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Highlights—June 6, 2009

  • Hudson Valley Times Herald-Record: Protesters decry IBM job cuts. Union backers take message to the streets. By Christine Young. Excerpts: For 25 years, Tom Midgley has dodged the black Fridays and Monday massacres that have become just another day at the office within Big Blue. "The work I've been doing is a niche thing," shrugs the information technologist, guessing at why he's been spared. Midgley, president of Alliance@IBM, was among about 20 union supporters waving signs under a light rain on Route 9 Wednesday, protesting IBM's ongoing job cuts. Midgley has been trying to organize Big Blue since 1999, surviving dozens of mass firings, the "resource actions" and "work-force rebalancing" that keep IBM lean and stockholders happy. He said the union effort has failed because there's "a lot of fear." ...

    Among the protesters was Rick Clark, an IBMer for 11 years before he was fired in January. "What's ironic is two years ago, I found a job in Connecticut," he said. "It would have been a promotion and great pay." When Clark gave notice, IBM offered him more pay and new opportunities, so he stayed. "I joined the Strategic Planning group and gave presentations to executives," he recalled. "I got good appraisals and bonuses. Then I got laid off. It totally shocked me."

  • Hudson Valley Times Herald-Record: Reader comments concerning the above article. Selected comments follow:
    • A decade ago GM and Chrysler had short term profits as only objective, now they're going down and nobody feels bad for them. Now IBM is trying to increase their already big profits at the expense of their valuable employees; everybody will be happy to see them go down in a decade when they won't be able to make anything high tech any more.
    • I worked very hard and earned my position at IBM. I never feel that a job is "owed" to me - I must work hard every day to demonstrate my value. I did. I had very good performance reviews. I was extremely loyal to IBM, always worked hard long hours, sacrificed my home family life by traveling whenever IBM asked me (I never said no) and by working many nights and weekends. IBM expects loyalty, but shows no such loyalty in return.

      IBM is turning it's workforce into a mercenary group - every person for them self, no feeling of pride or loyalty to the corporation. Competition between employees is rising, and lots of backstabbing goes on.

      Your assumption, and others' assumption, that IBMers are complacent and have not earned their positions is not true. IBM is staffed by an amazing group of talented, dedicated, hard working people. Morale is low, yes, and the typical worker at IBM is now motivated by fear of being let go so they all work extra hard, even knowing this effort will have no bearing on being chosen for a lay off.

    • Have you ever wondered why IBM announces their profit is going UP while laying off reportedly thousands of OLDER, LONG-TERM QUALITY workers? What is remarkable is the demeaning and slick way IBM is conducting business: Taking tax breaks while laying off workers in small numbers all over the country on a monthly basis to AVOID REPORTING AND BAD PUBLICITY.

      They are outsourcing jobs then forcing good, long-term employees to forgo their UNEMPLOYMENT by telling them if they don't transfer across the country they will be considered to have "voluntarily resigned".

      Those workers that invested 28 years with a company being forced to retire without full benefits. Business requires change, I get it. Why not just say the truth. It's cheaper overseas and IBM no longer cares about their employees. PROFIT OVER PEOPLE. IBM is shrewd, profit-making but morally bankrupt. It's the change and hope you can believe in!! SHAME ON YOU, IBM.

    • There may be a few incompetent, complacent workers being laid off in the "race to the cheapest" that US corporations are currently running. But by and large, I'd bet the people being let go are vital, productive employees, willing to work for it, whose only fault is that they stood between the executives and the bottom line.

      Take ibm for instance: They're profitable, but still cutting American employees. Why? Because they need to make more profit (9.20 per share this year). And they fully intend to cut their way to that number, even if it is unhealthy for the company in the long term. And it will be...

      The forced migration of jobs offshore is short-sighted for both US business, and the United States. Corporate greed (and maybe too much government entitlement - but that's another rant) will destroy this country.

    • Currently, 29% of IBM's workforce is in the U.S., down from 35% in 2006. The fact that IBM has built up large workforces in such low-cost countries as India allows it to shift work abroad more easily, says Ron Hira, assistant professor of public policy at the Rochester Institute of Technology. See http://www.businessweek.com/bwdaily/dnflash/content/mar2009/db20090325_626883.htm?chan=rss_topDiscussed_ssi_5
    • It's no secret that IBM is outsourcing U.S. jobs. Last year, IBM's U.S. employment fell 5%, while emerging market employment rose 15%, particularly in high growth markets like India, China, Brazil and Russia. But typically, the company has filled those jobs with local recruits. Prior to this year, IBM (IBM, Fortune 500) has relocated some employees overseas, but those moves sometimes involved Americans training foreign workers, followed by a pink slip for the U.S. employee, according to Trip Chowdhry, senior analyst at Global Equities Research. See http://money.cnn.com/2009/03/31/technology/ibm/
    • What IBM is doing is not technically a "layoff" in common terms. It is a "resource action" meaning a "redistribution of the workforce." There are jobs available in a transfer within the company. These jobs can be anywhere, even out of the country. This is according to the Department of Labor in Albany.

      I had to research this myself because it makes my head spin off like the exorcist. If these people "refuse" the transfer, they are NOT eligible for unemployment and MUST either resign, apply for retirement or be terminated. IBM does NOT care for these AMERICAN workers who have built their company.

      Many of these people happen to be close to retirement age and have deep roots in the Hudson Valley. They own houses and just can't up and move "in thirty days" in this economy to San Jose or Austin. It just disgusts me.

    • I do support capitalism and the ability for anybody to rise in the corporate world and be rewarded for it, but there comes a point where the line has been crossed with corporate greed and it becomes ludicrous. IBM received tax breaks from NYS and what was their expression of gratitude: layoffs of employees based out of NY offices. That is theft and no loopholes can justify that. Its not capitalism: it's greed.

      Capitalism does not have to mean "screw as many employees or the community as much as you can." IBM outsourcing those jobs was a big slap in the face to this country and they are not entitled to anymore government benefits such as tax breaks. If you want to benefit from a capitalistic economy or take advantage of government benefits, then you need to be prepare to give something in return.

      I have read a post where someone stated that nobody is owed anything when referring to the IBM employees. How come nobody says that when referring to the shareholders or upper management?

    • The real war underway right now isn't being fought with terrorists. It's being waged by the wealthy on the middle class and poor. PL Editorial August, 2003.

      There's a tremendous, and rapidly growing, gap in the distribution of wealth in American society. While there will always be some gap in any meritocratic society, most of the current yawning chasm isn't due to differences in merit between the ultrawealthy and the middle class and poor. Rather, it's due to an ever-increasing imbalance of political and economic power, which has dramatically shifted since the mid-70s to favor the wealthy. Secondarily, it's due to the capture of almost the entirety of the mass media by the ultrawealthy, and its transformation in their hands into an incredibly effective instrument of propaganda on their own behalf.

