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6, 2000 April, 2000

Highlights—July 14, 2007

  • From MSN Money: International Business Machines Corp.: Insider Trading
    Date Name Transaction Number Shares Price (US $) Value (US $)
    05/18/2007 Rometty, Virginia M Sold 9,014 107.05 964,935
    05/16/2007 Mills, Steven A Sold 5,000 104.93 524,650
    05/01/2007 Donofrio, Nicholas M Sold 98,046 102.28 10,030,000
    05/01/2007 Iwata, Jon C Sold 32,046 102.47 3,280,000
    04/27/2007 MacDonald, J Randall Sold 12,974 100.54 1,300,000
    04/26/2007 Horn, Paul M Sold 16,246 100.89 1,640,000
    04/27/2007 Kelly, John E III Sold 10,927 101.11 1,100,000
    04/25/2007 Dormann, Juergen Sold 4,000 99.87 399,480
    04/25/2007 O'Donnel, Daniel E Sold 13,200 99.92 1,320,000
    04/25/2007 Sanford, Linda S Sold 13,527 99.96 1,350,000
    02/27/2007 Dormann, Juergen Sold 4,000 96.00 384,000
    02/16/2007 Rometty, Virginia M Sold 26,470 99.06 2,620,000
    02/09/2007 Kelly, John E III Sold 11,000 99.27 1,090,000
    02/08/2007 Black, Cathleen P Sold 8,000 99.34 794,704
    02/01/2007 Horn, Paul M Sold 25,000 98.34 2,460,000
    02/01/2007 Rometty, Virginia M Sold 8,253 98.88 816,015
    02/01/2007 Zeitler, William M Sold 33,600 99.08 3,330,000
    01/31/2007 Harreld, J Bruce Sold 80,000 99.05 7,920,000
    01/31/2007 Palmisano, Samuel J Sold 64,000 98.80 6,320,000
  • Yahoo! message board post: "Re: Retirees -- old medical plan and FHA and those on Medicare" by "ibmaccountant". Full excerpt: I wonder how many 2nd choicers who gave up the older plan to embrace the cash balance plan in 1999 realize how much they gave up? I wonder how many 3rd non-choicer types realize they've been had? How many realize that the pension heist was minor compared to the medical heist? Heck there might have been even 1st choicers who took up the offer for a lump sum without doing proper financial diligence.

    The reason for the mafia raids on the teamster retirement plans in the 60's and the CEO raids on US corporate pension funds in the 80's and 90's were so successful was because we Americans as a whole are an optimistic and trusting lot to perceived proper authority and many of us can't put our arms around complex actuarial calculations. This fellow who thinks the PPA is a formal retirement is an example of a sheep that's been shorn but doesn't even realize it yet, after so many years.

    The folks at Watson-Wyatt and the employer based retirement "enhancement" coalitions were right. You can steal millions from a bank with a great set of expert thieves and get caught likely, but with the right pro-large business Supreme Court and the right political backing, all you need is some MBAs conspiring with the actuarial profession to steal billions from the American people and get away with it.

    Insolvency of the IBM Pension Fund aside, even if you know you are going to die the day after you retire with a DB plan, in only some very specific legal and financial combinatorial circumstances does the actuarial value of the annuity overcome the lump sum, especially in low interest environments at time of retirement.

    Insolvency of the IBM Pension Fund aside, even if you know you are going to die the day after you retire with a DB plan, in only some very specific legal and financial combinatorial circumstances does the actuarial value of the annuity overcome the lump sum, especially in low interest environments at time of retirement.

    Except for Social Security, the employee retirement protective net set up by the New Deal and the labor movements of the early 1900's have been effectively wiped out in this country. "Bait and Switch" has replaced the "Grapes of Wrath".

  • Yahoo! message board post: "Re: Bridge, pension buyout...by year end 2007 ??" by "thekanck". Excerpts: The only reason I question the degree of Sam's stupidity is that I have been involved in LEAN, and long term it will create all kinds of havoc for IBM - lots of good folk quitting and lots of customers pissed off.

    One explanation would be that it is "window dressing" for the sale of business in the near term (after cost reductions have been recognized but the damage done to the business has not ;-)

    The other explanation is that Sam's managers really think LEAN is a good idea for the long haul... I've talked to a lot of folks some up thru 2nd and 3rd line management and none that I have talked to believe this is going to work out worth a crap.

    So it's kind of a quandary.... if Sam is "smart" the window dressing explanation plays better - but announcement of a sale might be short-term price goose for stock. If Sam is "dumber" then LEAN is just another strategic initiative and there is very little risk to the $110 put play ;-)

  • USA Today: Review: 'Richistan' shows how wealthy live it up. By Russ Juskalian. Excerpts: Somewhere in the world, 100-foot yachts are derided as "dinghies," it takes five people and a handful of e-mails to remove a mouse from the kitchen and "true wealth" starts at a hefty $10 million. That's "Richistan"

    The term, which journalist Robert Frank defines as a "parallel country of the rich," is also the title of his new book about its inhabitants, whom he calls Richistanis. The book got its start in 2003, when Frank, who reports for The Wall Street Journal, picked up a fresh, full-time beat: the new rich.

    "I immersed myself in their world, hanging around yacht marinas, slipping into charity balls, loitering in Ferrari dealerships and scoping out the Sotheby's and Christie's auctions," he writes.

  • USA Today: Fed's Yellen: Income gap poses risk. By Sue Kirchhoff. Excerpts: U.S. income inequality has risen to such a level that "there are signs that (it) is intensifying resistance to globalization, impairing social cohesion, and could, ultimately, undermine American democracy," San Francisco Federal Reserve Bank President Janet Yellen said Monday.

    In language rare for a central bank official, Yellen suggested that high priority be given to improving education, tax credits and other aspects of the social safety net, despite the cost in dollars and possible impact on economic efficiency, according to the text of her lecture at the University of California, Irvine.

    "Inequality has risen to the point that it seems to me worthwhile for the U.S. to seriously consider taking the risk of making our economy more rewarding for more of the people," Yellen said.

