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• Los Angeles Times: Minding Medicare's Drug Gap. The program leaves a $2,850 hole in coverage. Now half a year into the plan, 3.4 million seniors may have to decide how to pay or avoid the costs. By Ricardo Alonso-Zaldivar and Rong-Gong Lin II. Excerpts: When Congress created the Medicare prescription drug program, it adopted an unusual idea to hold down costs: the so-called doughnut hole. The program pays most of a participant's drug bills until expenses reach $2,250 in a year. Then it stops paying until costs exceed $5,100. That leaves a hole of $2,850 that seniors with serious prescription needs are expected to manage on their own.
  Now, six months into the drug program — the first new major healthcare benefit for the elderly in decades — 3.4 million seniors are approaching the doughnut hole. Most of them are middle-class seniors with multiple chronic illnesses. (The poor are exempt from the gap.) Some have already experienced an abrupt surge in prescription costs. [...]
  Under the Medicare drug benefit designed by Congress, beneficiaries pay the first $250 in drug costs for the year. The plan then pays 75% of the next $2,000. After that comes the $2,850 doughnut hole, for which seniors are solely responsible. Then, when a beneficiary's drug bills for the year exceed $5,100 ($250 plus $2,000 plus $2,850), Medicare pays 95%. [...]
  Democrats say the coverage gap can be closed if Congress grants Medicare authority to directly negotiate lower prices with drug manufacturers. Eliminating the gap with tax dollars would be expensive, perhaps costing more than $10 billion a year now, and bigger sums in the future.
• Wall Street Journal: Health-Care Costs To Hit Workers, Retirees Harder. By Jilian Mincer. Excerpts: Americans should expect to pay more for medical costs whether they are employed or retired, according to two new studies. The reports, by Milliman Inc. and Watson Wyatt Worldwide, show that health-care costs are still rising at a fast pace -- despite slowing from double-digit rates in recent years -- and that businesses expect to curtail or limit retiree medical benefits. [...]
  The average annual medical cost for a family of four participating in a preferred provider organization, or PPO, program is up 9.6% from 2005 to $13,382 in 2006, according to Milliman, a consulting and actuarial firm that released its second annual study Thursday. Unlike other major health-care cost studies, which look at costs in terms of annual premiums or just the employer's share, the Milliman study also factors in employees' costs, including out-of-pocket expenses. [...]
  Nearly two-thirds of employers expect to increase the financial contribution for future retirees, and half expect to change the design of their plans. Twenty-four percent plan to tighten eligibility for future retirees. Fidelity Investments has estimated that a 65-year-old couple retiring without employer-provided health benefits will need $200,000 for out-of-pocket health-care expenses during retirement.
• Jim Hightower: Health Care Morality. Full excerpt: Contrary to the "contrived wisdom" of the Powers That Be, providing health care for everyone is not an economic or even a health issue – it's a moral issue.
  Notice that corporate chieftains and the political elites all have the Rolls Royce of health care – while most Americans are trying to make do with a sputtering Yugo, and while millions of our people are walking barefoot. This crass inequality on such a basic human need is a moral abomination.
  How is it that the richest country with the most democratic ideals of any country in the history of the world has 45 million people with no health coverage and millions more with pathetic coverage? And how is it that We The People pay $1.2 trillion a year to a corporate health care complex (more than any other people pay) and rank only 37th in the world in the quality of health care we receive?
  The Powers That Be just shrug their shoulders and say, well, sadly, America can't afford a system of good quality coverage for all. Can't afford it? George W says America can afford the $1.2 trillion in tax giveaways he's bestowed on the wealthiest people in our land. He says America can afford the $300 billion in direct costs already shelled out for his war of lies in Iraq. He says America can afford the hundreds-of-billions of tax dollars being pocketed by drug companies and insurance giants through his boondoggle prescription drug program.
