commercially suspect, untenable fiascos that no one is willing to stand behind. Business is not that
hard until you introduce unfettered human nature into the equation.
for 2 years" by "Graduate_2004". Full excerpt: Been working for BCS for 2 years...
consistently disappointed with raise, bonus, and work environment.. but for some reason I have stayed for
this long. This is the only company I've worked for out of college - so my question is... is it this bad
everywhere else? I want to move somewhere that I feel rewarded, challenged, and that I'm constantly learning...
my coworkers suggest that I get out of here while I can. Thoughts?
is a common plight" by "Dose of reality". Excerpt: Our entire resource management
strategy relies on two fundamental precepts:
- Candidate ignorance of what it is like on the inside and playing up the "luster" of the
brand to lure them in
- Mind-control of hired "mice" to get them to race around a virtual maze for some cheese
that simply isn't there. Along the way we try to get you to believe that it is the same all over. If
we get 3 years out of you, we are happy. All the while we use artificially limiting comparisons like "it
is the same at ACN", as if that is the only other alternative you have. BTW, it is not the same
at ACN, though it is no paradise there either.
There are hundreds of excellent companies out there that are willing to pay good money
for good people, and reward them for good work. The only reason to stay here is if you have no externally marketable
skills. If you are in that category, then spend some focused time on upgrading your skills, forget about wasting
effort trying to please your managers, and get out as soon as you can. The odds of finding a better career opportunity
are about 90% Think much more broadly - well outside the big x consulting market. Companies have been doing a
lot of insourcing of development and operations. The industry doesn't pay the same market premiums that we used
to, yet the visceral desire to "get into consulting" is still there.
on the Alliance@IBM Site:
- Alliance@IBM: Attention IBM employees:
IBM is blocking e-mail to and from the Alliance@IBM e-mail address email@example.com 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.
Union Amicus on IBM pension (PDF). The union says the pensions changes announced to its UK
workforce will slash the pensions earned by employees and force people to leave the final salary scheme early.
IBM to close final salary pension schemes by back door says Amicus.
- PBC's and 2 "3"'s equal stealth job cuts. IBM employees are once again being forced
out the door. If you are being forced out please contact the Alliance: firstname.lastname@example.org from
your home computer. Let us know your location, name, age and time of service. Information will be held in
strict confidence. We will put you in contact with someone that can give you advice on challenging your force
- From the Job
Cuts Status & Comments page:
- Comment 2/06/06: Dear ISC and Procurement employees, I am one of you but moreover I am the Massachusetts
Representative of the Alliance@IBM. I was one of the very experienced procurement employees who trained
his replacement from India. I am now dealing with my second resource action since 2003. Frankly, I
believe each and everyone of you should fight the Resource Actions, file an appeal today with the Plan
Administrator, at the address in your package. Read the Resource Action Tool Kit on the Alliance web
site and by all means write to me if I can help you in any way.
Whether you are in Massachusetts or
anywhere else in the US. Furthermore, if you are dealing with a chronic or debilitating medical condition
seek the support of the ADA, find out if you have a disability or discover if your disability is a
reason for your termination. I have been speaking to many people at IBM who may be eligible for protection
under the LAW. Talk to your local human rights commission, or state disability commission, they will
direct you to the proper people.
Let's not call it a resource action, or being laid off, we are being
fired! Take these actions on the first day that you receive the "package". I did reject a
severance payment a few years back and I received a few more years of pensionable earnings, I even
reached my 25th anniversary. The struggle you undertake may be tough, use the resources of Alliance@IBM.
The services of reduced attorney's fees are available for dues paying members. You also may want to
look into the newest suit over OT. Join me at the Stockholders Meeting! Let's take a stand together.
Join the Alliance! Steve Bergeron, IBM employee MA Representative at Large. Alliance@IBM MA Rep. @ Large-
- Comment 2/06/06: I am another one of those who, after two 3 ratings, was offered a "mutual" separation
package. I am also one of those who repeatedly gets calls from a contracting company to go BACK to
IBM and do the same job, even in the SAME group for significantly less $$$. If my performance warranted
poor performance ratings and a separation package, why would they want me to come back in any capacity
other than to collect the trash (and there's plenty of that there)?? It's criminal and unethical what
they do to people. -Anonymous-
- Comment 2/08/06: I am another one of the 62 ISC Procurement employees who were "fired" rated
a 3 twice as well, however was told it was merely a staff reduction. I am seeing an Attorney tomorrow,
and I am filing an appeal. I encourage everyone to do the same. I wonder how many of us are women?
Please contact the Alliance if you have ben fired as well. -Anonymous-
- Comment 2/08/06: Guys, if you are certain that your job is going to be outsourced
to India and like me were scheduled to train someone from India, look for a job and just bolt out.
