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Highlights—September 8, 2007

  • New York Times: The New Social Contract. By David Brooks. Excerpts: In 1942, Franklin Roosevelt imposed wage controls on American companies. Unable to lure workers with higher salaries, many employers began offering health insurance and other benefits. Then, in 1952, officials at the Internal Revenue Service ruled that these benefits wouldn't count as taxable income.

    And so, accidentally, the modern American health and pension system was born.

    The system, in which families received social protections through their employers, worked well for decades. But now it's coming apart at the seams. The proportion of people insured is falling. Rising health care costs burden employers. Workers can't chase opportunities because they can't bring their health insurance packages with them.

    As Jason Bordoff points out in the current issue of Democracy, the old employer-based social contract is eroding, and the central domestic policy debate of our time is over how to replace it.

  • San Jose Mercury-News: All workers, not just a few CEOs, need retirement funds. By Bill Lockyer. Excerpts: The American worker powers our economic growth, but for years that worker's retirement security has been steadily, disturbingly disappearing. As we celebrate labor's contributions today, we should truly honor workers by ending that erosion and reinvigorating the pension system to ensure it provides the means for them, and their children and grandchildren, to enjoy retirement.

    In today's America, only one of every five private workers has a secure pension. Increasingly, businesses have frozen or abandoned "defined benefit" plans that guarantee a certain level of retirement benefits to workers. Employers have moved instead toward plans that set specific and limited levels of contributions by employees and, in some cases, by employers. For workers, these "defined contribution" plans increase risk and diminish retirement security. The average 401(k) savings for workers age 55 to 64 is a mere $60,000, enough for a monthly retirement annuity of just $400. [...]

    Meanwhile, as they have slashed workers' pensions, corporate chief executives have been fattening their own.

    IBM froze its pension plan for workers in January 2006. But CEO Samuel Palmisano will receive an annual pension of $4 million - $75,000 a week - when he retires at age 65. (Emphasis added by editor of www.ibmemployee.com). Meanwhile, over at AT&T, former CEO David Dorman received a $2.1 million annual pension, or 60 percent of his salary, after only five years with the company. In stark contrast, AT&T accountant Ray Colotti received an annual pension of only $28,000, or 33 percent of his salary, after 33 years on the job.

  • Jim Hightower: Rebuild the Middle Class. Full excerpt: It’s Labor Day weekend! Do you know where your middle class is?

    In the ditch, that’s where. It’s been shoved there by callous and selfish profit-seekers rushing to get cheap labor in China and India, taking America’s middle-class jobs with them. It’s been shoved there, too, by Bush’s anti-government ideologues, who’ve been working feverishly to dismantle the middle-class framework of labor laws, health care, and pension protection. It’s been shoved there, as well, by a weak-kneed Democratic leadership that has lost touch with its populist roots, and by a conglomerate media establishment that has abandoned any connection to – much less concern for – working stiffs.

    The economic and political elites crow that the U.S. economy continues to grow phenomenally – though they seem unaware that this growth is based on low incomes and low prospects for the great majority of Americans, while the benefits of growth are being piped to the very wealthiest families. Middle-class incomes continue to fall (even with families working three or four jobs) and poverty continues to rise. Yet the elites stride blithely by, oblivious to the fact that America is breaking apart beneath their well-shod feet.

    When told that polls show that Americans are now worried about inflation, a clueless George W said, “They cite inflation?” You see, he’s told that inflation is up only 2.7 percent – but he’s totally ignorant of the fact that milk prices are up 13 percent in the past year, oranges 20 percent, dried beans 11 percent, and both bread and chicken up 10 percent. That’s nothing for the elites, but these are staples for the real America that the elites no longer see or hear.

    A middle class exists only if workaday Americans demand it, fight for it, and build it. That’s what we must do between this Labor Day and next year’s – when we’ll be in the thick of a presidential race.

  • eWeek: Congress Pushes Back on H1-B Visas. Will the 110th Congress continue to disappoint the tech sector? By Roy Mark. Excerpts: When the immigration reform bill went down in flames in May, a provision to raise the cap on H-1B visas also went up in smoke. That the controversial legislation—loaded with such explosive political hot buttons such as border security and amnesty—failed came as no surprise as Congress has unsuccessfully wrangled with these issues for years.

    What did surprise many in the tech sector, though, was the serious pushback by lawmakers on H-1B visas. An increase in the specialized-occupation temporary worker visas had been a top priority for the technology sector, which claims there are not enough qualified U.S. workers to fill their advance-degree positions. [...]

    "What many of us have come to understand is that these H-1B visas are not being used to supplement the American work force where we have shortages but, rather, H1-B visas are being used to replace American workers with lower-cost foreign workers," Sen. Bernie Sanders (I-Vt.) said in his May 25 floor comments. [...]

