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For its own reasons, IBM executives continue to say little about company layoffs. That policy has backfired, attracting still more scrutiny and criticism. ...
We have asked IBM about its recent layoffs, but the company has declined to comment. For the record, J. Randall MacDonald, IBM's senior vice president for human resources, told The New York Times in March that it is routine for the company to lay off some employees while hiring elsewhere. "This business is in a constant state of transformation," MacDonald said. "I think of this as business as usual for us."
The Times article also chronicled how IBM and other companies have scattered their layoffs, presumably to remain under the radar as worker rage intensifies. Former IBM workers provide a different perspective from MacDonald's, noting that the company reported strong quarterly results in January. One engineer recently laid off by IBM told the Times that the company is using the downturn "as an excuse to lay people off." ...
The nasty tone of the offshoring debate is a symptom of economic uncertainty and plain old fear about the future. Workers, especially engineers, see no end to the mounting pile of pink slips. Many U.S. corporations are now so fearful of a backlash that an unprecedented number of high-tech H-1B visas for fiscal 2009 have gone unused. Industry backers of H-1B point to the current surplus of high-tech visas as an indication that market forces have corrected any abuses of the program.
Union officials would counter that H-1B visas represent a government subsidy to industry that ultimately allows it to ship skilled jobs with decent wages overseas in the name of saving labor costs.
I really do understand if a company is in trouble it needs to cut costs. But in the case of IBM, they're not in trouble, and the way they are 'cutting costs' reminds me of a thief in the night.
|Year||U.S. Workers||Workers Cut||Percentage Cut|
* Estimated based on rumor of 16,000 cuts. 10,000 already confirmed.
The Watson's had great loyalty to their employees....today's IBM sees them as parts of a scheme to squeeze as extract as much profit as possible....worldwide. If today's leaders of IBM could shed all the retiree pensions and medical benefits, they would do it in a picosecond The only thing stopping them is bad PR.
|Medical Plan||Employee Only
|Aetna Open Choice PPO||$659.10||$177.00||$1319.20||$810.00|
|Health Net NY||$847.67||unknown||$1695.70||unknown|
|IBM EPO - MVP||$704.62||$193.00||$1409.23||$888.00|
|IBM Hi Ded PPO w/ HSA - MVP||$593.54||$146.00||$1187.09||$672.00|
|High Ded PPO - MVP||$514.21||$0.00||$1028.43||$299.00|
|Med Ded PPO - MVP||$614.97||$170.00||$1229.93||$782.00|
|Low Ded PPO - MVP||$773.97||$267.00||$1547.95||$1041.00|
|Dental Plan||Employee Only
For recent retirees who are under the FHA medical plan, the cost for Employee+spouse is indeed 2x the cost for just the single retiree. For retirees under the old plan, there is a roughly a $7000/$3000 subsidy. In your case, it sounds like you are on medicare, so you get the $3000 subsidy. Thus, the cost for you plus your spouse should be approximately 2x the cost for just yourself, plus $3000.
Now GM is going through the same chapter 11 routine brought on by $4 gas with the Commodity Futures Trading Modernization act passed in 2000 that promoted middlemen to drive the price of oil to $175 a barrel without touching a drop for 18 months. The average family had $300 a month in credit card debt overspending just to cover gas to go to work they are still trying to pay it off that has dried up discretionary income to buy cars and other things like homes. It will be interesting to see if GM management and employees can circumvent the ploy of Chapter 11 for the benefit of lawyers and bankers to get to the pension assets. Here is what a retired GM executive thinks about the fate of their pensions. GM retirees facing cuts in pensions If plans are taken over in bankruptcy, billions would not be made up.
The 80's, 90's, and this decade will go down in history as the assault and demise of retirement for the baby boomers shifting to a lifetime of work. Oh, don't forget that half of those over the age of 65 have a disability that prevents them from working full time.
Did you know that Newt Gingrich, while speaker of the house and my congressperson told us at a town meeting that Social Security was fixed and it Medicare needed fixed and don't worry about Social Security?