  • Computerworld: U.S. immigration laws prompt Microsoft to set up shop in Canada. Vendor says development center in Vancouver will help it retain workers from overseas. By Nancy Gohring. Excerpts: Microsoft Corp. plans to open a software development center in Vancouver, British Columbia, later this year, partly as a way to recruit and retain talented workers who can't get into or stay in the U.S. because of immigration laws. The software vendor announced the plans Thursday, saying that the new Microsoft Canada Development Centre will open this fall and be staffed by developers "from around the world."

    Microsoft, along with other high-tech companies, has been a vocal supporter of legislation that would increase the number of foreign workers allowed to enter the U.S. on visas such as the H-1B. Currently, businesses are competing with one another for a total of 65,000 H-1B visas that can be issued during the federal government's fiscal year, plus another 20,000 visas that are set aside for workers with advanced degrees from U.S. universities.

  • IT Wire (Australia): Want to be a computer scientist? Forget maths. By Stuart Corner. Excerpts: A new book seeks to demolish the concept that computer science is rooted in mathematics and, in particular that the notion of the algorithm is fundamental to computer science. In particular, he says the notion of the algorithm, "has been largely ineffective as a paradigm for computer science." Fant argues that, because mathematicians, notably John Von Neumann and Alan Turing, were intimately involved with the early development of digital electronic computers in the 1940s they transplanted a mathematical model of computation, including the algorithm - commonly understood to be an exact prescription, defining a computational process, leading from various initial data to the desired result - into the fledgling science of computers. [...]

    "Mathematicians and computer scientists are pursuing fundamentally different aims, and the mathematician's tools are not as appropriate as was once supposed to the questions of the computer scientist. The primary questions of computer science are not of computational possibilities but of expressional possibilities. Computer science does not need a theory of computation; it needs a comprehensive theory of process expression."

  • eWeek Careers: Offshoring 2.0: The Post-India Market. By Deborah Perelman. Excerpts: What will be the next big offshoring frontier? While the experts don't all have the same locations in mind, they all agree that it will no longer be in India. Salary inflation is largely to blame for the change in course. When the outsourcing boom took off in 2004, the salaries of software engineers were one quarter of what San Francisco-area computer engineers made, making very clear the cost savings of offshoring.

    But in the years since, Indian salaries have soared—in several cases to 75 percent of U.S. levels—and some in Silicon Valley have begun to sour on sending jobs to India, wrote the Wall Street Journal on July 3. However, it wasn't only salary inflation that has caused many technology firms to pull their labor out of offshore centers; it was the hidden costs they hadn't anticipated such as geographic and time gaps, the need for more U.S. managers to oversee the outsourced relationships and the significant costs associated with pulling out.

  • eWeek Careers: Workers Rarely Jump Ship Over Pay Alone. By Deborah Perelman. Excerpts: It may come as a surprise to many executives, but workers aren't leaving their jobs just because they are not happy with their pay, according to the experts. Unless the gap between what an individual is making and the market valuation of their role is particularly wide, a higher salary might be the perk that sweetens the deal, but, in all likelihood, salary issues alone won't instigate a job change. [...]

    Research drives Estes' argument home. In an analysis of 19,700 post-exit surveys and 3,179 comments for PricewaterhouseCoopers' Saratoga Institute, released June 1, researchers found that the reasons employees left their previous job were strikingly different from what most executives believed them to be.

    "Because in third-party exit interviewing, employees tell them things they don't want to tell their employer because they don't want to burn a bridge. Almost 90 percent had left for reasons other than pay, yet nine out of 10 managers believe that money was the reason people left," said F. Leigh Branham, a consultant in Overland Park, Kan., and author of the report.

  • YouTube: The Simpsons - India Outsourcing - Modified.
  • New York Times: Bush Official Opposes Raising Taxes on Private Equity. By Stephen Labaton. Excerpts: Senator Max S. Baucus, Democrat of Montana who heads the committee, and the ranking Republican, Senator Charles E. Grassley of Iowa, introduced legislation last month that would raise the 15 percent tax rate on certain partnerships that go public, like the Blackstone Group and Kohlberg Kravis Roberts, to a top corporate rate of 35 percent.

    Senior Democrats in the House have separately proposed raising the taxes on the investment gains of fund managers — known as “carried interest” — from the capital gains rate of 15 percent to the ordinary income rate of as much as 35 percent. If adopted, the House proposal would more than double the tax rate for most of the compensation received by the partners at private equity and hedge funds and would raise billions of dollars annually in new taxes.

    The legislation was introduced as a growing number of lawmakers have come to see the outsize pay of fund managers as a ripe target for tax revenue to offset tax cuts or new spending, including a reduction in the alternative minimum tax and increases in federal health programs and education tax credits. [...]

    In his most detailed statement to date on the proposals, Senator Charles E. Schumer also appeared lukewarm. Mr. Schumer, the senior senator from New York and a top fund-raiser for the Democrats, has long enjoyed close ties to Wall Street. But Mr. Schumer has also long been critical of growing wage disparities and of Bush administration tax policies that he says he believes favor the wealthy over the middle class.

    He said that it was laudable to look for new sources of revenue to pay for new programs in education, infrastructure and energy and that it was “logical” to be looking at “the very highest end of the income scale, where average tax rates have actually been declining.”

  • New York Times: An Unjustified Privilege. By Paul Krugman. Full excerpt: During the 2000 presidential campaign, Ralph Nader mocked politicians of both parties as “Republicrats,” equally subservient to corporations and the wealthy. It was nonsense, of course: the modern G.O.P. is so devoted to the cause of making the rich richer that it makes even the most business-friendly Democrats look like F.D.R.

    But right now, as I watch Senate Democrats waffle over what should be a clear issue of justice and sound tax policy — namely, whether managers of private equity funds and hedge funds should be subject to the same taxes as ordinary working Americans — I’m starting to feel that Mr. Nader wasn’t all wrong.

    What’s at stake here is a proposal by House Democrats to tax “carried interest” as regular income. This would close a tax loophole that is complicated in detail, but basically lets fund managers take a large part of the fees they earn for handling other peoples’ money and redefine those fees, for tax purposes, as capital gains.

    The effect of this redefinition is that income that should be considered by normal standards to be ordinary income taxed at a 35 percent rate is treated as capital gains, taxed at only 15 percent instead. So fund managers get to pay a low tax rate that is supposed to provide incentives to risk-taking investors, even though they aren’t investors and they aren’t taking risks.