    "To win favor in China, Microsoft has pledged to spend more than $750 million on cooperative research, technology for schools and other investments," Sanders said. "If Microsoft and other corporations have billions of dollars to invest in technology…these same companies should have enough money to provide scholarships for middle-class kids in the United States of America."

  • CNN/Money: Globalization: Learning To Close The Continental Divide. Excerpt: Over the past year, IBM Chief Executive Sam Palmisano has put a laser focus on his company's worldwide vision and strategy. At a global leadership forum in July, he called global integration "the seminal economic and societal development" of this age. For the first time in history, businesses, transactions and billions of individuals are connected, Palmisano told the group of business leaders gathered in Washington, D.C. "And when everything and everyone is connected, we know what happens -- work moves. It flows to the places where it will be done best -- that is, most efficiently and with the highest quality," he said. "It's like water finding its own level."
  • New York Times: The Employment Tea Leaves. Excerpts: In the bad-news-is-good-news world of Wall Street, a lot of investors had been hoping for a lukewarm employment report yesterday because job weakness would help to ensure an interest rate cut when the Federal Reserve meets later this month. But not even the most self-interested could celebrate the report’s grim numbers.

    Over all, employment contracted by 4,000 jobs in August, the first monthly decline in four years. The job-creation tallies for June and July were also revised downward, bringing average monthly job growth for the past three months to less than a third of what’s needed simply to absorb new people entering the job market. Suddenly, analysts are talking about a possible recession. And that’s not good news for anybody. [...]

    If there is any good news here it is that hardship may be setting the stage — in this pre-election year — for a national discussion about what needs to be done to fix the economy and help the increasingly squeezed middle class.

    The Republicans will almost certainly renew their calls for tax cuts on investments and multimillion-dollar estates, arguing that such cuts would pump up the economy. But lower taxes for the rich would not benefit the middle class and would only worsen the budget deficit. Republicans may also continue to champion financial deregulation as a way to juice the economy. But that led to the housing bubble — and the current mortgage mess.

    Democrats, or some Republicans with a change of heart, must articulate — and Americans must demand — a program for ensuring that the middle class gets a bigger share of the economy’s spoils than it has received during the Bush era, when gains have largely been funneled to the richest Americans.

    To have a fairer and more inclusive economy, workers need true mobility, which requires health care reform. And they need to see a reversal in the country’s ever-deepening inequality, which could come about through more progressive income taxes, better public education and more help for workers whose jobs are displaced by globalization.

  • Los Angeles Times: Companies try to retain older workers. By Jonathan Peterson. Excerpts: In a society that exalts youth, older workers may sometimes feel like outcasts of the economy -- prodded into early retirement by corporate buyouts, overlooked for training and promotions, typecast by younger managers as past their prime. Indeed, one 2005 study found that job applicants under age 50 were 42% more likely to be called for interviews than those over 50.

    Yet there may be early glimmers of change. The oldest baby boomers are entering their 60s, raising the prospect of a vast wave of retirements. The post-World War II baby boom, moreover, was followed by a smaller "baby bust" generation. As a result, some employers are worried that they will lose too many people -- and are pioneering policies to make the workplace more friendly to older employees. [...]

    Some have predicted that mass retirements by baby boomers could trigger a disruptive shortage of workers in the coming years, depriving the U.S. economy of millions of needed employees and an immeasurable wealth of skills. But some economists say the concerns are overblown. Employers can move jobs overseas, they point out. Companies can invest in labor-saving technologies. They can restructure jobs. And, economists argue, they can pay more money to attract the workers they require.

  • Straight Goods: Avatars of the world, unite! Italian union's virtual demonstration against IBM launches new world of job actions. By Derek Blackadder. Excerpts: The effective use of the Internet by unions has long been a subject for discussion inside the labour movement and amongst labour-friendly academics. The debate just took a big, fast, sharp left turn with an announcement last week from the union representing Italian IBM employees. [...]

    Rappresentanza Sindacale Unitaria IBM Vimercate (RSU), has, announced online (naturally) that sometime this month its 9,000 members, employees of IBM, will mount a job action, an information picket designed to inform the public (but especially IBM clients) about the company's employment policies — online.

    They won't be refusing to touch their computers. This isn't really a strike. To the contrary, union members will probably be spending more time at their keyboards than ever, when the action starts. What the union is organizing is a picket of IBM's "island" on Second Life, the online alternate world

  • eWeek: IT Workers Second-Guess Career Choice. By Deborah Perelman. Excerpts: Though it has come a long way from the gloom-and-doom days of the dot-com bust, the state of the IT workplace isn't shiny and happy. If you ask an IT pro what they think of their chosen career path, a surprising number might pause before giving you a litany of reasons that the technology workplace leaves them feeling unsettled. [...]

