Welcome to IBM Employee News and Links

Quick Links:

Get involved! Insider trading After IBM Lenovo Employee Discount

Previous highlights:

August 28, 2010 August 21, 2010 August 14, 2010 August 7, 2010 July 31, 2010 July 24, 2010 July 17, 2010 July 10, 2010 July 3, 2010 June 26, 2010 June 19, 2010 June 12, 2010 June 5, 2010 May 29, 2010 May 22, 2010 May 15, 2010 May 8, 2010 May 1, 2010 April 24, 2010 April 17, 2010 April 10, 2010 April 3, 2010 March 27, 2010 March 20, 2010 March 13, 2010 March 6, 2010 February 27, 2010 February 20, 2010 February 13, 2010 February 6, 2010 January 30, 2010 January 23, 2010 January 16, 2010 January 9, 2010 January 2, 2010 December 26, 2009 December 19, 2009 December 12, 2009 December 5, 2009 November 28, 2009 November 21, 2009 November 14, 2009 November 7, 2009 October 31, 2009 October 24, 2009 October 17, 2009 October 10, 2009 October 3, 2009 September 26, 2009 September 19, 2009 September 12, 2009 September 5, 2009 August 29, 2009 August 22, 2009 August 15, 2009 August 8, 2009 August 1, 2009 July 25, 2009 July 18, 2009 July 11, 2009 July 4, 2009 June 27, 2009 June 20, 2009 June 13, 2009 June 6, 2009 May 30, 2009 May 23, 2009 May 16, 2009 May 9, 2009 May 2, 2009 April 25, 2009 April 18, 2009 April 11, 2009 April 4, 2009 March 28, 2009 March 21, 2009 March 14, 2009 March 7, 2009 February 28, 2009 February 21, 2009 February 14, 2009 February 7, 2009 January 31, 2009 January 24, 2009 January 17, 2009 January 10, 2009 January 03, 2009 December 27, 2008 December 20, 2008 December 13, 2008 December 6, 2008 November 29, 2008 November 22, 2008 November 15, 2008 November 8, 2008 November 1, 2008 October 25, 2008 October 18, 2008 October 11, 2008 October 4, 2008 September 27, 2008 September 20, 2008 September 13, 2008 September 6, 2008 August 30, 2008 August 23, 2008 August 16, 2008 August 9, 2008 August 2, 2008 July 26, 2008 July 19, 2008 July 12, 2008 July 5, 2008 June 28, 2008 June 21, 2008 June 14, 2008 June 7, 2008 May 31, 2008 May 24, 2008 May 17, 2008 May 10, 2008 2008 Stock Meeting April 26, 2008 April 19, 2008 April 12, 2008 April 5, 2008 March 29, 2008 March 22, 2008 March 15, 2008 March 8, 2008 March 1, 2008 February 16, 2008 February 9, 2008 February 2, 2008 January 26, 2008 January 19, 2008 January 12, 2008 January 5, 2008 December 29, 2007 December 22, 2007 December 15, 2007 December 8, 2007 December 1, 2007 November 24, 2007 November 17, 2007 November 10, 2007 November 3, 2007 October 27, 2007 October 20, 2007 October 13, 2007 October 6, 2007 September 29, 2007 September 22, 2007 September 15, 2007 September 8, 2007 September 1, 2007 August 25, 2007 August 18, 2007 August 11, 2007 August 4, 2007 July 28, 2007 July 21, 2007 July 14, 2007 July 7, 2007 June 30, 2007 June 23, 2007 June 16, 2007 June 9, 2007 June 2, 2007 May 26, 2007 May 19, 2007 May 12, 2007 May 5, 2007 2007 Stock Meeting April 21, 2007 April 14, 2007 April 7, 2007 March 31, 2007 March 24, 2007 March 17, 2007 March 10, 2007 March 3, 2007 February 24, 2007 February 17, 2007 February 10, 2007 February 3, 2007 January 27, 2007 January 20, 2007 January 13, 2007 January 6, 2007 December 30, 2006 December 23, 2006 December 16, 2006 December 9, 2006 December 2, 2006 November 25, 2006 November 18, 2006 November 11, 2006 November 4, 2006 October 28, 2006 October 21, 2006 October 14, 2006 October 7, 2006 September 30, 2006 September 23, 2006 September 16, 2006 September 9, 2006 September 2, 2006 August 26, 2006 August 19, 2006 August 12, 2006 August 5, 2006 July 29, 2006 July 22, 2006 July 15, 2006 July 8, 2006 July 1, 2006 June 24, 2006 June 17, 2006 June 10, 2006 June 3, 2006 May 27, 2006 May 20, 2006 May 13, 2006 May 6, 2006 2006 Stock Meeting April 22, 2006 April 15, 2006 April 8, 2006 April 1, 2006 March 25, 2006 March 18, 2006 March 11, 2006 March 4, 2006 February 25, 2006 February 18, 2006 February 11, 2006 February 4, 2006 January 28, 2006 January 21, 2006 January 14, 2006 January 7, 2006 December 31, 2005 December 24, 2005 December 17, 2005 December 10, 2005 December 03, 2005 November 26, 2005 November 19, 2005 November 12, 2005 November 5, 2005 October 29, 2005 October 22, 2005 October 15, 2005 October 8, 2005 October 1, 2005 September 24, 2005 September 17, 2005 September 10, 2005 September 3, 2005 August 27, 2005 