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Highlights—August 18, 2007

CNN/Money: DOJ: IBM, PriceWaterhouseCoopers Settle Suit. Full excerpt: IBM Corp.and PriceWaterhouseCoopers have agreed to pay a total of $5.2 million to settle allegations that the companies solicited and provided improper payments on technology contracts with government agencies, the Justice Department said Thursday. IBM agreed to pay roughly $2.97 million, while PWC will pay around $2.32 million. According to the complaints against the companies, IBM and PWC "knowingly solicited and/or made payments of money and other things of value, known as alliance benefits," to a number of companies, the DOJ said. The government said it intervened in the actions because the "alleged alliance relationships and resulting alliance benefits amount to kickbacks, as well as undisclosed conflict of interest relationships."
Wall Street Journal: IBM Says It Didn't Pay Kick-Backs But Settles Justice Department Case. By William Bulkeley. Excerpts: International Business Machines Corp. didn't make any kick-back payments or engage in illegal activities in a case in Arkansas that is being pursued by the Justice Department, a spokesman said. The Justice department announced earlier that IBM had agreed to pay $2.97 million to settle allegations raised by whistle-blowers that it "solicited and provided improper payments and other things of value on technology contracts with government agencies."
The IBM spokesman issued a statement that: "IBM did not engage in kick backs false claims or any other illegal conduct alleged in the various complaints that have been filed in this matter. IBM's business practices and policies comply with all applicable statutes and regulations including requirements related to government contracts." He declined further comment. The IBM spokesman declined to explain why IBM had made the settlement payment if it hadn't done anything wrong. The allegations involve a whistleblower complaint about 2004 alliances among technology providers that the government says amount to kick backs.
BusinessWeek: IBM's Global Hold. The tech giant's global integration strategy appears to be paying off: Every division reported strong second-quarter growth. By Steve Hamm. Excerpts: On Feb. 5, 1924, Thomas Watson Sr. changed the name of the company he ran from Computing-Tabulating-Recording to International Business Machines. The change reflected Watson's ambitions rather than reality. C-T-R operated only in the U.S. and Canada. But since the name change, IBM has been at the forefront of each new wave in the globalization of business—from international to multinational, and now to the next new thing. For three years, IBM has been striving to become what it calls a "globally integrated enterprise." Now, the strategy is finally starting to click.
The strongest evidence that IBM's big bet is paying off came a few weeks ago when it announced its second-quarter results. Revenues were up a strong 9%, to $23.8 billion. Every division reported healthy growth, including the long-troubled IT services group, where revenues rose 10%. But confirmation that the strategy is succeeding trickles in almost every day with announcements of major IT services contract wins in India or Russia. No wonder IBM's stock, trading at about $112, has risen by 50% over the past year—even after pulling back some in the market's summer swoon. [...]

These changes haven't come easily. IBM seems to be in a constant state of upheaval: More than 20,000 jobs have been eliminated in the U.S., Western Europe, and Japan even as the work force has grown beyond 50,000 employees in India and 10,000 in China. "This is a huge shift for IBM, but I believe it's necessary if we are to capture the benefits and step up to the challenges of a globally integrated economy," Chief Executive Samuel Palmisano said at an IBM-sponsored Forum on Global Leadership on July 25 in Washington, D.C.
CNN/Money: IBM to consolidate Mass. operations. Excerpt: International Business Machines Corp. said Monday it will consolidate its Massachusetts-based software operations next year at a 3,400-employee campus along Interstate 495 in suburban Littleton and Westford. The move will bring together many of IBM's (NYSE:IBM) 5,000 Massachusetts workers who are now spread among eight cities: Bedford, Cambridge, Lexington, Lowell, Marlborough, Westborough, Waltham and Westford.
CNN/Money: IBM Opens Latin America's First Mainframe Software Center. Local Companies Gain Access to the World's Most Sophisticated Business Computer and World-Class Software Experts. Excerpt: IBM has opened a mainframe software competency center in São Paulo, Brazil, enabling local companies to build, test and run applications on the IBM mainframe without impacting their current technical environment or requiring crucial resources to be assigned toward pilot programs. The System z Center also offers software training and business guidance on how the IBM mainframe can deliver faster and customized solutions through proven case studies and innovative testing techniques.
The Times of Munster, Indiana: Out with outsourcing? By Keith Benman. Two years ago, Fortune 500 energy company NiSource Inc., of Merrillville, announced it would be cutting more than 1,000 jobs after inking a $1.6 billion outsourcing agreement with IBM.
Five months ago, NiSource quietly told employees that financing and accounting jobs outsourced to IBM were coming back to NiSource because "some results had fallen short of expectations."

In late 2006, telecom giant AT&T announced that 2,000 jobs previously outsourced both domestically and overseas would be added to AT&T's payroll. In July, AT&T delivered on that pledge in Indiana with the opening of a new 425-employee DSL computer call center in Indianapolis.

"Customers need a good experience when they come to us," AT&T Indiana President George Fleetwood said last month. "We are very much in a competitive environment." [...]

From NiSource second quarter report filed with SEC in August 2005: "NiSource Corporate Services and IBM signed a definitive agreement for IBM to provide a broad range of business transformation and outsourcing services to NiSource. The 10-year agreement is expected to deliver upwards of $530 million in gross savings in operating and capital costs across NiSource's 15 primary operating subsidiaries over the course of the contract, as well as provide technology advances and enhanced service capabilities."