    No matter how many stories crop up in which CIOs confess "outsourcing didn't work for me," the trend toward the commoditizing of IT and development work, not to mention sending IT overseas to save money, shows little sign of letting up. Will their jobs be next? IT workers worry everyday. Technology company CEOs predicted that their use of offshore services would increase over the next several years, according to a 2007 CEO Survey released by Deloitte, a Swiss company, on May 1. [...]

    If the dot-com bust was the first nail in the IT work force's coffin and offshore outsourcing the second, the decline in student enrollments in computer science programs and a dearth of qualified candidates may just be the third. Worse yet, many IT professionals admit that they don't feel comfortable ushering their own children down a career path so fraught with land mines.

    Recruiters facing difficulties finding the right IT candidate for a job bemoan the fact that after the dot-com boom parents told their kids not to go into technology and haven't changed their message since. Yet the issue runs deeper than parents disregarding that IT may be back and healthier than ever. "The shine is off the apple," one told eWEEK. "Outsourcing… H-1Bs… the commoditization of the IT workforce. Other career paths seem a safer bet."

  • Forbes: More In A Day Than In A Year. By Steve McGookin. Excerpts: As the nation prepares to celebrate a Labor Day holiday that will see the first increase in the federal minimum wage in 10 years, a new report shows that the gap in pay and compensation between workers and bosses is growing.

    Indeed, according to the study, compiled jointly by the Institute for Policy Studies and United for a Fair Economy, corporate CEOs "collected as much money from one day on the job as average workers made over the entire year." [...]

    The 14th annual survey showed that CEOs at the biggest U.S. companies averaged $10.8 million in pay and associated compensation, including stock options, based on data from 386 of the Fortune 500 companies. That's more than 364 times the pay of the average American worker. Meanwhile, the survey says, the top 20 private equity and hedge fund managers, who work on a fee-based reward system linked to their funds under management, were paid an average of $675.5 million.

    That is equivalent to 22,255 times the annual pay of an average American worker--or more in roughly 10 minutes than the average worker makes in a year, the study says. (In this survey, the "average" worker's salary is around $30,000 a year.)

    Meanwhile, the new federal minimum wage, $5.85 an hour, is, in real terms, 7% below where the minimum wage stood 10 years ago, the survey says. It also notes that CEO pay and compensation over that same decade has increased by about 45%. [...]

    And the discrepancy between the have-lots and the have-nots continued in terms of retirement planning, according to the survey. CEOs at major American corporations saw the value of their potential pensions grow by an average of $1.3 million last year. By contrast, just over half of all American households, where the head of the household is between 45 and 54, had a retirement account in 2004, the last year for which figures were available.

  • MSN/Money: Is a CEO worth 364 times the average Joe? By Michael Brush. Excerpts: In recognition of the just-completed Labor Day weekend, I'd like to offer a salute to American workers, who the United Nations just reported are second only to Norway's laborers when it comes to productivity.

    And now, a bit of bad news for those same workers: You're not getting credit for that productivity. Instead, top executives at your companies are reaping the rewards in the form of increasingly fat paydays.

    Here's a quick look at four ways in which workers are being shortchanged by their bosses:

    • No. 1: The chief executives at the biggest U.S. companies last year made as much money in a single day as the average worker made for the whole year. [...]
    • No. 2: The managers of the 20 top hedge funds and private-equity shops made more every 10 minutes last year, on average, than the average worker made for the whole year. [...]
    • No. 3: True, many workers got a break on July 24, when the federal minimum wage was increased to $5.85 from $5.15 -- the first increase in the federal minimum wage in 10 years. But the minimum wage is still 7% below where it was 10 years ago, adjusted for inflation. Meanwhile, CEO pay has gone up 45%, adjusted for inflation, in the same period, according to the "Executive Excess 2007" report.
    • No. 4: U.S. CEOs enjoy supersized advantages in pensions and perks, too. Thanks to generous contributions from their companies, CEOs at S&P 500 companies retire with an average of $10.1 million in their supplemental executive retirement plans, according to the Corporate Library. In contrast, only 36% of American households headed by someone over 65 even had a retirement account in 2004. Those accounts had an average value of $173,552, according to the Congressional Research Service. [...]

    Why the gap? Apologists for highly paid CEOs argue they are merely getting the pay they deserve for their talents. Their pay is determined freely by the laws of supply and demand in the marketplace. Right?

    There might be more to it than that. For one thing, U.S. execs make three times as much as their European counterparts, even though these European bosses manage companies that are 40% bigger. (The top 20 highest-paid execs at U.S. public companies made $36.4 million on average last year, while the same group in Europe got just $12.5 million on average.)

