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• AARP: Your Take-Charge Guide to Affordable Health Care. 55 insider tips for saving money on drugs, doctors, hospitals, dentists, and eye care. By Russell Wild. Excerpt: Recent estimates by Fidelity Investments show that a 65-year-old couple retiring today should have at least $200,000 saved just to cover out-of-pocket medical expenses during their retirement years. For couples ages 60, 55, and 50 planning to leave the work force at 65, the numbers jump to $275,000, $350,000, and $425,000, respectively. "This is considerably more than most Americans have planned for—if they have planned at all," says Brad Kimler, senior vice president of Fidelity Employer Services Company. This harsh reality is starting to translate into a kind of revolutionary fervor among some Americans. "Our health care system clearly isn't working," says William Schwied, M.D., M.P.H., an 85-year-old retired physician who has organized hundreds of California retirees in a grass-roots effort to fight for a better health care system. "The only way we'll see change is for people to take to the streets," he says.
• San Francisco Business Times: Most health savings accounts are staying empty. Excerpts: Many consumers simply aren't funding the health-savings accounts or HSAs linked to their high-deductible health insurance, say several new studies, calling into question whether the impact of so-called consumer-directed health plans is all it's cracked up to be. As of January, about 3.2 million Americans were enrolled in high-deductible plans, but only 820,000 of them -- 26 percent -- had opened and funded an HSA, according to data from Inside Consumer-Directed Care, a newsletter published by Atlantic Information Services.
  Other industry studies estimated that as many as 4 million consumers would be signed up for such plans by the end of March, and that about 1.4 million of them would have put funds into their health savings accounts. Figures for the first-quarter aren't yet available. But some observers say many consumers can't afford to fund the HSAs that accompany many of the these plans -- or don't benefit from their tax-advantaged aspects because of their tax status and income levels. Officials at WageWorks and others say the large gap between consumers with high-deductible plans and those who fund their HSAs challenges the thinking among policymakers and employers who believe that HSAs will play a big role in making health care more affordable.
  Raff said proponents of the plans are overstating their impact by ignoring the number of unfunded HSAs. "I think it's intentionally muddled when (these numbers) are reported nationally to the press. People are using this overly inflated number (3.2 million), or saying that they're talking about the number of HSA accounts when it's really the number of high-deductible plans with HSAs attached," she said.
• Kaiser Network: Lack of Action on Creation of Single-Payer Health Care System Hurting U.S. Auto Industry, UAW President Says. Full excerpt: The lack of action on a single-payer national health care system has led to problems for U.S. automakers, United Auto Workers President Ron Gettelfinger said on Monday at the 34th annual UAW convention in Las Vegas, the AP/Houston Chronicle reports. Gettelfinger also said that UAW agreements last year to make health benefit concessions to GM and Ford were difficult for him but necessary to address the large retiree health benefit liabilities of the companies and to protect future benefits. Under the agreements, UAW retirees and their dependents for the first time will pay part of their health insurance premiums, annual deductibles and copayments. Hourly UAW employees will have to contribute some of their future wage increases to a trust for health care costs. According to the AP/Chronicle, GM in 2005 spent about $5.4 billion on health benefits for 1.1 million employees, retirees and their dependents, and Ford spent about $3.5 billion for 550,000 employees, retirees and their dependents. Gettelfinger said that UAW must develop a new relationship with automakers, which face difficult times because of high health care costs and other issues. He said, "Like it or not, these challenges aren't the kind that can be ridden out. They demand new and farsighted solutions, and we must be an integral part of developing these solutions." UAW members on Wednesday likely will re-elect Gettelfinger to a second term as union president

• AFL-CIO: The U.S. Needs Manufacturing Jobs—So Does the Middle Class. By James Park. Excerpts: The crisis in manufacturing stems from a lethal combination of bad trade policies, misguided tax plans and a lack of a comprehensive health care system, write Baugh and Yudken in “Is Deindustrialization Inevitable,” in the summer issue of New Labor Forum. Baugh, executive director of the AFL-CIO Industrial Union Council (IUC), and Yudken, an economist and consultant on high-road industrial strategies, point out that beginning with the fatally-flawed North American Free Trade Agreement (NAFTA) 11 years ago, the United States has signed a series of deals that do not protect workers’ rights, paving the way for low wages to suck away higher paying jobs from the United States. This movement of production and jobs is encouraged by a tax policy that rewards companies for moving production offshore.
