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Highlights—November 15, 2008

  • WRAL (Raleigh): IBM slashes 215 senior positions, including six VPs; 38 jobs cut in RTP. By Rick Smith. Excerpts: IBM is laying off a host of senior managers, including at least six vice presidents, in another round of 215 job cuts among its Systems and Technology Group. An IBM spokesperson confirmed 38 of the people affected are based in the Triangle. Unlike recent cutbacks involving contractors and so-called long-term supplemental workers who didn’t receive benefits as full-time employees, the cuts made this week include numerous veteran IBMers up to 68 years in age. IBM calls the layoffs “resource reduction actions.” ...

    Some of the jobs affected are being “off-shored,” and IBMers will be tasked with training their replacements. “This is part of the rebalancing of our skills to balance our customer needs,” Buscemi said.

    Lee Conrad, a spokesperson for the union, was outraged by the news. “The Alliance@IBM has received information that 215 employees in STG have been targeted for a job cut,” Conrad said “It is also rumored that some of these jobs are being sent offshore and employees must train their replacements. “For IBM to fire U.S. workers and send the work offshore at a time of rising unemployment and economic crisis is unacceptable and, frankly, disgusting.” ...

    According to the IBM document provided to WRAL.com, positions being eliminated include a “distinguished engineer” as well as numerous “directors” and “senior” specialists in a variety of areas. ...

    Alliance@IBM, the fledgling union based in New York that is seeking to represent IBM workers, noted that it had been told numerous executives were being let go. “They have until January to leave IBM, and some are being asked to go to Dubai [in the United Arab Emirates] or China to work,” the union was told. “Some are being re-leveled [demoted] back to the field in sales.” The layoff news broke Monday ‘”with no warning – nothing,” the IBM employee told WRAL.

  • WRAL: From exec suite to front lines, young to seasoned, Big Blue casts a wide net for layoffs. By Rick Smith. Excerpts: An internal document made available to WRAL.com and Local Tech Wire offers a revealing look at IBM’s latest round of cutbacks in its Systems and Technology Group. Those being cut were “selected to participate,” IBM says. I’m sure people were waiting in line to sign up for the exit plan.

    rom those facing customers to the executive suite at the vice president level, from young to seasoned , from sales and marketing to engineers, and even at least one person honored within Big Blue’s ranks as a “distinguished engineer,” the ranks of those being given their walking papers is quite striking. ...

    An IBM spokesperson confirmed 38 layoffs at RTP, but in an interview declined to discuss even what business unit was affected, citing competitive reasons. But he did acknowledge that some jobs are being shifted overseas, and IBMers will be training their replacements in Taiwan and elsewhere. It’s bad enough to have one’s job “off-shored,” but having to train a replacement while preparing for unemployment – now that’s pouring salt on an open wound. Companies certainly must adapt to a changing world environment, but ...

    Making matters worse is how the document is written. The “Notice to Employees” is cold, bland legalese. But the words strike home when one thinks of the many blue-blood veterans that are being shown the door.

  • Rochester (MN) Post-Bulletin: IBM job cuts hit Rochester again.By Jeff Kiger. Excerpt: For the second time in about two weeks, IBM job cuts have hit Rochester. "We did have a resource action involving 12 people in Rochester on Nov. 12," IBM spokesman John Buscemi confirmed on Friday. He declined to give any specific detail about what jobs and employees were affected. "We don't mention departments or positions, because we consider that competitive information," he said.
  • NECN: IBM layoffs cause community concerns. By Anya Huneke. Excerpt: Another round of layoffs at big blue in Vermont. The microchip plant in Essex Junction has cut 100 temporary positions. And while IBM is calling this a single event, some are concerned the company - and the surrounding community - may be in trouble. At X-ray's barber shop in Essex Junction, Vermont. Patty Wells and Trish Cook hear all the town news and gossip. Including rumors about the IBM plant down the street- the state's largest for-profit employer. "We hear probably on a monthly basis that they're talking about laying off people." And this week .. The rumors proved to be true. IBM is laying off roughly 100 employees-- five months after laying off 180... And three months after reducing the pay of some workers. Patty "With a hundred here, then the last layoff, and the one before- they're getting down to a very few people."
  • Poughkeepsie Journal Letter to the Editor. IBM Puts Bottom Line Above Their Employees. By Patti Finnegan, Verbank. Full excerpt: My husband's longtime job with IBM has been eliminated; the same is true for some of his coworkers. However, positions have been found for all, though not in their field of specialty, eliminating the need for severance packages, should they decide not to accept the positions.

    There was a day when IBM cared for its employees, providing good benefits, and placed importance on their employees. IBM understood success came from the hard work of their employees. Unfortunately, today the focus is on the bottom line and stockholder, not the stake-holder, eroding our nation's middle-class economy.

    Most companies like IBM have outsourced their manufacturing lines overseas to save money, boosting their bottom line. While senior-level management receives huge wage increases and options, the laborer gets 3 percent at best.

    When did this country's moral compass go awry? Today, the hardworking blue collar worker is no longer part of the success equation. Our hardworking blue collar parents were valued employees, learning their skills by watching and then doing. They didn't need to go to college to succeed, unlike today, where all need a college degree to sell underwear at the local mall.

    I am so ashamed of our national values system. I challenge IBM and all other big corporations to reflect on this; where would these businesses be today without the efforts of our parents and grandparents who are responsible for creating today's empire?

  • Yahoo! IBM Pension and Retiree Issues message board: "Politicians - those whom we can be grateful for" by Kathi Cooper. Excerpts: I just wanted to remind everyone that when the pension suit was being fought, there were certain politicians that came to our aid and whom I have fond gratitude for. The list is long. Some of those generous politicians have passed away, others continue to work hard for us, and others have moved on to bigger and better things. One of those politicians is Rahm Emanuael, who will be the nation's Chief of Staff beginning on January 20th.

