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Highlights—April 12, 2008

  • New York Times: A Brighter Spotlight, Yet the Pay Rises. By Claudia H. Deutsch. Excerpts: Shareholders were mad about excessive compensation last year, when the economy was booming. This year, governance experts say, they are livid. “They are furious about the dichotomy of experiences — their shares fall, yet C.E.O. pay still rises,” said Paul Hodgson, a senior research associate at the Corporate Library, a governance research group.

    The compensation research firm Equilar recently compiled data about chief executive pay at 200 companies that filed their proxies by March 28 and had revenues of at least $6.5 billion. And the data illustrates Mr. Hodgson’s point. It shows that average compensation for chief executives who had held the job at least two years rose 5 percent in 2007, to $11.2 million (If new C.E.O.’s are counted, that number is $11.7 million). Even though performance-based bonuses were down last year, the value and prevalence of discretionary bonuses — ones not linked to performance — were up. A result is that C.E.O.’s who have held their jobs for two years received an average total bonus payout of $2.8 million, up 1.1 percent from 2006. ...

    Even when the credit crisis cost financial chiefs their jobs, it did not hurt their paychecks. Mr. O’Neal at Merrill and Charles Prince at Citigroup both walked away with fortunes. Washington Mutual, meanwhile, decided that write-offs would not count when it calculated performance-based bonuses, a decision that one compensation expert referred to as calculating batting averages without counting strikes. ...

    Many shareholders were aghast last year when Angelo R. Mozilo, who earned $100 million at Countrywide Financial in 2006, successfully argued that Countrywide should pay the taxes that were incurred that year when his wife accompanied him to business functions on the corporate jet.

  • New York Times: In the Boardroom, Every Back Gets Scratched. By Ben Stein. Excerpts: START with the obvious. Executive pay at the top levels in this country is stunning in its size and its rate of climb. According to the Congressional Research Service, average pay for chief executives stood at 179 times average worker pay in 2005, up from a multiple of 90 in 1994. Adjusted for inflation, average worker pay rose by a total of only 8 percent from 1995 to 2005; median pay for chief executives at the 350 largest companies rose 150 percent. ...

    The directors are elected by the stockholders via proxies — those things you get in the mail and then throw away. Thus, in effect, the board is selected by top management, usually by the C.E.O. himself. Once a director is on the board, there is only the slightest of chances that he will leave, except for death or old age or illness.

    To be a member of the board of a large company is a little example of paradise. You get good pay for just sitting in a meeting and listening to summary presentations. You get insurance and a pension. You can go to luxurious resorts and play golf. What the heck are security lines? You fly in private jets.

    Sometimes, you get stock options, and these can be meaningful. In other words, it’s nice to be the director of a public company. How do you keep your job? You are really nice to the person who put you in that job. You don’t know the little stockholder in Muncie who might have 500 shares. But you do know the guy who repeatedly reappoints you for your post at the directors’ table. The little stockholder cannot do a thing for you, but the boss can.

    When it comes to compensation, you want him to be really happy. It doesn’t matter how well he’s doing, unless he’s wreaking havoc and you may be sued. It doesn’t matter if the stock price has languished. You want what’s best for No. 1, and that means what’s best for Mr. Big.

    You hire a compensation consultant to work out pay and options and deferred pay and retirement and every other good thing for Mr. Big. The compensation committee knows that its hiring and rehiring are dependent on Mr. Big’s being happy. So it crafts a package that will keep him happy — and throws in a few goodies for the directors.

    It’s called the “boardroom buddy system,” and it works perfectly once you are on the inside. You just have to make sure you stay on the inside. And to do that, you don’t upset the apple cart with tacky questions about what the C.E.O. is doing or why he is paid so much. ...

    Now we come to a sad fact about modern American life. It was brought up by the Rev. Dr. Martin Luther King Jr., who often said that America, through its technology, has made of itself a neighborhood, but not a brotherhood. It is a lot worse now. The nation has become, to some at the top, far more of a looting opportunity than a family.

    I am not sure where this has come from — maybe from media that glamorize wealth and high-end consumption, maybe from poor moral training. But one thing is clear: Current law does not give shareholders or regulators any tools to rein in executive greed. There simply is no legal “cause of action” for pay packages that, however obscene, are approved by the board and disclosed to shareholders. Congress could change this. So could the Securities and Exchange Commission.