    For example, the typical hedge-fund manager has a 2-and-20 contract — that is, he gets a fee equal to 2 percent of the funds under management, plus 20 percent of whatever his fund earns. It’s not exactly straight salary, but none of this income comes from putting his own wealth at risk. Except for the fact that he might make a billion dollars a year, he resembles a waitress whose income depends on a mix of wages and tips, or a salesman who lives on a mix of salary and commissions, more than he resembles an entrepreneur who sinks his life savings into a new business.

    So why does he get the same tax breaks as that entrepreneur? Not to put too fine a point on it, why does Henry Kravis pay a lower tax rate on his management fees than I pay on my book royalties?

    There’s a larger question one could ask: should we even be giving preferential tax treatment to true capital gains? I’d say no, because there’s very little evidence that taxing capital gains as ordinary income would actually hurt the economy. Meanwhile, the low tax rate on capital gains is one main reason the truly rich often pay lower tax rates than the middle class.

    A couple of weeks ago, Warren Buffett pointed out that he pays an average federal income tax rate of 17.7 percent, while his receptionist pays about 30 percent.

    But even those who disagree with me on the larger point, who think the special treatment of capital gains is justified, should be able to agree that treating the income of fund managers differently from the way we treat the income of everyone else who works for a living makes no sense. And that’s why it’s very disheartening to read that prominent Democratic senators are taking seriously the claims of fund managers that making them pay taxes like regular people would discourage risk-taking.

    The immediate response should be: what risk-taking? To repeat: the fund managers aren’t entrepreneurs; they aren’t putting their own assets on the line.

    Look, this isn’t about envy, about punishing success. No doubt many fund managers earn their pay. Some of them also give generously to worthy causes.

    But closing the carried interest loophole should be a simple question of fairness: other Americans also earn their pay, but they don’t get special tax breaks. Plus, we’re talking about a lot of lost revenue due to that loophole — revenue that could, for example, be paying for the health care of tens if not hundreds of thousands of children.

    And since we’re living in the real world of politics, there’s also the Republicrat issue: the hesitation of the Senate Democrats is terrible for the party’s image. It conveys the impression that they’re as beholden to hedge funds, one of the few types of businesses whose campaign contributions strongly favor Democrats, as Republicans are to the oil and drug industries.

    So here’s a plea to Democratic senators on the fence: do the right thing and close this unjustified tax loophole.

  • Jim Hightower: Black-Robed Corporatists. Full excerpt: Do you feel as sorry for corporate executives as I do? These poor babies feel put upon by their own shareholders, customers, and workers who have sued them to stop their fraud, monopoly pricing, discrimination, and other illegal acts. The corporate royalty is mightily offended that such commoners have been allowed to interfere in its brutish pursuit of riches, and the royalists have been crying louder than Paris Hilton about the unfairness of having to answer to the law.

    Luckily for them, they have friends in high places who feel their pain and can dry their tears with government actions to stop dastardly citizens from bothering them with lawsuits. The corporate wrongdoers have long had the Bushites on their side, and many congress critters of both parties have also been there for them, offering comforting legislative hugs. Now, however, the best friend of the corporate elite is in the third branch of government: The Supreme Court.

    With Chief Justice John Roberts at the helm, the nation's highest court is stacked with judges whose legal careers have been dedicated to corporate service, and this bias has turned the court into a safe play zone for corporate ruffians. This year, the Supremes have revealed their corporate coziness by taking a greater number of business cases and stretching the law, precedent, common sense, and their own credibility to enhance corporate power.

    In 13 business rulings this year, the corporate majority has favored tobacco companies, automakers, insurance giants, and others over the people harmed. Even more important than each individual case, the court's decisions are making it much harder for those who are injured or defrauded to go to court. in effect, the are building new legal walls for corporate wrongdoers to hide behind, shutting out ordinary people who try to get justice from the system.

    These black-robed corporatists are out of control. The court should be working for justice, not for corporations.

  • Los Angeles Times: More employers doing away with pensions, study finds. The swift demise of traditional plans catches some analysts by surprise. 'This is a watershed event,' one expert says. By Peter G. Gosselin. Excerpts: Nearly two-thirds of employers that offer traditional pensions have closed their plans to new hires or frozen them for all employees, or plan to do so in the next two years, according to a study released Tuesday. The latest numbers show an acceleration in the decline of pensions — retirement plans in which employers, instead of employees, are responsible for investing retirement money and providing benefits. They also illustrate that the trend is no longer confined to troubled industries such as steel, auto and airlines, but now involves healthy companies such as IBM and Verizon. [...]

    "What you're seeing is the slippage of the middle class," said Certner of AARP. "Their retirement benefits are much smaller than those of the previous generation that had traditional pensions."

  • Bloomberg: UAL Can't Stop Pilots' Pension Suit Against Union, Judge Says. By Andrew Harris. Excerpts: UAL Corp., parent company of United Airlines, failed to quash a lawsuit filed on behalf of about 1,700 pilots claiming their union didn't adequately defend their pensions as the carrier emerged from bankruptcy. U.S. District Court Judge Matthew Kennelly in Chicago rejected UAL's argument that pension issues settled during its bankruptcy case couldn't be revisited. The pilots, plus 2,000 more covered by a second case, can pursue their pension claims as two classes, said the judge, who previously allowed UAL to intervene in the pilots' suits against the union.
  • Information Clearing House: How Fake Job Ads Defraud Americans To Secure Green Cards For Immigrants. Excerpt: Immigration attorneys from Cohen & Grigsby explains how they assist employers in running classified ads with the goal of NOT finding any qualified applicants, and the steps they go through to disqualify even the most qualified Americans in order to secure green cards for H-1b workers. See what Bush and Congress really mean by a "shortage of skilled U.S. workers." Microsoft, Oracle, Hewlett-Packard, and thousands of other companies are running fake ads in Sunday newspapers across the country each week
  • Binghamton Press & Sun-Bulletin, courtesy of the Alliance@IBM: IBM workers' records pushed for TCE study. Researcher cites worldwide interest. By Tom Wilber. Excerpts: A Boston University professor who used IBM records to track cancer deaths among workers in San Jose, Calif., told Endicott residents Tuesday there is worldwide interest in a similar study proposed by federal officials for workers at the Endicott plant. Richard Clapp, professor of environmental health and a national authority on chemical exposure, encouraged employees and advocates to work with scientists from the National Institute of Occupational Safety and Health to develop the study. [...]
  • Reuters: IBM mulling chip facility at China plant. By Sophie Taylor. Excerpt: "IBM already has a plant in Shenzhen for servers, and early this year senior management discussed whether they could make chips instead of importing them into China to put into their servers," said a China-based industry source close to IBM.