    In April 2003, the US Treasury held a public hearing on Cash Balance Plans. Rahm Emanuel, who helped us out behind the scenes many times, came forward that day and provided the following testimony on our behalf. Emanuel was also the lead sponsor of H.R. 1677, the Pension Benefits Protection Act of 2003. As you know, his bill never passed. Below is Rahm's testimony.

    From http://www.house.gov/emanuel/pr_030409b.htm: WASHINGTON, DC—Congressman Rahm Emanuel (D-IL) today delivered testimony at the Internal Revenue Service (IRS) hearing on proposed regulations regarding companies converting to cash balance pension plans. Emanuel spoke against the regulations as proposed, which would allow companies to exempt the plans from age discrimination rules that apply to pension plans.

    "I hope that after these hearings this panel will come up with new regulations that make sense and strike a balance between business innovation and the rights of long-standing employees," Emanuel testified before the panel of nine attorneys from the IRS and the Treasury Department.

    "It's wrong for companies to promise retirement benefits to long- standing workers, and then to pull the rug out from under them by making changes midstream. Pension agreements are no different than any other contracts into which companies have entered. Employees agree to supply their labor and work hard every day to help improve the company's bottom line. In return, employers offer them wages and in many cases, retirement benefits in the form of defined benefit pensions. Working Americans should be able to take comfort in the fact that the pensions they've earned will be there when they retire." ...

    "It's not hard to imagine the sense of betrayal and anger the workers at companies like AT&T and IBM must have felt when they found out their pension benefits had been cut in half overnight. These working Americans have families to support and bills to pay, like mortgages and college tuition.

    "One of the hardworking individuals who traveled here to tell her story is Kathi Cooper, a resident of Bethalto in my home state of Illinois. Ms. Cooper has worked for IBM almost 25 years and faces a 64% pension cut resulting from a cash balance conversion. She stands to lose hundreds of thousands of dollars due to IBM's actions. Ms. Cooper is the lead plaintiff in a federal class action lawsuit against IBM currently pending in the Southern District of Illinois. There are hundreds of thousands of stories just like hers all over the U.S. ...

    The Clinton Administration placed a moratorium on cash balance conversions in 1999 because of the radical effect these conversions were having on the lifetime savings of long-serving workers. Sure, cash balance plans may be better for younger workers. But there is a way to offer these plans to younger workers while also maintaining the pension benefits that long-standing workers have earned through years of hard work. If changes are going to be made, companies need to find a point of delineation that doesn't radically alter the financial fortunes of their longest tenured employees.

    In 1995, President Clinton signed into law the first piece of legislation enacted by the 104th Congress, the Congressional Accountability Act. This Act applied 11 existing employment, civil rights, health, and safety-related statutes and regulations to the legislative branch. Perhaps the Administration and some Members of Congress would have a different view if the proposed regulations were added to the Congressional Accountability Act and applied to them. If cash balance conversions are such great medicine for older workers, then let's convert Congressional pensions to cash balance plans.

    Perhaps some are familiar with the recent Congressional Research Service study reporting that nearly every Member of Congress would lose out—in many cases by hundreds of thousands of dollars, if this were to happen. In that case, Members who had worked hard for years expecting to receive their full pensions would be understandably outraged. We all know that Congress would never accept such an unjust result—and neither should rank-and-file, hardworking Americans.

  • Yahoo IBM Pension and Retirement Issues message board: "Rahm Emanuel" by "ibm_slave". Full excerpt: Pension rights advocacy groups will have a friend in the Whitehouse with Rahm Emanuel as Whitehouse Chief of Staff. During our struggle with IBM, Rahm exhibited a clear understanding of corporate pension pork that was pushed by industry lobbyists such as the American Benefits Council and the ERISA Industry Committee.
  • Yahoo! IBM Employee Issues message board: "more Layoffs announced" by "rbexis". Full excerpt: Hi All. Unfortunately it looks as though 50 more Project Managers will get the boot in the final quarter of 2008. We will be replaced by PM from India. How sad...and of course not a care from our 1st or second line Managers.
  • ComputerWorld: IBM aims to counter researcher shortage in India. By John Ribeiro. Excerpt: IBM India Research Laboratory (IRL) unveiled Thursday its Blue Scholar Program, which aims to encourage computer science graduates in India to take up research as a career. The move is in response to shortages of researchers in India as engineering graduates pursue other lucrative careers. IBM plans to train as researchers exceptionally talented engineering graduates and postgraduate students in computer science from leading technical institutions in India.
  • The Street: Apple-IBM Tussle Over Exec Gets Nasty. By James Rogers. Excerpts: The dispute between IBM and Apple over former IBM executive Mark Papermaster is heating up. Papermaster, whose recent appointment as Apple's iPod and iPhone engineering chief prompted a breach-of-contract dispute with IBM, has been ordered to stop work by a federal court judge.

    Judge Kenneth Karas ordered Papermaster to cease his work for Apple "until further Order of this Court," in a ruling issued Friday in the U.S. District Court for the Southern District of New York. Papermaster's lawyers have until Tuesday to register their objections, with a hearing set for Nov. 18.

    Papermaster joined Apple on Nov. 4 as senior vice president of devices hardware engineering, where he is responsible for iPod and iPhone engineering. The former IBM executive assumed the position after Apple's iPod guru Tony Fadell, reduced his role with the company to spend more time with his family. IBM, however, sued Papermaster after he handed in his notice last month, alleging that he breached a non-compete agreement. Under the terms of the agreement, Papermaster cannot work for a competitor for up to a year after the end of his IBM employment.