    • While it makes little difference whether a Bill Gates has 600 billion or 601 billion, it makes all the difference in the world whether a worker is making $20,000 a year or $30,000 a year.
    • DarkestB4, I know you are a "right-Fighter" (always must be right no matter what and has the last word) and love to see your name in lights here however, you are wrong. These East Fishkill workers were "selected for a Resource Action". During the RA time period, workers are offered an opportunity to find work within the company before they are "freed". They were then offered jobs within the company for their specific skills. Since they refused the jobs (that were in Texas), IBM reported that refusal to DOL and the DOL cited them as ineligible because they REFUSED A WORK OFFER!!

      This happened to an entire department of people who know are unemployed, refused unemployment and are waiting for a nonsense hearing at DOL to have appeal on the decision. IBM is doing its workers very dirty and no un-cited source of "cut and paste" from you is going to make it right. These are good workers performing IBM-specific high level technical skills that just can't be used anywhere.

      This was not a typical layoff..It's a resource action within the company..IBM is great at finding loopholes like the one they are pulling now to deprive near retirement workers the recent OBAMA COBRA Benefit...It's not about you, DarkestB4, it's about them ...maybe you should go to the DOL hearing with them. You seem to know everything.....maybe you can help...Put your right-fighting to work! Have a nice day!

  • The Mainichi Daily News (Japan): 3 workers sue IBM Japan over alleged forced retirements, human rights violations. Excerpts: Three IBM Japan, Ltd. employees have filed a suit against the company with the Tokyo District Court alleging a violation of their human rights in a bid to coerce retirement. The suit calls for IBM Japan to pay 9 million yen in compensation and to end coerced retirement.

    According to the plaintiffs' attorneys, it's common for cases calling for redress after an employee has been forced to resign, but suits filed before retirement are extremely unusual. As companies proceed with permanent employee layoffs, the case appears likely to draw a great deal of attention. ...

    The case against the company was brought by Takeshi Kimura, 59, and two other members of the IBM Japan branch of the All Japan Metal and Information Machinery Workers Union (JMIU). According to the union and the complaint, the three men were repeatedly pressured to retire in meetings with their superiors, who told the three plaintiffs that the company no longer needed them, and that no one at IBM could work until 60 years of age, among other inducements. The men were called into such meetings around five times a month, during which one superior kicked a desk.

    When the men refused retirement, their superiors threatened to downgrade their work evaluations and reduce their wages, and took other measures to try and force the men to leave the company. The suit claims that using the alleged strong-arm tactics to coerce the men into retirement is a violation of the Labor Contract Act and an infringement of their human rights. ...

    "The company is laying people off even as it is gaining profits," says Kimura. "I want to stop the company from laying people off like this on behalf of all those workers who put their all into the company, and then were unreasonably forced to quit without even a chance to speak." IBM Japan's public relations department declined to comment, stating that it had not seen the case, and could not say how many people had retired from the company.

  • AOL Daily Finance: Did IBM bribe the House Speaker in Massachusetts? By Peter Cohan. Excerpts: In Massachusetts, it has been about 15 years since we had a speaker of our House of Representatives who has not left a cloud of ethical problems in his wake. The latest is happening right now, starring Sal DiMasi, who staged a reelection as Speaker, followed by a January 2009 resignation and the recent revelations about the real reason for that departure. And it involves the bluest of blue chip firms, International Business Machines (IBM).

    While IBM has managed to keep its name out of this story up until now, IBM bought the software company, Cognos, that allegedly bribed DiMasi and his associates to win two contracts, including a $13 million software contract with Massachusetts signed in August 2007. The $57,000 in payments from Cognos to a law firm to DiMasi were allegedly made in 2006 and 2007. ...

    As more details come out, IBM executives may be forced to take further steps to wipe the tarnish that this scheme could have on IBM's sterling reputation. One thing seems sure to me -- IBM will not be able to continue to dismiss this with a simple "no comment."

  • ZD-Net: IBM's Devil's Triangle: An enterprise software soap opera. By Michael Krigsman. Excerpt: IBM faces lawsuits and public embarrassment in the Philippines over a failed government project involving the company’s DB2 database product. The situation offers a textbook example of the Devil’s Triangle, and demonstrates the tensions and conflicts that arise between technology vendors, customers, and system integrators.
  • eWeek: IBM Unit Files Libel Suit Against Philippine Government Agency. Excerpt: The local unit of U.S. computer giant IBM has filed a libel suit against a Philippine government agency after being accused of selling it faulty software, court records showed Friday. IBM Philippines filed against the Government Service Insurance System after an advertising campaign in which it claimed the U.S. giant had sold it faulty software. IBM Philippines said the GSIS ads in local newspapers "were not only false and misleading, but were motivated by ill will and malice."
  • eWeek: H-1B Visas and Unemployment: A Federal Case. By Don Sears. Excerpts: The U.S. government, at least the part that is fighting H-1B visa fraud, is looking to prove a point about the program: that fraud in H-1B visa program and the number of visa holders in U.S. tech jobs are putting current struggling American technology workers out of work. Unemployment for the technology industry is up, just as every industry's numbers are up. But are companies going out of their way to replace Americans with H-1B workers? That's what the feds appear to be out to prove. ...

    The U.S. said it is "prepared to demonstrate to the court the manner in which the defendant's schemes, along with similar schemes by similar companies have substantially deprived U.S. citizens of employment." The government then points out that "in January of 2009, the total number of workers employed in the information technology occupation under the H-1B program substantially exceeded the 241,000 unemployed U.S. citizen workers within the same occupation."

  • Yahoo! IBM Employee Issues message board: "Charlie Rose interview of 2002, video" by "ibmmike2006". Full excerpt: I listened to this interview a few years ago, today, the interview of Lou Gerstner (CEO from 1993 to 2002) Age 60 in 2002, is watchable on video. The video was done right after he released his book "Elephants". At the time of the interview, there were 160,000 US employees with 319,000 world wide. I think today, there are 396,000 world wide and only about 100,000 US employees with about as many in India, a reduction of 60,000 IBM jobs in 7 years in the USA.

    Half of the program, when asked what he was going to do, was doing something about education. I googled education and Gerstner, and I see very little activity. Evidently, he found the Government Educated Indians of more value to IBM than the parents who paid for their kids education in the USA. The only place Lou wound up after IBM was as the Chairman of Carlyle group where he resigned and became a board member last year today at age 67. http://en.wikipedia.org/wiki/Lou_Gerstner

    The 36 minute video shows a "Young Sam" and how Lou "found his replacement" and how he pats himself on the back for "Saving IBM". He hates regulation of companies and laws like the Sarbane-Oxley law after Enron, Tyco, and Worldcom. He did not mention the Glass-Steagal Law that prevented fraud repealed in 1999 with the Gramm-Leach-Biley law that led to Enron, sub-primes, credit default swaps, and derivatives. He, like all corporate CEO's, hate regulation, and noted he likes it when it can be "modified" probably with the money that funnels into Congress from corporations.

    The same year Lou left IBM, he was a member of the Forbes Richest 400 in America and titled as a "Self Made Man". Yeah, from IBM Assets, that include its people, their defined benefit pension plan and annuity from the 60's, the mainframe.

    In 1997, he gave himself 10 million shares of IBM stock options that doubled the next year to 20 million plus an average of $20 million a year. In 2008, the 10 year stock option strike price was $53 and the selling price of each share was $108 I think. Not a bad "payday" for Lou.