I am not sure where you come up with the idea that Social Security is unsustainable when a high profile libertarian and conservative say otherwise.
Its nice that you plan on working until you are 70 but IBM sent some of our jobs to India when we were 53. Ask around and see how that income and benefits was replaced.
It is nice that you are a proponent of 401Ks. Are you aware that a 401K was never intended to replace a pension, but to supplement it? what do you say to people that worked for lower wages in exchange for the promise of pension and health care and had the rug pulled out from under them in they 50s and 60s, what to late to make it up, by a corporation still makes 10 Billion a quarter?
If a 401K and no health care is so great, why doesn't Sam have a similar plan to ours. Why does he not even a pay a deductible for his health care. Why is his pension guaranteed?
Did you know that people have gone back and compared what their 30 year pension was worth versus what a 401K over the same time was worth about 50%, half as much?
What do you tell people that worked for lower compensation for promised benefits and now their meager pension doesn't even cover the cost of premiums, let alone any medical expenses?
While you don't believe in national health care the United States is the only country in the world that does not. We pay about double for health care with worse health outcomes that the rest of the world.
What doesn't work is buying insurance, paying 1/3 of our health care dollars to insurance companies that pay lawyers to deny people coverage. What do you say to diabetics that cannot get coverage in the "free market"? Are you aware that under John McCain's health plan he would not be covered because he had cancer?
People are not dying in the streets of Cancun, England, France, Germany, Australia or even Cuba due to national health care being a failure.
My current congressperson is Dr. Tom Price, or Dr. No. Why is it that he always votes against health care for the masses but does not give up his government health care? Is Senator Kennedy dead because he has government health care or has he far out lived what you would have with your meager 401K plan?
It is very common for federal employees, IRS employees, police, and teachers to receive the same, after 30 years, 75 to 80%. Compare with my 23% from IBM, no cost of living, and health options that eat up most of the piddly pension payment. Now compare with Palmisano; Sam will get somewhere between $10,000 and $20,000 a DAY.
I am not sure why anyone would think that it is unreasonable to work for a company, who always emphasized how good the long term benefits like the pension of IBM were even though the wages were less than other companies, to not expect the pension emphasizing "I don't want you to go to work for the competition as IBM's long term benefits are outstanding" to have the company keep their word. I could justify my lower wages in those days knowing that those monies I was not getting were being deposited in the pension fund for my benefit. At that time, the pension was calculated as 1.5 times your salary times your years of service with no cap on years of service.
When Lou came in, changed the pension calculation to 1.35 times your salary with a cap of 30 years. Shortly after that, he awarded himself 20 million shares of IBM stock and averaged over $20 million a year in compensation for nine years.
A year later, in 1999 the cash balance conversion was announced. It released about $10 Billion from the defined benefit pension fund for vapor profits to boost the bottom line and employees lost 50% of their anticipated pension. Well thought out, well executed, and the courts supported the pension theft along with Congress. Money well spent by the Corporate PAC's.
If my US Senator feels he needs 80% of his final salary, why should I be happy with 23% and if you add in Social Security, it rises to 40% with the purchasing power with no cost of living adjustment cutting the purchasing power of the pension in half, in 15 years especially since the CEO of IBM gets $10K to $20K a day?
Everyone on this board, well almost everyone, knows IBM stole the long term employee pensions in the 90's. The money IBM stole went to boost profits and to grease the pockets of the IBM former and current executives. This has nothing to do with entitlement. I earned every bit of what I expected and never got, on call for IBM for three decades 24/7 keeping customers satisfied in the field face to face in the customers office.
If I had known, a guy like Gerstner could alter the commitment, I would have demanded higher pay when I was 20 something so I could invest into something like the 401K. Unfortunately, the 401K was not available then and when these pension rule changes took place after 30 years, I could not make up the lost pension especially since they were forcing 30 years employees and sometimes less, out the door in their late 40's or early 50's before their pension maximized. Good luck, you have taken note not to trust IBM, but with the market losses in most 401K's, all the gain of your 401K over 10 years was lost in 12 months in 2008, you might have to ramp up your savings, a lot. In fact, you might have to work for life or die in poverty.