  • ZD-Net: The IBM-Apple-Papermaster triangle: How far does a non-compete go? By Larry Dignan. Excerpt: The courtroom tug-of-war between IBM and Mark Papermaster is getting nasty. Papermaster responded Friday to IBM’s attempts to prevent him from taking over the iPod unit at Apple. Papermaster argued that IBM doesn’t compete with Apple in consumer electronics. IBM reiterated that Papermaster violated a non-compete agreement. Now a judge is preventing Papermaster from working at Apple. The two big issues: How binding is a non-compete agreement? And is the mere fact that microprocessors run consumer and enterprise technology enough to keep Papermaster from his dream job?

    In this Papermaster case, those questions loom large. If Papermaster, the executive in formerly in charge of IBM’s blade server unit, was going to Apple to run the xServe product line Big Blue would have an easy argument to understand. But since Papermaster is going into consumer electronics–a place where IBM doesn’t play ball anymore–the executive has a good argument.

  • Fortune: IBM must put up $3 million in Papermaster case. By Philip Elmer-DeWitt. Excerpts: IBM only had to pay a $350 filing fee to sue Mark Papermaster, the 25-year IBM (IBM) veteran hired by Steve Jobs last month to run Apple’s (AAPL) iPod and iPhone division. It’s going to cost the company a lot more to pursue the case. Last Friday, U.S. District Judge Kenneth Karas granted Big Blue the preliminary injunction it sought — based on a noncompetition clause signed in 2006 — and ordered Papermaster to stop working for Apple immediately. See The Papermaster chronicles. ...

    On Wednesday, Papermaster’s lawyers filed their answer to IBM’s suit and filed counterclaims of their own. They admitted only those facts that were indisputable and denied pretty much everything else — including the fact that Papermaster worked for IBM. IBM and Apple aren’t competitors, they claim, and even if they were, Papermaster has been hired to do work that has nothing to do with IBM. And even if it did, IBM’s noncompetition agreement is unreasonably broad, Papermaster’s lawyers assert. What’s more, they argue, it doesn’t apply in Texas (where Papermaster worked for 17 years) or California (where Apple is based) — neither of which honor such agreements.

  • The Register: IBM chief talks change, and a little politics. Sam Palmisano says we can fix stuff - with IT, of course. By Timothy Prickett Morgan. Excerpts: IT executives are a funny group. They are usually like broken Magic 8 balls. Whenever you shake them up - perhaps with a financial crisis or a new political reality - they always say the same thing: more IT will fix our problems. But every now and then when you shake the ball, you get a slightly different set of answers than you expected.

    That's what happened last Thursday when IBM's chairman and chief executive, Sam Palmisano, gave a speech at the Council on Foreign Relations in New York, only two days after the presidential election in the United States. Change was - and still is - in the air, and that was one of the themes of Palmisano's speech. You can see the draft of the speech, which Palmisano more or less stuck to, at this link, and you can watch the video of the speech here.

  • Associated Press, courtesy of the San Francisco Chronicle: Some companies cut 401(k) matches. By David Pitt. Excerpt: Retirement accounts already battered by a steep market decline may get hit again as several companies suspend or reduce their 401(k) match to save cash. Workers at General Motors and Frontier Airlines, for example, could potentially lose thousands of dollars in company contributions from their retirement accounts. GM, which recently said it is suspending company matches for its 32,000 eligible salaried workers, said last week its U.S. auto sales plunged 45 percent as it struggles along with competitors to survive the credit crisis and financial market turmoil.
  • USA Today: To ride out bad times with 401(k) savings takes a plan. By Christine Dugas. Excerpt: The nation is experiencing what some have called the worst financial crisis since the Great Depression. And based on the sharp drop in the value of their 401(k)s, few American families would disagree. Now, more than ever, they need advice on how to deal with the crisis. Jerry Costilow, for example, retired in 2004 because of health problems. For now he relies in part on Social Security Disability payments. Through the end of September, the value of his 401(k) was down more than 25%. "My 401(k) is killing me," says Costilow, 63. "It's one of those things where you beat your head against a wall." But 401(k) participants shouldn't just ignore their dwindling balances. And they need to avoid steps that could make their problems worse. Among the biggest mistakes...
  • eWeek: H-1B Visa Reform Takes Shape to Address Fraud, Procedural Nightmares. By Kevin Fogarty. In the wake of a report claiming up to 20 percent of H-1B applicants may be fraudulent, the U.S. Bureau of Citizenship and Immigration Services will look more closely at H-1B visa applications. The agency responsible for granting H-1B visa applications plans to tighten up its procedures for vetting and approving the applications in the wake of a report indicating as many as 20 percent of the applications may be fraudulent or technically flawed. ...

    The report is an audit of 246 applications that found 13 percent of the applicants used forged documentation, false businesses or addresses, false job offers, or misrepresented their immigration status. Another 7 percent had technical violations such as requiring the applicant to pay the application fee or list a salary substantively above what the applicant would actually be paid.

  • eWeek: Did Pfizer Force Its Staff to Train Their H-1B Replacements? By Kevin Fogarty. Excerpts: Pfizer is taking flak for what detractors charge is a plan to use U.S. workers to train the foreign contractors who will replace them during a years-long outsourcing project. Contractors in the company's Groton and New London, Conn., research and development facilities—many of whom are either former full-time staffers or replaced Connecticut-based staff—are complaining that foreign workers on H-1B visas are coming in to be trained on the company's systems, according to a report in The (New London, Conn.) Day, a local newspaper.

    Those temporary workers are scheduled to return to India, where they will run the same systems as part of an outsourcing deal Pfizer signed three years ago with Infosys Technologies and Satyam Computer Services.

  • Workforce Management: Despite Huge Profits Big Oil Has Big Hole in Pension Funding. Excerpts: While few corporate pensions have been immune to the dramatic downturn in the equity markets this year, it appears that plans at energy companies are in the worst shape. According to a new analysis of S&P 500 companies from Citi Investment Research, companies in the energy sector had defined-benefit plans that were only slightly more than 80 percent funded at the beginning of this year—the lowest funding level among any of the 10 industries examined by Citi. ...