    Take a look at this video, from November 2002 and ask yourself, did Lou turn IBM around to have three quarters of the employees outside the USA as IBM is today or did he save the company for its USA employees? The video is a bit jumpy depending on your download speed. Interesting to see his "body language".

    Reminds me of how you can tell a lawyer is lying, "His lips moved". He sure gives off a "cocky" demeanor. Quite different to see him on video verses reading the interviews in Business Week and others. I don't think he has given a TV interview since 2002. http://www.charlierose.com/view/interview/2286

  • BusinessWeek: Get Used to a 'Working Retirement'. The recession, a changed workplace, and increased life expectancies are altering the way Americans spend their golden years. By Chris Farrell. Excerpts: Our image of retirement is still shaped by the early decades after World War II. The elderly poverty rate plunged thanks to Social Security. Older Americans gained universal health-care coverage with Medicare in 1965. And Corporate America offered workers defined benefit pension plans based on a salary and years-of-service formula.

    It was in these years that retirees developed a distinct lifestyle captured by the mass migration to Sunbelt communities, traveling in RVs and bus tours, spending long mornings on the golf course and other recreational pursuits. The development of modern retirement is a great social achievement of the 20th century. But in the 21st century, the underlying economics of retirement are changing. ...

    Indeed, the current pension system is making everyday retirement insecurity worse. Employers have embraced defined contribution savings plans like 401(k)s. But such plans don't deliver a steady stream of income during one's golden years. There's also plenty of evidence that workers with access to defined contribution savings plans aren't taking full advantage of them, either.

    But wait, there's more: The health insurance system is widely acknowledged to be broken and is a strain on family finances. Even with Medicare coverage after age 65, the elderly are finding it necessary to pay for a greater percentage of their overall medical bill.

  • Business Insurance: Delphi intends to end salaried employees' pension plan. By Jerry Geisel. Excerpt: Financially troubled auto parts manufacturer Delphi Corp. said it intends to shed its underfunded pension plan for salaried employees and retirees as part of a plan to emerge from bankruptcy reorganization. In a filing Monday with the Securities and Exchange Commission, Troy, Mich.-based Delphi, which intends to sell many of its assets to a private equity firm, said it explored a number of alternatives for the pension plan, but none proved “feasible.” As a result, it said it does not expect to continue the plan and that the Pension Benefit Guaranty Corp. will take over the plan.
  • US News & World Report: Jobs That Still Offer Traditional Pensions. A few holdouts continue to offer these gold-plated retirement benefits. By Emily Brandon. Excerpts: Traditional pensions that pay out guaranteed benefits for life aren't easy to come by these days, as most employers have long since abandoned their traditional pension plans in favor of 401(k)'s. Still, there are some holdout industries that continue to reward lifelong employees with gold-plated retirement benefits. Here are a few places to look for jobs that may offer the coveted traditional pension. (A selected reader comment concerning this article follows:
    • One important profession wasn't mentioned in the article - the US Military! After only 20 years of service one is eligible to retire with 50% of salary, full medical and dental benefits for life, and a host of other benefits. Had I stayed for 30 years (until age 48) I could have retired with 75% of my salary. I retired this month and am only 38 years old - that's right, 38! In my case it works out to almost $40K a year for the rest of my life (adjusted upwards annually for inflation). Is it enough to live on forever? No, but it will make my house payment and gives me much greater flexibility than my peers in terms of future careers and options.
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  • Job Cuts Status & Comments page
    • Comment 05/29/09: Has anyone who was RAed been successful in submitting a petition for the TAA program benefits? It would seem that the IBM Resource Action is a prime candidate for this program. And that once a petition is accepted, then all 2009 RAs would be blanket covered by the first approved petition. TAA has to do with benefits for people affected by offshoring. A petition requires signatures of 3 affected employees. http://www.doleta.gov/tradeact/ -I-Want-My-TAA-
    • Comment 05/29/09: Well some of us have joined the Alliance recently. I've heard nothing about big June STG layoffs but assume this will be a more surgical strike this time. Remember labor unions are the reason why (most of us) do not work Saturdays and have a 5 day work week. Lest we forget that this is a benefit that was paid for in blood in the 1930s. -Anonymous-
    • Comment 05/29/09: When are we going to organize a protest against H1B visas? It is 1 thing to off-shore work, it is totally another to import cheap labor to take our jobs. PM at NYPD has stated his goal is to replace everyone except 2 key client facing people, with Indians. I see numerous job postings that state they are looking for "landed GD resource" - that's code for an Indian on an H1B visa. -Anonymous-
    • Comment 05/29/09: Regarding unemployment benefits in NC if you have received severance pay... here is the Q&A from the NC ESC FAQ: http://www.ncesc1.com/individual/FAQs/faqMain.asp#application I received separation pay (or severance pay, wages in lieu of notice, vacation pay, etc.). When should I file a claim? You are not eligible for unemployment insurance benefits for any full week covered by separation pay, vacation pay, etc. (nor may such a week count as your “waiting period week”). Generally, you should file your claim the first week after the period covered by the payment (if the last week of the payment is not a full week’s pay, you may file that same week, although you possibly will still be ineligible due to excessive earnings).

      IMPORTANT EXCEPTION: Individuals receiving severance pay are considered to be unemployed (and, therefore, may file a claim) during any week that they are registered at or attending an institution of higher learning, a secondary school or an approved training program.. You must provide documentation of your school attendance/registration, and you must meet unemployment insurance “availability for work” requirements. -Anonymous-

    • Comment 05/29/09: Responding to the question on how to file an appeal if you have been denied the 65% COBRA Subsidy. Go to www.dol.gov/cobra and you will see the 'bullet' point for Cobra Claim Denials on the landing page in the left column. Fill out the form and carefully respond to all questions. At the end of the application you will be required to indicate the reasons you were excluded from this Cobra Subsidy. If you have any documentation attach that.

      All I had was the conversations with the IBM ESC which I specified and that I was specifically advised that I am not eligible. And furthermore, I indicated that IBM considered me a retiree even though I was RA'd and the loophole that IBM has used to deny my participation: Age + years of service. Further stating that I am not a retiree, I was permanently laid off and at no time was I provided with an information package as required to be sent out to all on 4/18/2009 detailing the Subsidy program. -anonymous-

    • Comment 05/30/09: We're starting to see a lot of folks with over 30 years of company time leaving ITD. Supposedly, IBM is offering this targeted group some sort of package to leave. Does anyone have any details? Is this basically a 'forced' retirement, where the pkg is just the same as any other RA package? Or are they getting a different package? -miss understanding-
    • Comment 05/30/09: It looks like there is a no-renewal policy for contractors in the Vancouver area. Seems to fit in with the talk about contractors on this comment board. -west coast canada-
    • Comment 05/30/09: To my Alliance Reply - FEAR is right. Have you ever spoken to a female who complained about sexual harassment and discrimination? Retaliation is also covered under Federal Law - but IBM has their routine and script down. Word up ladies - don't do it unless you have PICTURES, WITNESSES, or really strong PROOF. Otherwise, don't come forward. They don't tell you that on the intranet do they? And the Open Door (or whatever they call it today) - they'll thank you and make it sound like it was your fault, then punish the managers "behind the scenes". You will never know and you'll never get the justice you expected - only the label that you Open Doored that will follow you everywhere. Been there, done that, bought the T shirt. Might write a book - who wants to join me? We didn't sign away the right to write on the RA forms did we? -gotta-b-invisible-

      Alliance Reply: Did you ever talk to an attorney? We have been told about the sexual harassment and discrimination, in the past. It doesn't get addressed by IBM like it should. We agree, that it is not acceptable for a company to gloss over the issue and 'punish the managers "behind the scenes".' Contact Us and provide your email. We want to hear your story. It will be strictly confidential.