  Of course, our so-called political leaders don't feel the pain of America's corporatized and exclusive health system. The very politicos who say America can't afford universal coverage receive full platinum coverage for their families – courtesy of you and me.
  This is Jim Hightower saying... No public official should have even a dime's worth of coverage until every man, woman, and child in America has full coverage. For morality's sake, the president and congress ought to be last in line, not first!

• From the Job Cuts Status & Comments page
  • Comment 7/07/06: On 7/6/06, IBM Rochester has cut approximately 41 band 2-level regulars. They will be replaced by a temporary work staff. Dublin will hire 300 employees for software development & management. Go figure.... -Anonymous-
• From the General Visitor's Comment page:
  • Comment 7/01/06: If a foreign entity targeted and attacked a strategically important industry of the US with dumping, unfair trade or even bombs, our government leaders would understand the threat and react accordingly. How is it different when our own citizens destroy the technology industry? These attackers are under the rule of law of our country, which should make the whole affair more controllable, yet nothing happens. We are told that this is somehow good for us. Has our whole system of government become so corrupt as to ignore the obvious? They feed us the same corporate speak and provide no results, in a direct imitation of their corporate counterparts.-Anonymous-
  • Comment 7/01/06: I do not understand IBM upper management anymore. I was told that my product is projected to sell double or even triple; but we are not allowed any headcounts. Having said that, the upper management wants all the numbers to be good, which is making all of us work many overtimes. When we work many overtime, the management is lecturing us about not having work-life balance. If we let stuff drop so we can go home, we get lecture from the management that we are not meeting our goals. Our management is giving us mixed messages.
    Having said that, if the management team is understaffed, they will staff it. If the SWEs are understaffed, we have to work harder. I seen all of the SWEs working many hours of overtime but I do not see any of our first line working too much overtime so they can preach about work-life balance. -Anonymous-
  • Comment 7/05/06: Looks like Old Smoke And Mirrors (SAM) Palmisano has led us back to the $70 price range in our stock. Can’t believe this is shortly after Sidney Taurel, chairman of IBM’s executive compensation (CEO of Eli Lilly, the company that makes the antipsychotic drug Zyprexa) approved SAM’s 29% increase in pay. But maybe the thought is that the price would have fallen even farther without such a big incentive to perform! Another concern I have. Without investment in the future (employee training, significant new product development, etc.) which will provide increasing, or at least consistent returns, the part of the stock price that’s based on speculation of future returns will continue to evaporate. The share price could get down close to $21 per share (the hard asset value per share). For proof, Lou’s “no vision” took the stock down to within twenty-some dollars of that mark. -Anonymous-
  • Comment 7/05/06: To the person who said this "If a foreign entity targeted and attacked a strategically important industry of the US with dumping, unfair trade or even bombs, our government leaders would understand the threat and react accordingly. How is it different when our own citizens destroy the technology industry? These attackers are under the rule of law of our country, which should make the whole affair more controllable, yet nothing happens. We are told that this is somehow good for us. Has our whole system of government become so corrupt as to ignore the obvious?" I say - the reason is that these people all play golf in the same country clubs, their kids go to the same prep schools, they are immune to any backlash of problems caused by this because of their golden parachutes, they do not care about America only as it relates to their own wealth, they do not care about employees, and they sure as heck do not care about customers either as people outside of IBM know now which is why they stopped investing in its future. -Anonymous-
  • Comment 7/05/06: Remember when IBM was number 1 in Business Ethics magazine. Well IBM is now number 41! It seems others have caught on to what employees have been saying: http://www.business-ethics.com/media/Chart%20of%20100%20Best%20Corp%20Citizens%20for%202006.pdf