    The report noted that a substantial chunk of the funding shortfall in the energy industry belonged to just a handful of companies. That included Exxon Mobil, ConocoPhillips and Chevron, which have been reporting huge profits but still had three of the 10 most underfunded pension plans in the S&P 500 at the beginning of this year.

  • Financial Week: Biz lobbies for a pension break Market slide has sponsors out for funding relief. By Mark Bruno. Excerpts: Corporations are expected to impress upon President-elect Barack Obama and Congress that the woes they are experiencing over their ailing pensions must be addressed even before the Democrats take over the White House in January. Pension funding rules are estimated to cost companies more than $100 billion next year—hardly small change in any year, let alone one that could see a severe recession—and could force corporations to eventually freeze or terminate their defined-benefit pension plans.

    But getting Mr. Obama and lawmakers to pay attention to pension funding could prove to be a major challenge. So lobbyists are preparing to make a broader case for relaxing the rules. “It's not just a pension issue,” said Lynn Dudley, senior vice president of policy at the American Benefits Council, an employer advocacy group in Washington that's lobbying on behalf of hundreds of corporations for some temporary relief from pension funding rules. “It's a major economic issue that needs to be recognized immediately.”

  • Associate Press, courtesy of the New York Times: Companies Push Congress for Pension Relief. Excerpt: Roughly 300 companies and business groups plan to make the request in a letter Wednesday to congressional committees. The authors include some of the nation's biggest corporate names from a wide range of sectors, including Ford Motor Co., IBM Corp., Pfizer Inc. and Verizon Communications Inc.
  • Financial Week: Next market loser: deferred comp. Execs’ supplemental bennies to get hit if workers’ plan funding falls below 60%. Thank the 2006 pension law. By Mark Bruno. Excerpt: As large corporate pension plans plunge deeper into the red, there's more on the line than just retirement benefits for rank-and-file workers. Pension benefits for top executives may soon be in jeopardy too, thanks to regulations put in place a few years ago. Tucked into the Pension Protection Act of 2006—which was designed to shore up the funding levels of corporate pension plans, among other things—is a provision that says companies with defined-benefit plans that are funded only 60% or less may not set aside money for non-qualified pension plans for executives, including supplemental executive retirement plans, or SERPs.
  • Yahoo! IBM Retiree Information Exchange message board: Elimination of Doughnut Hole and GM Health Benefits. By Kathi Cooper. Excerpts: 2 things to consider for the very near future:
    • First, when planning for that doughnut hole, Obama would close the doughnut hole in the Medicare Part D prescription drug program, would allow the federal government to negotiate for lower drug prices for the Medicare program, and supports allowing seniors to import safe prescription drugs from overseas. He also proposes to eliminate subsidies to the private insurance Medicare Advantage program. (assumes his election platform comes to fruition, a high probability given all Democratic congress) http://www.hr.cch.com/news/benefits/111008.asp
    • Second, GM eliminated retiree health benefits, giving $300.00 extra in retiree pension checks and telling them to find their own coverage. These corporations travel in packs. Feel certain that IBM is examining the same. http://tinyurl.com/5uo8yf
  • The Register: Vintage IBM tape drive in Apollo moon dust rescue. 40-year-old data recovery. By Austin Modine. Excerpts: An Australian scientist hopes to restore a vintage, refrigerator-sized IBM tape drive stored in a museum to recover Apollo moon mission data the space agency misplaced nearly 40f years ago. NASA's only means of measuring moon dust during its Apollo missions has gone largely unappreciated until recently, reports Australia's ABC News. Now the trouble is getting a 1960s-era IBM 729 Mark V tape drive necessary to read the data up and running. ...

    The tapes were kept in a climate-controlled room since then, but with no real way to unlock the data. Then SpectrumData stumbled upon an old IBM 729 Mark V tape drive at the Australian Computer Museum Society, which agreed to loan the historic metal. "It's going to have to be a custom job to get it working again. It's certainly not simple, there's a lot of circuitry in there, it's old, it's not as clean as it should be, and there's a lot of work to do," said Guy Holmes of SpectrumData.

  • Wall Street Journal Op-Ed: It's Time to Rethink Our Retirement Plans. Let's fix what isn't working, before the next financial crisis. Excerpts: While our nation has experienced other financial crises, the current one is the first to occur when so many Americans bear so much responsibility for their own retirement savings. Never before have those savings been as exposed to the markets, as workers are now experiencing acutely. While stocks will eventually recover, we should take time to rethink how Americans achieve lifetime financial security -- and the mechanisms in place to help them do it.

    Traditional pension benefits can no longer be relied upon when global competition and rapid technological change challenge the ability of even the greatest companies to make good on future commitments. Moreover, Americans switch employers and even careers several times over the course of their working lives.

    Yet the 401(k)s and other accounts that have replaced those pensions are not producing sufficient retirement savings. According to the McKinsey Global Institute, two-thirds of Americans between the ages of 54 and 63 have not saved enough for retirement. It's not that 401(k)s are bad, it's just that they were conceived as supplementary retirement vehicles, not as a holistic retirement system.

  • BusinessWeek: IBM Reshapes Its Sales Meetings. Lee Green, head designer at IBM, is applying the same design method for creating PCs to guide the tech company's sales pitches. By Reena Jana. Excerpts: It's a breezy fall day and the trees lining the parking lots at IBM's (IBM) corporate campus in Hawthorne, N.Y., are turning bright red. But the leaves aren't the only things changing here. The site is the first client briefing center where meetings, essentially day-long technology demonstrations and sales pitches for potential customers of Big Blue's consulting services, have been newly structured. And that process has been overseen not by a sales executive or human resources director, but by a veteran IBM designer, Lee Green.