From NiSource second quarter report filed with SEC on August 2007: "NiSource's recent IBM Agreement may not achieve the level of savings that was originally anticipated. Additionally, many associated changes in systems and personnel are being made, increasing operational and control risk during transition, which may have an impact on the business and its financial condition. ... At the beginning of 2007, a high-level team of NiSource and IBM resources began a joint reassessment of the relationship, including the transformation projects that were part of the original agreement."
Silicon Republic (Ireland): Redundancy for Xerox workers if no job at IBM. Excerpts: Dublin Xerox workers who find that a new position will be unavailable at IBM following the strategic outsourcing will be offered a “generous and fair redundancy package” by Xerox, according to an internal communication seen by siliconrepublic.com.
As the IDA worked tirelessly yesterday to save as many of the 900 jobs being outsourced to IBM by Xerox, the company sent an official communication to employees outlining the schedule for the transfer of jobs to IBM.

The communication revealed that the work could be further off-shored to Sofia in Bulgaria, Bangalore in India, Manila in the Philippines and Greenock in Scotland.

In early July, it emerged that Xerox, following a strategic review, awarded a substantial outsourcing contract to IBM that would see 900 out of Xerox’s 1,700-strong Irish workforce transfer to IBM but remain in their usual offices.
Associated Press, courtesy of Forbes: CEO Trade Group Spent $4.6M Lobbying. Excerpts: The Business Roundtable, whose members include chief executives of 160 U.S. companies, spent $4.6 million in first half of 2007 to lobby the federal government, according to a disclosure form.
The group lobbied on federal executive compensation reports, taxes, international trade, immigration, global warming and other issues, according to the form posted online Tuesday by the Senate's public records office.

In addition to Congress, the group lobbied the State and Treasury departments, White House and other agencies.

Chief executives W. James McNerney Jr. of Boeing Co., Samuel J. Palmisano of International Business Machines Corp. and Rex W. Tillerson of ExxonMobil Corp. are some members of the group.
Yahoo! message board post: "Dear IBM and Ex IBM Employees," by "junegirly1986". Full excerpt: On February 6, 2007, the Law Offices of Erik H. Langeland, P.C. filed a nationwide complaint in the United States District Court for the Eastern District of Massachusetts seeking to recover unpaid overtime on behalf of all IBM Sales Representatives who worked more than 40 hours per week, but were not paid overtime.
Plaintiffs allege that they are owed money damages for IBM's failure to properly pay them for their extensive overtime hours as required by federal law. The basis of Plaintiffs' claims is that IBM required its Sales Representatives to work extensive overtime to meet their sales requirements, failed to keep accurate time records and failed to properly compensate Sales Representatives who worked more than 40 hours per week.

Plaintiffs are continuing to investigate the case and are preparing to file a motion with the Court requesting that notice be sent to all "similarly situated" IBM Sales Representatives throughout the United States. Plaintiffs believe that the case may involve hundreds or even thousands of its current and former Sales Representatives.

Plaintiffs' objectives are to: 1) recover unpaid overtime and other damages for all IBM Sales Representatives who worked more than 40 hours per week, but were not paid overtime; 2) require that IBM change its time keeping system to accurately record all hours worked by its Sales Representatives; and, 3) require that IBM revise its compensation policies so that Sales Representatives are paid for all overtime hours worked.

Contact: Erik H. Langeland; 500 Fifth Avenue, Suite 1610; New York, NY 10110; (212) 354-6270; (212) 898-9086 (Fax)
Plan Sponsor: Former Colgate-Palmolive Employees Challenge Cash Balance Plan. Excerpts: Two former Colgate-Palmolive employees have asked a federal judge in Ohio to grant class action status to a lawsuit alleging their former employer’s cash balance plan underestimated their lump-sum retirement payout.
Paul Adelman worked for the company for 13 years and Valerie Nutter for 12 years. Both plaintiffs opted to take lump-sum retirement benefits when they left the company and both claim they were shortchanged, according to the lawsuit.

According to the suit filed in the U.S. District Court for the Southern District of Ohio, "had Plaintiffs' hypothetical account balances been projected to normal retirement age at a rate that did not understate the value of the interest credits they had the right to receive though normal retirement age," they would have received more money.
Yahoo! message board post: "IBM says a mistake was made in crediting my service when I returned" by Candis Wilson. Full excerpt: I worked for IBM from 1974 and left in 1986 when IBM sold the Product Centers to NYNEX. I was rehired to IBM in 1996 and received my service credit from 1974 to 1986. IBM is now saying that was a mistake that they transferred my service to NYNEX and I was not eligible to receive it from IBM.
I accepted employment back to IBM with the knowledge I would receive my service credit and I did with all associated benefits. I took a severance package from IBM in 2000 when my division closed. At that time I received my pension worksheets and I took a lump sum.

Now May 2007 IBM is coming back to me and asking me to pay back the lump sum and they have discontinued my monthly pension payments that I've been receiving since 2000.

I disagree with IBM that a mistake was made - I was rehired based on the facts IBM provided me. Has anyone else experienced this? Any help will be appreciated. Thanks, Candis Wilson
Yahoo! message board post: "Re: IBM says a mistake was made in crediting my service when I returned to IBM" by Janet Krueger. Full excerpt: IBM is assuming that you will simply accept the cut in benefits without question. Sadly, many do, which enables IBM to get away with breaking federal law and cheating people. Don't let them get by with it that easily!
I would suggest you gather as much written information as you can find about exactly what you think you were promised and when. Then look for ways to escalate IBM's decision to not give you the service credit you were promised.