As a side note, you might be lucky and not have a disability that prevents you from working full time. Where today, there are 49 million Americans who are disabled according to the US Census and there are 50 million who are going to receive a $250 check from the Government as SS, SSDI, and Veterans DI. Only 201 million are left that are not receiving federal checks and not disabled and includes kids and 20 million illegal aliens who cost the taxpayer $300 Billion a year and $1,000 each year from every American's health insurance policy. I suppose some of the 50 million might be disabled but SSDI is granted in only 40% of the requests for SSDI payments.
Unless these kinds of problems are addressed, most will have a lifetime of work, instead of a lifetime of retirement after 65. If the defined benefit pension of public employees and others protected by unions of school teachers and police enjoy a lifetime of retirement, then it should have been possible for IBM to keep its commitment to its employees. The money had been set aside over three decades or more. Unfortunately, Gerstner had no obstacles in his way to stop him from "stealing the pension fund". No union, no organization, weak employee rights laws thanks to the courts and congress, along with a passive work force. Human Resources declared war on its employees.
Thanks for sharing what your expectations are in the future. It appears, the last two decades of convincing employees they are entirely responsible for their future is working, even though, the executives are being taken care of quite nicely with deferred corporate funded non-qualified defined pension plans like Sam.
By the way, if IBM had "done the right thing" with the defined benefit pension and chose not to steal the pension plan for the benefit of a few, then this board and others would not exist. But I firmly believe, "what goes around, comes around".
I had multiple, excellent job offers when I graduated from collage 20+ years ago. Had I known the IBM promises would be broken and discarded, I never would have chosen IBM as the place to invest my future.
Snow's case is typical of the way corporate executives have, for the past 35 years, managed to gild their retirement benefits even as they hollowed out workers' pensions. It started with the 1974 Employee Retirement Income Security Act, the law ostensibly designed to ensure that workers could collect the retirement benefits they'd earned. erisa brought some important reforms—including establishing the federal Pension Benefit Guaranty Corporation (pbgc) to help workers whose pensions went bust—but it also was riddled with favors to business. And in the decades since, legions of lobbyists have helped create numerous new loopholes, exemptions, and special deals. The result is two separate and unequal pension systems: Executives get the equivalent of antebellum mansions, while workers get leaky shacks liable to collapse at the first harsh economic wind. Here are 10 of the key ways in which it happened. (Be warned: This stuff gets a bit technical. Washington is full of people who are very well paid to figure out insanely complex ways to take money from you and me.)
After the war, my father joined IBM and remained there for about 15 years. I remember that he was constantly in debt from paying our college tuitions and medical bills for his ailing parents. He never talked about it, but every so often, I would see a line of bills from credit companies spread out on the bed. He had a fierce dislike of Wall Street and the banking industry, formed during the Depression and abetted now by his high-interest debts. Although he had a three-hour round-trip commute on the New York Central Railroad every day from our home in a then-unfashionable part of the Hudson Valley, he often remarked how grateful he was that he didn't have to ride the New Haven trains with all the cocktail-wielding brokers. Even if he'd had any money to spare, he wouldn't have invested it on Wall Street. But when he retired, he got his pension, which my mother continued to collect after he died—not much, but enough to live on in a frugal way.
Lost revenue isn't the only problem, Obama says. He contends the current system gives companies an incentive to invest overseas rather than creating jobs in the U.S. "It's a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, N.Y.," Obama said Monday.
If Obama's proposal becomes law, the hard-hit companies would include tech bellwethers like Hewlett-Packard Co., IBM Corp., Cisco Systems Inc., Microsoft Corp. and Google Inc. Each of those companies realized a benefit of more than $1 billion from lower foreign tax rates in their most recent fiscal years - an advantage that could lost if Obama is able to change the rules. ...
Collectively, HP, IBM, Cisco, Microsoft and Google lowered their tax bills by a combined $7.4 billion in their last fiscal years by taking advantage of lower tax rates outside the United States, according to an analysis by The Associated Press. ...