August 20, 2005 August 13, 2005 August 6, 2005 July 30, 2005 July 23, 2005 July 16, 2005 July 9, 2005 July 2, 2005 June 25, 2005 June 18, 2005 June 11, 2005 June 4, 2005 May 28, 2005 May 21, 2005 May 14, 2005 May 7, 2005 April 30, 2005 April 23, 2005 April 16, 2005 April 9, 2005 April 2, 2005 March 26, 2005 March 19, 2005 March 12, 2005 March 5, 2005 February 26, 2005 February 19, 2005 February 12, 2005 February 5, 2005 January 29, 2005 January 22, 2005 January 15, 2005 January 8, 2005 January 1, 2005 December 25, 2004 December 18, 2004 December 11, 2004 December 4, 2004 November 27, 2004 November 20, 2004 November 13, 2004 November 6, 2004 October 30, 2004 October 23, 2004 October 16, 2004 October 9, 2004 October 2, 2004 September 25, 2004 September 18, 2004 September 11, 2004 September 4, 2004 August 28, 2004 August 21, 2004 August 14, 2004 August 7, 2004 July 31, 2004 July 24, 2004 July 17, 2004 July 10, 2004 July 3, 2004 June 26, 2004 June 19, 2004 June 5, 2004 May 29, 2004 May 22, 2004 May 15, 2004 May 8, 2004 2004 Stock Meeting April 24, 2004 April 10, 2004 April 3, 2004 March 27, 2004 March 20, 2004 March 13, 2004 March 6, 2004 February 28, 2004 February 21, 2004 February 14, 2004 February 7, 2004 February 1, 2004 January 18, 2004 December 27, 2003 December 20, 2003 December 13, 2003 December 6, 2003 November 29, 2003 November 22, 2003 November 15, 2003 November 8, 2003 November 1, 2003 October 25, 2003 October 18, 2003 October 11, 2003 October 4, 2003 September 27, 2003 September 20, 2003 September 13, 2003 September 6, 2003 August 30, 2003 August 23, 2003 August 16, 2003 August 9, 2003 Pension Lawsuit Win July 26, 2003 July 19, 2003 July 12, 2003 July 5, 2003 June 28, 2003 June 21, 2003 June 14, 2003 June 7, 2003 May 31, 2003 May 24, 2003 May 17, 2003 May 10, 2003 2003 Stock Meeting April 26, 2003 April 19, 2003 April 12, 2003 April 5, 2003 March 29, 2003 March 22, 2003 March 15, 2003 March 8, 2003 March 1, 2003 February 22, 2003 February 15, 2003 February 8, 2003 February 1, 2003 January 25, 2003 January 18, 2003 January 11, 2003 January 4, 2003 December 28, 2002 December 21, 2002 December 14, 2002 December 7, 2002 November 30, 2002 November 23, 2002 November 16, 2002 November 9, 2002 November 2, 2002 October 26, 2002 October 19, 2002 October 12, 2002 October 5, 2002 September 28, 2002 September 21, 2002 September 14, 2002 September 7, 2002 August 31, 2002 August 24, 2002 August 17, 2002 August 10, 2002 August 3, 2002 July 27, 2002 July 20, 2002 July 13, 2002 July 6, 2002 June 29, 2002 June 22, 2002 June 15, 2002 June 8, 2002 June 1, 2002 May 25, 2002 May 18, 2002 May 11, 2002 2002 Stock Meeting April 27, 2002 April 20, 2002 April 13, 2002 April 6, 2002 March 30, 2002 March 23, 2002 March 16, 2002 March 9, 2002 March 2, 2002 February 23, 2002 February 16, 2002 February 9, 2002 February 2, 2002 January 26, 2002 January 19, 2002 January 12, 2002 January 5, 2002 December 29, 2001 December 22, 2001 December 15, 2001 December 8, 2001 December 1, 2001 November 24, 2001 November 17, 2001 November 10, 2001 November 3, 2001 October 27, 2001 October 20, 2001 October 13, 2001 October 6, 2001 September 29, 2001 September 22, 2001 September 15, 2001 September 8, 2001 September 1, 2001 August 25, 2001 August 18, 2001 August 11, 2001 August 4, 2001 July 28, 2001 July 21, 2001 July 14, 2001 July 7, 2001 June 30, 2001 June 23, 2001 June 16, 2001 June 9, 2001 June 2, 2001 May 26, 2001 May 19, 2001 May 12, 2001 May 5, 2001 2001 Stock Meeting April 21, 2001 April 14, 2001 April 7, 2001 March 31, 2001 March 24, 2001 March 17, 2001 March 10, 2001 March 3, 2001 February 24, 2001 February 17, 2001 February 10, 2001 February 3, 2001 January 27, 2001 January 20, 2001 January 13, 2001 January 6, 2001 December 30, 2000 December 23, 2000 December 16, 2000 December 9, 2000 December 2, 2000 November 24, 2000 November 17, 2000 November 10, 2000 November 4, 2000 October 28, 2000 October 21, 2000 October 14, 2000 October 7, 2000 September 30, 2000 September 23, 2000 September 16, 2000 September 9, 2000 September 2, 2000 August 26, 2000 August 19, 2000 August 12, 2000 July 29, 2000 July 22, 2000 July 15, 2000 July 1, 2000 June 24, 2000 June 17, 2000 June 10, 2000 June 3, 2000 May 27, 2000 May 20, 2000 May 13, 2000 May 6, 2000 April, 2000