    25 years ago, Green, vice-president of brand values and experiences, helped market IBM's first consumer PC. Now, he has applied what business school professors and engineers like to call "design thinking" to reimagine how sales teams bring in new business.

    Design thinking is based on observing what customers want and then creating, testing, and refining prototypes of products and services to address those desires. At IBM's briefing center, staff members now have extremely detailed guidelines of what to show and tell at a given time. Before, the company had no standardized model of how to pitch clients. Instead, sales staff had to rely on their own intuition, with varying degrees of success.

  • Europa Press, courtesy of the Alliance@IBM: The Court finds IBM SPAIN guilty of professional harassment. The company refuses to comply with the sentence pronounced. Excerpts: he Court of justice of Castilla y León (Second Instance) has found IBM Global Services Spain responsible for the professional harassment of a worker assigned to the Michelín company. It has annulled her dismissal and obliged the company to readmit her and pay her the salaries not received. According to sources within the IBM Works Committee, “the company refuses to comply with the sentence pronounced by the TSJ of Castilla y León the 12th. February 2007, which rejected the appeal presented by the company against the ruling of the Social Court number 2 of Valladolid on 12th. September 2007.”
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
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  • The Commonwealth Fund: Health Reform in a New Era: Options for the Obama Administration. By Karen Davis. Excerpts: In 2007, the number of uninsured stood at 46 million, up 20 percent from 2000. And the number of underinsured—people with health insurance that fails to provide adequate access to care or financial protection—jumped 60 percent over four years, to 25 million in 2007. Today, people are worried about keeping their jobs and health coverage, and are increasingly concerned about their debt, including medical debt. The Commonwealth Fund 2007 Biennial Health Insurance Survey found that about two-thirds of U.S. working-age adults, or 116 million people, struggled to pay medical bills or pay off medical debt, went without needed care because of cost, were uninsured for a time during the year, or were underinsured.

    While President-elect Obama has set forth the substance of his health reform agenda, he has not yet revealed his overarching strategy or precisely when and how he would move on health reform, but there are a number of courses of action open to his Administration.

  • New York Times: Some G.M. Retirees Are in a Health Care Squeeze. By Nick Bunkley. Excerpts: General Motors is living on borrowed time, spending more than $2 billion in cash a month and lobbying for a government bailout to keep it out of bankruptcy. And for about 100,000 of its white-collar retirees, time is about to run out on G.M.’s gold-plated medical benefits.

    To conserve its dwindling cash reserves, G.M. is eliminating lifetime health care coverage for its legions of retirees at the end of this year, leaving people like Ken Hewitt to fend for themselves in deciding how to cover their doctor’s bills and prescription drug costs. ...

    To help retirees pay for their new coverage, G.M. is raising monthly pension payments by $300, which typically means $240 or $255 after taxes. ...

    “Anyone that thinks they can go out and replace insurance that you had with General Motors for $255 and get the same kind of coverage, I’d like to sell them a bridge in Wisconsin somewhere,” said Mr. Dickinson, 65, whose irritation with G.M.’s move is apparent in the headline “G.M. Robs Their Elderly Retirees” on his Web site atop information about the changeover.

  • New York Times: Deported in a Coma, Saved Back in U.S... By Deborah Sontag. Excerpts: Soon after Antonio Torres, a husky 19-year-old farmworker, suffered catastrophic injuries in a car accident last June, a Phoenix hospital began making plans for his repatriation to Mexico.

    Mr. Torres was comatose and connected to a ventilator. He was also a legal immigrant whose family lives and works in the purple alfalfa fields of this southwestern town. But he was uninsured. So the hospital disregarded the strenuous objections of his grief-stricken parents and sent Mr. Torres on a four-hour journey over the California border into Mexicali.

    For days, Mr. Torres languished in a busy emergency room there, but his parents, Jesús and Gloria Torres, were not about to give up on him. Although many uninsured immigrants have been repatriated by American hospitals, few have seen their journey take the U-turn that the Torreses engineered for their son. They found a hospital in California willing to treat him, loaded him into a donated ambulance and drove him back into the United States as a potentially deadly infection raged through his system.

    By summer’s end, despite the grimmest of prognoses from the hospital in Phoenix, Mr. Torres had not only survived but thrived. Newly discharged from rehabilitation in California, he was haltingly walking, talking and, hoisting his cane to his shoulder like a rifle, performing a silent, comic, effortful imitation of a marching soldier.

    “In Arizona, apparently, they see us as beasts of burden that can be dumped back over the border when we have outlived our usefulness,” the elder Mr. Torres, who is 47, said in Spanish. “But we outwitted them. We were not going to let our son die. And look at him now!”

  • Physicians for a National Health Program: Unhealthy Solutions: Private Insurance, High Costs and the Denial of Care. An Interview with Steffie Woolhandler. Excerpts: We have looked at bankruptcy to see what share of all U.S. bankruptcies are due to medical illness and medical bills. It turns out that at about half of all U.S. bankruptcies are due at least in part to illness. The most surprising thing in our study on bankruptcy was that the overwhelming majority of those American families pushed into bankruptcy by medical bills had insurance, at least at the onset of the illness that bankrupted them. About 76 percent of all people in the U.S. pushed into medical bankruptcy do have health insurance when they first get sick.

    There are two ways that they are bankrupted. Sometimes people have insurance through their job, but they become too sick to work, or have to take off work to care for a very sick child, and they lose their health insurance. So they have health insurance and then lose it because of the illness itself.

    But another very frequent scenario in our bankruptcy data involved people who held onto their insurance, usually private insurance, throughout the illness that bankrupted them. They were insured the entire time, but were bankrupted anyway by gaps in their coverage — uncovered services, co-payments and deductibles.

    Private health insurance is a defective product. On one hand, you may lose it when you need it most — when you get sick. On the other hand, even if you are able to hold onto private insurance, the gaps in the coverage mean that you may be bankrupted anyway.