Obama reasons that U.S. companies will create more jobs in the United States if there is less of an advantage to setting up operations overseas.
But Guardino disagrees, maintaining that high-tech firms and other U.S. companies are establishing more foreign offices to take advantage of their biggest growth opportunities. And as they bring in more revenue overseas, companies are also able to hire more workers in the United States as well as in other countries, Guardino said. (Editor's note: If this is the case, why has IBM's North American employment plummeted?)
Economists are divided over whether higher taxes would give corporations incentives to move jobs overseas or impair economic growth at home. In the coming debate, both Mr. Obama and the business lobby will claim that their way will save jobs.
The top corporate tax rate is 35 percent, but the Treasury Department estimated that in 2004, the most recent year for which data is available, American multinationals paid $16 billion in taxes on $700 billion in foreign income — an effective rate of 2.3 percent. ...
Mr. Obama said most Americans paid taxes as “an obligation of citizenship,” but some businesses and rich people were “shirking” their duties, “aided and abetted by a broken tax system, written by well-connected lobbyists on behalf of well-heeled interests and individuals.” “It’s a tax code full of corporate loopholes that makes it perfectly legal for companies to avoid paying their fair share. It’s a tax code that makes it all too easy for a number — a small number of individuals and companies to abuse overseas tax havens to avoid paying any taxes at all,” the president said. “And it’s a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York.”
The president vowed Monday to overhaul a tax code that allowed companies to pay less tax, as he put it, to “create a job in Bangalore, India, than if you create one in Buffalo, New York.” One element to that change could be the elimination of a deduction for American companies when they invest in subsidiaries outside the United States.
American companies have tens of thousands of employees in India in wholly owned subsidiaries. Many of these Indian operations handle customer service and back-office functions, particularly for banks and credit card companies. American businesses employ thousands more in India by contracting work to local technology and outsourcing companies. ...
Many business people in India were upset by Mr. Obama’s tax proposal. The president of the Associated Chambers of Commerce and Industry of India, Sajjan Jindal, said it could “kill the spirit of competition.” The Indian affiliate of CNN spent Tuesday afternoon asking economists and politicians whether Mr. Obama was “anti-India.” An editorial in The Times of India said Bangalore had become a “catch-all term to hang U.S. economic woes on.” ...
Some big American companies have large numbers of employees in India. For example, General Electric has about 14,500 employees in India, I.B.M. more than 74,000, and Citigroup more than 10,000. In addition, India’s information technology and outsourcing companies employ about 2.2 million people, and American companies account for about 60 percent of their business.
“Yeah, in a competitive field—if suddenly a quarter of the people are more equipped, but you don’t want to take the risks with your body—it could begin to seem terribly unfair,” he said. “I don’t think we need to be turning up the crank another notch on how hard we work. But the fact is, the baseline competitive level is going to reorient around what these drugs make possible, and you can choose to compete or not.” ...
And yet when enthusiasts share their vision of our neuroenhanced future it can sound dystopian. Zack Lynch, of NeuroInsights, gave me a rationale for smart pills that I found particularly grim. “If you’re a fifty-five-year-old in Boston, you have to compete with a twenty-six-year-old from Mumbai now, and those kinds of pressures are only going to grow,” he began. Countries other than the U.S. might tend to be a little looser with their regulations, and offer approval of new cognitive enhancers first. “And if you’re a company that’s got forty-seven offices worldwide, and all of a sudden your Singapore office is using cognitive enablers, and you’re saying to Congress, ‘I’m moving all my financial operations to Singapore and Taiwan, because it’s legal to use those there,’ you bet that Congress is going to say, ‘Well, O.K.’ It will be a moot question then. It would be like saying, ‘No, you can’t use a cell phone. It might increase productivity!’" ...
All this may be leading to a kind of society I’m not sure I want to live in: a society where we’re even more overworked and driven by technology than we already are, and where we have to take drugs to keep up; a society where we give children academic steroids along with their daily vitamins. ...