  • New York Times: Corporate Croesus. Excerpts: It’s hard to square the conceit that chief executives are rewarded for improving companies’ performance with the fact that chiefs at 10 financial-services firms in the study made $320 million last year, even as their banks reported mortgage-related losses of $55 billion.

    Meanwhile, the average earnings of typical workers have failed to keep up with inflation in four of the past five years. According to the economists Emmanuel Saez of the University of California, Berkeley, and Thomas Piketty of the Paris School of Economics, average incomes in the highest-earning 1 percent of the United States grew 11 percent year-over-year between 2002 and 2006. Incomes in the bottom 99 percent grew by 0.9 percent annually over the period. This year looks bad, too.

    This polarization is producing a pattern of income distribution rarely seen outside Africa or Latin America, and unheard of in the United States, at least since the gilded age. In 2006, the 15,000 families in the top 0.01 percent of the income distribution — earning at least $10.7 million apiece — pocketed 3.48 percent of the nation’s total income, double their share in 1993.

  • eWeek: Lawyer: L-1 Visas Used to Dodge H-1B Regulations. By Deb Perelman. Excerpts: Unlike its H-1B cousin, the L-1B visa has no annual cap and no requirement that the foreign workers are paid a fair salary. ...

    Introduced in the 1970s, L-1 visas are non-immigrant visas, which allow companies operating in both the United States and abroad to transfer certain classes of employees into the United States for up to seven years. The L-1 visa is more limited than H-1B visas in several ways: the L-1A is only for managers and executives, or for employees with specialized knowledge that cannot be found in the U.S. ...

    However, it is the ways that L-1 visas are more lax than H-1Bs that have drawn the ire of some interest groups. L-1 visas have no annual cap and no requirement than that the visa-holder is paid the prevailing wage for their role. "With H-1B visas, there is no requirement that you have to prove you aren't displacing a U.S. worker. You only need to assure regulators that you're paying them a fair wage. But the L-1 visa doesn't require this and I've heard of situations where an H-1B visa holder might be paid $42,000 for a job, but the L-1 visa [holder] only making $12,000," said Meltzer.

    Though they receive less media coverage, usage lists show that L-1 visas have not flown under the radar of large tech employers. According to the U.S. Senate, IBM was the third biggest user of L-1 visas in the 2006 fiscal year, receiving 1,237. Intel received 394 L-1 visas; HP received 316; Oracle received 176 and Microsoft received 169.

  • New York Times: Many Visas Are Sought for Skilled Immigrants. By Julia Preston. Excerpts: Federal immigration authorities received about 163,000 petitions for temporary work visas for highly skilled immigrants for the year starting Oct. 1, officials said Thursday, nearly twice as many as the number of visas available. The government each year offers 65,000 visas, known as H-1Bs, for highly educated foreign workers, and 20,000 visas for immigrants with a master’s degree or doctorate from an American college or university. Citizenship and Immigration Services closed the application period Tuesday after it had been open for the five-day minimum. ...

    The visa announcement brought renewed calls from American technology companies to raise the annual limits. On Thursday, senators led by John Cornyn, Republican of Texas, introduced a bill that would raise the H-1B cap to 145,000 visas each year through 2011. It would also allow businesses to use, over a three-year period, some 150,000 visas that were available in past years but were never issued. ...

    Labor organizations say that H-1B immigrants have depressed wages for American technology workers. Some employers have protested that they were crowded out of the visa pool by the Indian outsourcing companies. A Web site was started in January by American technology workers who said they had been driven from jobs by H-1B immigrants. About 150 members have posted their stories on the site, hireamericansfirst.org. ...

    It’s not that you can’t find Americans,” a 55-year-old American technology worker in Florida, who was contacted through the Web site, said in an interview Thursday. “It’s that you can’t find Americans at the price you can get away with paying an H-1B worker.” A computer systems administrator with 25 years of experience, he said he did not want to have his name published for fear of jeopardizing a job he recently found after a four-year search.

  • eWeek: Where Did All the Girl Geeks Go? By Deb Perelman. Excerpts: A professor says he has only one girl in a computer science major class in 2008, down from 40 percent in 2000. What happened? eWEEK gets field experts to weigh in. While women hold 51 percent of professional jobs in the United States, they make up only 26 percent of the IT work force, according to the National Center for Women & Information Technology. Furthermore, fewer women worked in IT in 2008 than in 2000. But the loss of women in the technology field begins long before they reach the professional level. The proportion of CS (computer science) bachelor's degrees awarded to women has fallen from 36 to 21 percent between 1983 and 2006. ...