  • New York Times: The Health Care Challenge: Sailing Into a Perfect Storm. By Uwe E. Reinhardt.
  • U.S. News & World Report on Friday issued its America's Best Heath Insurance Plans rankings and published several articles related to the issue. Headlines and summaries appear below.
  • Los Angeles Times: Obama urged to overhaul healthcare, stat. Groups representing retirees, business and labor call for comprehensive healthcare reform in the new administration's first 100 days. By Noam N. Levey. Excerpt: Four leading advocacy groups representing business, labor and retirees are starting a campaign today to press Barack Obama to enact comprehensive healthcare reform, upping the pressure on the president-elect to tackle the issue quickly after he takes office. In a letter to Obama, the Business Roundtable, the National Federation of Independent Businesses, AARP and the Service Employees International Union urge that a healthcare overhaul be a priority in the administration's first 100 days.
  • Health Beat: Advice for the “Seemingly Healthy”: Know Your Chances (Part I).
  • Human Resource Executive Online: Insurance Producers Worried Obama Health Plan Could Leave Them Out. Excerpts: A decade and a half ago, it was the now-defunct Health Insurers Association of America that led the charge against then-First Lady Hillary Clinton's health care reform plan, marshalling the entire business community in a revolt that had at least a bit to do with the Republicans' take-over of Congress in 1994. But as the health insurance community prepares for revived efforts at health care reform under president-elect Obama, it is not the insurers who write the coverage, but the producers who sell it, that seem most alarmed by changes that could be coming. ...

    And it isn't just life/health specialists who are paying attention. Agents and brokers that traditionally have been engaged primarily in commercial property/casualty increasingly have been relying on the profitable growth of health benefits as a hedge against the waning and waxing of the insurance pricing cycle. "Employee benefits, for independent agents, is the fastest part of their book of business," said Robert Rusbuldt, president of the Independent Insurance Agents & Brokers of America. "For a medium-size agency, employee benefits is now constituting a meaningful size of their book of business, and it's the most profitable part of their book of business, because there's no soft market."

  • Physicians for a National Health Program: Lessons from the U.K. By Martin Roland, D.M., The New England Journal of Medicine. Excerpts: The United Kingdom takes the importance of primary care for granted. The U.K. government is effectively the country’s single payer, and successive administrations have been convinced by mounting evidence that primary care promotes high-quality, cost-effective, and equitable health care. If anything, the U.K. government has become more convinced over the past 15 years that strong primary care needs to be at the heart of the country’s health care system — quite the reverse of the situation in the United States. U.K. primary care physicians now have average earnings of $220,000 (in U.S. dollars), which is more than many specialists earn. ...

    Having a single-payer system also means that U.K. primary care physicians hold each patient’s lifelong record, which includes a letter regarding every visit to a specialist. Virtually all primary care physicians use electronic medical records, and laboratories now generally download lab results directly into family practitioners’ computer systems. Again, the government took advantage of having a single-payer system to define common standards to which all suppliers of electronic medical records must adhere. ...

    What can we learn from the U.K.? Through a single payer system the U.K. has been able to build a strong primary care infrastructure with teams organized to provide high-quality coordinated care for everyone. They have done this at a fraction of the costs of U.S. health care, while compensating their primary care physicians very generously. And how is the U.S. going to use this information? We are going to reject it because it is not a uniquely American solution. Instead, we are about to expand our dysfunctional, fragmented, wasteful, costly system of financing health care, simply because it is uniquely American!? ...

    The U.K. system, like that of many other nations, uses their power as a monopsony to purchase much greater value in health care. The United States now wants to use our tax dollars as credits to help us purchase individual plans that do not cooperate but compete. That competition not only results in tremendous administrative waste, it also destroys any prospect of creating an effective monopsony

    So we are going to tax ourselves to provide even more funds to our unique, corporate-model private insurers to allow them to burn up more resources while establishing a barrier to much needed delivery system reform (a barrier because the financing is fragmented).

News and Opinion Concerning the U.S. Financial Crisis
Minimize "It is a restatement of laissez-faire-let things take their natural course without government interference. If people manage to become prosperous, good. If they starve, or have no place to live, or no money to pay medical bills, they have only themselves to blame; it is not the responsibility of society. We mustn't make people dependent on government- it is bad for them, the argument goes. Better hunger than dependency, better sickness than dependency."

"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.

  • New York Times Op-Ed: Beyond the Fat Cats. By Bob Herbert. Excerpts: The most important thing the Democrats and President-elect Obama can do with regard to the economy is bring back a sense of fairness and equity. The fat cats who placed the entire economy at risk with their greed and manic irresponsibility are trying to lay claim to every last dime in the national Treasury. Meanwhile, we’re nowhere close to an economic recovery program that will help the people who are hurting most. ...

    When the Champagne and caviar crowd is in trouble, there is no conceivable limit to the amount of taxpayer money that can be found, and found quickly. But when it comes to ordinary citizens in dire situations — those being thrown out of work or forced from their homes by foreclosure or driven into bankruptcy because of illness and a lack of adequate health insurance — well, then we have to start pinching pennies. That’s when it’s time to become fiscally conservative. President Bush even vetoed a bill that would have expanded health insurance coverage for children.

    We can find trillions for a foolish war and for pompous, self-righteous high-rollers who wrecked their companies and the economy. But what about the working poor and the young people who are being clobbered in this downturn, battered so badly that they’re all but destitute? Can we find any way to help them?