This winter, I spoke again with Alex, the Harvard graduate, and found that, after a break of several months, he had gone back to taking Adderall—a small dose every day. He felt that he was learning to use the drug in a more “disciplined” manner. Now, he said, it was less about staying up late to finish work he should have done earlier, and more “about staying focused on work, which makes me want to work longer hours.” What employer would object to that?
It also said that the 401(k) plan "is one of the most beneficial tools" for employees to save for retirement.
Revenue and dividends are going only to the investors, and year after year more bonuses are going to IBM managers. This is having a negative affect on the morale of IBM employees. Bonuses to corporate management are under scrutiny by President Barack Obama’s administration. Management bonuses are also under the control of Sam Palmisano, our CEO and Corporate Social Responsibility offices. We will no longer accept these excessive benefits to IBM managers. We ask IBM to reinvest money in the direction of IBM workers (main stakeholders of this company), and especially to the employees that have not received salary increases for 7 or 10 years. On top of this many education course are cut due to low funds.
Alliance reply: Agree whole heartedly. Although, "rising up to stop him" would not stop him; BUT rising up to take a seat at the bargaining table and being able to influence stockholder meetings in your favor (like CWA did at AT&T) would be just as good as an end result. He and all CEO's like him will continue to get rich and gloat with their wealth... however, organizing will at least level the field.
I am so disappointed about the way I was treated after 28 years of service that I would not recommend my worst enemy to work for this company. After 28 years of good performance and 25 years of management, I was treated like something flushed down the toilet. I did not get 30 years, therefore, my retirement check is altered in pay and my medical is gone in one year.
A landed person from India comes over and take my job. I was not even thanked for the years of travel, hard work, recruiting, etc. that I did for this company. I would have never thought my career would have ended this way with this company. On 4/27. ,my manager told me to send her my thinkpad, badge, and IDs to my computer and I could take the rest of the day off. She told me she would send me my check when she got the items. Twenty eight years ended in 1.5 minutes. I am truly disappointed. -Very disappointed-
Ok, enough ruthless thinking... I'm so sorry you folks at IBM are going through this. Been there done that... got out when I saw the writing on the wall. I wish you guys the best, when you're looking for your next job ... don't wait for these guys to chase you down the hall. Be proactive, take your careers (and lives…) back!!! Start a union or get out... either way, you'll be happier -Sincerely-
IBM won't admit that the RA program is an offshoring program, so RAed people cannot take advantage of the Obama changes for the TAA program to support displaced workers. And you get severance but so what, it gets deducted from your unemployment claim, so that is a wash.
IBM is pocketing the Obama COBRA subsidy on health insurance so kiss that goodbye. The IBM Future Health Account will only last you 4-5 years so if you are RAed in your 50's you'll go bankrupt before you reach Medicare age. Oh, and wait until you see the costs of retiree medical thru IBM starting about $10K/year for a single person. They discontinued traditional pensions after the courts wouldn\'t let them loot the old pension plan. I could go on and on, but this is why IBMers no longer trust the Palmisano crime family. -Spartacus-
Just a warning, this may become your full salary. IBM is just testing the waters. I covered a meeting for my manager. Here is the plan. By year end 2010 10% of IBM will be located in the US. The remaining employees will be located in india, singapore, hong kong, vietnam, communist china, brazil, argentina, russia & eastern europe etc.... The few with balls in EU will remain for a while. I have a question. Why are IBM US employees so cordial to the H-1Bs that are here to take your job ? Why do you even train them? A small severance package? What do you think your expected survival rate would be in their country? They know you are losing your livelihood to them.