Highlights—October 24, 2009

• I, Cringely: No Joy in Mudville. By Bob Cringely. Excerpts: I have no idea whether IBM senior vice-president Bob Moffat is guilty of insider trading or not, though that’s what he was arrested for yesterday. What I do know is that Moffat’s job since 2005 has been as the architect of IBM’s project called LEAN, which is intended to adjust Big Blue’s global labor force to maximize profitability. I’ve written quite a bit about LEAN, much to the consternation of IBM, characterizing it in large part as a way to replace expensive older American workers with younger and cheaper workers in India and Argentina while cleverly dodging U.S. age discrimination and possibly other civil rights laws. Whatever the legality of LEAN it is downright mean and shows little respect for the people who made IBM what it is today.

  What does it say, then, when the architect of LEAN is arrested for alleged insider trading?

  The good news, I guess, is that he was caught. The rest of the news is bad. If Moffat is guilty as charged then it shows serious ethical and moral lapses at the very top of IBM (Moffat has been mentioned as a possible successor to IBM CEO Sam Palmisano). Even if he is proved innocent Moffat is still guilty of poor judgment in his choice of friends and of being a blabbermouth. Since Moffat is being charged, in part, with insider trading of IBM’s own shares, then LEAN itself should probably come under some scrutiny as a possible tool for generating insider profits.