    In the fall of 2000, Bloch taught a programming course that was a prerequisite for a computer science degree, for which enrollment was 40 percent women. In the current academic year, there is only one female computer science major, he said.

  • Seattle Times: Companies find ways to retain expertise of older workers. By Marsha King. Excerpt: Historically, senior workers have received incentives to leave their jobs early to make room for the next generation. But a change in thinking is under way. As baby boomers march toward retirement, too few younger workers may be available to fill the gap. Weyerhaeuser asked Gromala if he'd like to help kick off a new delayed-retirement program by going part time while still accumulating a pension and enjoying company-paid health insurance. "It was like finding a bunch of Easter eggs," Gromala said.
  • Casper Star-Tribune: Lawsuit targets pension plan. By Jeff Gearino. Excerpts: A federal judge has authorized a class-action lawsuit over alleged cuts in pension benefits brought against Solvay Chemicals Inc., one of southwest Wyoming's leading soda ash producers. An attorney for the plaintiffs said employees of Solvay have been invited to join the national class-action lawsuit aimed at fighting changes in the soda ash giant's pension benefits. U.S. District Judge Alan Johnson authorized the class action in the lawsuit filed against Solvay in a Feb. 8 order and ruled that the case could move forward under federal age discrimination laws. Richard Honaker, co-counsel for the class-action members, said he hopes to include in the lawsuit all employees in Wyoming and elsewhere who were affected by the company's pension changes. ...

    The two allege that their retirement benefits were cut because of their age, in violation of the federal Age Discrimination in Employment Act and the Employee Retirement Income Security Act. The lawsuit alleges that for years, the company's pension plan offered benefits calculated on a formula based on an employee's pay and years of service. The complaint says that when Solvay changed to a system based on credits assigned in a retirement balance account, known as a "cash balance" pension plan, the initial balances did not reflect the value of the plan under the previous system.

  • Wall Street Journal: Demand Soars for Firms That Fit Out Private Jets. By Susan Carey and J. Lynn Lunsford. Excerpts: For super-rich fliers in search of the ultimate status symbol, the big problem isn't plunking down $50 million to $250 million for a new, full-size jetliner from Boeing or Airbus. It's finding someone to turn that plane into a flying palace.

    These purveyors of customized interiors, called "completion centers," are increasingly sold out for years to come as demand for transport-size personal aircraft has soared from a handful a year to dozens. That means lots more work designing and installing mother-of-pearl vanities, gilded ceilings, exotic wood cabinets, hand-made carpeting, multihead showers -- even throne rooms and gyms. Some vendors design the china, crystal and sterling silver that travel on board, and a few have installed missile defense systems on the aircraft.

    "We have more work than we can handle," says Jon Buccola, chief executive officer of outfitter Greenpoint Technologies Inc. of Kirkland, Wash. Greenpoint, which specializes in interiors on new Boeing 737 business jets, has won $100 million in new business since the start of the year and is talking to a potential client who won't even get his or her new aircraft until 2014, he says.

    Once a cottage industry that primarily retrofitted former airline planes, many of these completion centers now are focusing on new VIP planes, called "green aircraft" because they come out of the factories unpainted and covered in a greenish protective coat. The firms spend months -- or even years -- designing and installing the interiors at prices that rival the cost of the aircraft themselves. Demand is so strong that new players are joining the handful of established centers in the U.S. and Europe, despite a shortage of engineers who are familiar with this arcane work and the specialized craftsmen who build the furnishings, do the upholstery and construct entire galleys and lavatories by hand. ...

    "The overall economy at the upper sphere is doing very well," says Jerry Gore, chief executive officer of Gore Design Completions Ltd. in San Antonio, Texas. His growing firm, which he owns with his ex-wife Kathy Gore, the president, is in talks with more than 30 prospects for assignments as far out as 2015, he says.

  • Wall Street Journal: Obama Chides McCain on CEO Pay. By Nick Timiraos. Excerpts: Democratic presidential hopeful Sen. Barack Obama renewed his push for legislation that would require corporations to offer a nonbinding shareholder vote on executive compensation on Friday, days after Republican candidate Sen. John McCain lashed out against rising CEO pay. ...