  Companies that try to do the right thing by providing health care and good retirement benefits are put at a competitive disadvantage with companies that are located in countries that provide comprehensive national health insurance. Last year, the nation imported a record $725 billion more in products than it exported. That’s $2 billion worth of goods and products that Americans didn’t make every day of the year. [...]
  The evil soul mate to the nation’s bad trade policy is bad tax policy. The authors cite Rep. Charles Rangel (D-N.Y.), a congressional tax expert, who explained in a recent report that U.S. tax policies encourage companies to move abroad. When corporations close a plant to move it overseas, they can deduct the cost of the plant closing from their taxes. They also receive a benefit worth as much as 35 percent of the plant closing costs. And on top of all those benefits, corporation can then borrow money from the federal government to fund foreign operations and deduct the interest from their taxes.
  The last straw breaking the back of U.S. manufacturing is health care. U.S. competitors are located in countries that either offer national health insurance for everyone—or none at all—and so unlike U.S. firms, they aren’t obligated to pay soaring employer-paid health care costs. General Motors plants in Detroit, for example, spend $1,400 more to build each car because of health care costs than they do across the river in Windsor, Ontario. Health care costs also have undermined bargaining power for wages, and health care is the number one issue in nearly every contract negotiation.
• Job Cuts Status & Comments page
  • Comment 6/14/06: An honest and brave soul who posted this on internal IBM site when reacting to recent IBM's gala at Bangalore, India: IBMer in Global Financing — Rochester, New York, USA: "I have very mixed emotions about this event. I respect the Indian people for their education and business skills. I understand how the business world is changing and why IBM is investing in India and similar countries with a low cost work force. The bottom line is IBM is investing where labor is cheap and can do so with the advancement in communications technologies.
    The part I struggle with, like many, many IBMers these days, is for that the last several years my peers/friends continue to lose their jobs, many of which get moved to India, etc. For those of us who remain, work hours are significantly longer due to less people around to do what needs to be done, no raises in 5-6 years, "working vacations" and a more difficult staff work process working with IBMers outside the United States. Not to mention responsiveness to customer requests is slower with multiple countries' employees working various steps in a process.
    This does not make for a high morale environment. At my division's kick-off meeting this year, many folks who normally attend were not invited to save money and there was not any "fun" activity as part of the week...yet IBM has an "extravaganza" in India.
    I find myself having a hard time getting excited about this Bangalore event, sorry. It does not seem our executives have an understanding and appreciation of what folks are going through in countries where the employee base is shrinking...There are many long term dedicated IBMers who have invested years to support IBM's efforts along the way. In closing, I look forward to the time when our stock goes up to see the fruits of all these changes...Thank you for listening." -Anonymous-
  • Comment 6/15/06: US Corporations are offshoring and removing the "buying-power" of the American workers, therefore the US public can no longer purchase the homes/cars/items we use to purchase because we no longer make money. US Corporations are offshoring to India/Brazil/China to people with lower paying salaries, but still are not the "true" buying power of goods. Note: US Corporations are offshoring all of the US public financial information; government and corporation knowledge and secrets; credit card information of the public; etc. to these countries.
  • Comment 6/15/06: Attrition? Jobs do not have to be cut - but they can make it unbearable if you decide to stay. I have lately seen people walk away after giving up. They chip away at your self worth until you just give up. I would prefer to be laid off. But you see, it costs more $$$ for IBM to do this and nothing if you just walk away. I guess they do not think employees in other countries will mind being treated this way. What goes around, comes around. -Anonymous-
  • Comment 6/17/06: IBM internal VM and MVS support going to India at the end of June. The Fishkill desks received walking papers last week. The AIX desk was downsized and will be in India shortly. -Anonymous-
  • Comment 6/18/06: IBM Greenock Born 1954 Died 2004... At its height about 5,000 workers. Up until year 2000, IBM prided itself on no (enforced) redundancies (US version of layoffs.) " We'll always find work for them!" From circa 1990 slow drip effect which saw contractors more involved thus undermining pay rates, bonuses, etc - especially mid-late 1990s. Courtesy of new CEO well paid jobs became low paid with premiums and shift allowances, etc eroded. Agencies were encouraged to undercut each other till many previously well paid jobs became minimum wage.