New on the Alliance@IBM Site
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  • Job Cuts Status & Comments page
    • Comment 11/10/08: Significant but unknown number of job cuts in STG starting today I think, Nov 10. Not location-specific but all in the US. -STG-IBMer-
    • Comment 11/10/08: Looks like all TTPM PMs will be let go to be replaced by PMs in India working remote..why you ask? Because they are cheaper...so we hit the road. -IBM_SUCKs-
    • Comment 11/11/08: Well now, IBM makes +$9B in NET profits, and, of course, the next logical move to to GR as many positions as possible. Sounds about right - yes ? I've worked for this company for a while now and I'm sick of this crap. How about a "CHALLENGE" from some prissy PE? Let me translate : If you folks can work serious overtime, for no overtime pay, and meet some CRAZY date in a project plan, then our reward is that I (the stately PE) will get a HUGE bonus, and you miserable worker-bee types get to try and salvage your personnel relationships because you sacrificed EVERYTING (ie:kids' birthdays, vacations, scheduled vacations, etc...) so IBM can APPEAR to be able to deliver ANYTHING, no matter how nuts the dates and scope are! Oh, and at the end of the project, there is NO, and I mean NO, confirmation that you will still have a job. How's that sound?

      There is always someone, somewhere in this great world, cheaper than you. And, IBM will give that person your job, to save a few "sheckles". It doesn't matter if they speak english well, or not...they are cheaper. Has anyone actually opened a trouble ticket with IBM internal support and gotten any sort of reasonable response? A rhetorical question, I know; everyone knows that if you do not work at a location with an actual IBM hardware or software tech, or your brother, son, or neighbor is not a computer expert, then YOU ARE SCREWED!!!!!!!!!! Good luck getting anything other than "Good afternoon Mr Man, my name is Earl, from Mayanta, India, is your computer plugged in? Yes...then can I please close this ticket (so I can get credit for "resolving" more tickets than my worker-neighbor "James").

      I'm not sure what the answer to this insanity is (see, I'm so messed up that my english diction is f%$ked-up also). Anyway, god bless the a-wholes at the exec level, making $$$$$, while us small workers pick up the crumbs, and HOPE our job will not be "GR'd" this year. No worries though, it will be GR'd next year so IBM can save .5% on some labor cost somewhere in some "cost-case". And in parting, all you SDM's and DPE types out there, remember that the email has been circulated to GR a large portion of the "Command and Control" positions. I think the official position must be to eliminate all of you pesky workers who have some notion of actually retiring from IBM with a livable savings. As Karl Marx was fond of saying "From each according to his abilities (the workers), to each according to his needs (IBM Mgmt and Exec)". Enjoy! -I-Used-2-Luv-IBM-Then-I-Woke-Up

    • Comment 11/11/08: I was laid off yesterday. I work in the Systems & Technology Group-Industry Systems. Based in Atlanta. Based on conversations with numerous colleagues, I estimate that 100-200 STG employees are laid off, mostly in the US, mostly working on the STG "worldwide team." I have been offered separation and severance terms commonly extended to US employees: 30-days until official separation, 2 weeks salary for every year worked up to 26 weeks total, 12 months worth of medial and insurance coverage. I am 48 years old. -25-Year IBM Vet-
    • Comment 11/11/08: I was a manager for 15 years at IBM. When it came to layoffs, our VP’s motto was “better a 2 on the old plan than a 3 on the new plan”. Time after time, we would fire a 2 performing “old plan” person rather than a 3 performing “new plan” person doing the exact same job, to meet our layoff quota. Of course we would put them in some sort of job category that sounded different but was totally bogus, like the “new plan” person was a “customer consultant” and the “old plan” person was a “client consultant”, but we all knew they did the exact same job. All other managers I knew in all other IBM areas did the same thing. If someone subpoenaed the lay off records of all 2 or better performing employees, the IBM evidence of age discrimination and bias in firing “old plan” employees would be overwhelming. -Anonymous-
    • Comment 11/11/08: Many have not noticed but the predictions made about the offshoring and the consequences are going on in Texas right now show what future business with IBM will be like for IT direction. Texas recently suspended ALL PAYMENTS until security compliance is done including not sending security/HIPPA docs and data to India for Steady State! Additionally a Bangalore based PM was responsible for the fowl up of a huge DB that was for the state Attorney General office which compromised 100's of cases....get used to it....want to see where SAM thinks should go next - you better read this - really insightful...from US NEWS.
    • Comment 11/12/08: Adding to my 11/10 comment: The STG resource actions in the US seem to be outsourced to IBM-India. -STG-IBMer-
    • Comment 11/12/08: Responding to a message below -- I don't think that the Texas screw-up had much to do with off-shoring. Most govt contracts end up in trouble because the legacy transformation cost is way underestimated just to land the job. Poorly staffed engagements fail whether it is delivered using local or offshore resources. On the topic of this forum -- I can confirm the story about job cuts in STG. The cuts seem to be more widespread including Band 9 & 10 senior employees. -Brandon123-
    • Comment 11/12/08: Lots of executives are being given packages today. They have until January to leave IBM and some are being asked to go to Dubai or China to work. Some are being re-leveled back to the field in sales. -say it ain' t so Joe!-
    • Comment 11/13/08: -say it ain' t so Joe!- Which divisions or sectors are the executives being packaged or pressured to transfer? What level/type and number of executives are being hit with packages or relocation options? -another_ibm_serial#-
    • Comment 11/13/08: STG US Layoffs. "STG SG&R Resource Action (SGAR) Notified 11/10/08 Last Day 12/10/08 Total = 215 40-49 yrs old = 32% 50+ yrs old = 55.4% Mostly in Sales, Marketing & other SG&A -anon-
    • Comment 11/13/08: -Brandon123- guess again bub, was there and know what happened - was offshoring and those were the problems and that was the MAIN problem, the State of Texas was promised in SLA's that NONE would happen and that was their biggest complaint on steady state move. Happened in Global and know all of the problems there and had to even train my SA's and TL's who were switched over to Bangalore Resources after they were RA'd, how else do you explain the HUGE problem with a Indian based PM and team doing that screw up on the DA's file structure and having a completely screwed up Active Directory and botched backups/production runs as well.