There are three groups you could try contacting:
- Call the Department of Labor and ask how you go about filing a complaint. You should be able to find a number to call by looking at their web site, www.dol.gov -- you probably need to talk to the NY office.
- Call the Pension Center -- you can find contact information at http://www.pensionrights.org/.
- Call an employment lawyer who specializes in employee benefits -- it usually helps to look for one who understands the laws in your state as well as federal law. A good place to start to find one is http://www.findlaw.com.
Hope that helps!

For those of you who haven't left IBM yet, it really is helpful if you keep an annual printout of your estimated pension benefits at home in a safe place.

And anyone switching jobs needs to get any and all promises being made IN WRITING. If the hiring manager is willing to give you a written document, write him/her a note saying "This is what I understood you to say at our meeting on xx/xx/xx..." -- that puts them on written notice about what your understanding is, and leaves them obligated to immediately correct any false assumptions.
The Dallas Morning News: Many 401(k) fees are hidden. Employers' retirement plans have costs that cut into your return. By Pamela Yip. Excerpts: There are many things that make a successful investor, not the least of which is keeping your investment costs down because they cut into your return. In a 401(k) plan, it's especially important to keep costs low because you're dealing with money you're hoping will sustain you through retirement.
High fees can exact a heavy toll on a 401(k) plan over the course of an employee's career, but workers trying to determine their expenses are at a loss because the fees are not clearly disclosed.

"It should be criminal what's going on in this industry," said David B. Loeper, author of the forthcoming book Stop the 401(k) Rip-off! "People are unaware of what they're paying, if anything." [...]

"Hidden fees are eating into the retirement savings of millions of American workers without them knowing it," said Rep. George Miller, D-Calif., who has introduced legislation that would require employers to ensure that American workers have clear and complete information about 401(k) fees. "Workers and employers need better information about fees in order to make well-informed decisions about basic things like which plans and investment options will give them the best deal."
Kiplinger's Money Power, courtesy of the Baltimore Sun: Money Power: Thinking ahead on retirement plans. Employees look at reality of retirement goals 5, 10 years in advance. By Mary Beth Franklin. Excerpts: You're at the top of your game, the peak of your career, and you're making more money than you've ever made. Now is the perfect time to think about quitting. Say what? It's true. The five-to-10-year period before you retire is the time to assess your retirement preparations to see whether they're realistic. And if you're falling shy of your goals, you still have time to make adjustments.
The federal government has been offering retirement-transition seminars to employees for years. Now, corporate America is waking up to the fact that as workers shoulder more of the burden of providing for retirement, they need more help figuring out how to do it.

IBM, the venerable U.S. company once synonymous with career-to-grave employee benefits, is on the leading edge of this new trend. In conjunction with its decision to freeze its traditional pension and cash-balance plans and move to a 401(k)-only strategy next year, IBM recently launched an innovative Money Smart educational program to help employees make the transition from work to retirement.

The program offers comprehensive pre-retirement seminars, presented on site during business hours, that cover all the moving parts of a 21st-century retirement, including how to estimate future expenses and decide on an appropriate withdrawal strategy to make your savings last a lifetime. Seminar leaders also discuss Social Security options and what to do about health coverage before Medicare kicks in at age 65.
MS-NBC: Boomers will spend golden years at work. As work force ages, companies must adapt with flexible policies. By Eve Tahmincioglu. Excerpt: In the next decade or so, the U.S. workplace will be transformed with an explosion of flexible work schedules and a host of technologies that will make work tasks easier. What will cause these changes? A boatload of middle-aged workers. That’s right, by 2020, there will be more 55-plus workers grinding away than at any other time in our history. As a result, labor experts foresee a rush by the nation’s businesses to accommodate the aging workforce.
Wall Street Journal: New CEOs May Spur Resistance If They Try to Alter Firm's Culture. By Carol Hymowitz. Excerpts: Employees who find themselves reporting to a new chief executive, especially an outsider who has bought their company or been recruited to turn it around, often face a roller coaster of changes. New leaders typically reshape their senior executive team and the company's growth strategies. The most wrenching adjustment occurs when a CEO changes the corporate culture -- the core values and ways of doing things that bind people to their jobs. [...]
Generally, employees are more likely to support a CEO pushing strategic change if he or she doesn't at the same time run roughshod over their culture. Yet few new CEOs take the time to learn about the culture they have inherited. "They need to understand both the traditional purpose of a company and its philosophy -- or why, precisely, employees feel the work they do is important, and how they believe their approach distinguishes them from others," says Sheila Margolis, president of the Workplace Culture Institute, an Atlanta-based consultant. "If a leader changes either a company's purpose or philosophy, it will feel like a different place even if its name remains the same."
American Public Media's MarketPlace: Need a raise? Keep performance high. By Kai Ryssdal. Excerpts: Most of us are feeling some kind of financial pinch at the moment. High energy prices or rising school fees. Health insurance costs going up twice as fast as inflation is. But don't count on the boss to help you out much. We learned today plans for your pay increase are decidedly modest. From WGBH in Boston, Marketplace's Helen Palmer reports. [...]
Helen Palmer: And the magic number that companies are budgeting for pay raises next year? Ryan Johnson: Across the board, it's 3.9 percent. That's Ryan Johnson of WorldatWork, a human resource association that's tracked this figure for 34 years. Johnson says it's not all bad news — managers will definitely give some workers more.