You have two options. Organize or remain as you are. I don't work for IBM anymore, but the people who read this site (non IBM employees - media included ) have a bit of a problem understanding and empathizing with people who don't seem to want to help themselves. After reading many of the posts, I'm in agreement. -ex_ibm_lackey-
In light of the current economic conditions, IBM recently notified CDI that from May 10th through June 13th all CDI ITD resources are required to reduce normal work schedules by 20%. This action is not a reflection of any dissatisfaction over the services provided by you or CDI but rather a business decision. Your IBM Manager will work directly with your CDI Account Executive to coordinate a reduced work schedule that minimizes any impact to IBM or its clients. You should receive the communication regarding your reduction schedule from your CDI Account Executive. When you begin working the reduction schedule and notifying CDI of these reduced work hours please enter 0 hours into the CDI Web Based Time reporting tool and note the word “furlough” in the comment section. This decision and action is not to be discussed with any IBM clients. It is expected that normal work schedules will resume after this request is completed
Talking about headcount implies that they have a head, which would make them sound human. IBM's workers are not a valued resource, they are numbers on a chart that have associated financial implications to the company with their salary, benefits, retirement, and need for costly items in an office such as chairs, electricity, and heat. You are not defined by the skills and experience that you have. Your PBC rating is arbitrary. You are an FTE, and you cost too much money.
There are people in other countries that don't need the same salary, and they don't require benefits of the same nature. As for the minimum number of people required in the USA, they'll take care of that with the Band 3 people they bring in new to the GDFs. Those folks will gladly sign up for the jobs, what with unemployment being so high and the economy in this state. But hey, without an employment contract, we are free. Free to have them do whatever they wish to us. -Pickles-
An organization called Conservatives for Patients Rights is running TV ads that try and scare you about any changes to the health care system. The ad says Obama's system will put bureaucrats in Washington in charge of *all* your health care decisions. They want you to believe you won't be able to choose your doctors or hospitals and that the system will be worse than what they have in England or even Canada. They want you to believe you will have no control over anything.
Who are the Conservatives for Patients Rights? The organization is backed by a man named Richard Scott. Don't know who he is? Scott previously started the for-profit hospital chain in 1987 that later became the $23 billion Columbia/HCA. He was ousted from this post in 1997 after an FBI investigation of Columbia/HCA that led to 14 felony convictions and $1.7 billion in criminal and civil fines for Medicare fraud.
Now, do you think they have your best interests in mind? Don't fall for their FUD.
At issue are so-called individual plans that consumers get on their own when, say, they’ve been laid off from a job but are too young for Medicare or too “affluent” for Medicaid. An estimated 14,000 Americans a day lose their job-based coverage, and many might be considering individual insurance for the first time in their lives
But increasingly, individual insurance is a nightmare for consumers: more costly than the equivalent job-based coverage, and for those in less-than-perfect health, unaffordable at best and unavailable at worst. Moreover, the lack of effective consumer protections in most states allows insurers to sell plans with “affordable” premiums whose skimpy coverage can leave people who get very sick with the added burden of ruinous medical debt. ...
For our investigation, we hired a national expert to help us evaluate a range of real policies from many states and interviewed Americans who bought those policies. We talked to insurance experts and regulators to learn more. Here is what we found...
Most Democrats, however, remained skeptical about the insurance industry's offer. "Trusting insurance companies in a regulated market is not something I think the American people are ready to do," Andy Stern, the president of the Service Employees International Union, told ABC News. ...
In an effort to find a compromise on an issue which has become a key sticking point in the debate over health-care reform, Baucus asked Sen. Chuck Schumer, D-N.Y., to develop a plan, which he presented Tuesday, that would require any new government-run insurance program to comply with all the rules that apply to private insurance.
"Just as bad as a public plan with an unfair advantage, is no public plan at all," said Schumer. "The American people have some problems with the government. But they have a lot more problems with private insurers."
More recently, insurers have begun trying to save money by shifting their focus from patients to doctors. Increasingly, insurers have been delaying payments to physicians, and, doctors say, insurers are underpaying for many services. Physicians are now fighting back, bringing lawsuits against insurers. Doctors often complain that we live in a terribly litigious society. Now, they are hiring the lawyers. Are the suits justified? ...
Insurers have focused on business practices that include delaying payments to providers, “bundling” several procedures and then reimbursing at a lower rate, and underpayment of services provided outside the network. These newer cost-containment measures have now raised the ire of providers. According to an article written by Maureen Glabman in the February 2009 issue of Managed Care, class-action lawsuits filed by providers against all of the major health plans have nearly tripled from the late nineties to the first five years of this century.