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Health Care Policy and Marketplace Review: The Best 39 Minutes You Can Spend Understanding the Various National Health Systems. Excerpt: NPR's "Fresh Air" broadcast a 39-minute interview with Jonathan Oberlander, a political scientist with expertise in health care politics and policy and the University of North Carolina at Chapel Hill.

    Studying other systems is important as we in America look to reform our health care system. Unfortunately, we hear many things out of context and some outright myths.

    Listening to Professor Oberlander, I came away impressed that I had listened to one of the most informed and dispassionate discussions of the U.S. health care system, as well as many of the other industrialized systems we have heard about.

    If you want a straight down-the-middle 39-minute tour de force of leading international health care systems, as well as our own, give it a listen.

    You can access it here.

  • New York Times, courtesy of Common Dreams: Health Care Terror. By Paul Krugman. Full excerpt: These days terrorism is the first refuge of scoundrels. So when British authorities announced that a ring of Muslim doctors working for the National Health Service was behind the recent failed bomb plot, we should have known what was coming. “National healthcare: Breeding ground for terror?” read the on-screen headline, as the Fox News host Neil Cavuto and the commentator Jerry Bowyer solemnly discussed how universal health care promotes terrorism.

    While this was crass even by the standards of Bush-era political discourse, Fox was following in a long tradition. For more than 60 years, the medical-industrial complex and its political allies have used scare tactics to prevent America from following its conscience and making access to health care a right for all its citizens.

    I say conscience, because the health care issue is, most of all, about morality.

    That’s what we learn from the overwhelming response to Michael Moore’s “Sicko.” Health care reformers should, by all means, address the anxieties of middle-class Americans, their growing and justified fear of finding themselves uninsured or having their insurers deny coverage when they need it most. But reformers shouldn’t focus only on self-interest. They should also appeal to Americans’ sense of decency and humanity.

    What outrages people who see “Sicko” is the sheer cruelty and injustice of the American health care system - sick people who can’t pay their hospital bills literally dumped on the sidewalk, a child who dies because an emergency room that isn’t a participant in her mother’s health plan won’t treat her, hard-working Americans driven into humiliating poverty by medical bills.

    “Sicko” is a powerful call to action - but don’t count the defenders of the status quo out. History shows that they’re very good at fending off reform by finding new ways to scare us.

    These scare tactics have often included over-the-top claims about the dangers of government insurance. “Sicko” plays part of a recording Ronald Reagan once made for the American Medical Association, warning that a proposed program of health insurance for the elderly - the program now known as Medicare - would lead to totalitarianism.

    Right now, by the way, Medicare - which did enormous good, without leading to a dictatorship - is being undermined by privatization.

    Mainly, though, the big-money interests with a stake in the present system want you to believe that universal health care would lead to a crushing tax burden and lousy medical care.

    Now, every wealthy country except the United States already has some form of universal care. Citizens of these countries pay extra taxes as a result - but they make up for that through savings on insurance premiums and out-of-pocket medical costs. The overall cost of health care in countries with universal coverage is much lower than it is here.

    Meanwhile, every available indicator says that in terms of quality, access to needed care and health outcomes, the U.S. health care system does worse, not better, than other advanced countries - even Britain, which spends only about 40 percent as much per person as we do.

    Yes, Canadians wait longer than insured Americans for elective surgery. But over all, the average Canadian’s access to health care is as good as that of the average insured American - and much better than that of uninsured Americans, many of whom never receive needed care at all.

    And the French manage to provide arguably the best health care in the world, without significant waiting lists of any kind. There’s a scene in “Sicko” in which expatriate Americans in Paris praise the French system. According to the hard data they’re not romanticizing. It really is that good.

    All of which raises the question Mr. Moore asks at the beginning of “Sicko”: who are we?

    “We have always known that heedless self-interest was bad morals; we know now that it is bad economics.” So declared F.D.R. in 1937, in words that apply perfectly to health care today. This isn’t one of those cases where we face painful tradeoffs - here, doing the right thing is also cost-efficient. Universal health care would save thousands of American lives each year, while actually saving money.

    So this is a test. The only things standing in the way of universal health care are the fear-mongering and influence-buying of interest groups. If we can’t overcome those forces here, there’s not much hope for America’s future.

  • Bloomberg, courtesy of the Los Angeles Times: As co-pay rises, prescription use drops. By Nicole Ostrow. Excerpts: When patients pay more for prescription medicine, they use it less, according to a new study. Researchers say this may spur more serious illnesses over time. Consumers spend 2% to 6% less on prescription drugs for each 10% rise in their out-of-pocket costs for such things as rising deductibles, the amount paid upfront for insurance-based healthcare, said a review of 132 studies released today by the Rand Corp., a Santa Monica-based public policy institute. [...]

    "For patients with certain chronic illnesses, when you increase cost-sharing on the pharmacy side, you end up with more hospitalizations and more use of emergency departments," said Dana Goldman, lead author of the new study, which was published in the Journal of the American Medical Assn.

  • New York Times: Some Chronically Ill Adults Wait for Medicare. By Gina Kolata. Excerpts: When uninsured adults with common chronic illnesses became eligible for Medicare, they saw doctors and were hospitalized more often and reported greater medical expenses than people who had had insurance. And their increased use of medical services continued at least until at least age 72, researchers are reporting today.

    Its researchers, led by Dr. John Z. Ayanian, an associate professor of medicine and health care policy at Harvard Medical School, used data from the Health and Retirement Study, a federally financed study that included 9,760 adults who were 51 to 61 in 1992. Dr. Ayanian and his colleagues focused on 5,158 of them who survived to age 65 by 2004 and who either had private insurance or no insurance at all before receiving Medicare.

    The participants were interviewed and surveyed about their health and medical care every two years until 2004. That allowed the Harvard researchers to ask what happened when people who had not had insurance suddenly could have their health care paid for by the federal government.