    • Comment 05/31/09: Was anything reported on this year's shareholder meeting? I didn't see word one. Was anyone allowed by der Führer to stand up and talk about the 10K IBMers fired since January? Why am I guessing no one was so allowed. Was the very brave gentleman there again and did he ask der Führer how he would get by on $20K a DAY while 10K employees were fired and their lives ruined? Why am I guessing he was not so allowed. And still people talk about the sheeple, who walk around thinking 'not me', 'not my job', being brave and unionizing. Nota Bene: AT WILL EMPLOYEE. -anonymouse-
    • Comment 06/01/09: Here is the future in software group. All coding and testing jobs will be sent overseas and managers will stay in the US. That way US upper management can keep track of the work via US managers, while those frontline managers deal with con calls during the night with their employees and con call during the day with upper management. If you want to stay at IBM, become a manager ASAP. -Iseethefuture-
    • Comment 06/01/09: June 1 cuts are happening in ITG, and I got selected. From the tool provided on this site, it appears 3000+ are being let go. -anonymous-
    • Comment 06/01/09: Anyone heard if there is going to be another round of layoffs this month? A friend of mine went to work in India...man....he regrets it big time. IBM is offering one way tickets to people to work in India and make a lower salary. -McLoven-
    • Comment 06/01/09: I was RA'd today. I have 30 days to find a job. 2+ rating forever, job is going to Brazil. -NextToGo-
    • Comment 06/02/09: To -NextToGo-: While it may seem like a bad thing at the moment, once you find a new job you will wonder how you survived at this horrible company. PBC ratings mean nothing, never did. It felt like the end of the world to me and the panic set in but within a few months I was working closer to home for more money, no stress, no pager, no on call, no overtime for free. Things happen for a reason. Keep your chin up. -Gone_in_07-
    • Comment 06/02/09: To -NextToGo-: While it may seem like a bad thing at the moment, once you find a new job you will wonder how you survived at this horrible company. PBC ratings mean nothing, never did. It felt like the end of the world to me and the panic set in but within a few months I was working closer to home for more money, no stress, no pager, no on call, no overtime for free. Things happen for a reason. Keep your chin up. -Gone_in_07-
    • Comment 06/02/09: RA'd today, should receive package info soon. ITD. Job went to India. -MyTurn
    • Comment 06/02/09: SWG Rational in Lexington, Ma - Lost our Rational Licensing support group today. Not sure how many folks were RA'ed, maybe around 10, but their jobs are going to India. The rest of us in Rational Support are wondering when it will be our turn. -anonymous-
    • Comment 06/02/09: I was RAed earlier this year, and found another job very quickly. I have been receiving more and more emails to my resume address lately that are for contractor positions at IBM. They are obviously not reading the resumes of the people to whom they blast out these blanket emails, or they would see that I have just left IBM... but what is interesting is that they are trying to urgently fill these contract openings in IA, CO, CA, and other states for the same types of positions that they are actively firing people from as well.

      It is definitely NOT the case that the economy is hurting IBM. It is also NOT the case that they need to rebalance the workforce based upon skills if they are firing people while actively hiring contractors to do the exact same types of work. This company had a magnificent profit in 2008. They are forecasting incredible earnings for 2009. They increased the dividend to their shareholders. But they are adding to the high unemployment level in the USA, firing the workers that produced the profits while bringing in contractors through the backdoor. This is without even mentioning the offshoring of work to other countries. -Pork Chop-

    • Comment 06/02/09: Lexington Kentucky being decimated as we speak. They will move us to IA at current pay, then within a year cut our pay 20%. Bank on it. -Lexington-
    • Comment 06/02/09: Regarding GDF relocation: There will be no severance pay if you decide not to relocate to one of the three U.S. Co-locations. If you decline to relocate, you will be asked to "involuntarily resign" and give a two week notice. -melb-
    • Comment 06/02/09: There have been firings the past couple of days in Rational Development, Software Group in RTP, NC. Rumor is over 5% are currently targeted for extermination. Nothing posted on NC Warn, so this is more stealth, flying under the radar tactic which ibm has become very expert. Too bad ibm doesn't make the same quality engineering effort in the products we make. -SWGcutsNOW-
    • Comment 06/02/09: The GDF rumors are running rampant. I know one person who has been given notice, a work-from-home employee. In the next few months all work-at-home employees will be either relocated to a GDF or released... with no severance when the final few rounds hit. -Terminally IAM-
    • Comment 06/02/09: IBM's current business mantra " A diarrhea of ignorance wrapped in a constipation of bureaucracy" that pretty much sums it up -Anonymous-
    • Comment 06/03/09: Take Time program just announced for SWG... Yea right, take some more time off when a lot of the project GA dates I am aware of are already at risk.... This place is being run into the ground by our execs.. Got to make those earnings numbers for next quarter... Looking more and more like GM, Chrysler and Enron every day. -Gettin Hosed-
    • Comment 06/03/09: I am in POK according to my "list" approximately 700 were tapped June 1. We have 30 days to find work. The severance package is like Greek to read through..and the "Job Opportunity Market" tool is very convoluted . It takes like 15 minutes to apply for a job. I worked there 25 years. I had a great appraisal. I was respected by my peers and customers. -I am stunned-

      Alliance Reply: We are sorry for your job loss. By what you have posted here, it appears that you didn't know about Alliance@IBM until you got fired. Is that true? If you did know; may I ask why you didn't try to organize before this? We've been here 10 years. You were at IBM 25 years... Just curious, no disrespect intended.

    • Comment 06/03/09: I have declined to relocate to a GDF Co-location. I was informed by my manager that I will be required to "voluntarily resign" and give a two weeks notice. There will not be any severance pay if you decline to move to one of the three U.S. GDF sites (Boulder, CO, Dubuque, Iowa or Fishkill, NY. -MelB-

      Alliance Reply: What do you lose if you tell them you WILL NOT 'voluntarily resign' ??? Force them to fire you. They'll need to come up with a reason...and it won't be "the employee refused to quit". They can't fire you for refusing to quit. Don't make it easy for IBM.