  Selected reader comments for the above article follow:

  • The “outsourcing” ideology that has crept into the very soul of companies in the name of short term profitability is soon to be proven dead wrong. You can only outsource so much – then you lose control of your company because those you outsourced to now own your technology, and you have no one to blame but yourselves. It’s not “flag-waving” – it’s long-term thinking. If everything and everybody in a company were outsourced, the CEO alone would be staring at an empty office and building. That’s not what makes a company, let alone a company culture. If I worked for IBM, I’ll bail out right now – don’t walk, RUN. IBM deserves every vulture that will pick its stoic, corporate bones clean, period. They have it coming and have no one to blame but themselves. Rock on, Cringe!
  • Words cannot possibly express how thrilled I am to see Bob Moffat get his sorry backside in the Federal court ringer. He has been personally responsible for most of the cutting of US jobs, the anorexic cost cutting and the policy of disrespect of employees. A ruthless, arrogant and self-serving jerk. There were at least two sites where employees cheered the news. Hey Bob Moffat – to use one of your own quotes – “if you want loyalty, get a dog”. The question is how many more IBM senior execs do the same as Mr. Moffat.
  • The American corporate model says that people are fungible. The Japanese and Korean models give workers tenure. For decades the managerial class (for want of a better term) and it’s confederates in academia and the punditry have said that the Japanese model can’t endure. Sooner or later it will fail. I know the topic is complicated and that there are a lot of externalities, but it appears to me that the American model is the one that more often fails. I’d rather be a long term holder of Toyota or Honda stock than GM’s. Perhaps that’s a bad example, because of the autocracy in those industries between Labor and Management, except that all cars imported into the United States from overseas were made by a Union hand.
  • This guy, not to mention the entire senior executive lot, has been gutting the rank and file of IBM for years to pad the stock price. Now we see the rest of the story which just shows how far and illegally it has progressed. And Bob, you are right, the whole senior leadership is just plain ‘mean.’ This guy is gutless and will squeal on every other executive within two throws of himself, including Sam, to save his own arse. Couldn’t happen to a nicer bunch of folks!
  • Global Services Victim says: When Moffat took over Global Services the hope was he would unlock the business. It had suffered from years of apathetic and dysfunctional leadership. Big investments were made for stupid things while important projects were not funded. Global Services never did the things needed to be more efficient. Mr. Moffat was a believed to be a good BUSINESS manager and he’d start running things like a good business. Or so we hoped. Instead as reported he led the effort to replace 10,000’s, perhaps a 100,000 or two of US workers with overseas workers.

    For those left behind we’ve been left with a division that is even more dysfunctional than before. We are having big time problems with many of our contracts, maybe more than half of them, maybe even more. It is not that our friends overseas can do the job or not. It is often not their fault. The problem is we’ve dumbed down the business. We have people doing deals who are making multi-million dollar technical decisions, who have no clue what they are doing. They sign the deal, collect their commission, move on to the next deal. Then people like me are brought in to clean up the mess.

    IBM has this mindset that anyone should be able to do anything. This governs how Global Services is being managed. I don’t know if Moffat brought this to us, or if he turned it up 10 notches. Thanks Bob.

  • Another GS victim says: Ha, you are spot on!!!! I get called in to sort out the mess too. The problem is it is getting to the point of being unrecoverable. We have dumbed down so far I am amazed companies outsource with us.
  • IBMrInFL says: I second this. The sales team and sales architect will promise and sell the customer the moon, then out the door they go to the next fraudulent sale, and here we come to “deliver” it. It’s ridiculous the promises made that we have to keep, not to mention working with the folks overseas, who are knowledgeable in their little realm of expertise, but never seem to get the big picture. It tends to prolong efforts about 4X.
  • Frank says: The problem with IBM's offshoring strategy is that IBM is not hiring quality people in those low-cost countries nor paying for top talent. Turnover is high, skills are low to non-existent, and experience is nil. All of which adversely and greatly effect the quality, timeliness and productivity of these global resources. Poor quality, poor productivity and poor timeliness, combined with immaturity and lack of discipline, mean delivery failures and not just a few. After many resource actions the remaining experienced professionals in high cost countries are subjected to near sweatshop conditions.