• From the Pension Comments page
  • Comments 07/04/06: Ran the new comparison tool. Time to go, there's no chance my pension after 12/31/2007 will ever make up the loss with 401(k) money. -Anonymous-
  • Comments 07/05/06: Don't be surprised if on 01/02/2008 IBM decides to end the 401(k) plus plan to remain "competitive"... They broke promises and lied to us before and in the present and they sure can do the same in the future! -Anonymous-
  • Comments 07/05/06: If there isn't a class action suit over the changes , i will be appalled. The pension was promised and those that promised it are long retired and collecting as PROMISED, the pension plan should be honored. A class action suit needs to be put fourth and the CEO named in the suit. Nothing would please more then to see a Pompass Ass doing time. -Annoyed-
• From the IBM employees on employee raises page:
  • Comment 7/01/06: According to my manager (and a lot of other managers evidently) I am near the top of my pay range. I was given a 3% raise (only the second in the last six years). PBC 2, "regional" scale, 25+ years at RTP. What I find interesting is the information on my compensation summary statement. The monthly market range within the industry and local labor market for my job family and band (Advisory Software Engineer, band 8) is 5240 - 10757. Now I am supposedly near the top of the range. But unless they are using new math, my new salary is only 77% of the maximum and only at the 60% mark inside the given range. I think that the "top of the pay range" remarks are probably uniformly untrue. Suggestion: Let us share our monthly market range information. I am curious how much variation there might be depending on where we work. -Anonymous-
  • Comment 7/04/06: Note that the CPI-U, known simply as the "inflation rate," is 4.2% for the year ending May, 2006, according to the U.S. Bureau of Labor Statistics (http://www.bls.gov). Thus a 1% raise is really a 3.2% pay cut. Moreover, the BLS reports that worker productivity continues to rise quite substantially -- 2.5% over the past year for non-farm businesses, and that's not including the effect of extra hours worked. At least over the long term employees should receive some share of those productivity gains in the form of higher wages. That's not happening. We're going backwards, fast. And I'm still excluding pension, health insurance, and other benefit cuts. Just to give you all some idea, here's an example. Assume inflation moderates somewhat and averages 4% per year for the next 10 years. Assume also that you receive a 2% annual increase in salary, without fail. (Now that's ambitious given recent trends!) In that situation, after 10 years, your salary will be nearly 20% lower in value. I would encourage everyone not receiving pay increases at least equal to inflation -- that's probably everyone except Sam -- to describe them as pay cuts, because that's exactly what they are. -CPI Watcher-
  • Comment 7/05/06: I am an IBM employee in KL, Malaysia. My raise this year is 0, as my manager told me that I needed 6 months to learn the ropes (I joined in March 2005), and this is official company policy, to give nil increments and performance bonuses to those that joined within the previous year. My question is, does this apply to IBM employees worldwide as well? -Anonymous-

• "IBM's cost burdens" by "DM Bingham". Full excerpt: One disadvantage the Blue Pig has is that the indirect costs the management has imposed on the financial structure of bidding for work to pay for: 1) Huge management bonuses for a bloated kleptocracy 2) Another $5 - $7B USD free cash flow for stock buybacks.
  I assume every competitor has similar management enrichment schemes, but you can see that IBM has very little $ in the bid sales price to pay for the actual performance of the work. Thus the race to the bottom of the wage pool and quality be darned.
  It is very similar to the manufacturing flight abroad but the ability of the customer to discern quality is limited, the Pig wraps every contract in a battalion of lawyers, and the true stories of slipshod work and wrecked progress are kept out of the news to keep the customer management from getting fried by their stockholders. Witness how Accenture and ACS keep the multiple stories of their failures in the Public Sector out of the news. You have to go to the Yahoo Financial Message Boards on each stock to see what is going on. Only the the stories of Medicare recipients not getting their benefits gets these stories told. The private sector massacres like Firemens' Fund and Mt Sinai Hospital never make the news.