Johnson: You're paying for performance, and you're giving the best performers a 6 or 7 or 8 percent raise. And unfortunately, some people are still gonna to get a 0 or a 1 percent raise, the low performers. Johnson says that kind of variable pay, or pay for performance, is the norm now for 80 percent of companies. Gary Chaison, who teaches labor issues at Clark University, calls this survey extremely demoralising for workers, because it shows who gets the lion's share of the pay raises.

Gary Chaison: An increasingly large share of budgetary allocations of companies are going for the companies' executives and their senior officers rather than for most workers.

Labor's lost bargaining power, Chaison says. If you factor in inflation, the U.S. hourly wage has actually fallen over the last five years, even as productivity has shot up. [...]

That makes it hard for them to raise wages. But Kochan says he doubts that U.S. workers will accept another decade of stagnant pay in the face of skyrocketing executive compensation. Though it's not obvious what workers can do.

Motley Fool: A Disastrous Retirement Scenario. By Chuck Saletta. Excerpts: A Sicilian man recently lost his primary source of income and access to his home. At 61 years old, this was a tough break, and, sadly, he needed police intervention to get his life back to normal.

What makes a sad story comical? There's more to this story, though. This gentleman's income? An allowance from his mother. His home? His mother's, actually. And did I mention that he's 61?

For instance, if our 61-year-old Sicilian had stuck $100 in each of these companies at age 25 back in 1971, check out what he'd have by now:

Company	Value* of $100 Invested on Jan. 4, 1971
General Motors	$748.65
IBM	$1,905.91
3M	$4,641.67
General Electric	$12,196.88
McDonald's	$18,842.31
Boeing	$52,785.00
Altria	$74,600.00

CNN/Money: For moms, return to work a bit cushier. Excerpts: Gina Thoma is taking a year off work to raise a family, but she's still playing the corporate game. As part of a new program at PricewaterhouseCoopers, the 42-year-old mother of three mingles at company events, checks in with a career coach and attends seminars to keep her accounting skills fresh. 'They're keeping the door open for me, saying they would still like to have me,' said Thoma, who quit her job at the financial services firm in January.
Once regarded as a career setback, taking extended time off work to care for children is no longer a liability as businesses fight to hold onto valuable female executives. A growing number of companies are rolling out lavish welcome mats for returning women, offering a spate of options that ease the transition back. [...]

At IBM, many women work with managers to map out a personalized strategy for returning before going on extended leave. At Deloitte & Touche, employees can dial workloads up or down depending on personal needs.

Such programs, which are typically intended for new mothers, mean women no longer have to pick between their career or their family, said Ellen Galinsky, president of the Families and Work Institute.
Forbes: India Has The Brains, But Where's The Beef? By Prabhakar Raghavan. Excerpts: India is full of smart, highly-trained, English-speaking computer wizards, thanks to the legendary Indian Institutes of Technology. All it needs is decent "infrastructure"--code for airports, highways and the reliable supply of utilities--and its full potential is ready to be realized.
Sound familiar? That's the shibboleth that many Western executives and journalists buy into, fed by quick fact-finding trips and endlessly repeated media myths.

In India, critics of this simplistic picture tend to attack the lack of access to primary education for hundreds of millions of children, and this has rightly been the focus of education policy. One level up, the voracious appetite of the information technology (IT) sector demands science and engineering graduates at a rate that's on par with the U.S., China and Russia. [...]

India's real infrastructure problem--with no solution in sight--is not airports or electricity; it is the virtual nonexistence of graduate education and research in information and other crucial technologies. Consider this for starters: The U.S. produces about 1,400 Ph.D.s in computer science annually and China about 3,000. By stark comparison, India's annual computer science Ph.D. production languishes at roughly 40. That number is about the same as that for Israel, a nation with roughly 5% of India's population size.

Perhaps more significant, the quality of graduate research in India lags significantly behind the U.S. and Europe, with a few rare exceptions. This seems paradoxical, considering that American academia and industry thrive on Indian scientists. The reason is that graduates from the top Indian science and engineering schools tend to head abroad to do their graduate work, where they frequently excel and settle. [...]

What is the cost to the Indian economy and society from laggard graduate education and research? Most Indian IT jobs are in building outsourced solutions, quality control, software maintenance and support, and coding to designs created abroad--the IT workforce equivalent of C.K. Prahalad's "bottom of the pyramid." [...]