    Like several other posters, I’m one of people that come in to pick up the pieces after global resources’ incompetence causes mishaps, crashes of other such failures. The scary thing is that the global resources aren’t getting better – their skills aren’t improving, they still show poor ownership of issues, they make no effort to teach themselves skills and the maturity issues aren’t improving. They still can’t handle even the most routine and simple tasks without help. Meanwhile IBM continues to resource action the experts that keep the joint running.

    The sad thing is that the global resources aren’t being held accountable for their failures, failures are always blame on their US counterparts. Who is Sam going to blame when there aren’t any US professionals left.

    The question is how long will it be until the global resources teams can do an acceptable job of service delivery and product development. The follow-up question is whether IBM can survive long enough for the global resource teams to become effective. IBM needs to consider that the bitterness of poor quality will linger in our clients’ shops long after the sweetness of meeting the quarter’s financial targets.

  • Former IBMer says: I’m not surprised to this at all. I left a year and a half ago after almost 6 years of no raises. I saw more and more people from India coming over and replacing people who had served our country, it was very disheartening to say the least. I was once proud to be part of this company, but the incompetent management, and the low morale from the treatment of some horrible managers to long time hard working employee’s was just unbelievable. So why is the Government giving IBM bailout money for outsourcing? No one understands that. Not long after I left, many had their pay cut, and to think I was just tired of no raises. Can you imagine hanging in there that long, no raises, and then have your pay cut? Many years ago, I had wonderful managers at IBM, but my last years, it was apparent that had other things in mind, they quit managing. There is so much to tell, but one thing for sure, the head, Sam P. only cares about the stocks, NOT EMPLOYEEs, please someone help the people that are left there.
  • Paul Reiners says: “So Moffat is guilty or he’s stupid, neither of which says much for IBM.” If he’s anything like my former IBM manager and team lead, probably just not all that bright. I joined IBM with such a high opinion of the company. I still think parts of IBM, such as developerWorks, are great. But I’ve never been so disappointed, overall, with an institution. Such insular, arrogant management with so little to be arrogant about.
  • Fred Buse says: “...it shows serious ethical and moral lapses at the very top of IBM.” Morals in the leadership of IBM? You don’t need Bob Moffat as a poster child to make a case for immorality in the executive ranks of IBM. How moral was it to strip away the promises of the pension plan and health care in retirement? How moral was it to fire thousands of North Americans and replace their jobs with “global resources”? There is no morality, there is no soul, there is no heart in the leadership of IBM. There is only the cold, dark eyes and deadly precision of the instincts of a Tiger Shark. It’s just business.
  • js says: Gee, didn’t know that insider trading is considered part of ‘free enterprise.’ What’s going on today in IBM and much of corporate America isn’t free enterprise, it’s thieves looting the companies at the expense of the customers, employees and ultimately the stockholders when the hollowed out companies fail in the future after the rats desert with their huge pensions and bonuses. And if American ‘free enterprise’ is so freaking wonderful why would you want to undermine it by shipping it all overseas? Or is it only suppose to benefit the American elite like this Moffat rat? The people who actually create the wealth are the people who actually work, not the scumbags like Moffat who only create wealth for themselves by legally and illegally stealing it from others.
  • Jim says: I think it’s time to be clear about what it means to be an “American” company and enjoy the benefits of such. Tax breaks, military, governmental, and other support mechanisms all accrue to a select few while the great body of workers (Americans) get the shaft.
  • Global Services Survivor says: What about IBM’s vaulted Business Conduct Guidelines? A few years ago I attended a charity event. At the event was a VP from IBM and a VP from one of IBM’s “partners.” The two VP’s had a good thing going. They would take turns taking the other on very posh junkets. The “partner” took the IBM VP to the Superbowl, the IBM’er took the “partner” to the US Open. I had just finished my annual signing of my Business Conduct Guidelines. It was clear IBM met “do what I say, not what I do.” Did Mr. Moffat make business decisions to the detriment of the company for his own personal benefit? I have a very bad feeling about this.
  • KC_the_SuperDog says: Cringely, you sexy thang you. I love a good looking boy with brains.