    “If you’re successful, you should be rewarded. But if you’re a Wall Street CEO today, it doesn’t seem to matter whether you’re doing a good job or a bad job for your shareholders and workers: You’ll be rewarded either way,” Obama said in prepared remarks. He lauded McCain’s recent show of disgust with executive pay, but criticized him for not supporting the Shareholder Vote on Executive Compensation Act, which would give shareholders the chance to signal their displeasure with executive pay with a nonbinding vote. “When he’s had the chance to do something about this problem, he’s opted for continuing the do-nothing approach of the Bush years,” Obama said.

    McCain has stepped up his criticism of rising executive pay at a time when many corporations have posted steep losses. In the past, McCain has supported measures to force companies to count stock options grants as company expenses for accounting purposes. “It’s outrageous that someone who is the head of Bear Stearns cashes in millions and millions of dollars in stocks,” McCain said last weekend. “And I think it’s unconscionable when the guy who apparently is the head of Countrywide and his co-conspirators make huge amounts of money while Americans are facing the threat of losing their own homes.”

  • Time Magazine: Giving Investors a Say on CEO Pay. Excerpts: Investors this year have asked for so-called "say on pay" at some 100 companies, including Coca-Cola, IBM, General Motors, Exxon Mobil, Citigroup, Anheuser-Busch, General Electric and Wal-Mart. As companies hold their annual meetings throughout April and May, some 70 different institutional investors will be pushing to add an annual provision to let shareholders vote up or down on how companies pay their top five executives. Earlier this week, about 150 institutional investors and representatives from companies like Pfizer, Morgan Stanley, Dell, BP, Sara Lee, Fed Ex, Procter & Gamble and United Health gathered in New York for a roundtable on say-on-pay votes. Such votes wouldn't actually be binding, but they still might serve to pressure firms into behaving the way shareholders want them to, especially when it comes to linking pay to performance. "This isn't an attack on companies in general," says Smith. "This is good governance, just like ratification of auditors or majority vote for directors." ...

    Most companies, not surprisingly, aren't so amenable to the idea. The core argument against the movement is that CEOs get paid a market rate and say-on-pay votes undermine the very nature of corporate governance — a board of directors charged with luring and keeping the best talent. In the rebuttal statements to say-for-pay proposals found in their annual proxies, companies lay out all sorts of counter-arguments. IBM says there's no way that shareholders can know what's an appropriate pay practice since they're not privy to competitive information like which executives are receiving other job offers. Coca-Cola stresses that shareholders already have a way to deal with pay practices they find unpalatable: don't vote for members of the board when they come up for re-election.

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • BusinessWeek: Most Docs Favor National Health Insurance. A recent survey shows 59% of U.S. physicians support national universal health insurance, up from 49% just five years ago. By Catherine Arnst. Excerpts: Most U.S. doctors now support the idea of national health insurance, a shift from a half-decade ago, when less than half favored a national system, a new survey has found. According to a study published in the Mar. 31 issue of the Annals of Internal Medicine, 59% of the nation's physicians support federal legislation to establish national health insurance, often referred to as a single-payer system. These plans usually involve a single, federally administered fund that guarantees health-care coverage for everyone, much like Medicare currently does for seniors, and eliminates or substantially lessens the role of private insurers. In a similar survey five years ago, only 49% favored it. Thirty-two percent of doctors oppose universal coverage, down eight points from the previous survey, while 9% are neutral. ...

    The findings signal a sea change in the attitude of the medical establishment toward universal care. Throughout the 20th century, U.S. doctors have been among the fiercest and most influential opponents of national insurance, citing concerns of a meddlesome bureaucracy, a loss of independence, and lower reimbursements. Lobbying by the AMA and other professional groups scuttled efforts to introduce universal coverage by several Presidents, starting with Calvin Coolidge and continuing through Franklin Roosevelt, Harry Truman, Jimmy Carter, and Bill Clinton. Back in 1948, after Truman was elected in part on a platform of compulsory health insurance, the AMA urged its members to "resist the enslavement of the medical profession." That attitude held constant for decades.

    But with so many Americans uninsured, doctors are finding that the lack of universal coverage is making it more and more difficult for them to do their jobs. "Across the board, physicians feel that our fragmented and for-profit insurance system is obstructing good patient care, and a majority now support national insurance as the remedy," says Dr. Ronald Ackerman, associate director for the Center for Health Policy-Professionalism Research at Indiana University School of Medicine and a co-author of the study.