Overall, the U.S. remains virtually unchallenged in IT innovation--a direct result of its second-to-none graduate education and research system, whose genesis lay in the Cold War. The result is a steady stream of new businesses being created in America and driving sustained IT industry growth. Crucially, this system exerts an influence beyond the actual granting of degrees--witness that the founders of Google, Microsoft and Yahoo! all have yet to complete their degree programs.
Network World: Part-time jobs scarce in IT. Experts cite unique demands of profession for lack of 20-hour-a-week opportunities. By Cara Garretson. Excerpts: The lazy days of summer might have you thinking about how nice it would be to cut back on your work hours -- permanently. However, unlike many professions where opportunities for part-time workers are growing steadily, most employers would rather their IT staff work more hours, not fewer. [...]
One IT professional says that because the job isn’t task-based -- rarely is something truly "finished" in IT -- it’s difficult to quantify the work involved, and therefore hard to come up with a scaled-back version of the position.
Poughkeepsie Journal: Hinchey gets cash for IBM study. Groups: E. Fishkill workers' health also needs look. By Craig Wolf. Excerpts: A planned study of cancer rates among 28,000 people who worked for IBM Corp. at its former site in Endicott, Broome County, should be replicated in Dutchess County, leaders of two groups said Monday. People in chemically contaminated areas of East Fishkill likely face a health risk similar to that of Endicott, they said.
"I think it's probably the same thing, but a different place," said Debra Hall, of Hopewell Junction, who heads Hopewell Junction Citizens for Clean Water.

Rick White, an organizer in Endicott for the union group Alliance@IBM, said, "We feel confident that [the National Institutes of Safety and Health] is going to find some very interesting information about this and hope that the results, regardless of what they were, would be an impetus to study other IBM sites and other companies in this same industry."

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform

New York Times: World’s Best Medical Care? Excerpts: Many Americans are under the delusion that we have “the best health care system in the world,” as President Bush sees it, or provide the “best medical care in the world,” as Rudolph Giuliani declared last week. That may be true at many top medical centers. But the disturbing truth is that this country lags well behind other advanced nations in delivering timely and effective care. [...]
Seven years ago, the World Health Organization made the first major effort to rank the health systems of 191 nations. France and Italy took the top two spots; the United States was a dismal 37th. More recently, the highly regarded Commonwealth Fund has pioneered in comparing the United States with other advanced nations through surveys of patients and doctors and analysis of other data. Its latest report, issued in May, ranked the United States last or next-to-last compared with five other nations — Australia, Canada, Germany, New Zealand and the United Kingdom — on most measures of performance, including quality of care and access to it. Other comparative studies also put the United States in a relatively bad light.

Insurance coverage. All other major industrialized nations provide universal health coverage, and most of them have comprehensive benefit packages with no cost-sharing by the patients. The United States, to its shame, has some 45 million people without health insurance and many more millions who have poor coverage. Although the president has blithely said that these people can always get treatment in an emergency room, many studies have shown that people without insurance postpone treatment until a minor illness becomes worse, harming their own health and imposing greater costs. [...]

Healthy lives. We have known for years that America has a high infant mortality rate, so it is no surprise that we rank last among 23 nations by that yardstick. But the problem is much broader. We rank near the bottom in healthy life expectancy at age 60, and 15th among 19 countries in deaths from a wide range of illnesses that would not have been fatal if treated with timely and effective care. The good news is that we have done a better job than other industrialized nations in reducing smoking. The bad news is that our obesity epidemic is the worst in the world. [...]

Patient satisfaction. Despite the declarations of their political leaders, many Americans hold surprisingly negative views of their health care system. Polls in Europe and North America seven to nine years ago found that only 40 percent of Americans were satisfied with the nation’s health care system, placing us 14th out of 17 countries. In recent Commonwealth Fund surveys of five countries, American attitudes stand out as the most negative, with a third of the adults surveyed calling for rebuilding the entire system, compared with only 13 percent who feel that way in Britain and 14 percent in Canada.
Employee Benefits News: Many workers are underinsured and unhappy with health plan. By Lydell C. Bridgeford. Excerpts: Many adults are dissatisfied with their health insurance, and 24% of Americans have just bare-bones policies, meaning they are not adequately covered if faced with major medical expenses, according to new research from Consumer Reports magazine.
Many survey respondents said they lacked the money to keep up with escalating costs of deductibles and copays. In fact, 43% of workers admitted that they put off visiting doctors due to costs. The advocacy publication defined the “underinsured” as employees who felt their health plans did a poor job in covering the cost of prescription drugs, doctor visits, medical tests and catastrophic medical conditions. They had a median household income of $58,950 per year, the publication notes. [...]

About 20% of respondents were so disappointed with their health plans that they wanted to switch. Roughly 67% of respondents were completely or very satisfied with their HMO or PPO. Twenty-one percent complained about billing errors, while 25% said they had a problem with their primary care provider, and 36% said they had problems when they contacted their insurance company. Fourteen percent of respondents in HMOs complained they had to wait a long time to get appointments, versus 8% in PPOs. [...]

Among those who were not seriously ill, complaints about gaining access to care typically hovered in the single digits. But the complaints were nearly three times greater for those with a serious illness.

New on the Alliance@IBM Site:

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 08/11/07: oh boy...here we go again. Many folks from our our group are headed out to Boulder, CO for another round of LEAN. I'm guessing when we return, there will be another mass layoff in our dept. Our manager has well over 50 people to manage. You know it can't stay this way for very long. I'm guessing that they will be laying off a good number of us in the upcoming weeks. -saying goodbye is never easy-
- Comment 08/11/07: Ohhh the next few months are going to bring a world of hurt upon those who are left. Record profits rewarded with layoffs and paltry raises after priming us with the hints of an across the board salary review. The IBM'er spirit is broken. That has been the intention for the past 5 years.
  Those golden days of dot com increases and salary bumps are now being rubbed in our collective faces. The management chain is using divide conquer and fear against us. You need to assume you will be targeted and not live in fear anymore. Its over.. face it and deal with it like adults. Prepare.. be ready so when the next ones come, as they will, you can laugh and get paid to move to a better company.
  