  • BusinessWeek: How To Make A Microserf Smile. While Google was turning heads with its employee perks, an unlikely manager took on morale in Redmond. Excerpts: Steven A. Ballmer had an epic morale problem on his hands. Microsoft Corp.'s stock had been drifting sideways for years, and Google envy was rampant on the Redmond (Wash.) campus. The chronically delayed Windows Vista was irking the Microserfs and blackening their outlook. So was the perception that their company was flabby, middle-aged, and unhip.

    Ballmer decided he needed a new human resources chief, someone to help improve the mood. Rather than promoting an HR professional or looking outside, he turned to perhaps the most unlikely candidate on his staff, a veteran product manager named Lisa Brummel.

    No one was more stunned than Brummel. The 47-year-old executive is about as un-HR as you can imagine. She shuns business books (her taste runs to historical nonfiction); she takes the bus to work (using the 20-minute ride to zone out); and her wardrobe (shorts and sneakers) is in flagrant violation of the HR fashion police. [...]

    Over the next two years, Brummel tore up Microsoft's HR playbook. In the process, she has begun to sculpt a new HR that is junking a one-size-fits-all approach for a system tailored to the needs of individual employees. In Brummel's HR, her people are supposed to act less like cops and more like concierges.

    With Microsoft's dormant stock, Brummel can do only so much to boost morale. But her approach seems to be resonating. She has made the annual performance review more equitable, introduced new perks, including a service that sends doctors to employees' homes in cases of emergency, and won plaudits for making HR—once widely considered a shadowy politburo—more transparent and consultative. "From the beginning," says Julie Madhusoodanan, a lead software tester in the Windows division, "Lisa was all about 'We're here to serve you.' [...]

    They were fed up with the nickel-and- diming on creature comforts. How could a company headquartered near Seattle, home of all things barista, serve industrial-grade sludge in do-it-yourself makers that belonged in a mess hall? "The coffee was just really, really bad," says corporate Vice-President Chris Capossela. (Editor's note: Coffee? Heck, IBM pulled its free water dispensers out of its facilities!) [...]

    Nothing got people buzzing more than Brummel's overhaul of the performance review. Employees dreaded Microsoft's ranking system for all the usual reasons: It pitted co-workers against one another at a time when the company needed to be more collaborative; it was unfair; it made frank evaluations less likely.

    Here Brummel faced a political third rail. Ballmer was the godfather of the forced curve, believing that differentiation—giving a few people the top grade, most a pass, and laggards failing marks—was the key to Microsoft's we-take-the-hills culture. And when Brummel broached ditching the curve, it was his turn to say "No way." More yelling ensued as they darted in and out of each other's adjacent offices.

    Microsoft has always had two rankings: one measuring annual performance and one that captures long-term potential. A forced curve applied to both. To get Ballmer on board, Brummel created a new system that preserved the positive aspects—grades and the chance for stars to win bigger paychecks—while canceling out the negatives. No longer would the first ranking—employee's yearly performance—be subject to the curve. Raises and bonuses would be tied to that grade. Bosses would have freedom to pass out whatever grades they wanted, making less likely the excuse so many of us have heard: "I really wanted to give you a 4. But I had the curve, so I had to give you a 3." [...]

    So how's she doing so far? Attrition is down from 10% in 2005 to 8.3%. The new performance rating system has not yet led to grade inflation. And employees, who give Brummel rock-star positive reviews, describe a more buoyant mood. Then again, her InsideMS blog, intended as a marketplace of ideas, quickly turned into a rant-fest. Some employees say Microsoft needs to do a better job of recruiting internally. And, of course, Brummel can't do anything about the stock price.

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
Minimize
  • Bristol Herald Courier (Bristol, TN): Retirees picket EMBARQ because the company plans to discontinue paying for their health insurance. By Mac McLean. Excerpts: Glenn Ward said he spends $3,000 a month buying the prescription drugs needed to treat his wife’s Parkinson’s disease. He and other EMBARQ retirees learned last month they will lose their company-paid health insurance on Jan. 1. "It’s a crying shame," Ward said Thursday morning. "You think you have health insurance and then you don’t." [...]

    EMBARQ spokesman Tom Matthews defended the action by saying it would save the company $30 million a year starting in 2008 and would remove $300 million in long-term liability from its balance sheet. He also said that only 19 percent of privately owned companies still provide health insurance to retirees.

  • New York Times: Report Card on Medicare’s Drug Plan. Excerpts: A large in-depth survey of older Americans has yielded a mixed appraisal of the new Medicare prescription drug benefit. The program has largely succeeded in its primary goal of providing drug coverage to Medicare beneficiaries who previously lacked it. But it has fallen short in providing subsidies to low-income Americans, in protecting people from high out-of-pocket costs and in matching the benefits offered by other private and public sources of coverage. These shortcomings will need attention as the program rolls forward. [...]