"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.
President Clinton is wrong. This is not a “do-nothing” Congress: They’ve done lots of damage .In a major act of fiscal folly, Congress repealed that Depression-era reform the Glass-Steagall Act. Now banks, insurance companies, and brokerage houses can merge away. This leaves banks, already in trouble from making so many marginal commercial loans, vulnerable to any disasters in their allied insurance companies and brokerage firms. When the banks get in trouble, guess who bails them out?
Speaking of bailing out banks, I also ran across Timothy Geithner’s name in 1998. In July 1998, we ran excerpts from a transcript of a House Bank Subcommittee. Bernie Sanders questions Geithner, who was then Assistant Secretary for International Affairs for the Treasury Department, about whether the IMF is “simply a front group for giant banks, global corporations, and wealthy investors.” Sanders shines, asking why the IMF makes loans to countries that suppress human rights, such as Indonesia. And Geithner? Well, he just sounds like a technocrat. (But we already knew that.)
On the other hand, in the testosterone-poisoned sandbox of the male investor, the most important thing is beating the other guy; the second most important: bragging about it. The long term is somebody else's problem, and asking for advice is an admission of inferiority. Worrying about risk is for sissies. Leverage is good, since it raises returns -- while the market goes up. Is it any wonder the male-dominated world of Wall Street has boomed and busted every few years for more than two centuries?
Women, by contrast, put safety first. Even after controlling for age, income and marital status, women are more inclined than men to wear seat belts, avoid cigarette smoking, floss and brush their teeth and get their blood pressure checked. They even have been shown to be 40% less prone than men to run yellow traffic lights. Women are less afflicted than men by overconfidence, or the delusion that they know more than they really do. And they're more likely than men to attribute success to factors outside themselves, like luck or fate.
Trading down to a lower-skilled job isn't just a hit to Mr. Friedson's ego. It could also hurt his bank account for years to come. Economic research shows that the consequences of graduating in a downturn are long-lasting. They include lower earnings, a slower climb up the occupational ladder and a widening gap between the least- and most-successful grads. In short, luck matters. The damage can linger up to 15 years, says Lisa Kahn, a Yale School of Management economist. She used the National Longitudinal Survey of Youth, a government data base, to track wages of white men who graduated before, during and after the deep 1980s recession.
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:
Essentially Obama wants to close a loophole in the tax code which would pretty much kill a large incentive for IBM et al to offshore. (If you saw their patent application...) Sure you may save on the dollar per hour rate, but overall the cost incentives just went down because you lose the tax savings. Not to mention that the value add benefit isn't there.
As someone who sold lab services, I routinely had to show the value add of why it was smarter to bring in a higher priced body for a shorter period of time, because I could show the value add and justify the rates. Offshoring is definitely losing its luster. If Obama gets his way, IBM just got spanked along with a couple of other multi nationals.
So too it is with IBM execs. When they choose to deny the many failures, high turnover, rapidly escalating salaries, quality problems and lack of productivity of low cost countries because they have tasted apparent cost savings, their arrogant strategy of myopic, relentless cost-cutting and offshoring will continue. Denial is contagious. Imagine quarter after quarter after quarter of denial heaped upon denial heaped upon denial.
Isn't it remarkable how IBM is spending more executive resource on optimizing the stock price than it is on growing the company.
Like the captain of the Titanic who received warnings of bergs ahead, but arrogantly steamed on at speed, Sam and his henchmen have had their warnings, but have chosen to ignore them and in fact have told the harbingers of doom to STFU.
So by Sam's decree, it will be "stay the course, full speed ahead" into trouble.
Like the captain of the Titanic, the thieves and scoundrels at IBM's helm will drive toward failure at top speed and by the time they recognize the abysmal condition of the company, there will be no way to recover. Unlike the captains of old who had character to go down with their ships, Sam and his ilk will head for the executive class, gold-plated lifeboats and leave the employees and stockholders with squat.
"Nice to have known you, it was great (for me) while it lasted" Sam will shout to those freezing to death after the IBM ship sinks.
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