I feel soooo good, because I left IBM hanging, I am an owner of this critical program, that only I
have a good understanding of, I was lucky enough to land another job quickly, and gave IBM only a 5
day notice and told them see ya, and good luck in training the person from India on my duties next
month. Gave them a taste of there own back stabbing medicine. For me it was easy to just leave because
I've been there 3 years and don't have all that pension and benefits vested yet. If possible we need
to show IBM, that we can't just be undervalued to meet managements financial goals and I don't know
how others feel about it, other than a teammate. I have no desire to give some foreign worker all the
tips and insides and outs that I took years of experience to gain, through some stressful experiences
and long hours on my own mistrials and research to get to where I am today. Best of luck to you all,
missing the good ol IBM -Anonymous-
- Comment 2/09/06: Ditto. When they told me I had to train my foreign replacement during
my last 30 days, I only gave the basic information and withheld any extra info that wasn't already
documented. As we all know, there are curves and fixes that occur, often, but not enough to document
since they aren't repeatable enough and are unique to the situation. We handle those through our experience
with tools and projects. Next time one comes up, my replacement will be screwed and really have to
scramble to figure out how to respond. If IBM wants to call me back as a high priced consultant, they
have my number, but I know they won't. They'll just throw more lower priced people at it until they
cover all the holes I left. They screwed me out of a lot of retirement money and anything I can do
to offset that by hurting their bottom line is fine by me. -Anonymous-
- Comment 2/10/06: A few weeks ago, I was told, during my PBC review, that I was being
placed on Notified Re-deployment. This, for those of you that don't know, is when you're told that
your skills aren't needed in your group any longer and that you have limited time to try and find yourself
another opportunity within IBM. Of course, that failing, you'll become part of the next resource action.
Interestingly enough, my PBC review never covered my work for the past year, it referred to a project
that I had problems with, 2 years ago and under another manager. It said that there were situations
that I couldn't be assigned to because I was 'weak' in some areas and this held the whole team back.
I've been on the same project, for over a year, and the overall PM hadn't even been consulted regarding
my activity during the year. If I'm unable to find something, I intend to look into my legal options
- From the General
Visitor's Comment page:
- Comments 02/06/06: Good grief! Did you see the number of insider transactions for IBM for the last 2 weeks?
Scary the way the execs are dumping their stock. I'm on of those (un)fortunate ones in Canada who with a PBC
of 2 and being one of a few who won groundbreaking deals in 2004, got marched out like a criminal. Went to drop
off my laptop on last day and saw bunch of kids with tattoos lining up for IBM access cards. Should I dump my
stock now or remain forever hopeful? Maybe it's already too late! -Anonymous-
- Comments 02/06/06: Since the pension debacle, from what I can see, most employees are simply going through
the motions and could care less about the company or its results. Palmisano and this management team are in
for a big surprise in the coming quarters because the majority of employees will do nothing for them. Why should
they? IBM management has proven that they have utter contempt for the employee and employees are not important
to good results. In the end, that will be the death nell. Expect Sam to be gone by the end of the year. -Anonymous-
- Comments 02/06/06: IBM retirees should check their prescription drug plans. I called in during the enrollment
period to change my plan from the old plan, for which they were now charging $251/mo. to the Medical/Prescription
Drug Supplement at $37/mo. because the prescription only plan would cost much more than buying our prescriptions
directly at full price. When I received my pension stub from Fidelity and my first prescription at the same
time, I discovered that they had not made the change I requested. I assume this is a mistake on IBM's part and
that they will correct it when I call in on Monday. However, the mistake is much to IBM's benefit. The $251/mo.
charge is about 5 times the price of a commercial plan through AARP (United Healthcare) for a plan which, although
different, is potentially better. Obviously, IBM is not paying any of the cost of the plan and probably is making
a profit from it. They cannot legally reduce the amount of the pension, but they can do it indirectly by charging
full price, or even excessive charges for benefits. I believe this is what they are trying to do.
Each year, we receive a statement concerning the financial condition of the retiree
benefit plans. Until a few years ago, this was accompanied by a statement that these benefits are part of your
compensation as an IBM employee. Since this is true, they are retroactively reducing our compensation by denying
these benefits. Why can't this be enforced legally? Also, I have an official publication of IBM (probably from
about 25 years ago) which seems to infer that they will continue to provide benefits for life. When many of
us started with the company around 1950, we were being told that we would have full medical benefits, paid by
IBM, for life, both for ourselves and our spouse. Doesn't any documentation of this exist? Why can't this be
enforced as a contract?
- Comments 02/07/06: I am a procurement buyer that received a ratings of 2+ for the last two
years. However, I received the resource call on 1/19. I also had to train an India replacement so that they
could move my job to india. I ended up staying on for 1 1/2 years working with the india team as they can't
do the job. I have been guiding them and fixing their mistakes. Now the support will crash once I am gone. Pay
based on performance is just a slogan. It is not true in IBM. Customer support is horrible now that India is
taking the jobs. Executives should be ashamed, they are slowly ruining the IBM name. Of course as long as they
get their bonus all is well. -Anonymous-
- Comments 02/07/06: If you respect employees, they become ambassadors of the business. If you
disrespect employees, you have a dissatisfied customer for each person that they interact with outside of the
organization. IBM - It IS possible to turn a profit without being disloyal to employees who stuck by you in
thin times. It is a choice and if you make the right choice your vendors and business associates will applaud
you for years for having the business acumen to succeed. Any company could succeed in the 1980s. IBM needs to
model their treatment of people within the organization in order to have them treat customers likewise. To do
anything less is just plain stupid and will ultimately result in negative organizational and financial consequences.