    I would hope that the SEC looks into the needless 2009 Resource Actions (at least at the level of 4,800 in Jan and another 4,300 in Feb). These people were FRONT OFFICE (many were pulled off of client accounts on which they were billing), SKILLED (highly skilled, as in consultants, engineers, project managers), and STRONG PERFORMERS (many were rated as 2’s and 2+’s… some of those rated as 3’s were arguably unjustly rated as such). The work was simply offshored for a temporary but significant stock price increase. What the SEC has to look at is the money, friend, and family trail back to those who knew how significant and pervasive the cuts would be in Q1.

    The EEOC should investigate the documentation that IBM has provided on those Q1 9,000 cuts… the official documents show an overwhelming, and I mean OVERWHELMING, discrimination against workers aged 40 and above. I don’t care what explanation IBM has for the process – the end result is discriminatory.

  • Mullen Itover says: Wait, Stop……… I must have missed it somewhere in the article or the comments……….. What’s missing here???? Oh yeah, Did no one notice that one of the McKinsey VIPs was pegged too? And for whispering the secrets from within AMD…………. Hmmmm, Moffat LEAN Moffat brought LEAN to IBM.. Hmmm Moffat LEAN LEAN is McKinsey. Hmmm that company had a VIP just arrested with Moffat……. Coincidence?

    Well, now that the caught a fish, let’s see if the feds can go back and get the rest of them. Here’s hoping Bob’s mentor and all their little minions are caught and gone. Lord knows, they’ve not had much of a public drubbing over their systematic raiding of the company over the past 5 or 6 years.

    Didn’t the State of Indiana just kick IBM out last week? IBM has a huge, and well deserved customer drain at the moment. There is absolutely NO quality being delivered out of their outsourced support area, and there is every likelihood a great deal of their customer’s confidential data is leaking through the cracks. How these guys manage to stay in business with most of the world’s governments is a constant puzzle to me.

  • FutureUser says: Too bad IBM doesn’t “get it” any more. It used to be about acquiring the best talent and empowering them to do great things. Now it’s about creative accounting and the occasional buyout of a key competing technology. Best thing to do is track down the brilliant former IBM’ers and start buying from them…. They are the ones with the knowledge, and no longer under the master’s whip. Try http://www.ecomstation.com/ if you want some serious post-Microsoft technology.
  • Koptwan Indernaz says: IBM is mean. IBM wasn’t nice to me. Blah, Blah Blah. IBM is a global company with global operations. It puts the work where it best suited. Fat, dumb, low-skilled, overpaid Americans with a massive sense of entitlement don’t rank well in the global marketplace. It’s just another sign of the end of the American empire.

    And spare us the “IBM is about to collapse as layoffs will wreck contract performance!” junk that has been recycled regularly here since about 2003. Aside from whinging aforementioned fat, entitled Americans, there is no evidence. Anecdotes are not evidence, corporate results are, and IBM’s have been good for at least the last 5 years.

    I don’t work for IBM, but the pathetic bleating from the ex-IBM worker bees is tiresome. There’s 400,000 IBM employees so it can’t be hard to find complainers. If you are so terrific, take your payout, and go get another job.

  • Ouch says: Wait until your employer kicks you in the head and endangers the financial well being of your home and family. Maybe you’ll feel differently. IBM was different. While most companies treat its workers like mindless pawns, IBM chose to respect and value its workforce.

    Forget the workers for a minute, there is a bigger issue. A company is as good as its word. If you agree to buy a product or service from a company, you expect to get what you bought. You expect to be treated fairly and honestly.