    Some 8 percent of the Medicare drug beneficiaries, for example, spent at least $300 a month on their medications, compared with only 5 percent for older Americans covered by employer plans or the Department of Veterans Affairs. This is probably because employer plans typically don’t have a gap in coverage comparable to the notorious “doughnut hole” in Medicare coverage, and because veterans’ coverage has low cost-sharing requirements.

    The unfortunate consequence for patient health is that Medicare enrollees were much more likely to postpone medications because of the cost. Indeed, fully 20 percent of all enrollees in a Medicare drug plan reported that they had not filled, or had delayed filling, a prescription because of costs. That was a much higher rate than reported by older Americans in employer (8 percent) or veterans’ (12 percent) plans.

  • CFO Magazine: At Your Beck and Call. Concierge plans offer the kind of health care Michael Moore would love — if it were universal. But are they worth the out-of-pocket expense? By Lori Calabro. Excerpts: Tired of doctors' visits that consist of waiting 45 minutes for a hurried 5-minute conversation? Try the boutique alternative. Also called concierge care or membership-based coverage, these services are becoming increasingly popular despite their high cost.

    The idea is to charge consumers as much as $15,000 a year for better service than they can get through a conventional medical practice. Traditional primary-care physicians tend to serve 2,500 to 3,000 patients, and often the time they can spend with any one is limited by insurance as well as workload. Concierge doctors, in contrast, keep patient loads down to under 600. Most cut their ties to Medicaid and insurance plans. They promise their patients on-time appointments, 24/7 access, and medical tests that the physician, rather than the insurance company, deems necessary. It is medical care when, where, and from whom you want it.

  • Workforce Management: All I Want for Labor Day Is Great Health Care. Among benefits employees currently do not have, 100 percent coverage of health care costs by the employer is considered a more desirable benefit to employees than competitive salary. Excerpt: If Labor Day was like Christmas, American employees would be opening better health insurance as their present this year. That’s the upshot of a recent survey of 1,223 employed U.S. adults by Harris Interactive. The study, released Tuesday, August 28, and sponsored by human resources software firm Kronos, found exceptional health care coverage to be the most desired benefit currently not offered by employers. Among benefits employees currently do not have, 100 percent coverage of health care costs by the employer is considered a more desirable benefit to employees than competitive salary. [...]

    One reason for the trend is that employees are struggling to pay for their share of employer-sponsored health care, says Helen Darling, president of the National Business Group on Health, a nonprofit group that represents large employers.

  • USA Today: UAW wary of health care changes. By Sharon Silke Carty. Excerpt: A growing number of United Auto Workers union members oppose a health care plan that has been hailed as the solution to many of the auto industry's woes. Autoworkers are worried that the plan, which would shift the responsibility for retiree health care costs to the UAW, is risky and could leave thousands of retirees under- or uninsured if the plan goes broke, which has happened at two other companies that tried similar deals. "What they're proposing is to shortchange us," says Greg Shotwell, a labor activist in Grand Rapids, Mich.
  • Wall Street Journal: The Call That Can Save Your Life in a Heart Attack. By Ron Winslow. Excerpts: What do asking for directions and calling 911 have in common? Men, it seems, don't like to do either. When it comes to a heart attack, reluctance to call 911 could make the difference between life and death. [...]

    Heart experts and public-health officials have long been stymied in efforts to get people to pick up the phone instead of their car keys when experiencing symptoms such as chest pain, sweating and shortness of breath. Indeed, many people fail to take any immediate action, not wanting to bother anyone in case it's a false alarm.

  • Los Angeles Times, courtesy of the California Nurses Association: Nuñez's unhealthy bill - No reform at all would be better than giving Schwarzenegger a political victory and leaving insurance companies in charge.
  • "My Turn: We need health care for all" by Senator Bernie Sanders (Ind.-VT): Excerpts: The gross inadequacy of the American health care system is a moral disgrace. Today, we are the only nation in the industrialized world that does not guarantee health care to all. Meanwhile, we have the most costly, inefficient and wasteful system in the world -- spending some 31 percent of our health care dollars in administration. We can do better, we must do better. The time is long overdue for Congress to pass a national health care program which, finally, guarantees health care to all as a right and not a privilege.

    Currently, 47 million Americans have no health insurance and the number of under-insured is even higher. Health care costs are soaring. We also pay, by far, the highest prices in the world for prescription drugs. As bad as our general health care system is, the dental care situation may even be worse.