  • PBS's FrontLine: Coming April 15, Sick Round the World. Other rich countries shave universal health care. Why don't we? Excerpt: Four in five Americans say the U.S. health care system needs “fundamental” change. Can the U.S. learn anything from the rest of the world about how to run a health care system, or are these nations so culturally different from us that their solutions would simply not be acceptable to Americans? FRONTLINE correspondent T.R. Reid examines first-hand the health care systems of other advanced capitalist democracies--UK, Germany, Switzerland, Japan and Taiwan--to see what tried and tested ideas might help us reform our broken health care system.
  • Nation Center for Policy Analysis: Advertising May Have More Influence On Prescriptions Than Science. Excerpts: Few Canadians are taking a controversial new cholesterol-lowering drug compared with millions in the United States, where the medication has been heavily promoted, according to a new study published in the New England Journal of Medicine. The results suggest that advertising may have a greater influence on the use of a medication than scientific evidence.

    Other major findings:

    • More than 33 million prescriptions for ezetimibe, sold under the brand names Zetia, Ezetrol and Vytorin, were issued in the United States in 2006, compared with just 824,000 in Canada during the same period.
    • The drug accounted for more than 15 per cent of all prescriptions for cholesterol-lowering medication in the United States that year, but only 3.4 per cent in Canada.
    • More than $200-million (U.S.) was spent on direct-to-consumer advertising for Vytorin in 2007 and that sales of the drug recently eclipsed $5-billion.
  • New York Times: Quality Care at Bargain Prices. Excerpts: When politicians talk of reforming the health care system to rein in costs, skeptical patients often worry that they will be forced to accept shoddy treatment in second-rate institutions. So it is a relief to learn that the famed Mayo Clinic in Minnesota and the renowned Cleveland Clinic in Ohio offer outstanding care at bargain prices — at least compared with higher-priced, equally prestigious medical centers elsewhere. ...

    Few will be surprised to discover that doctors in high-expenditure institutions are typically paid on a fee-for-service basis, which means they earn more if they do more. Mayo Clinic doctors, by contrast, are on salary and have no financial incentive to do anything more than the patient clearly needs.

  • New York Times: Health Care Horror Stories. By Paul Krugman. Excerpts: Not long ago, a young Ohio woman named Trina Bachtel, who was having health problems while pregnant, tried to get help at a local clinic. Unfortunately, she had previously sought care at the same clinic while uninsured and had a large unpaid balance. The clinic wouldn’t see her again unless she paid $100 per visit — which she didn’t have.

    Eventually, she sought care at a hospital 30 miles away. By then, however, it was too late. Both she and the baby died. You may think that this was an extreme case, but stories like this are common in America.

    Back in 2006, The Wall Street Journal told another such story: that of a young woman named Monique White, who failed to get regular care for lupus because she lacked insurance. Then, one night, “as skin lesions spread over her body and her stomach swelled, she couldn’t sleep.”

    The Journal’s report goes on: “Mama, please help me! Please take me to the E.R.,” she howled, according to her mother, Gail Deal. “O.K., let’s go,” Mrs. Deal recalls saying. “No, I can’t,” the daughter replied. “I don’t have insurance.” She was rushed to the hospital the next day after suffering a seizure — and the hospital spared no expense on her treatment. But it all came too late; she was dead a few months later.

New on the Alliance@IBM Site:
  • Spotlight: As the Alliance@IBM CWA Local 1701 begins its Spring membership drive you need to know some hard facts.

    The Alliance has been losing members due to retirement, job loss and employee financial difficulties. This web site receives an average of 40,000 visitors a month.

    Tough economic times are obvious; however, we simply can not go on or take employee advocacy to higher levels if we don't build our dues paying membership. It is not just this web site: It is an office and an organization that is at stake. Our staff of 1 full time, 1 part time and volunteers/members are dedicated to building this organization; but it is up to YOU to see that we are able to keep the office open and the organization financially viable. We need to become financially independent--We can not continue to rely on being financed by non-IBM CWA members. IBM employees need to support their own organization!

    Frankly if IBM employees do not see the value of this employee organization then the future of our work is in jeopardy.