    The effect that emerged — a surge in the use of health care by those who were previously uninsured — was concentrated in people with cardiovascular disease or diabetes. Those are conditions, the investigators noted, in which treatment can prevent serious consequences that can require extra doctor visits, hospitalizations and expense. In the study, 2,951 of the 5,158 participants had one of those conditions.

    When such previously uninsured people became eligible for Medicare, they had 13 percent more doctor visits, 20 percent more hospitalizations, and reported 51 percent greater medical expenditures than those with the same diseases who had had insurance all along. [...]

    “It shows how unfair our system is,” said Louise Russell, a research professor at the Institute for Health at Rutgers University in New Brunswick, N.J. “These people were not getting care, and they were at least as in need of it as the people who were insured.”

    The study also shows that it may be less expensive than expected to provide universal health insurance, Dr. Ayanian and his colleagues concluded. Medicare is bearing the brunt when uninsured people put off seeing doctors or seeking medical care until they turn 65.

New on the Alliance@IBM Site:
  • New Collective Agreement ratified at Canadian IBM Global Services firm. Excerpts: The 240 members of Local 911, the Communications, Energy and Paperworkers Union of Canada voted 85% in favor of accepting an eleventh - hour contract offer from ISM Information Systems Management Canada on June 21, 2007. Seven days earlier this group of ISM Canada (IBM Global Services) employees had voted 75% in favor of striking after having rejected the employer's initial offer.

    The workers accepted a new two - year contract with wage increases of 4% retroactive to December 29, 2006. An additional 4% increase will occur at the end of 2007 and improvements to benefits will become effective immediately. [...]

    CEP Local 911 is an established bargaining unit that has represented Saskatchewan IT workers since 1973. It is one of two bargaining units at ISM Canada, a wholly - owned subsidiary of IBM Canada. The other group is represented in the Province of British Columbia by the BC Government and General Employees Union.

  • From the Job Cuts Status & Comments page (Note: There were a massive number of posts to this page during the last week. The following is a sampling of the large list of posts received by the Alliance@IBM.)
    • Comment 07/08/07: My birthday is July 4th and my last day at IBM was July 29th. Let me tell you... this last birthday was definitely the best I've had in a LONG while. The positions I'm in line for ALL involve a pay raise, and from what I've been offered so far, I can expect anywhere from 5% to 30% more than what IBM was paying. Not only that, but the positions I'm applying for will not require me to work the 80-100+ hours I was putting in at my last position... they actually ENCOURAGE working only 40 hours/week! My friends have been saying "I'm sorry you've been laid off." My response? This is the BEST thing that has ever happened to me. I am FREEEEEEE! :- -Independence day!-
    • Comment 07/08/07: Re LEAN 4 - thanks for the update,"waiting for the ax". What I find amazing about this LEAN stuff is how little the LEAN leadership understands the business, how disorganized they are and how they have no idea where the project is ultimately heading. We recently completed (?) LEAN 3. At the end of co-location part, you ask what's the plan from here and you get a bunch of hemming and hawing and a bunch of fancy sounding blather that means nothing. Nothing tangible, no plan, no objectives.

      We're now supposed to be gearing up for LEAN 4, but have been given zero information about it. Your post told us more than we've heard previously. So it is a push to automate - of course that takes resource to automate work, but we've already so short resource (especially in the summer due to vacations/holidays) that we probably cannot do any significant automation. Scheduling this phase now is not smart and I for one will take my vacation rather than postpone it to make up for their poor timing and planning. -4-Runner-

    • Comment 07/10/07: Some GTS units had a disastrous 1H. There is planning for a series of cuts in GTS for late August thru early September. The field sales force will be re-organized and trimmed significantly with more sales work moving to GSIS as a prelude to moving function overseas. -Planning Cuts-
    • Comment 07/10/07: I was around when IBM first broke its inferred promise in '93 (with 9+ years). People then as now mistakenly believed that the full employment policy meant employment for life --never so-- I came back in 2000 to a much different IBM. My first job was sitting on the consulting bench for three months waiting to do some work while I watched other teams struggle with a workload they had due to a miscalculation in an SOW. I asked if I could assist and was politely told "butt out".

      A few weeks later I was helping to answer an RFP. I spend a significant level of effort to come up with the best architect, project plan, technology and supporting vendors for the project. After two weeks of review by non-technical management so far away from the project and technology they were almost on the other side of the planet, my proposal came back. Nothing like the technology, costs, or participants I had spec'd out and more than 10x the price. I was told the project was risky so they had to add contingency fees to cover the risk. The truth was the management was risky as they didn't know about the technology so they added a fudge factor.

      Needless to say IBM lost the bid, the funny thing was all the technology and players and even the architecture that was used (no vendor won and the customer decided to do it themselves) ended up in the solution as spec'd. Three years later I found out the customer had asked to rent me by name for the project after the bid was closed and IBM said I was already assigned to another project...hmm..games that piss of customers.

      I moved onto a corporate reengineering job to find things even worse and more disconnected. The now famous "On Demand" marketing campaign was developed in a hurry because they needed to show something to Sam quickly or loose their respective Executive Heads. During a review I blew so many holes in the plan, my management came up to me and said enough you're having people feel sorry for the guy. The sad point being that they should have felt outrage that a half-baked idea with little detail and no follow through should be considered ready to release.

      I had asked some rather simple questions like what would Microsoft and HP do in 15, 30, 60 and 90 days in response to this campaign? What is your next step? What is your reaction plan to your competitor's most likely responses? The Senior Exec could address a single question. He just looked like a Deer in the headlights. When he finally spoke it was gibberish about "there is no way we could determine what a competitor would do". I chewed on him further after such and told them exactly what the top competitors would do in 15, 30, 60 an 90 days and sure enough they did.

      While the ads look great the effect on the bottom line was essentially negative. The competitors did almost exactly what I said they'd do almost like I had written a script for them to follow. Was I a mindreader; hardly anyone who'd paid attention to the competition would have know this stuff. Did the Exec bother to take down my predictions and at least follow up with his staff for a mitigation plan? No he was busy jockeying for his next position before the shoe dropped on the schmoe that would take over his job when he moved on.