    In most aspects of IBM’s business it is cutting its customers short. IBM is promising the world and delivering a lot less. They are not keeping their word, their commitment to their customers. IBM is not treating ANYONE fairly or honesty — its employees, its partners, its customers, …. THIS IS THE CORE OF THE PROBLEM.

    I have watched scores of friends at IBM get laid off. I can deal with an economic downsizing of the company, making the necessary adjustments in response to business changes. I support 22 customers who believe they are getting 24×7 support with 30 minute response times. The truth is there is no one on staff providing this service. We miss over half of the problems and find out about them when the customer calls. It takes about an hour to get someone, usually overseas assigned to work the problem. They have never worked with the customer before, they know nothing about the customers applications, and they have never touched the customers systems before. When a customer pays for 24×7, 30 minute service it is usually because their applications are pretty important to their business and outages can be very expensive. When it takes us 2-4 hours, instead of 30 minutes to fix a problem; that is not good.

    IBM made commitments to its customers. IBM is reneging on those commitments. IBM expects me to withhold the truth and give the customer the impression we are doing what we promised. IBM expects me to deliver service without the staff or tools, and to lie to my customers. If the customer discovers the truth I am the person IBM will sacrifice. I am the one who will suffer the consequences. I could lose my job and my livelihood while those who made the decision to cheat my customers are not held accountable.

    The fact jobs are being off shored, and pay and benefits are being cut is just one SYMPTOM of a much bigger problem. If these things were being done to adjust to a changing business that would be understandable. What is really happening is a vast culture of deception by the senior management of one of the worlds largest companies.

  • Mark says: Wall Street plays up the myth that public companies are managed for the benefit of their shareholders. The truth is each shareholder has such a small piece of ownership that management has all the power. They essentially run the business for their own enrichment. They set the compensation rules for themselves. They manage the books so their bonus targets are met. They use corporate money to elect politicians that enact laws favorable to them — and often harmful to the rest of us. This cycle will never end until corporations lose the right to influence elections and legislation IN ANY WAY. The heart of this is supreme court decisions that gave corporations the same constitutional rights as living human beings.

• The Register (United Kingdom): Big Blue union calls for probe of all IBM execs. By Austin Modine. Excerpts: Union organizers are rallying around the recent arrest of IBM executive Robert Moffat on insider trading charges to call for a broader investigation into all the company's heads. Alliance@IBM, a union that represents a small number of IBM employees, posted an open letter on its website Tuesday asking the US Department of Justice and US Securities and Exchange Commission to launch a probe of all IBM executives. On behalf of current and former employees at Big Blue, the organization is an extremely vocal critic of IBM outsourcing and its downsizing of domestic operations.

  "There's been an awful lot of rumor and innuendo over the years from employees who are very concerned that they see IBM taking a turn towards what they believe is unethical behavior and possibly illegal behavior," alliance@IBM national coordinator Lee Conrad told El Reg. "While this can't be proved at this point, there's an underlying feeling that this arrest of Moffat might just be the tip of the iceberg." ...

  In an open letter posted on its website, Alliance@IBM questions whether Moffat's alleged actions involve more than just one executive at IBM – particularly in light of Moffat being groomed to become the company's next chief executive. Conrad tells us Alliance@IBM has faxed its call to investigate to the SEC and sent it via email to the DoJ. It also plans to distribute the letter to select politicians that oversee large IBM communities, such as in New York and California.

  According to Conrad, many IBM employees herald the hiring of former CEO Louis Gerstner in 1993 as the beginning of IBM's loss of respect for its workers. "What employees feel and what the Alliance feels is that the current crop of IBM executive have pretty much broken faith with the employees and the communities that IBM does business in," he said.

• Hudson Valley Times Herald-Record: Robert Moffat, senior VP at IBM, arrested. By George Spohr. Excerpts: An IBM executive who oversees the company's operations in East Fishkill and Poughkeepsie was arrested on insider trading charges Friday. Robert Moffat, 53, of Ridgefield, Conn., senior vice president and group executive at IBM's Systems and Technology Group, was part of a hedge fund insider trading group that federal prosecutors say reaped $20 million in insider profits. Prosecutors say the ring of six also included Raj Rajaratnam, one of the wealthiest men in the country, and Danielle Chiesi, a Bear Stearns executive.