    In the United States today we spend over $7,100 per person on health care while other countries, which provide health care to all their people, spend considerably less. And what do we get for this huge expenditure? Well, we rank 42nd in the world in terms of longevity, 41st in the world in terms of infant mortality and near the bottom of the list in terms of disease prevention. According to a number of studies, we also rank low in terms of patient satisfaction. In the midst of all of this, insurance companies and drug companies make out like bandits.

New on the Alliance@IBM Site:
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  • From the Job Cuts Status & Comments page
    • Comment 08/30/07: Heads up in the 8" Fab World. Its likely up for sale: "We are making an internal assessment about these available 8-inch fabs and have listed out all potential sellers worldwide. With more US-based IDMs heading for 45nm CPU production, they have to gradually sell their 8-inch fabs. Candidates include IBM, Intel and STMicroelectronics. Since the number of sellers is more than those of buyers, a deal will depend on whether a particular fab is suitable for us." http://www.digitimes.com/bits_chips/a20070829VL200.html -BlueBlows-
    • Comment 08/30/07: IBM won't sell the 8" fab, it's too profitable. The IBM M.O. is to sell off low margin businesses. -Anonymous-
    • Comment 09/01/07: TO: "I understand that IBM will pay you for unused vacations if you were laid off. But what if you quit IBM?" You only can get the EARNED vacation (for instance, if you get fours weeks vacation for the year and you quit on 9/30/07 you have earned 15 vacation days) that you have not already taken when you quit. I would first make sure you have taken all your personal choice holidays and then take all your earned vacation days before you quit. That way IBM can't rook you out of any vacation day you haven't taken but earned.

      Don't expect IBM to be forthcoming with paying you for vacation earned but not taken when you quit. They might challenge you on it so have your CLAIM and/or TOTALS reports as some proof. Who can trust IBM anymore? They already stole our pension, dumb down our pay, cut our benefits, give our jobs to paid slave labor abroad, and overall treat us like %$#@. Note; If you have taken more than your earned vacation when you quit then IBM will deduct those days taken from your pay. You can bet your last paycheck these skin flinted, greedy, filthy bastards will be sure to not miss this! -Anonymous-

    • Comment 09/06/07: An undisclosed number of IBM staff employees in Global Admin got a notified redeployment package. Almost all vendor employees in Global Admin will get the boot by end of October. Sad. -Anon-
    • Comment 09/07/07: LEAN turned out to be a "GOAT RODEO".. total chaos to the employees, as well as customers... I was never so glad to leave a company as I was with IBM -Anonymous-
  • General Visitor's Comment page:
  • Pension Comments page
  • Raise and Salary Comments
    • Comment 08/27/07: Salary = 80K; Band Level = 8; Job Title = Project Manager; Years Service = 9; Hours/Week = 60; Div Name = 07; Location = East Coast; Message = The ibm we use to love is gone.. SP and team are milking what's left of the reputation. -RA's IBMer-
    • Comment 09/01/07: Salary = 38000 Euro; Band Level = 6; Job Title = Software Engineer; Years Service = 4; Hours/Week = 8/1; Div Name = DSL; Location = Ireland, Dublin; Message = Hello, I'm an Egyptian Software Engineer, I have an offer from IBM Ireland (Dublin Software Lab) to work as a Software Engineer (Band 6 with 38000 Euros Gross Salary), I have 4 years experience. I need an advise, shall I join them? I feel that the salary is not suitable for me and my family but I'm not completely sure of this as I didn't live in Europe before (I have one daughter - down syndrome baby). They had send me the official job offer, what shall I do now? shall I ask to resend the job offer with a higher salary or what? please advise. Thanks, -Anonymous-
    • Comment 09/02/07: Band Level = 9; Job Title = Senior Software Engineer; Message = To Anonymous who's considering going to Ireland: I'm from the US, where we have the worst health care system of the industrialized nations, so, of course, I think first of your benefits, not your salary. You've probably thought about this, but, given your daughter's special needs, you really need to investigate medical and schooling implications, equally with salary. In the US, we know that IBM takes back benefits every year, so please understand the implications of Ireland's system, particularly if you're not a citizen (?), vs. what you think you may be guaranteed by an initial offer from IBM. (Again, we generally get treated worse in the US than in Europe--not much of a safety net for health care--so I may be hypersensitive to these issues.) -alreadyGone-
    • Comment 09/03/07: To the Egyptian Software Engineer, life in Dublin is sweet and affordable but accommodation is high, a family of three would spend 1200-2000 Euro/month . Your net take home pay (after tax, pension...etc) is around 33K/year. you always can ask for more! :) -BlackMoon-
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  • International Comments
Vault Message Board Posts:
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Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC.

  • "Inside IBM!" by "blue_mirage". Full excerpt: I have been sifting through the board, and have come across many unpleasant experiences that people have had with IBM. Well, i work with IBM India and this is my experience with the company.