    At no time were there any unions at this site (50 years) .'Ploys' over the last 10 years included Solectron (lasted 2 years) and Mimtec and others local but off-site of the massive Spango Valley Site. Hey, has everyone figured this one out?.. if only cheap labour economies get to build products where does this leave 'industrialised' countries. Service industries have to have manufacturers; if not, where do they get their local revenues from.. if no one is building anything except in China, India, East Europe etc, Is this a recipe for unrest? Could this be the end of Blue collar workers and also the middle classes? -Anonymous-
  • Comment 6/18/06: Any of you guys hear anything about the Dublin campus? Management won't disclose anything. All we hear are rumours of job cuts and plant closure in the next 3 years. All we know for certain is we are losing a lot of our low end product to China. Any help would be appreciated! -Anonymous-
  • Comment 6/21/06: Hearing a rumor that IBM USA is working on a means to "vendor out" 1st, 2nd and 3rd line management, to some offshore business consultant company? Any truth to this? Why not, once done with offshoring US workers, logically the next in line is management and HR. It's an IBM global world after all! Loyalty to employees is old fashioned...maybe so, but, I'll never use an IBM product or service because of IBM's odd way of dealing with long term employees. -Anonymous-
  • Comment 6/21/06: Yes, I too am hearing the same rumor about offshoring lower levels of management in RTP. The reasoning is that current US management doesn't have what it takes to fire the 3's and managed 2's. With offshored/non-IBM management, the job becomes easy and IBM's hands are clean. -Anonymous-
• From the General Visitor's Comment page:
  • Comment 6/15/06: As a former IBM employee, forced into early retirement in 2002, I am appalled by the way IBM treats its employees and retirees. I would like to see all employee stockholders unite, insist on a board seat and push for fair and equitable treatment of employees and retired employees. The current CEO is doing a horrible job and doesn't deserve a 29% pay increase and a rediculously high pension after Gerstner cut the pension of all retirees. -Anonymous-
• Pension Comments page
  • Comments 06/13/06: Just heard a story that some pompous IBM exec has been making the rounds from IBM site to site, attempting to cheer employees up over the last pension ripoff. He was depressed because he could not understand why people were so mad. Then somehow, the crowd discovered, his pension was not cut at all and protected by "His" contract with IBM... the crowd started calling him names,liar, phony, etc., when they realized he lost nothing because of his contract. What a phony, liar! Is this a true story? All I can say, anyone at IBM should seek contracts because IBM will never stop cutting benefits unless contracts stop them! Join Alliance -Anonymous-
  • Comments 06/15/06: I just ran the numbers on the new pension comparison tool. It appears that there is a different conversion factor for those who were lucky to make it to 30 before 12/31/2007 so you get screwed anyway. I'm history. Band 10 "1" performer in IGS with 33 years in this rat hole. -Anonymous-
  • Comments 06/15/06: Better read the new W3 estimator real close. Estimates are based on yearly raises of 2.6% and varible pay of 5% per year. IBM claims this is the average for all employees over the last five years. For me , this means the estimator will be biased high!
  • Comments 06/16/06: The Retirement Comparison assumes "annual pay increases of 2.75% because that is the annual average of U.S. pay increases over the past three years." I know that IBM would not lie to me, so I have three possible explanations for this statistic:
    1. If over the past six years I received: no raise, no raise, 3%, no raise, no raise, and 2.5% then perhaps the average of my raises – when they occurred - is 2.75%.
    2. “All U.S. employees” includes new hires. When I joined the company right out of college, I received more frequent raises, and the percentages were relatively large as my base salary was relatively low. Of course today new hires are not in any pension plan but their numbers can be used to skew the statistics anyway.
    3. If we factor in a 29% raise for one very highly paid executive, that might make up for a lot of employees receiving non-existent raises. However, that would be cynical and I refuse to be cynical in this Best of All Possible Companies!