    • Comment 06/03/09: Based on my own personal experience, don't waste your time looking for a job within IBM. I could not even get a mgr to talk to me. Use the time to look outside. -goodtobegone-
    • Comment 06/03/09: Yes, it's true. Forget about looking for a job internally. Although it can't be proven, IBM managers have been told not to consider candidates that have been RA'd because they can find a newbie or contractor to do the job for less. The hiring manager doesn't want to go through the hassle of trying to convince his/her boss that an RA'd employee is a perfect match for the job. -Forget It-
    • Comment 06/03/09: True Financial Conditions at IBM appear more dismal than is publicized! IBM EFK STG is quietly cutting legacy contractor/vendor business just for the immediate savings and justifiable business reason is offered! We are among the staffing NUMBERS IBM USES TO GET TAX BENEFITS FROM NYS! These types of business decisions should be counted amongst the WARN notices and "sporadic" employee layoffs.

      IBM employees should know that tracking these kinds of "savings" will show where RA's logically will be targeted in the future. We work along IBM employees every day and see our associates and friends leave and not come back to the line. We knew it was just a matter of time they would get around to us too. Good Luck to all. Looks like we are going to need it. How desperate are they? -IBM Contractors Gone!-

    • Comment 06/03/09: Based on the spreadsheet that was printed off at my location, the GDF EFK location is targeting first line managers to be Band 7 - BAND FREAKING 7 for a first line manager. This Band also includes those with over 4 years of experience. A "Level 2" employee (one that has between 1 and 4 years experience) has this breakdown for staffing:
      • 10% Band 4
      • 80% Band 5
      • 10% Band 6

      Level 1 (those with less than 1 year experience):

      • 50% Band 3
      • 50% Band 4

      Also included in this printout were required courses to take for those working in the EFK GDF. Looks like all education dollars are going towards educating GDF employees -anonymous-

    • Comment 06/03/09: This is the text I wrote in my appeal to the Dept of Labor regarding denial of the COBRA subsidy. Text in the Comments paragraph: The subsidy is denied to anyone who has COBRA and who also has access to any other plan. I was bridged to retirement at age 62 and I have access to the IBM retiree FHA health plan. The problem is that the FHA plan is about twice as expensive as the COBRA plan. To be denied the subsidy in this case severely violates the spirit of the subsidy, which is to reduce the COBRA premium for those who lost their job in this very bad economy. Because the FHA plan is so expensive, I am keeping the COBRA health plan - but I have to pay 100% of the COBRA premium. (I did not say anything about IBM's TMP benefit for the medical part of the COBRA benefit). The rule should be changed - if a person has access to another plan, they must take the plan with the least cost in order to be eligible for the subsidy. -anonymous-
    • Comment 06/03/09: I heard that SWG layoffs - RTP will happen next week. Not wholesale cuts by by 5/10 per area. -dilbert-
    • Comment 06/03/09: There continue to be job cuts in Rational Software Group in RTP, NC. If you don't have the utilization of up front customer face time, you are at risk. Even more so if you are over 45, IBM wants to get rid of you. Rational is not doing well and mgmt are frantic to get the spread sheets looking better by dumping older employees. No more Mr Nice Guy, i.e. no more 6 months, you only get 3 months severance at best now. -Glad2BGone-
    • Comment 06/03/09: Got RA'ed today from S and C, GBS -RAed-
    • Comment 06/03/09: Was part of the 'resource action' in February. Had been in Administration for the last 29 years, 9 months. Looking for a job. Don't have the credentials to land an administrative job. Unfortunately working for IBM for 29 years and 9 months is now a hindrance in finding a job. I was always so proud to be working for IBM, not any longer. -Anonymous
    • Comment 06/03/09: It is shocking the info that was stated about the band break down in the GDF. My dept is there and most of the IBMers (we have a few contractors) are Band 8 or 9. I know at least one person who would probably respond to be lowered to a band 7 by retiring. -in the GDF-
    • Comment 06/03/09: To Mel B. My manager told me basically the same thing, except he used the terminology, you will be forced to "involuntarily resign". He also suggested that I play the game and when given a start date for my new GDF location, to accept and then not show-up for my first day of work. I believe if I did this, I would be fired and therefore, not be eligible for unemployment benefits. Is anyone else going through this? I am being forced to go to a job site in a different city and my commute will be 1.5 to 2 hours one way. -To Mel B-

      Alliance Reply: What do you lose if you tell them you WILL NOT 'involuntarily resign'? Don't be a fool for IBM. Refuse to "play the game". Your bound to lose if you choose to play. Force them to fire you.

    • Comment 06/04/09: >>Please start making plans to leave... NOW. -Macabby-, good post but I respectfully disagree. This is doing exactly what IBM wants you to do. My advice, IF the person can do it, is to stick it out. Make alternative plans, absolutely -- keep the resume up to date, keep the skills up to date, and the like -- but leave without a severance? Why? Management is desperate to kick out everyone over 50 with 30 years, or perhaps over 40, so let THEM do the kicking out.

      It's stressful, and demoralizing, and demeaning, to listen to moronic management talk about 'visibility' and 'not doing enough', but ignore them. Do your job to the best of your ability, play the game if you like, ignore the moronic management if you so choose, and wait for them to fire you. Trust me, it WILL happen.

      There is no more respect for the individual or the work they do, the only employees still valued are those who suck up -- watch out for the team leaders who act as hatchet men for moronic managers -- so if you don't suck up, big time, you're gone. The moral is, based on my experience -- keep your skills up to date, do your job, and expect to be fired, but not until you've been humiliated, threatened and demoralized, especially when it comes to training an underskilled replacement. Oh, and most importantly of all? UNIONIZE! NB: AT WILL EMPLOYEE. -anonymouse-