  Our times will be remembered well.. they will be in books for how to ruin a great company and run it into the ground. Remember the golden days when customer sat was valued ? Nowadays, if you have anywhere near a good customer sat, you have way too many resources on your account.. lean the hell out of it. Firefighting mode, stress, job insecurity, 60 hour weeks, fear of asking for raises, no education .. its here to stay.. why would they change it ?
  
  Look around you and think back 5 years ago when all of the top folks you admired and looked up to were here at IBM.. I bet your last paycheck.. they are not here anymore. The forced attrition rate at IBM is staggering.. anyone with good skills and 2 or more years here wants to leave. Its a churn and burn shop.. high turn over low skills newbies that cut their teeth in IBM and then realize that the reputation is nowhere near the actual reality. The street sees the same thing.. channel partners are bailing on IBM.. big customers are bailing on IBM.. You can only run a company on its reputation for so long before it starts to backfire.. Its back firing now -SoreSphincter-
- Comment 08/12/07: To Sore - You are right. Every quarter the mis-leaders of IBM continue in their starvation strategy to "cut their way to corporate prosperity". They have continuously starved employee pay, raises, appraisal ratings, bonuses, benefits, promotions, education, equipment to do our jobs, awards, respect, appreciation and empowerment. I'm sure I missed some.
  Meanwhile, due to their starvation strategy, the job demands get driven higher and higher to the point of impossibility and employee exhaustion - and the overbearing, stifling, constipated bureaucracy remains entrenched and untouched. But of course the executive class does not have to live with the starvation strategy themselves - they act like pigs - they continue to have the best of everything - their bloated staffs, their protected cronies, their liberal stock options and their obscene pay.
  
  Employees have and continue to make sacrifices for this failed starvation strategy - some have sacrificed their jobs and careers. Yet the executives that drive the starvation strategy haven't sacrificed a thing. Not one damned thing. Regime change at IBM is needed now!
  
  Your advice to be ready for layoff is well heeded. Build as much market-valuable skills you can. Assess the job market. Have possible employers/job in line. Strengthen your people networks, especially those outside of IBM. Have your resume polished and ready. Perhaps post it on some internet job sites to gauge interest in your skills. Make sure you are not over-invested in IBM stock. If this starvation strategy continues, IBM will surely die. The best way to avoid going down with IBM is to not be invested with IBM with your money and your career. RCN -RegimeChangeNow-
- Comment 08/12/07: Anyone got any inside info for cuts in Canada? Morale is IGS Canada is still extremely low and many of us can't get anything out of the 1st line Managers. They probably don't know themselves. -Danger Mouse-
- Comment 08/13/07: Well last Friday all of our US level 2 contractors were released. The overseas support staff is doing too good of a job, so they released our English speaking Level 2 assets. Expect more will come later this month or next. -Take this job and SHOVE IT-
- Comment 08/13/07: Lean & Mean.. in reference to not supporting the blue pig when you leave, you are right on the money. I have seen the exodus of some very highly banded (D Levels) leave IBM. The flood of folks leaving is starting to catch the eyes of folks. A lot of top notch folks have been burned by the current management chain. You can bet your bottom dollar that folks who leave disgruntled, rightly so, would not recommend this company. I know I wouldn't recommend it at all. I would 5 years ago.. now, at the way they treat their people.. not at all. Just wait until the baby boomers start to retire over the next few years as well -SoreSphincter-
- Comment 08/13/07: Lean & Mean.. you are right on the money.. the folks that have been burned end up in corporate environments where they will make decisions. I can honestly state that most folks, when screwed enough, will return the favor when and as often as they can. I cannot over state the fact that each and everyone needs to be prepared for the worst case.
  Become a boy scout and be prepared. The cuts are not over. Cuts have been a way to prop up the stock and met that significant cost "take out" that sam promised the street on the last earnings. The growth that he is talking about is all based on the hype of lean.. either thru advances in processes or cuts.. they will get their numbers.. you can count on that. You can also count on getting screwed with no reach around or even a kiss.
  
  We have had the best earnings in several years.. our bonuses were crap and the pay increases / merit were crap for those who got them. You would think that they would try to prop up morale.. they DONT CARE ABOUT US.. look at the manage out 2's docs.. they are going to squeeze us until we quit.
  