      The point of all this dirty linen is that the once famous IBM Management is now become management by spreadsheet. If you thing Microsoft is any better, they've gotten the disease too. Balmer is going to have his hands full as his company starts getting hardening of the arteries --they have become as or more IBM-like than IBM. So much so that they hire full time contingent staff to gather statistics and put together status reports. -Exec Mgt Insider-

    • Comment 07/11/07: Has anyone heard, or can substantiate, any of the rumors flying around the 300mm fab in E.Fishkill about end of July layoffs? The tax abatement program with the State of NY for tax reduction credits centered around employment figures is due to end this month. It was a five year program guaranteeing tax credits as long as certain employment figures were met. Due to this, it seems logical that there will be some employee terminations at this facility shortly.

      I think they will want to scare people into working harder and longer. This is how the slave owners of the deep south used to treat their people to keep them too scared to rebel. Too many rumors flying for something not to happen. Managers have lied to us for a long time about poor performance at our facility. I wonder if they ever look inwardly at themselves and ask the question "is there anything we may be doing to cause this?"

      Maybe they should stop their micro-managing techniques, tell us the problems, and let us work as a team to engineer solutions. I sure wish something would happen that would unify the employees and make them want to force change. I think the company knows how much they can force down our throats without us rebelling. Please call into the HV conference calls and give your support. -Anonymous-

    • Comment 07/12/07: I find it laughable that the Alliance claims it's "unacceptable" that they only signed up 3 new members last month. Look, the problem is this. Employees have no idea that you guys even exist. It's true, sorry to be so blunt. I am 100% travel. I've been to locations where people have never heard of the alliance. Yes, in cities like Endicott and Burlington, there's a big presence. But there are hundreds of locations in the US. I've been to big locations like Atlanta and Tampa where people have no clue.

      My suggestion is to build on the previous "15 minute break". Lets face it, the last one was a flop. This time, we need to really send a message. Extend the break to 30 mins. On Sametime, put up an away message stating exactly why we are away, include a link to the alliance website. Change your voicemail to say such as well. Even run an 'out of office' agent during the break. We really need to change course on getting the word out. Your thoughts please? -it's not working-

    • Comment 07/13/07: "it's not working" is correct. No one knows about the Alliance. The Alliance is depending on the workers to spread the word and apparently that is not the case. What is the Alliance management team itself doing to spread the word, other than this web site ??? "Nothing." If no one knows about your product, you're doom to failure. -SSR in Pa-

      Alliance reply: The Alliance has sent out thousands of e-mails to IBM employees and thousand of snail mail information packages. 101,000 people came to the Alliance web site last month. We have had massive media coverage of issues over job cuts, offshoring, pension and other issues. Many media sites have have linked the articles to the Alliance web site. Many of our issues are reported on online IT magazines also with links to the Alliance. We have e-mail broadcasts that go out to 11,000 addresses. We even have members distributing flyers at IBM sites. To say we are doing nothing is flat out wrong.

      Right now we have 1 full time staff person and a part timer. Of course we are going to ask employees to do their part. You must ask why the IBM employees aren't telling their co-workers and spreading the word. You say no one knows about the Alliance. Have you told your co-workers? If they don't know then it is your fault. If every employee who comes to this web site has not told 5 of their co-workers about it then that is a problem. If you want a massive advertisement campaign then you have to be willing to pony up the money for expensive ads. Our current small number of dues paying members can't be expected to foot the whole bill for people that don't want to help. I hope you have done your part.

    • Comment 07/13/07:To it's not working. I am a member and I tell people all the time to join the alliance and I have signed up some too. What are you doing except complaining that nobody knows about us. Are you telling people about the Alliance or are you too scared to even mention it? Have you signed up anybody? The forms are on the web site. -do some work-
    • Comment 07/13/07: "Employees have no idea that you guys even exist." I've found that a many engineers at my site know about it. But there's no interest in it. I think this happens for three reasons.
      • No one believes it would help.
      • Most believe joining and being vocal would hurt them (put them on the next RA list).
      • Most who are unhappy would just prefer (and are trying to) find a better job elsewhere. I wish luck to everyone who wants to stay @ IBM, and try to make it better. I think it's too broken a place to work, and is going to get worse in the next few years. -it's not worth it-
  • From the General Visitor's Comment page:
    • Comment 07/07/07: The Alliance reply is dead on the money as far as a management section. Management has their forums within IBM. Speakup. Spirit Communities. Workgroup Opinion Surveys etc. Wake the hell up you morons who thought that was a good idea. Management not only is aware of what's going on, They engineered it. They sat on conference calls worldwide and plotted and planned how to stick together and lie to the employees and cheat them out of wage increases and bonuses and get them to standby 24 hours a day 7 days a week and be afraid to claim overtime to keep a job that management has made so caustic and hate filled to work in that most of us would be better off elsewhere.

      They probably read our pathetic comments on high level conference calls as a joke to hear how loud and long the sheep are bleating. We have all heard " There's not much in the bucket this year". And Sam gets 29 percent. And they laugh at us. Then we hear " A 2+ would have figured out how to fix it without claiming the overtime".

      Then the Board of directors gets 25 percent raises and they laugh even harder at us. And year after year we whine on this site, and we whine to our co workers and we whine to our bartenders and anyone else who will listen and we DO NOTHING and that's what makes the management teams worldwide roll on the floor laughing their collective asses off at us because without us they have no company to rape and pillage from and we are too chickenshit to organize, unionize and get our fair share of the pie.

      Left to their own management will not even show you the empty pie plate. They will say " Pie? What pie ? The pie bucket is empty this year" Yes I am a Dues Paying Member. Yes I Proudly carry my Alliance Union Card and show it to anyone including management who wants to see it and some who don't . Yes I will vote union. Say yes with me because aren't you tired of hearing NO. No raise, No bonus, No pension, No sleep. No job security. -Exodus 2007-