    • Comment 06/04/09: IBM is having problems staffing the GDC in Iowa. If you look at the job postings you'll notice the opening date has been pushed out from June to November/December. They are also paying M&L for upper bands for some of the required skills. You can be sure even if you decide to go, and you get the M&L, IBM will be constantly looking for cheaper labor, so if you go there, beware! Once they find someone to replace you at a cheaper rate, you're toast. (or, you might be asked to continue your employment at a lower pay rate,. Is this something you are willing to do?) Think about it. -dun-4-
    • Comment 06/04/09: I can't stress enough how important it is to get another job, even if you believe yours is safe. It seems like the IT industry is starting to pick back up in the US (if you're not IBM of course), simply from the # of calls I've been getting. I just found a new job (put in my 2 weeks tomorrow), and I can not tell you the relief I feel, especially since I am 99% positive I'm slated for an RA in a month or two. In dealing with this new company, I forgot how nice it can be to work for a real company. I've been beaten down by IBM for so long I grossly undervalued myself. This new company has turned all that around and made me realize what a bad situation I was in. I do feel IBM needs a union, but at this point it may be too late for that. I would still press ahead with unionizing, but for your own good, get your name out there and look to leave IBM. There is a real world out there, and it is much brighter if you are not shrouded by the cloud of IBM. -How do you say goodbye in Indian?-
    • Comment 06/04/09: -I have heard rumblings that IBM plans for the GDF relocation is to try to force those workers not able to relocate to quit to save on paying any severance. - That's an expensive way to get workers to quit. The GDF concept has been in place for quite some time now. The GDF is a major cost cutting measure for IBM. From a previous post, the highest band level in a GDF will be 7, and those will be minimal. IBM is doing what they think is right by offering you to keep your job in a GDF. I doubt IBM has the forward looking capacity to say "if we create these GDFs and staff them with local employees, anybody remote that doesn't want to go can suck it and quit". IBM thinks about today, not tomorrow. This is obvious by pushing all work offshore and to low-skilled GDFs. IBM will be paying up the ass in the next 1-3 years for missed SLAs and clients will be dropping IBM as their provider of service. -anonymous-
    • Comment 06/04/09: 20 to 30 people have been let go in Endicott. Jobs related to Travel/Relocation Accounting. All jobs sent to either Argentina or Manilla. All of our area, including Payroll, will be overseas by next year this time. -wes-
    • Comment 06/04/09: Armonk, NY. Dec.,2009 (CNN) - IBM Corp. reported today that they would not be releasing end of year financial results. A spokesman said, "We know we made a boatload of money, because we dumped all our expensive US workforce, but unfortunately we are unable to access any of our financial systems to provide actual figures, as they are not working at this time. Trust us, we're rich. We can tell by the size of our bonuses. We hope to have our new paper and pencil system working soon, as we have a crack staff of cheap, untrained labor figuring out how to use this new breakthrough technology." -anon-
    • Comment 06/04/09: Curious - If you willing resign from IBM do you receive you unused vacation time paid out? Also, I was not able to utilize any vacation time last year as I was on 24x7 support of an account -- manager was supposed to roll that time forward to this year, but didn't. He said it is at his discretion if I required more this year. Is this him lying? Anything that can be done about this? -Anon-
    • Comment 06/04/09: My understanding about rolling over vacation to the next year is that it is 'unofficial' and strictly up to your manager. You can get screwed out of this time if you get a new manager (seen that happen) or your manager just changes his mind. I always thought people who did this were fools. I\'ve even seen people give up vacation time because the job was so freaking important. Biggest fools ever. -anon-
    • Comment 06/04/09: - IBM is having problems staffing the GDC in Iowa.- haha, no kidding. Who wants to live in the middle of farm country with an IT job? If you lose your job at the GDF (and based on the rumors, it sounds like anybody making more than band 7 money will eventually) there is NOTHING there. Dubuque was a horrible selection for IBM. If IBM has any brains, they would have put these GDFs in major university towns. They would have college grads to staff from on a yearly basis and be able to pay them complete crap since they have no experience fresh out of college. But yeah, let's put one in farm country and wonder why we can't staff it. DUH -anonymous-
    • Comment 06/04/09: I agree Dubuque was a really stupid choice of location. I imagine it has to do with yet more tax breaks. Iowa thought they could "buy" local IBM jobs with tax dollars because, hey, that worked so freakin' great in NY, didn't it? -ReapWhatYouSow-
    • Comment 06/04/09: To RacerX - in an ideal if not brutal world you would be right - necessary cuts would be surgical and well thought through. If you read through these comments since Jan you will see this is far from the case in 2009. Cuts are being made in a haphazard way, primarily of senior experienced people, with no regard to impact on future operations.

      I was fired in January, left with an excellent new job lined up even in this economy because my skill set is in such demand, and have enjoyed hearing from various executives I used to work with how outraged they were that I was forced out. I am sure that my story is far from unique. I know a number of hugely talented and hardworking 25+ year veterans who were also fired.

      This is not the IBM I joined - that IBM would never have treated its dedicated and productive workforce in this way. I would never return to IBM under any circumstances. Open your eyes to the new reality - there is a much better world outside with employers who treat their people as assets, not commodities. -anonymous-

    • Comment 06/05/09: But there are so colleges in and around Dubuque. Why do people have these stereotypes about 'farm country'? Many of the people there are quite smart, some are highly educated, and many more would stay in the community if only there were jobs. The quality of living out there, especially if you are raising a family, is quite high and the cost is much lower than in the major metropolitan areas. -Anonymous-
    • Comment 06/05/09: To RacerX: "Management knows that they get more than their money's worth from those more seasoned employees" LMAO, that's got to be the funniest think on this board this week :>). Keep them coming, laughter is good medicine for all of us here at the ibm sweatshop -RacerXneedTuneup-
    • Comment 06/05/09: If I were already living in Dubuque and had IT skills and experience, I'd work on a farm. There's more bullshit in IBM than on any farm around. IBM has devolved into a third world IT body shop. IBM's managers obviously are out of touch and simply don't understand how to manage IT services and resources to meet customer requirements. The new IBM technician is an inexperienced, unmotivated, unskilled module-monkey, learning at the expense of the customer and posing a critical risk to the business. That's the unfortunate and predictable result of IBM's ignorant, arrogant, non-technical, and greed-centric management. -former IBM customer-
    • Comment 06/05/09: I saw the article on the rally in Poughkeepsie. It is absolutely shameful that more IBMers and especially those who lost their jobs recently did not come out and support the Alliance. That lack of support hurts the Alliance. If you expect an organization to fight for you then you need to join them. I will say it again. It was shameful that hundreds did not show up. What does it take for you all to take action? -anon-
  • General Visitor's Comment page
    • Comment 05/25/09: Talking about aircraft, according to the FAA, IBM has 8 aircraft which includes 1 Sikorsky helicopter and Mooney M20 single engine aircraft based in Tampa, Florida. The rest are jets based out of Westchester County Airport, Does IBM really need a small air force? http://registry.faa.gov/aircraftinquiry/nameSQL.asp?nametxt=IBM&cmndfind.x=0&cmndfind.y=0&sort_option=5 -RTP Guy-
    • Comment 05/30/09: The current American business paradigm is a Ponzi scheme. The people at the top actually like what's happening, because they figure when they've gotten all the loot they can out of us, their fortunes and the power that comes with it will be that much more of an advantage if the vast majority of us are impoverished and can be ignored or exploited as they wish. From Golden Parachutes to Golden Coffins http://canucwhatic.blogspot.com/ -Maus 1-
  • Pension Comments page
  • Raise and Salary Comments
    • Comment 06/01/09: I'm glad to have a job but how does one make more money in this company? -Confused- : Then try to make more money: get out of tech. IBM doesn't pay for skills anymore. Sell your soul into IBM management paths. Management still makes money in IBM even if you don't even know much about Microsoft Office! (but being a Powerpoint user sure helps). You might have to become a professional brown noser to do it and be savvy enough to kiss the right a$$. Otherwise, you will be extremely lucky to make band 8 and be paid in the 70'sK range which is way under the midpay for the band no matter what your PBC are if you can survive the RA's that are common each business quarter in IBM USA now. -donewithBlue-
  • PBC Comments
    • Comment 06/04/09: IBM throw this worthless program in the dumper. It will save you more money by doing so. It don't matter what PBC you are in light of RA's. It's just as bad as the EDP (employee development plan). -anonymous-
    • Comment 06/04/09: I quite agree. The PBC program is extremely flawed. When I asked my manager where she pulls the performance information from, she said herself and the team lead. Both of whom I rarely speak with on a daily basis (because I'm a self-starter, disciplined, and don't need to be hand held to wipe my own butt). However, I am in nearly constant communication with DPEs, SDMs, and other support teams, such as middleware, for my accounts. Always working with them to resolve issues or streamline processes. The PBC rating needs to be based on the feedback of people you work with, the people that KNOW you are making a difference (or not). Not a manager you have a 1 on 1 with every other month. Or a team lead that doesn't even know what accounts you support. -anonymous-
  • International Comments
    • Comment 06/05/09: Country = UK; Union Affiliate = No; Job Title = IT Specialist; IBM Division = GTS; Message = UK GTS 1st line managers told to ensure CLAIM reporting is complete and up to date. In the US this is seen as a sign that separation packages are to be issued. -easyrider-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
Minimize
  • Los Angeles Times: Heading to Mexico for healthcare. By Tami Dennis. Excerpt: That's what about 1 million adult residents of California do each year, say UCLA researchers. Some are seeking medical services, some are seeking dental help. Others just want prescriptions.
  • New York Times: The Many Hidden Costs of High-Deductible Health Insurance. By Walecia Konrad. Excerpts: Is your medical insurance bad for your health? If you have a high-deductible plan, the answer may be yes. The investment firm Fidelity recently surveyed employees at various companies who had opted for a high-deductible health plan linked to a health savings account. About half of those workers said they or a family member had chosen not to seek medical care for minor ailments as many as four times in the last year to avoid paying the out-of-pocket expenses.