  Side note.. looking at other companies wages and benefit costs.. similar benefits PPO with family.. 50% cheaper than our costs wagers are higher as well.. prepare to get laid off.. that way when it happens .. you will get paid to leave -SoreSphincter-
- Comment 08/14/07: Danger Mouse in Canada.. I'm a former employee (RA'd back in 05) but I was talking to an ex co-worker the other day and this person told me LEAN meetings are going on pretty frequently right now. So who knows EH? -fedtothepigeons-
- Comment 08/14/07: Were being told at east fishkill in manufacturing that we get 2 -20minute breaks and a 42 minute lunch during a 12 hour shift .managers are sitting in the breakrooms to monitor this. employees have to change out of cleanroom garments run to the bathroom,try to use a microwave oven...eat..change back into there cleanroom garments and be at there tool in 20 minutes..we are being treated like dogs... -Anonymous-
- Comment 08/15/07: Resource action, GTS US-Canada sales probably starting early October. Individuals will be notified they are on performance plan early September. It might be moved to late August is sales continue to"trend adversely". -IGS Seller-
- Comment 08/16/07: I have no doubt many managers use sametime to gauge when an employee is "on the job". Using Sametime to track employee tardiness or whatever is like a burglar calling potential victim's homes and waiting until he gets an answering machine. Ah, they must not be home! WRONG If Managers really want to keep tabs on a potential slacker they can also check badge- ins if the employee works on-site.
  But then again, I don't know too many managers who would know how to add that database to their notes workspace or navigate to that URL. Why? Because most managers know nothing about computers or technology at IBM. Which is why the company is going down the tubes. AND they expect these same dopes to solve their own workstation problems with"My Help" another lame tool that is being glorified to executives so they can layoff more support people. Hey, if "My Help" doesn't work, they can always call the helpdesk and get India! -IdontmissIBM-
- Comment 08/16/07: Overheard: SWG has been told to cut back 5%, as it looks like 3rd quarter revenue will suck, and they want action to keep expenses in line with what's coming in. -Anonymous-
- Comment 08/16/07: Expect 20% - 25% resource cuts in STG in 4Q heading into 2008. Could be moved up if 3Q continues to be bad, I saw it with my own 2 eyes. -If You Sell / Support HW Lookout-
- Comment 08/17/07: Anyone wondering why HP's Profit is soaring (up 29% rom the same period last year)? I have a pal over there, and they are going crazy because of LEAN at IBM, as the clients are leaving IBM in droves, they are profiting. 1.\) Because they learned that offshoring support doesn't work well and have brought a lot of their jobs back to the US. 2) Even though they are run by greedy board members (most big companies are), they are run by smart greedy board members. (Unlike SAM and his cronies) -Watcher-
From the General Visitor's Comment page:
- Comment 08/12/07: The LEAN meeting hosted at Pok included RTP and Poughkeepsie Ops managers along with team leads. Take your guess as to where the next round of firings will be from. -No Lean-
- Comment 08/12/07: Since the '90s IBM has played a game with numbers. The IBM East Fishkill NY site property was sold to the State of NY for $1.00. With that the company is no longer responsible for property taxes which posed a heavy burden on local residents who were assess to pay a much higher property tax rate. Today Dutchess County residents now pay one of the highest property taxes in the area.
  At one time IBM had vast amounts of properties and commercial buildings in Dutchess County, including a country club. Many resources that Watson was proud of! All that were sold for business profit. Difference today is that IBM real estate sell offs are no longer available and employees are now utilized in a supply and demand market, when a person is fired for no apparent reason it brings profit to IBM and its shareholders. It's a numbers game. Instead of making computers for profit now blood money is utilized to increase their share holdings.. What a shame !! -Anonymous-
- Comment 08/13/07: We only hear of IBM customer signings from USA based companies it seems. No real Chinese customer signings? No real Indian signings? No Brazil signings? But IBM is more than willing to send jobs to these countries from the USA so they can make profits by the lower pay and service provided for the primarily based USA signings and business. Nice strategy Sam: your global economy views are such a farce and you are an idiot. -Sam_a_sham-
Pension Comments page
Raise and Salary Comments
- Comment 08/12/07: Salary = 79980 with new Employer; Band Level = Was a Band 8; Job Title = Business Analyst; Years Service = (Had 7); Hours/Week = 45 with new Company. 60 with IBM; Location = Kentucky; Message = Left IBM (as first line manager) in Oct and received 2% pay increase. Just received another 5% pay increase after 9 months service. Also am receiving quarterly bonuses. Have received $5,600 1Q/2Q combined, more than I had received in the past two years at IBM. It's good to be out and have a life. -Anonymous-
- Comment 08/13/07: Salary = unchanged from last year; Band Level = 6; Job Title = accountant; Years Service = 1.5; Hours/Week = 40; Location = Tulsa; Message = I got a 2 rating last year & a raise. I got a 2 rating this year but no raise. I disputed the lack of a raise to my first, second and third line managers but no one did anything. They sympathized but stated that this was corporate policy. I filed a complaint on the "Speak Up" form and eventually spoke to a manager in the corporate appeals department. They basically stated the same thing. I was treated "equitably" and no one will change the policy. Supposedly there is less and less money available for compensation so we have to "make do". $9 billion in net income last year and there's not enough money for raises for 2's and above??? So I just do my 40 hours and go home regardless of how much work goes undone. Too bad if the undone work is a requirement and causes an SLA to be missed. They don't staff the project properly then IBM should pay the penalty. No skin off my back. -Troubled in Tulsa-
- Comment 08/14/07: Here is the monthly salary survey update:
  - Band 2: 4 respondents, avg: $36K, standard deviation: $9K, range: (min/max reported): $24K to $42K
  - Band 3: 1 respondent, $25K
  - Band 4: 11 respondents, avg: $46K, standard deviation: $11K, range: $32K to $60K
  - Band 5: 3 respondents, avg: $58K, standard deviation: $16K, range: $48K to $77K
  - Band 6: 29 respondents, avg: $61K, std dev: $8K, range: $46K to $79K
  - Band 7: 63 respondents, avg: $71K, std dev: $13K, range: $49K to $110K
  - Band 8: 62 respondents, avg: $99K, std dev: $16K, range: $60K to $130K
  - Band 9: 30 respondents, avg: $118K, std dev: $17K, range: $89K to $152K
  - Band 10: 11 respondents, avg: $148K, std dev: $25K, range: $107K to $190K
  Notes:
  - It has been reported that the "official" range for band 8 (Software Engineer, 01A) is 60K to 144K
  - Bands 1-5 are non-exempt (overtime-eligible) while bands 6-10 are exempt.
  To "Troubled in Tulsa": in your shoes, I'd be looking for a different company to work for. -Anonymous-
PBC Comments

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.