    I joined IBM as a management graduate, and was quite easily snowed by the IBM recruiting machine which led me to believe that i'd go on to become a top 'management consultant'. Its been a few months here, and all i have seen IBM do is try and sell technology and solutions in the name of management and strategy consulting, or carry out some operational improvement work. We are as far away from management consulting as peace is from Iraq, just that in both the cases, Uncle 'Sam' makes us believe otherwise. The Blue Pig (right christened by the board members) has no regard whatsoever for the career development of its employees, and the concept of "fit" in a project in non-existent. Anyone can be put onto anything, regardless of what the interests of the employee, its background etc. are.

    The salary raises are extremely low ( a tad better from USA where employees have cuts, but hey, by 2015, I am sure i'd be ranting in the same way about the Venezuela and Philippines population !), the quality of projects is abysmal. Even if someone conjures up the strength and the motivation to perform in this atmosphere, he is bound to be rewarded with a PBC which most of the population would get, without working their asses off !

    In short, joining this company is career suicide, more so if anyone is joining it at the start of their career. There are much better places outside which would value you as an employee, and not treat you as just another resource. So make your choices before its too late !

    A word here for Dose, i think your description of the company and its environment is very accurate, and its the same here in India, coz the philosophy of the management is essentially the same...which is to post QoQ profits on the Wall Street. I am under no illusion that IBM's investments in India are bcoz of the cost arbitrage...BUT, the quality of the professionals here isn't as bad as u think ! I agree, our customer focus isn't as good as in the US...but we have some really good people here (although a few are being wasted in IBM), which are learning the tricks of the trade and learning them pretty fast. Outsourcing started just to exploit the cost advantage but ultimately it has had benefits in improving the quality of professional in India; and i am sure the day our capabilities match that of any other resource in the world, will be the day the first wave of job cuts will be announced in India !!

  • "SP Disengenous comments" by "bluedngone". Full excerpt: I am sure there are many fine professionals in India who have tremendous potential. Your observations about IBM in India no different that US are very astute.

    What galls most of the North American IBM'ers (and ex-IBM'ers like me) is the way it was presented to the employees. We were told that IBM was focusing most of it's new hiring on India and China because that was where the business was growing. Any additions in those countries would not impact the employee population in North America as there was more than enough business to keep us employed. The reality was exactly the opposite. My group as were others was consolidated from a regional structure to North American (I am including Canada). Then as people moved, left and the business grew, all the new hires were Indian.

    When LEAN came along, it was presented as process to restructure the business to better meet the customer satisfaction requirements. What LEAN turned out to be was a tool to remove the added Indian redundancy by RA'ing North American workers when they felt the Indian workers could marginally backfill the lost experience.

    What IBM didn't expect from LEAN was the mass exodus of talented professionals that LEAN generated. When a ship starts sinking, the first to leave are often the best. After three rounds of LEAN, the younger experienced employees without a great investment in IBM started leaving in mass. IBM hasn't had to execute the LEAN August and September cuts to employees because they are now scrambling to backfill the key positions they lost from layoffs and resignations. I've heard they've lost as many by resignation as Resource Action. At my locale, they lost more in June to resignation than resource action.

    SP's actions by moving jobs to India, Argentina, Brazil were strictly for cost, not business growth. What I learned 16 years ago when I worked for another computer company that no longer exists. When a computer company stops investing in it's people and business (R&D,etc.) by using cost control as the business model, that company is going down the tubes. We've seen in the US; GE Computers, Sperry, Bourghs, Wang, Honeywell, Digital Equipment, etc. Those business are history. Right now HP and SUN are or have re-invented themselves and are growing. IBM is selling off computer assets as fast as possible.

    Good luck on the SS Titanic.

  • "Update" by "Frank_Reality". Full excerpt: Well, it used to be one third (the cost of an Indian employee compared to one in the U.S.), however with the relatively small skilled labor pool and increasing demand, salaries over in India are growing at a 25 to 45% annual rate, it's closing in of half the cost. Meanwhile at IBM in the US, salaries have near flat-lined for several years and it appears this will continue.

    The cost differential is rapidly eroding away, if you don't consider productivity and the overhead of running split operations. It's gone if you add them in.

    From the experience with my project, about 10% are almost as good as the best US employees, they just lack experience. Another 50% are productive, but not as good as our US staff. The bottom 40% are barely productive and have to be carried by the others or our US staff. We also had 10% reassigned as it was clear they were useless to us.

    None of this is racist, it is all fact from our project. This is not unique to India either - I've seen similar numbers from other low cost countries. Your projects may do better.