    Please consider joining the Alliance@IBM as a member for only $10 a month--the cost of a few Starbuck's coffees. Your dues and involvement help the Alliance with the following:

    • Organizing employees and challenging IBM on policies and practices detrimental to employees and retirees.
    • Exposing job cuts.
    • Helping employees to deal with redeployment and replacement training.
    • World wide media source for IBM employee issues.
    • Legal references and current labor law information.
    • Political action on employee issues.
    • Stockholder proposals and actions.
    • Working with International IBM employee Unions to develop worldwide responses to IBM employee issues.
    • Working with Federal, State, and Local officials to make sure IBM employees, IBM retirees and communities find information and remedies for toxic exposures from IBM sites.
    • Union privileges and benefits through Alliance@IBM's membership that are offered through the Union Plus /Privilege program.

    We also have the expense of keeping an office up and running: Rent, Office supplies, fax, phones internet access and mailings of organizing materials; such as newsletters, flyers and brochures.

    We believe Alliance@IBM has, by its very existence; given IBM Corporate Mgmt pause, during their anti-employee actions.

    The bottom line is that if we are NOT here, then IBM Corporate Management has the field. There will be some who say that employees do not want representation through an employee organization or a union. Now is the time: Prove them wrong or prove them right.

  • Plan Now! Make your voice heard at the IBM Stockholder meeting April 29th in Charlotte, North Carolina. Details to follow...
  • From the Job Cuts Status & Comments page
    • Comment 4/07/08: to -gadfly- I was one of the chosen ones to be slowly agonizingly surplussed over a year and a half to RICE-OH. My understanding is that some OEM printers like Zebra and Lexmark and others will still be serviced by IBM as the joint venture has no desire to support its competitors so some of the folks will still be working on printers. Referring to it as a launch is being generous.It looked more like a deliberate sinking to me so I retired.

      The printer folks leaving in most localities are already assigned to a printer only manager in their own branch. In my old locality they have already been locked out of IBM sub offices even though the transition does not occur till june 1. The one point they kept making on conference calls is we would see the difference between working for a multi billion dollar business and working for a multi million dollar business. This was usually the answer if we asked about spending any money. As printer folks were getting bupkiss for raises already and no respect already it seemed a really good time to make my exodus. Just a shining example of the new IBM.

      As I chose to not have a retirement luncheon ( My quarter century was a lunch meat tray in the office if I insisted on having one. because no money in the budget for printer folks that year) I also did not get retirement letters or a retirement gift. I was told they had done away with retirement gifts even though I knew they had not. Showed me how appreciated my 30 years including area specialist for the Series One were. Also showed me what a backstabbing liar and hypocrite the printer manager out of Richmond is.

      No problem though, Ill buy my own cheap clock for my mantle and tell folks to buy Xerox and Hp printers, anything BUT Ibm. tic toc tic toc. I guess this is what happens when you refuse to kiss anyone's butt. Good luck to all. Hope the printer folks are smart enough to unionize right away in the new company. That would be GREAT. And the ONLY way they will stop their abuse.. -Exodus 2007-