  • Comments 06/16/06: Just looked at this new estimator. First I am amazed it took so long to get something this USELESS out. Second it showed me what I feared if I retire at 58 I lose almost 40% of what was coming from IBM pension. However they add in your 401K savings to make it look not so bad at over 10% loss at 58. -Anonymous-
  • Comments 06/16/06: Yes another blatantly FALSE assumption on this new tool: the interest rate of return for the Cash balance...they are still using 6% when history shows:
    1999: 5.5%
    2000: 6.0%
    2001: 6.8%
    2002: 3.9%
    2003: 2.7%
    2004: 2.3%
    2005: 3.1%
    2006: 5.0%
    An average over the last 9 years of only 4.4% That's the same garbage they pulled when they stole my pension back then. Assumed a large annual compounded interest rate to determine how much to seed the cash balance even if that's not really what you're going to pay. -Anonymous-
  • Comments 06/18/06: I have over 30 yrs service with IBM. In reviewing the "retirement comparison tool". If I stay until January 2008 - I lose over $200 per month versus my "current" amount. This is another "take away" for older employees. Something MUST change. Since the Gerstner reign, older employees have lost approximately 40% of their retirement. -Anonymous-
  • Comments 06/19/06: If I was losing only 200 a month I'd be thrilled. For me its about 30K a year, maybe Sam could send me 1/2 his weekly pension check to cover the gap? -Anonymous-
  • Comments 06/19/06: Older IBM'ers have lost approximately 40% of their retirement, now this additional cut of 10% totals to 50% of our retirement. So, $30K is more aligned to the truth. -Anonymous-
  • Comments 06/20/06: Watch out when using IBM's new pension benefit compare tool...they have a bad assumption that is likely going to show invalid numbers..... The PPA and 401K plans are like IRA accounts, you can't withdraw your money until you are 59.5. IBM used 58 as a retirement age, but I bet they didn't figure in the penalty for early withdrawal. So the numbers they show are likely NOT the numbers you'd really get if you tried to retire at 58. -Anonymous-
  • Comments 06/20/06: When I started at IBM, the general pattern was the longer you stay with the company, the more $$ you make. The new pattern is the longer you stay with the company, the more you lose. It is not right that they gave some of us the choice between the old and the new retirement plan and now they have changed the old plan. We may have made a different choice if we had known the rules were going to change. Not fair at all! Shame on IBM for not living up to their agreement. -Anonymous-
  • Comments 06/20/06: There has been a massive shift of risk from IBM to the employee. The retirement plan used to promise you a certain benefit. IBM was able to hire the services of high powered financial analysts to manage the retirement fund, to get the best investment returns from it. Now that burden has been dumped smack onto the individual employee. You have been respected as a super-smart individual who can outwit the market and produce super duper returns on your own. There is probably nothing we can do to turn this around, however the union might become an umbrella under which we can collectively hire that out-of-work Wall Street wizard that used to get paid by IBM. He can still do the same job for us, only via union auspices. -Anonymous-
  • Comments 06/20/06: You can withdraw monies from your 401K immediately, without penalty, if you are 55 years old or older at the time you retire. So, that part is correct, BUT, the other assumptions they have given are very wacky. Also, in the comparisons, it appears they compare the new 401K against only the old plan pension, not the old time pension, plus the old 401K combined. YOU LOSE, either way. -no_ky_3months_short-

• "I hope so but" by "CandorSense". Full excerpt: My guess is you will not see the IBM Help desk come back. While we might have went there to save money, it had the additional effect of pissing off everyone who called and thus we developed our own internal help networks (friends and co-workers). So my guess is that the stuff we shipped to India not only resulted in lower costs, but every month contributes to fewer calls.
  Must be some evil genius who loves that. If you moved the help desk back, and put competent people on it, we'd use it. lol.
  I'm pretty sure IBM couldn't care less about how its employees are "helped" so why bother. Pretty soon they'll be able to staff the IBM help desk with a half dozen people working one telephone in shifts.