    • Comment 07/13/07:This is to "Manage this" in reference managers making "extra money" and being "promoted". There was no extra money and it was not a promotion. Became a manager as a lateral move and never got more money. After 14 years of that BS, I finally wised up. GO UNION. -ex mgr-
  • Pension Comments page
  • Raise and Salary Comments
    • Comment 07/09/07: Salary = 79k; Band Level = 7; Job Title = Staff SW Eng; Years Service = 5; Hours/Week = my wife knows how many!!!!; Div Name = SWG; Location = RTP; Message = Have been getting a top rating [1s] in my organization since the past 4 years and am looking for a promotion to band 8 this year. Do you all think that's reasonable/ feasible? Comments? -John Doe-
    • Comment 07/12/07: Salary = 113K; Band Level = 8; Job Title = IT Architect; Years Service = 7; Hours/Week = 45; Div Name = GTS; Location = Atlanta; Message = No raise this year -GTS Guy-
  • PBC Comments
    • Comment 07/14/07: Prior Yr PBC = 2+; This Yr PBC = 2; This Yr Bonus = 3,000; Prior Yr Bonus = 7,000; Message = If you want to get ahead at IBM, I recommend taking acting classes. Don't bother with improving your technical skills. I see many people who are accomplished in their field and get things done remain in the same spot year after year. However, those who can evade their workloads, write meaningless reports, smile and say positive things get promoted. The stage is the thing! -Anonymous-
Vault Message Board Posts:

Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. A few sample posts follow:

  • "Designation & Reputation" by "lonelydiver". Full excerpt: How would you compare Accenture versus IBM in consulting services in UK market? What does Manager level in Accenture correspond to in IBM hierarchy? Can you indicate what is career hierarchy in IBM? (for example accenture is like analyst, consultant, manager, sr manager and sr executive). Thanks!
  • "Experience in each" by "jeeee4". Full excerpt: Accenture has a career hierarchy and tends to help you with some training along the way. IBM seems more interested in using what you bring then getting you out the door if you ever rise to the point where you get too pricey per hour. No travel allowed in IBM for non-client billable purposes (ie training, conferences, etc.).
  • "Move to Consulting in mid 30s" by "lonelydiver". Full excerpt: Hi, I would like to get experience, views from folks who might have made move to consulting from industry in mid 30s at manager / sr manager levels. OR from folks who have been in consulting but see these guys who made move from industry. Basically,
    • I have heard a lot about industry hire washout rate being too high. How is your experience?
    • What difference did you see in industry vis-a-vis consulting? How would you advise to handle these differences?
    • In retrospect would you say -- do not make a move to consulting unless one is ready to (what)?
    • Did your age play (positive or negative) any role in getting adjusted in the group. Assuming that ones who come straight to consulting would be manager / sr manager / may be partners by that age!
    • Is consulting a much more riskier option? Did you ever think about getting back to industry, if so did you find less options or more options?
  • "Some Answers" by "ancientblueconsultant". Excerpts: I'll start with the caveat that I've been in consulting for 20 years and I came from the IT sales business. Not much of an industry type, so to speak.
    • The washout rate is VERY high. Worse yet, the probability of return to industry at the same level at which they entered consulting for washouts is very poor.
    • Industry is a job, consulting is a lifestyle. The major reason for washouts is that industry types cannot handle the lifestyle change. Being on the road is much different than being behind a desk. You don;'t go for the full solution, you go for only the minimum to keep the client satisfied. Consulting is only for the very young who have no family or the very old who have already created and set a family and now want some additional money or excitement at the end of their working life. Divorced and widowed folks also succeed in this lifestyle. Everyone else in consulting is miserable from a family life perspective. Many decide to quit the day they wake up in a hotel room and can't tell where they are and why they are there.
    • Don't move unless you have no family issues with long separations. Don't move unless you are an experienced world class expert in some niche in the industry. Why would someone hire you?
    • Doesn't matter unless you want to make consulting a career. Long term teams are an anachronism, you usually create a team for a job, then disband. Age makes no difference except in the lifestyle issue. You don't talk about your 5 beautiful kids and you're married life to a bunch of 25 year-old Indians and American hotshots that just graduated with their MBAs. They'll think your from another planet.
    • Consulting is much riskier. You can make or break your reputation (and thus your future work prospects) in one statement to a client.

    One more point. I truly believe IBM is not a good haven for industry types, since it is primarily a technology driven practice environment. They have little influence in the boardroom beyond the CIO except in IT industry, where they are a competitor. The Big 4 or boutiques are much better plays to get connections in the industry.

  • "Beyond the Blues" by "SouthRoute55". Full excerpt: Some of you may remember – I left IBM last Jan, I left mainly for financial reasons (change of my circumstances) I got a role with what they call tier 1 investment bank, I get paid 40K more that what I got paid at IBM and was told typically for my grade people can expect 50-100% bonus… sounds good? Yeah financially much better, however my role is sooooooo low low level, it was advertised as a senior management level, but if the project I am on was managed by IBM I would have given this role for a grad or someone who had 1-2 years experience at the most!! Isn’t it ironic? I earned a lot less money at IBM for for a lot more responsibility. To tell you the truth I really miss the roles I used to do at IBM. My new role is soooooo boring!!
  • "Not Unusual" by "ancientblueconsultant". Full excerpt: When you are worked to death for peanuts, you feel guilty when you make so much more money for less stress. Athletes and POWs have historically suffered from this syndrome. They become addicted to the highs from over achievement or the stress of repeated beatings and slavery. Some psychiatrists are now calling this "Battered Employee Syndrome" or the "Mount Everest Effect".

    Another source of this comes from entrepreneurs. Many wonder why folks go back into the grind of a start-up after making millions. It's not the money, it's the addiction to the high of stress.

    What you think is so boring is essentially normal stress level and achievement. The difference was it was thrust upon you by the Blue Pig for less money and personal acknowledgement of achievement.

    You can come back. I have seen many who miss the stress and the psychological beatings. On the other hand, you could channel your free and boring time into an entrepreneurial activity that get you fame or additional wealth. At some time you'll start getting tired, maybe after 20-30 years. Then you'll appreciate the fact that you took your boring time and built something for yourself, rather than for Sam, Nick or the PQ...

  • "Not everyone gets addicted to it though" by "civilliberty". Full excerpt: I have an ex-IBM colleague who was worked to death and enjoys taking the contracting assignments which is says, in comparison are easy to the work he did at IBM.
  • "How much should I care?" by "Blue Moon 22". Excerpts: It's been 12 months for me at the Big Blue Pig, but I'm finally on my way out (probably 11 months too late). I'd like to get some advice from you all on what is "appropriate" in terms of my exit.