"There is scope for ethical recruiting?" by "civilliberty". Full excerpt: Being a contractor I field many calls from the recruiting industry and I would have to say there is a dearth of real talent in that field. I think the promise of easy money has caused all sorts of people to flood into this field, especially from a particular part of the world.
There is a real need for people who have ethics and understand the industry , and who also MAKE there money rather than skinning it off the top - unfortunately, these people appear to be very rare. I'm sure though, were someone to take up the challenge they'd make good money while doing the right thing by employer and employee alike.

In all honesty though, I could never steer someone towards IBM. A recruiter from new zealand called me recently and is very aware how the company operates in australia. He said because NZ is smaller market they can't get away with treating people like they do in australia.
"Bell and Howell" by "phooey69". Full excerpt: Do any seasoned citizens here remember the Bell and Howell company? They used to make all sorts of cool stuff...movie cameras, slide projectors, etc. If you think back to your grade school days (at least here in the US), you probably had some Bell and Howell equipment laying around.
I mention this company because in many ways, I suspect that IBM's future will be much like B&H. In the end, B&H's manufacturing lines of business split from B&H and merged into other companies.

After these lines of business split, B&H really had nothing to sell but its name. Nowadays, you can see Bell and Howell infomercials on TV...really! I've seen the B&H name used on TV to sell digital cameras, sunlamps, air purifiers...that sort of thing.

I firmly believe that if IBM continues on its present course, it will see the same fate as B&H.

You can see it already, albeit in very slow motion. No apparent strategic or tactical direction...long-term sell off of assets...product lines splitting off to other companies...lack of investment in the business...desperate labor arbitrage arrangements on a grand scale...emergency measures every quarter to improve cash flow...insider selling (not buying) of stock...

As time goes on, any line of business that's worth anything will eventually be sold for cash to other companies. Remaining lines of business will be shut down. What's left will be IBM's patent portfolio and the brand name. How long will this process take? I don't know...maybe 5 years, maybe 10-15 years.
"GBS Video Challenge" by "GBS_BC". Full excerpt: Posted without comment...
Here’s your chance to make an impact on the next generation of GBS Consultants!

Our University Recruiting team is challenging you (GBS Consultants) to show your creative side and tell college students on campuses nationwide what it’s like to be a consultant at IBM. Explain in a two to five minute video the advantages of an IBM consulting career and why college candidates should join GBS; describe what the project work is like; the interesting people you meet; the travel; the work culture. Most of all, it should be fun! Your video can be humorous, dramatic, animated, and/or musical – whatever creative and memorable approach you feel will best appeal to college students and illustrate the life of a GBS Consultant.

Winners of this Challenge will be announced on September 30, and selected videos will be showcased this fall on college campuses to help recruit top talent. Post your two to five minute video on YouTube, using private group name, "IBM Recruiting Challenge Group" from now until August 31, 2007.

Get the complete details on the GBS US Video Challenge and make an impact on GBS university recruiting nationwide!
"Good Grief!!" by "sickandtiredofbeingsunil". Full excerpt: Is anyone else thinking of 'total d-head' from http://www.gettingdrunkinfirstclass.com/ for this? I'm thinking mildly animated power point presentation..."
"I'd really like to take up this offer" by "civilliberty". Full excerpt: But, I have 2 concerns: 1. I don't know if you could stand an australian accent 2. I don't think my video would make it past the censors (I'm thinking maybe a Marx brother's skit would be a good idea).
"The Roles" by "civilliberty". Full excerpt: My pintail thoughts on the script:
1. Groucho Marx is the recruiter who's job is to explain the culture at IBM, the high performance team and the values that will be instilled in recruits and the marketable skills they stand to gain.He has a part motivational and part sales role to this end. He knows the personnel side of the business and where IBM leads the way in employer and employee relationships. The transparency and open door policy that is a hallmark of the culture will also be explained in detail. The upmarket salary new candidates will receive will be emphasized to wet their appetite and to illustrate to them that they will be working for a standout employer.
2. Zeppo is Sam Palmisano. His job is to ensure candidates embrace company values and the vision for the future and where the individual fits within the company overall. He will talk about IBM's history, what makes it such a great company and why the market values IBM the way it does. He will also show why IBM is number 1, and a safe bet for a rewarding career which can be as broad as the individual desires. He has to instill the dream of the better IBM way into the individual to inspire him/her to give the job all they've got, to go the extra mile, with or without reward, for the love of the job.
3. Harpo is a project manager tasked with explaining as best he can how IBM manage's projects and the client relationship. He has to instill confidence in the employee about IBM standards and the IBM way overall and how important the employee is in projecting a professional image to the client. He will also explain the various roles that are filled within the project team and how employees interact both professionally and personally at this level.
"Here's an angle" by "Dose of reality". Full excerpt: I think a hybrid approach might be best, though difficult to splice together. I see a combination of Keystone Cops, The Grapes of Wrath, and The Sopranos.

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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