    As any doctor will tell you, small health problems left untreated can become big problems, warns Kathleen Stoll, director of health policy at the health care advocacy group Families USA. “This is just one of the many high-deductible pitfalls consumers need to watch out for,” Ms. Stoll said. ...

    Even if you can afford the costs, the loopholes that insurers often weave into these plans to reduce premiums can mean that even after your deductible is met, you may not have the coverage you need to handle a serious illness or accident. “For most people, a high-deductible plan is basically a bet against yourself,” said Ms. Stoll. “You’re betting that you won’t get sick and you won’t have an accident. But isn’t that exactly what insurance is supposed to be? A bet that something might happen, and if it does you’ll be protected?”

  • Milliman: Milliman Medical Index. Excerpts: The fifth annual Milliman Medical Index™ (MMI™) measures average annual medical spending for a typical American family of four covered by an employer-sponsored preferred provider organization (PPO) program. The MMI provides a consistent benchmark of healthcare benefit costs by annually assessing the changes in those costs over the most recent five-year period.

    Key MMI findings include:

    • The total 2009 medical cost for a typical American family of four is $16,771, compared with the 2008 figure of $15,609. This is a 7.4% increase from 2008 to 2009.
    • This is the third straight year of decreasing cost trends. Even so, the $1,162 increase is the highest since the 2006 increase of $1,169, when cost trends were at 9.6%.
    • Every category of costs except inpatient and outpatient facility care experienced lower cost trends than last year.
    • This is the third consecutive double-digit percentage increase in the amount that employees spend for healthcare services. This is primarily due to increased employee contributions, as out-of-pocket cost-sharing trends were more modest.
    • The current economic environment has significant implications for healthcare costs. The consequences of employers' lost business, consumer insecurity, and provider revenue pressures affect healthcare utilization, charges for healthcare services, and who pays for the healthcare. The unprecedented uncertainty has accelerated cost increases in some ways and at the same time has reduced certain categories of utilization (e.g., elective procedures).
  • Health Care Voices: Again, employers shifting more health costs to workers. By Bill Salganik. Excerpts: They call it employer-provided insurance, but employers are picking up less of the cost. "The recent economic downturn is causing employers to reduce their portion of benefit costs as a cost-saving measure," according to a new report from Milliman, Inc., an actuarial consulting firm.

    For 2009, workers are paying 41 percent of health costs, through premium share and through out-of-pocket charges such as deductibles and co-payments, according to Milliman's data. For an average family of four, total medical cost this year is $16,771. Of that, the employer pays $9,947 toward premiums, while employees pay $4,004 in premiums and $2,820 in out-of-pocket costs.

    The workers' share of the costs went up this year 30 percent more than the employers' share - more than three times as great a gap as Milliman has ever recorded. While overall health costs have gone up between 7.4 percent and 8.4 percent in the last three years, employees have faced double-digit increases as employers shifted more of the costs.

  • New York Times: Health Insurers Balk at Some Changes. By Reed Abelson. Excerpts: But so far, the industry has made no such promises about another segment of the health insurance market, one responsible for many people being uninsured in the first place: the market for small employers. By some estimates, about half of the nation’s uninsured are people who are self-employed or work for a small business. In other words, policy analysts and others say, unless the insurance industry is willing to give some of the same ground to small businesses that they have ceded to individual policy holders, a big part of what is wrong with the nation’s health care system may not get fixed.

    More than 40 percent of the private American labor force works for companies with fewer than 100 workers. Leaving small businesses out of the federal effort to overhaul health care would be “a big hole in any reform proposal,” said Karen Davis, president of the Commonwealth Fund, a nonprofit health care research group that advocates significant changes to the current system.

  • Washington Post: President Pivots on Taxing Benefits. Obama Is Willing to Consider Move to Gain Health Reform. By Ceci Connolly. Excerpt: President Obama, in a pivot from some of his harshest campaign rhetoric, told Democratic senators yesterday that he is willing to consider taxing employer-sponsored health benefits to help pay for a broad expansion of coverage. Senate Finance Committee Chairman Max Baucus (D-Mont.) said Obama expressed a willingness to consider changing the existing tax exclusion. The decision would probably anger liberal supporters such as labor unions, but such a tax change would raise enormous sums of money as Congress and the White House are struggling to find the estimated $1.2 trillion needed to pay for health-care reform over the next decade.
  • New York Times: City Labor Unions Agree to Reductions in Health Benefits. By Paul von Zielbauer. Excerpt: Mayor Michael R. Bloomberg and city labor officials announced a tentative agreement Tuesday to amend health benefits for more than 550,000 current and retired city employees, guaranteeing the city $400 million in savings over the next two fiscal years. The agreement between the city and the Municipal Labor Committee, which represents about 100 civil service unions in health care policy negotiations, includes compromises by each side and marks the first time that some city employees will be required to make co-payments for emergency-room, inpatient and ambulatory treatment.
  • American Medical News: Health plan requirements cost practices billions, with the per-doctor average near $70,000. Primary care physicians spent the greatest amount of time dealing with health plan administrative tasks. By Emily Berry. Excerpts: Physicians know that the phone calls, faxes and e-mails sent between their practices and health plans take time. Researchers have determined how much time it takes and what it costs. A study published online May 14 in Health Affairs estimates that practices' interactions with insurers cost $23.2 billion to $31 billion a year. The average physician spends 43 minutes per work day -- more than three hours a week -- dealing with health plan administrative requirements. ...

    Will changes come? Dr. Epperly said he doesn't believe insurers will make changes and standardizations voluntarily, because speeding payments would rob them of the interest they make off the premiums they "float" while processing claims. "It's in their financial interest to delay this as long as possible. Until they are forced to do it, they won't do it."