• "One of IBM's dichotomies" by "civilliberty". Full excerpt: I found it very frustrating and bizarre that for a company that claims to help make other companies more efficient they were incredibly in-efficient and myopic with their own internal processes. I worked in an area that because of the number of external clients with different communications setups required us to run a non-standard operating environment. The desktop support group were so dumbed down that their immediate response to system issues was to 're-image' a your machine. Of course because our setup was non-standard we had to rely on each other to get our machines working correctly again - and it once took me 2 weeks. Multiply that by say, 30 people in an area who might experience the problem at least once a year and that's more than a full year's salary. Add on top of that the inability to meet SLA and getting slammed financially by the client and all the attendant Bad Will and it all adds up.
• "It's really rather simple" by "Dose of reality". Full excerpt: The implicit assumption in all of the IBM HR policies is a total disregard for experience as a driver of effectiveness and success. This supports the age discrimination policies, the pension plan grabs, the offshore model, the H1/L1 model, and the outright deceptive compensation policies and practices which leads to the high attrition rate.
  The 6 month neophyte has the same number of eyes, ears, mouth and brain as a 40-year old veteran. That allows IBM to superficially represent them as capable, while lowering our cost structure. They are no more than movie props.
  What we all know is that in services, there is no substitute for experience and people skills, and this is where the low cost employee will fail over and over again.
  As far as the connection to our internal support structure, the operative word in your post was “claims”. Even with external clients, we pitch our projects as business process improvements, but in the end do no more than slam in technology. It’s the same or worse on the inside, since the billing rates are much lower!
• "You are correct, sir!" by "Frank_Reality". Full excerpt: Unfortunately, executives don't want outsourcing to fail, so all problems and failures are hidden from their view. We're not allowed to disrupt the executives' imagined views of utopia by communicating the truth. In short, they live in a fictional world and cannot be bothered with the truth. Real short, they're clueless.
  I know of one such utter failure of an outsourced project. Not only can't you kill it, you can't get any improvement in performance because they know they are protected by the execs. Result: The work isn't getting done and when it is done it's done poorly.
  BTW - Don't ever be the IBM equivalent of the child who reveals that "the Emperor has no clothes" and insists on telling the truth. That can be a quick career ending event.
• "Interesting point on internal projects" by "civilliberty". Full excerpt: I did some internal IBM training (which I am genuinely grateful for). The instructor who was very competent in this field bemoaned the quality and accuracy of the course notes - they were out of date in a number of areas and so made it difficult to complete various exercises. It was of course due to the fact that no budget was provisioned to keep the course material up to date.
• "Execution -- Death by weight" by "CONsulting_2_long". Full excerpt: The matrix is implemented poorly with measures for sure. Additionally, the matrix is a way to have more chiefs for everyone's buddy. Too many dimensions of a matrix makes for a lot overhead.
  • Sector
  • Industry
  • Horizontal
  • Practice Area
  • Service Area
  • Package/Partner/Technology
  At one point, I had over 20+ hours of standing conference calls for coordination. These were merely status calls that were not part of any proposal, client, or engagement management. If you add those calls, then the standing call time rose to over 30 hours/week. Most of calls were of questionable value, mostly a way for a 'leader' to speak to the organization to demonstrate his/her leadership capabilities. Obviously, non-value added, I skipped a great deal of them in order to do the real aspect of my position. I was quickly labeled 'a non-team player' for not participating. (That is how Dose and other have soooo much time to post here.) In addition to wasting part/whole practice time, the matrix must support the cost of these leaders and direct support staff (admin+staff).
  It is a poor model, unless you have to do a bunch of shopping on the internet.
• "Not just overhead" by "Frank_Reality". Full excerpt: The impact is far beyond the overhead that puts us at extreme competitive disadvantage. To make up for the cost, the employees on the front line take the brunt of cost reduction and takedown resulting in an anorexic work environment: no raises, no education, no promotions, third rate tools and PCs, poor accommodations when traveling and so on.
  Also, this overhead with all their staffs, bean counters and bureaucrats severely slow and block our abilities to serve our customers. Creativity is thwarted, agility is blocked, common sense is wiped out and customer satisfaction is eroded - all are sacrifices made at the Great Throne of the IBM Matrix.
  In the new economy, the slow will be devoured by the quick. Businesses that can't move quickly and effectively will be in economic danger. A service company that can't move quickly enough for their customers will soon have no customers.