      Look for this to happen more as big blue goes more to this model and that we were hearing about constantly from uppers. Figured out why the ST changes yet???? Here's a hint, few of them actually in Denver, Boulder or other locations-think time zone 11 hours ahead. Some SDMs getting word now and would not be surprised if overseas takes over customer facing accounts way before the original 2010 date, like maybe MARCH 2009!!!! Anyone else heard the same? -UC'd-

    • Comment 11/13/08: "IBM slashes 215 senior positions, including six VPs; 38 jobs cut in RTP" .... Does anyone know the names of the execs that supposedly being let go? My bet is that if you check their names in the IBM directory in 30 days you will find that somehow they all have found jobs within the company.... I think this press release is all window dressing! -stillemployed- Alliance reply: You are probably right. Executives protect their own. Isn't it time we protected our non-management co-workers? We all know that most workers do not find new jobs. A union contract would fix that. No new hires until RA'd workers are brought back!
    • Comment 11/13/08: I was one of the 100 contractors discarded at RTP in October. I know that everything I have to say has been said already, but I don't care. I was a contractor for 5 years, originally doing the job of a regular who was 'supervising' me. He had been a contractor at one point too, but that was back in the glorious fabled times when IBM actually converted contractors into regulars from time to time. I did a good job and was instrumental in making and/or saving several large deals for the company.

      The results of my work easily helped IBM get or keep several million dollars of business. Yet, when it was time for them to improve their stock report, I was spat out and left for dead. I remember a few years earlier when they had their 'preferred vendor' business, giving exclusive STG contracts to CTG. I've got nothing against CTG, but everyone knew at that time what they were really doing was getting rid of what little ability contractors had to shop around and get a better deal. I worked with regulars of similar experience who did similar or even less demanding jobs for double or even triple what I was making. I wasn't even the worst. I knew someone who had been a contractor for 10 years who was discarded at the same time that I was.

      I'm angry and I'm afraid. I watched jobs go overseas to Taiwan and other places - people asked to train their replacements, knowing that they were being replaced. I think this 'off-shoring' stuff is despicable. Most of all, I hate the euphemisms that IBM spokespeople use for all of this stuff. Resource reductions, rebalancing skills. It's an outrage, and it should be illegal. I think that US companies shouldn't be allow to move jobs out of the country - period. If they want to add new jobs in another country, fine, but they shouldn't be allowed to sell us out like this. These people don't deserve our loyalty. I hope IBM crashes and burns. They deserve it. -used_and_discarded-

  • General Visitor's Comment page
    • Comment 11/12/08: I see that the "Blue Harmony" folks in SBY have to pay for the their Kickoff meeting buffet. $23-$28 for 11/18/08. Can't the head of this "Blue Harmony" project or Sammy "I just cashed in $74,000,000 in stock options" Palmicrapo spare a few scheckles and treat these folks to a decent meal for this "important" project "event"? Oh, gee, I forgot the IBM Value system is based on their employees spending more and more of their money and sacrificing more and more so IBM can supposedly save money to increase "investor value".. What a &^%$ing joke! I ain' t paying for the buffet or going since I don't think the Kool-Aid served with the buffet will be sweet at all! But, yes. some on this Big Blew harmony "let's make it finally work" project will pay for it and think the drink is better and sweeter than that concocted by Jim Jones. -bigblewharmonysux-

      Alliance Reply: Why not call for a boycott of the meeting? Not just because of the meal price; but for all the reasons IBMers have become disgusted with management's 'important events', like layoffs, offshoring, and pay cuts. Spread the word that it's being boycotted. See what happens. It's just a suggestion.

  • Pension Comments page
  • Raise and Salary Comments
    • Comment 11/09/08: Salary = 170000; Band Level = 9; Job Title = Consultant; Years Service = 10+; Hours/Week = 40; Div Name = 5; Location = NY; Message = Not including bonus -Anonymous-
    • Comment 11/11/08: Salary = $56k after 15% cut; Band Level = 7; Job Title = IT Specialist; Hours/Week = 40 after "remix", 50+ while exempt; Message = Consistent 1 and 2+ performer, but IBM never had the budget (yeah, right) to even pay me at their below-average "midpoint". I stayed solely due to the work from home deal, but when the lean and GR initiatives starting proving that IBM now values low cost over quality and client satisfaction I just couldn't take it anymore. -LongGone-
    • Comment 11/12/08: Salary = 1030000 ($21,203.20 US Dollars); Band Level = 7A; Job Title = Advisory technical services professional; Years Service = 5; Hours/Week = 40; Div Name = IBM india; Location = Bangalore; Message = I want details on of this Band 7A -Anonymous-
  • PBC Comments
    • Comment 11/08/08: This Yr Bonus = less; Prior Yr Bonus = tiny; Message = More PBC "2" and PBC "3"'s this year since IBM wants to pay out less GDP. They need the money to give Sam and his thugs more stock options and to fund another big buyback. Also you won't see too many of tate your manager this year either. Wonder why.. -anonymous-
    • Comment 11/14/08: Prior Yr PBC = 3; This Yr PBC = 2+; This Yr Bonus = 2.5%; Prior Yr Bonus = 0; Message = 30 year employee age 61 Female. Band 7. I would never recommend working at IBM to a young person. Or for a person to study for a job in the IT industry in college. -none-
  • 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. Some sample posts follow:

  • "What are my chances?" by "Ineka". Full excerpt: What are my chances getting in as an entry level consultant in IBM? I have 1.5 yrs of experience with the government doing auditing, a bachelor's degree in accounting and good internship experience. I just applied via the IBM web site but I am wondering how effective that is. Unfortunately, I do not know any insiders who can forward my resume in but my main question is, what are my chances? Thanks!
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.