    I'm the PM and only IBM resource on a project about to enter UAT at a major client. While I couldn't care less about IBM (my bonus + raise of course didn't cover the annual increase in COL; no credit for hours worked beyond 40 each week), I would like to leave on good terms with this client. My IBM manager asked if I could stay an additional 2 months (I did my best not to laugh in his face) and then brought up the possibility of sub-contracting. I'd consider a month of sub-contracting depending on the terms, assuming it would cover my new market salary plus lost base salary at my new job that would be applied for my bonus. Any thoughts on if I should even consider this option? How does it work? Anything I can do to not burn bridges with my current client if I stick to my plan to leave in 2 weeks? I'm sure IBM has put this entirely on me in conversations with the client. Should I even consider explaining my position to the client or would that be horribly inappropriate?

    Any other words of wisdom on resigning beyond "what took so long?!" Thanks.

  • "Typical Situation-Some Advice" by "ancientblueconsultant". Full excerpt: First of all, in today's Blue Pig don't assume anything. There are so many incompetents out there now that the client may not have been told anything. The best policy is honesty and forthrightness with client, regardless of what the blue pig says.

    I'd take the sponsor out to lunch, explain to her/him that you are leaving. Make it clear that YOU (as a professional, not as a PIGgie) want to make sure her/his needs are taken care of properly. Ask her/him what he wants as the next course of action.

    Some clients will insist on a blue piggie as the PM. If that so, then you graciously tell the client you will stay during the transition (the 2 months). Some clients will want you a a sub for the duration of the project. Advise the client to press for you, not for any PM. Then go back the the piggies and tell them the client wants YOU as the PM and set up a subcontracting relationship.

    The client may want you as their sub. If that's the case, then you navigate those waters carefully but make sure you make both sides whole on the deal. The client could also hire you as an employee. That's certainly another possibility. Be ready for that.

    Within 2 weeks of departure is short enough lead time that you must talk to the client, regardless of what the Blue Pig tells you to do. They cannot label your departure as confidential anymore. Do you have any other work? You may want to consider how this fits in with your post-blue pig "freedom" plans. Hope this helps. Good luck. I feel you are a good skill and will do well elsewhere than the Blue Pig.

  • "Thanks ABC" by "Blue Moon 22". Full excerpt: I appreciate the words of wisdom. I neglected to mention that I do indeed have another position lined up, and that that firm would like me to start ASAP. They have a local project lined up for me that would start two weeks after the date I gave notice to IBM.

    I know IBM has at this point notified the client sponsor, who is asking that I be extended the two months. I don't think this is really plausible given my likely commitments to my new employer. I think I could work out an additional month without starting off on the wrong foot with my new employer.

    Is sub-contracting with IBM worth the hassle for one month? I'd want them to more than cover my lost pay from my new job (higher salary plus base pay that would apply to bonus) plus my benefits. I've never sub-contracted before, but my understanding is that it can be quite a process and have been told IBM won't sub-contract with individuals directly and that I won't get paid for 60+ days.

    Thanks again for the advice. I'd like to do my best to preserve my relationship with the client, but I feel at the end of the day that it is primarily IBM's actions that have put the client in this position.

  • "You know what to do" by "Dose of reality". Full excerpt: Your last paragraph says it all. In this day and age, most clients have an appreciation for the treatment of staff at IBM. They will be disappointed, but the consulting-savvy contacts at the client should understand the dynamics of a job change.

    I would approach the client at the management level that you have the best relationship with and explain the situation to them. I would not bring up the subject of subbing with IBM unless they broach the topic.

    Your new employer is the wildcard here - if they are willing to defer your start date, then you can finesse the level of interest in some sort of bridge arrangement from the client. If your new employer will work with you, then the best case is you score a nice stipend for a month or so – picking up some of the margin that IBM has been extorting on your behalf for the last year. Worst case is you make IBM look like the bad guy if they won’t work with you and the client.

    Under no circumstances should you just continue in IBM’s employment, unless they offer you an ironclad retention bonus that makes it worth your while.

    The potential benefit of an overwhelmingly positive break with the client just isn’t worth bending over backwards for no immediate return. If you just make the approach, the worst that can happen will be a slight bit of resentment, but nothing that should preclude working with them again, unless they are arrogant self-absorbed b@$+@rd$, in which case why would you want to retain the relationship anyway?

    Congratulations and good luck!

  • "You're Welcome" by "ancientblueconsultant". Full excerpt: Tell the client everything you've said here. Explain to her/him your dilemma. As to sub-contracting for 30 days, it's a maybe. That all depends on who your new employer is. If it's an IBM competitor, that might be dicey.

    Everyone in our business should be incorporated and ready to go as an indy always. This is almost for me a sign of a person that is flexible and ready to seize opportunities as they come by. I have my own Sub Chapter-S, ready to go even while I'm a CEO of a boutique. You never know...

    I think the timeframe is too short, but if you aren't going to a competitor and if there's time, you can at least try a week or 2 as an indy subcontractor. I personally don't think it'll have time to fly because of the short window, but it's worth checking. Set your rate. If IBM can't meet it, then you'll at least be able to say you tried.

    When talking to the client, don't blame the Blue Pig. That's bad form and makes you look narcissistic and placing blame elsewhere, even though it's true. Focus on the opportunity and the shiny future you think you've found elsewhere and don't comment on the mess you are luckily leaving behind. Say you found a better deal and that's the way the cookie crumbles. Let the client figure out why the Blue Pig is losing such good folk like you.

Modern-Day Robber Baron Corner:

Today's highly compensated executives face many difficulties, including figuring out how they can possibly spend all of the rich rewards they've earned on the backs of ordinary workers. Take a look at the insider trading of many of our IBM executives—spending the cash from all that stock "acquired at $0 per share" must be a real challenge! Or, imagine the difficulty IBM CEO Sam Palmisano will face spending his $10,000 to $20,000 a day pension when he retires!

As a way of helping out our beleaguered, modern-day robber barons this site will periodically feature "spending opportunities" that the "upper crust" of our society may want to take advantage of!

  • Wall Street Journal: House of the Week. Sedona (Chapel Included). By Ben Casselman. Excerpts: What: Three-bedroom, four-bathroom main house, about 4,500 square feet, on 6.75 acres. Where: Sedona, Ariz., about 115 miles north of Phoenix. Amenities: Three-bedroom guest house, guest apartment, detached house ("casita"), pool, two garages, workout room, wine cellar, putting green, picnic area with barbecue pit. Asking Price: $11.75 million.


If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

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