    • Comment 4/07/08: I can confirm while I was in LEAN meetings last about this time, a LEAN manager confirmed a rumor that I had previously heard regarding 85% of resources being offshored when it is all said and done. Granted it has been a few years ago now, but I believe the target was 2008. -Used to be in the know-
    • Comment 4/07/08: To "Exodus 2007": If it's been less than a year since you retired, you can still get your retirement gift . My manager also failed (out of ignorance, not malice, I think) to file all the right papers when I retired somewhat abruptly and voluntarily, but on good terms with the individuals in my reporting structure. I told my pension coordinator at ESC that I didn't get a retirement gift and she was able to look it up and verify that all the right forms weren't filed, and she then fixed it online. She told me the password, etc., over the phone, and I was able to order a gift. The point wasn't so much to get the gift, but to get rid of the feeling that I had been cheated. -alreadyGone-
  • General Visitor's Comment page:
    • Comment 4/05/08: Sad - It used to be when people asked me where I worked, I willingly told them with pride that I worked at IBM. Their responses were phrases like "Lucky you" and "Good for you" and "Great company". Now when they pry it out of me (I'm no longer willing nor proud to tell people I work at IBM unless they push the issue), the responses I get are "Oh I'm so sorry" or "Oh, you must be one of the survivors" or"How long will it be before they lay you off?". Some of my coworkers have experienced the same thing. The envy has been replaced by sympathy. I also know people who don't wear any of the IBM logoed Thanks award clothes in public. They're too embarrassed of the company. That is a clear indicator of how far IBM has fallen and how brutal IBM has become. Way to go, Sam. -From Envy to Sympathy-
    • Comment 4/09/08: I was told that I have 60 days on the AT&T Account. AT&T is"reducing" projects (another way of saying funding cuts across the board on IT Projects). Ripple effect on IBM personnel. There were rumors a few weeks and now reality (where there is smoke there is a fire). I am guessing there will be layoffs after 1Q results are announced. I can't see how this slowdown doesn't impact IBM (its actually dual impacts - economy and corporate goal of moving as much work overseas as possible). This strategy will backfire. -Anonymous-
    • Comment 4/10/08: Anyone hearing about health issues in the Toronto area? A friend of mine in St Louis says he's hearing rumors of a group up there with like 6 or 7 out on stress. Don't know if its true but he said he heard at least 1 killed them self - wtf if this is true!! -Edward-
    • Comment 4/10/08: I have been retired from IBM for 13 years, I don't understand why you don't have 10's of thousands of paying members. Are people that complacent that they won't pay small dues. I would be actively organizing if I was still an employee. I read everything that IBM is and has done to employees and maybe they deserve it. -Del Lynd-
    • Comment 4/10/08: For all those boo hooers out there, get up, dust yourself off and start a job at a new company. This BS is not worth it. I can't believe I've been out of that hole almost a year now and only come back here to remind myself how good I have it now. Since I began a new job outside of big blowed, I have not been angry every day, not been back stabbed, or put down by management after busting my butt. I don't have to work OT, am not on call, no pager. At the end of the day I go home and my weekends are mine. Get out and live life again. -Better_on_the_outside-
  • Pension Comments page
  • Raise and Salary Comments
    • Comment 04/08/08: Salary = 89K; Band Level = 8; Job Title = Project Manager; Years Service = 20; Hours/Week = 50; Message = Has anyone noticed IBM is now giving 3 performance ratings to any employee that is within the lower part of the ranking for the team they are on regardless of how well their performance or contributions exceeded their PBC objectives? This is now happening on the individual team level and not just at a higher overall average. I am seeing this on many teams where I work. The spin on it is "as compared to others" even when everyone on the team may be a "top gun". -Anonymous-
    • Comment 04/09/08: Get ready, prepare yourself my friends. Remember June graduation for all those foreign university students with the higher math and science scores is just about 60 days away and they will be entering the job market in huge numbers. H-1B visas baby. The economy is in the tank GLOBALLY and if you're a corporate exec trying to maintain your profits, and your job when you can't increase your sales or increase your margins the only option left to improve profits and get your bonus is to close sites, cut workers, offshore more labor, play the wage arbitration game. The stage has already been set. Millions of dollars will be save in severance packages this layoff go around as any potential package will most likely be based on a 40 hour work week, not the actual 50 hours or more that some of you work. This is just my opinion and it may be speculative but I would not be surprised that the new hires will come in sometime in June. You'll get 60 days to cross train your replacement and be out on the streets by September. Most of you will not see the six figure like buyout packages that many of the over 70,000 UAW workers are seeing and being offered right now. Good luck to you all... -spiderman-
  • PBC Comments
    • Comment 4/06/08: Prior Yr PBC = 2; This Yr PBC = 2; This Yr Bonus = 2700; Prior Yr Bonus = 2400; Message = I want a real annual evaluation based on my manager's knowledge of what I do. I have seen my manager (whose office is one floor above me) once in the last 12 months. We speak briefly on the phone once a quarter if that. She has never taken the time to get out of her office to do a walk thru of all the areas for which I am responsible. Thus has no first hand knowledge of the custom contract I support. This PBC process is bogus and a cop out for management. PBC's are really an essay contest where the employee is graded on how well he/she writes. I have worked for a number of employers thru the years and IBM has the worst management style imaginable. -Gone4Good-
    • Comment 4/10/08: to -Gone4Good- In the past I have just cut and pasted my scorecard the manager sent out monthly. Not a single word and got a 2+so it is not even an essay contest. -Exodus 2007-
  • International 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. Some sample posts follow:

  • "I've been wondering" by "Frank Cary". Full excerpt: if the Cookie Thief is a psychopath or merely an example of a functioning Asperberger syndrome. He clearly has no affection for people, nor does he trust them. He only manipulates things (mostly money) to get the things (measurements) he wants instead of invigorating and trusting people and systems to produce new or outstanding outcomes. So if the differentiator between psychopath and Asperger's is that the former realizes he's missing something and fakes it, and the latter never realizes what he's missing, which is Clueless lou?. Those of you closer to the Burning Bush than I ever was, please chime in with your thoughts.
  • "Interesting Analysis" by "Dose of Reality". Full Excerpt: I certainly don't have the expertise to answer the question, even though I spent significant time close to the "Devil's Pope" as some used to call him. On the other hand, I recently viewed a movie titled "Breach" which brought me memories (call them nightmares) of working with the Devil's Pope, as we used to call the cookie monster. The evil protagonist of the movie, the real life Robert Hanssen was IMHO, remarkably very psychologically similar to the cookie monster. The parallels like his brilliance, intense Catholicism, the constant harangue "teaching" his staff "the right way", his constant fear of failure, his intense desire to insert himself in your personal life unannounced and his shady close associates were uncannily identical. I'm very happy to be away from that dark place of worship of the occult and evil called Armonk. I couldn't see myself as yet another nameless groupie gadfly groveling in hope that some crumbs come my way from one of the Pope's selected Devil's disciples.
  • "TFL" by "Frank_Reality". Full excerpt: It would be nice if we could forget Three Fingers Louie, unfortunately he still has a huge amount of options to exercise before we are truly free of his thieving. But, what about Sam and his inner cabinet of hatchet-persons and thugs?
  • "It struck me as" by "Frank Cary". Full excerpt: I was reading the following from Dr Bardwick's book, One Step out the Door:
    “The new generation of straight-from-business-school managers tends to be as convinced of their own indispensable contribution as they are unimpressed by the contributions of people they’ve never understood or worked with. Because they don’t have personal relationships with less-educated people and they don’t really work with them, too many contemporary managers and executives have no respect for those who report to them.:
    "Without respect for subordinates, executives find it quite easy to think of employees as an expense to be managed. In that mindset, downsizing is a good thing . . . When senior managers are blind to the value of subordinates and to their dependence on them, they are also blind to the high cost of thinking of employees simply as costs.”

    The phrase "when senior managers are blind" put me right back in the spot when I challenged Lou in Austin to revisit the proposition of removing us 40-somethings from access to the old retirement program. As I looked up from reading my question to him, I saw in his eyes not hatred or rage or any emotion at all, but the blank look of a man who wasn't there. I thought them and still shiver now to think I'm looking into the void of a robot.

    Lou has never worked a production job nor managed a group of sales people. His whole career has been spent manipulating money. I believe he fits the above description to a "T".

    Now then ABC, I saw "Breach" recently too and I'm lost as far as characterizing Hanssen's behavior. Split personality maybe: one minute sexed up like Bill Clinton in heat and next minute pious as a pharisee. Is Lou a member of Opus Dei? That would be a hoot.

    When most of HR was sold off to Fidelity there was some rumbling from some of them about Lou charging off weekends with hookers in NYC on his TEAs, but it quickly died away.

    As far as Sam goes, I'm not as sure. Since he's a graduate of the ERL program, he's made a Faustian deal for his life here on earth. I'd be interested to hear the opinions of others who been near to him.

  • "He11 on Earth" by "Dose of Reality". Full excerpt: I like the Faustian analogy. I do see IBM as institutionalized Satanism. The insidious part is that there is no contract, no overt pact, and very few last minute redemptions like you would have in the American Cinema.You just morph into the role. One simply cannot thrive here and still keep both feet planted on the ground and marching toward some kind of eternal reward. To try to do both means that you would fail at both. Sam is a garden variety sociopath in a suit, complete with all the self-delusions of urbanity, decency, and executive competence. It is all too easy to be what the typical letter-bander is here, but the ultimate price is pretty high. Mr. Miagi had it right – “Balance”, and “Always lookh eyes”! That just doesn’t go with the IBM territory.
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.

This site is designed to allow IBM Employees to communicate and share methods of protecting their rights through the establishment of an IBM Employees Labor Union. Section 8(a)(1) of the National Labor Relations Act states it is a violation for Employers to spy on union gatherings, or pretend to spy. For the purpose of the National Labor Relations Act, notice is given that this site and all of its content, messages, communications, or other content is considered to be a union gathering.