    The questions we're asking is with the cost differential of US vs. India disappearing, do we move it back to the US, do we move the work to another low cost country to regain the cost advantage or do we push India for improved productivity? The fact that we're asking this question is an indicator that if the trend continues India will price itself out of our business.

  • "Agree- one other point" by "Scouter1". Full excerpt: Frank may well be correct that India salaries are approaching 1/2 U.S.

    Other point - U.S. project managers have been forced to take India resource - whether they needed them or not - AMS has "targets" (Mandatory) for the % of resource that must be from GR (usually India) - Many times the U.S. resource still did ALL the real work - on Overtime - since the India resources were frequently either incompetent or simply pointless to try to have them create work products that needed a in depth knowledge of the clients business processes (which you had to be on-site to appreciate) - the only area I saw GR work well was with straight forwarded coding - and then many times a U.S. person would have to correct - but some GR were good - then they would get pulled from your project or quit

  • "The race to the bottom" by "itblues". Full excerpt: IBM has set the precedent yet again.. rumor is now the package will mirror the "managed out" package...1 week for each year.

    There is zero loyalty left for the IBMer...ZERO They are looking for forced attrition. It seems like they are trying to get as many folks to leave on their own so when the sell off the divisions...the fiscal impact wont be as much. Look back at the recent stock holders voting for the ability to sell of parts or all of IBM...makes you wonder.

    I also hear that the turn over rate in India China and the other exploited countries is extremely high as well. Imagine its so bad that you cannot employ folks in these countries.

    I don't know if IBM is salvageable at this point. The IBMer spirit has been on the front line attack from management. We really need to research what Randy MacDonald did at his last company to see what he has planned for those IBMers that are left.

    Can you believe that the company openly stated that LEAN was an effort to IMPROVE morale ? I chuckle every time I remember that.

    Do you remember when customer sat was key ? lmao. Now, if you have a good customer sat... you're way over staffed. All of the accounts are running in an escalation mode..

    Workload has increased beyond a reasonable level. Our top notch folks have left...they are now working for the competitor or in a role to make a decision if IBM never gets a sale within their new companies.

    It would take a complete house cleaning session in Armonk along with an all hands on conf call where upper management basically admitted the faults and laid out a plan to thin middle management and get our model flattened out. We have toooo many layers of management.

    My only concern is the damage done to the street and other companies. We have burned a lot of folks.

    The MAIN thing we also need to do is STOP looking for short term gains by RA' folks to get the stock prices up. No one feels safe at IBM anymore. NO one. The churn and burn with getting new eager college grads won't even work anymore..

    I wish the VERY best to what remains of my IBMer family out there. Be prepared...get your resume up to date. Start looking so if you are canned, you are already prepared.

    I hope there is a special place in hell for the current management team and what they have done to so many members lives. They could have retained a lot more folks and done things better. Cutting the front line members doesn't make sense unless they're deadwood. We passed the deadwood stage back in 2002...it's in the bones and limbs now.

  • "Ramblings..." by "wonderaboutibm". Full excerpt: No reasonable voice on this board has ever said that there are not world-class resources in India and other emerging countries. What we have been saying is that the state of the third-world IT infrastructure is not what it needs to be for any rational observer to believe that such infrastructure could or should replace resources available now in the developed world.

    Once upon a time, Indian labor was really cheap, and, silly as it sounds, many corporate customers accepted the poor quality because, even if done over, the job was still cheaper than doing same in the US or Europe. This is no longer true (we can all agree that India is not as inexpensive resource pool as it used to be.) American management responds in one of two ways: either they continually look for locales even cheaper than India (Vietnam, anyone? How about eastern Europe?) or they continue blindly believing that somehow they can get equivalent quality (to developed-country IT) at $24 per hour. Oh, and I forgot: Our brilliant American management also continues to t believer that onshore resources from India and other foreign countries cost less than US FTEs. The moral is that once a story with a kernel of truth takes hold, it has a grip that lasts far longer than its period of validity.

    But, what the hell, history moves on, and IBM management trails along at the back of the parade. We are being awfully hard on SP. Really, we are. I never met the man, but I have seen many of his communications over the past few years. He is no dope, and he knows the score. He once really tried to motivate the workforce. He once tried to make IBM into a truly world-class organization with best-of-breed operations all over the globe, but he has failed and I think he knows it. His fallback – and this is sad – is to revert to the “I’m all right, Jack” school of thought. He is in a position to get out of Dodge before the bullets start flying. Four million a year will keep him relatively happy for the rest of his life.

    What galls us US employees is the pious intonation of the “IBM Values” -- how are these being practiced by our senior management? The management should be giving us and the other stakeholders an idea of the shape of things to come. Instead we get cost cutting. Some vision. Some imagination. Some leadership.

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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