  • AARP: 8 Myths About Health Care Reform. And why we can't afford to believe them anymore. By Karen Cheney. Excerpts: Americans spend more on health care every year than we do educating our children, building roads, even feeding ourselves—an estimated $2.6 trillion in 2009, or around $8,300 per person. Forty-five million Americans have no health insurance whatsoever. These staggering figures are at the heart of the current debate over health care reform: the need to control costs while providing coverage for all. As John Lumpkin, M.D., M.P.H., director of the Health Care Group for the Robert Wood Johnson Foundation, says, "There is enough evidence that it is now time to do something and to do the right thing." The key is to focus on the facts—and to dispel, once and for all, the myths that block our progress.
    • Myth 1: "Health reform won't benefit people like me, who have insurance." ...
    • Myth 2: "The boomers will bankrupt Medicare." ...
    • Myth 3: "Reforming our health care system will cost us more." ...
    • Myth 4: "My access to quality health care will decline." ...
    • Myth 5: "I won't be able to visit my favorite doctor." ...
    • Myth 6: "The uninsured actually do have access to good care—in the emergency room." ...
    • Myth 7: "We can't afford to tackle this problem now." ...
    • Myth 8: "We'll end up with socialized medicine." ...
  • New York Times op-ed: Medicare, Start the Bidding. By Peter S. Bach. Excerpts: Every year, like half a million other doctors, I sign on to the government’s largest no-bid, no-compete contract. We agree to treat Medicare patients for a set rate, and Medicare agrees to take all of us on board, whether or not our services are needed in the city or town where we practice. As a result, doctors — in particular, specialists — flock to some parts of the country and shun others.

    The trouble with this is that when there are too many doctors in one area, too much money gets spent on health care. But the system could take advantage of this fact to save money.

    Researchers have observed that having one additional specialist (per 100,000 people) in a region leads to about $13 more in health care spending per Medicare patient. New York City, for instance, has 186 specialists for every 100,000 residents, which is twice as many as Albany’s 93. Accordingly, Medicare spends $12,114 a year treating each patient in New York City, but only $5,950 in Albany.

    Patients in high spending areas are no sicker than patients anywhere else, their care is of no higher quality, and their health outcomes are no better, research has shown. Having more doctors doesn’t even offer more convenience. Patient satisfaction is no higher, and just as many patients complain about having trouble getting to see a doctor.

  • Consumerist: California To Fight Health Insurance Rescissions? By Meg Marco. Excerpt: The LA Times is reporting that California Insurance Commissioner Steve Poizner will reveal new regulations aimed at stopping a controversial health insurance practice in which customers with costly illnesses are retroactively dropped.
  • Washington Post: New Study: Bankruptcy Tied To Medical Bills. By Sarah Lovenheim. Excerpts: Sixty-two percent of all bankruptcies filed in 2007 were linked to medical expenses, according to a nationwide study released today by the American Journal of Medicine. That's nearly 20 percentage points higher than that pool of respondents reported were connected to medical costs in 2001.

    Of those who filed for bankruptcy in 2007, nearly 80 percent had health insurance. Respondents who reported having insurance indicated average expenses of just under $18,000. Respondents who filed and lacked insurance had average medical bills of nearly $27,000.

  • New York Times op-ed: Keeping Them Honest. By Paul Krugman. Excerpts: “I appreciate your efforts, and look forward to working with you so that the Congress can complete health care reform by October.” So declared President Obama in a letter this week to Senators Max Baucus and Edward Kennedy. The big health care push is officially on.

    But the devil is in the details. Health reform will fail unless we get serious cost control — and we won’t get that kind of control unless we fundamentally change the way the insurance industry, in particular, behaves. So let me offer Congress two pieces of advice:

    • Don’t trust the insurance industry.
    • Don’t trust the insurance industry.

    The Democratic strategy for health reform is based on a political judgment: the belief that the public will be more willing to accept reform, less easily Harry-and-Louised, if those who already have health coverage from private insurers are allowed to keep it. ...

    Now nobody is proposing that Americans be forced to get their insurance from the government. The “public option,” if it materializes, will be just that — an option Americans can choose. And the reason for providing this option was clearly laid out in Mr. Obama’s letter: It will give Americans “a better range of choices, make the health care market more competitive, and keep the insurance companies honest.”

    Those last five words are crucial because history shows that the insurance companies will do nothing to reform themselves unless forced to do so.

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: In Crisis, Banks Dig In for Fight Against Rules. By Gretchen Morgenson and Don Van Natta Jr. Excerpts: As the financial crisis entered one of its darkest phases in October, a handful of the nation’s largest banks began holding daily telephone sessions. Murmurs were already emanating from Washington about the need for a wide-ranging regulatory overhaul, and Wall Street executives girded for a fight.

    Atop the agenda during their calls: how to counter an expected attempt to rein in credit-default swaps and other derivatives — the sophisticated and profitable financial instruments that were intended to limit risk but instead had helped take the economy to the brink of disaster. ...

    But increased transparency of derivatives trades would cut into banks’ profits — hence the banks’ opposition. Customers who trade derivatives would pay less if they knew what the prevailing market prices were. “The banks want to go back to business as usual — and then some. And they have a lot of audacity now that everyone has bailed them out,” said Yra Harris, an independent commodities trader who was involved in an effort to regulate derivatives nine years ago. “But we have to begin with the premise that Wall Street doesn’t want transparency, because more transparency means less immediate profits.”

  • New York Times op-ed: Reagan Did It. By Paul Krugman. Excerpts: “This bill is the most important legislation for financial institutions in the last 50 years. It provides a long-term solution for troubled thrift institutions. ... All in all, I think we hit the jackpot.” So declared Ronald Reagan in 1982, as he signed the Garn-St. Germain Depository Institutions Act.

    He was, as it happened, wrong about solving the problems of the thrifts. On the contrary, the bill turned the modest-sized troubles of savings-and-loan institutions into an utter catastrophe. But he was right about the legislation’s significance. And as for that jackpot — well, it finally came more than 25 years later, in the form of the worst economic crisis since the Great Depression.

    For the more one looks into the origins of the current disaster, the clearer it becomes that the key wrong turn — the turn that made crisis inevitable — took place in the early 1980s, during the Reagan years. ...

    The immediate effect of Garn-St. Germain, as I said, was to turn the thrifts from a problem into a catastrophe. The S.& L. crisis has been written out of the Reagan hagiography, but the fact is that deregulation in effect gave the industry — whose deposits were federally insured — a license to gamble with taxpayers’ money, at best, or simply to loot it, at worst. By the time the government closed the books on the affair, taxpayers had lost $130 billion, back when that was a lot of money.

    But there was also a longer-term effect. Reagan-era legislative changes essentially ended New Deal restrictions on mortgage lending — restrictions that, in particular, limited the ability of families to buy homes without putting a significant amount of money down. These restrictions were put in place in the 1930s by political leaders who had just experienced a terrible financial crisis, and were trying to prevent another. But by 1980 the memory of the Depression had faded. Government, declared Reagan, is the problem, not the solution; the magic of the marketplace must be set free. And so the precautionary rules were scrapped.

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.

If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

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