• "The client base has already detected it" by "phooey69". Excerpts: The client base has already detected it Author: phooey69 Date: Jul 3, 2006 1:24 PM EST Does the client base know that something is wrong? Hell yes, they know. Maybe they aren't aware of all the details, but they know something is wrong. In SO, you can see the changes. Not as many deals are being signed. When deals ARE signed, they are not the winner-take-all megadeals of the past...they are more likely to be the small, segmented deals like helpdesk or server admin.
  Also, there are various consulting groups who assist the customer in negotiating deals with IBM. Those consultants all have their own business interests, to be sure, but that doesn't stop the customer from enlisting them when dealing with IBM.
  One of IBM's bigger problems right now is that IGS has adopted the body shop mentality. By doing so, it is subjecting itself to business, economic, and political concerns that could have been avoided under different circumstances. IBM might get away right now with changing staff to India, but don't expect it to last in the long run. Either IBM's $250/person/hour fee is going to go down, or the $20/person/hour staff cost is going to go up. Economics and competition will take care of that.
• "IBM does not reward technical skills" by "PBCS_SUCK". Full excerpt: The pig does not reward people for being technical and performing in a technical role. They have a philosophy that technical skills are a "commodity" which is one of the reasons they are offshoring so many technical jobs. The "skills" that employees are rewarded for at review time quite frequently have nothing to do with how well they perform their job. It doesn't take too long for many employees to realize that their hard core technical skills and achievements are not rewarded by management. So, the ones who want to stay and prosper begin to focus on other things that the pig rewards such as internal politics, paperwork, fluff technical presentations, and B.S. certifications.

• Forbes: Priciest Private Planes. By Neal Santelmann. Excerpts: Flying to exotic destinations has become almost as routine as grocery shopping, and promotional pricing means it can occasionally be cheaper to take a plane than a bus to your destination of choice. Still, one segment of the aviation industry is flying high when it comes to status and price--the private aircraft in all of its intriguing variations.
  Rare is the business big shot or celebrity bright light who would be caught in commercial first-class these days. Russian billionaire Roman Abramovich reportedly owns a private jet to go along with his trio of yachts. New papa Tom Cruise, who topped our Celebrity 100 list this year, served sushi to Katie Holmes aboard his private jet on their first date. Damage to the windshield of Oprah Winfrey's private jet forced the talk queen to re-land at Santa Barbara Municipal Airport late last year. And in April, hip hop maestro Snoop Dogg departed London in a private jet following detention after his entourage clashed with police at a Heathrow departure lounge. [...]
  While the sky's not exactly the limit on cabin excess--weight requirements and FAA restrictions see to that--Roth says his customers may spend anywhere from $800,000 to $1.5 million to make their cabins just so. For instance, an International Jet Interiors client from India recently requested crocodile leather trim throughout his aircraft, including for the centerpiece of the lavatory. "That's going to be a $10,000 toilet seat," notes Roth.
• Wall Street Journal: Insurers Cater to High-End Homeowners. Pricey Services Are Offered for Special Protection Even Before Hurricanes, Wildfires. By M.P. McQueen. Excerpts: AIG's Private Client Group is piloting a new Hurricane Protection Unit in three Florida counties starting this month that will send company employees to your home to scope out what you need to do to prevent wind and water damage. They'll work out a customized disaster plan to roll up your Oriental carpets and move them to higher floors, or evacuate your art collection to safety. After a storm hits, AIG will dispatch, even before you filed a claim, a special team with tarps and boards to patch up a leaky roof to make sure that more damage doesn't occur from rot and mold.
  High-end insurers offer other benefits as well, such as more-generous living expenses for homeowners displaced because of damage to their dwellings. Fireman's Fund, provides relocation services through a sister Allianz company that help families find new schools and doctors as well as temporary housing commensurate with the family's usual living standard. Such deluxe services are generally available to homeowners whose properties are valued at a combined $1 million or more. Annual premiums range from about $3,500 to $20,000, or even more. By contrast, the average homeowner paid about $668 in annual premiums in 2003, the latest data available, according to the National Association of Insurance Commissioners.