  One of the criminal complaints in the case filed in U.S. District Court in Manhattan says Chiesi and Moffat conspired to engage in insider trading in the securities of IBM. Another complaint in the case centers on Chiesi's desire to keep her friend, Moffat, at IBM to aid the insider trading scheme. ...

  'Cheering in the halls' Moffat is high up in the mid-Hudson IBM food chain, with some of the top managers there reporting to him. Employees in IBM's Systems and Technology Group make up the largest bloc of the company's more than 9,000 workers in the mid-Hudson.

  "I have talked to a few IBMers today, and there seems to be a lot of cheering in the halls of IBM over his arrest," said Lee Conrad, national coordinator of the employee-backed Alliance@IBM. "Employees are fed up with the executives of the company who seem to not care about the plight of the working people."

  'All about greed' Some of that ill will is because some of the most severe cuts in the mid-Hudson have been under Moffat's watch. "I believe it is indicative of the corporate culture inside IBM now," Conrad said. "It is all about greed. Slash jobs and payroll while the executives continue to get rich on bonuses, compensation and stock options." Moffat is a member of the IBM Performance Team and the IBM Corporate Operations Team, and some had considered him the heir apparent to IBM President, Chairman and CEO Sam Palmisano. IBM spokesman Doug Shelton said the company would have no comment.

• Wall Street Journal: Six Charged in Vast Insider-Trading Ring. By Jenny Strasburg and Chad Bray. Excerpts: In a case echoing the scandals of the 1980s, federal authorities exposed what they claim is the biggest insider-trading ring in a generation -- a conspiracy in which a hedge-fund kingpin and executives at blue-chip firms including IBM and Intel allegedly connived to profit on Google and other big-name stocks. ...

  The others taken into custody and charged were: Robert Moffat, 53, an executive at International Business Machines Corp. in charge of its supply chain, who recently was also given responsibility for its hardware, server and its semiconductor business -- and has been considered a potential future candidate for CEO. ...

  Relying on phone wiretaps, the criminal complaint described a period from 2006 and 2008 when Mr. Rajaratnam and his group allegedly swapped information that could move a stock. Wiretap transcripts appeared to show Mr. Rajaratnam working closely with Ms. Chiesi, with her serving as a key link between him and a network of contacts. Excerpts of taped conversations contained in court filings purported to show rapid-fire exchanges of information, and strategies about how best to trade on it. The wiretaps captured the high-pressure world of hedge-fund trading, as the duo discussed how certain information would weigh on coming earnings announcements of IBM, Akamai Technologies Inc. and others. ...

  During a call in August 2008, according to the filings, Mr. Rajaratnam and Ms. Chiesi discussed their concerns that their trading would draw regulators' attention. "On Akamai or IBM, anything, be radio silent," Mr. Rajaratnam told her, according to court filings. "I'm radio silent," Ms. Chiesi replied, according to the filings.

  The transcripts also showed the two discussing Mr. Moffat, the IBM executive. "Put him in some company where we can trade well," Mr. Rajaratnam was said to tell Ms. Chiesi on a recorded telephone call in September, 2008. Ms. Chiesi replied, according to the filings: "I know, I know. I'm thinking that too. Or just keep him at IBM, you know, because this guy is giving me more information.... I'd like to keep him at IBM right now because that's a very powerful place for him. For us, too."

• Fortune: 8 trades the insiders allegedly made. By Michael Copeland. Excerpts: The government's case in what it is calling the largest insider trading case involving a U.S. hedge fund contains a detailed list of trades involving household-name companies. Investigators have pieced together a case that alleges more than $25 million in illegal gains based on trading in 2006-09 on companies including Advanced Micro Devices, Akamai, Clearwire, Google, Hilton, Polycom and Sun Microsystems, among others. ...

  Just what did they allegedly do? Using information gleaned from wiretapped conversations between the accused and others, along with the statements of an apparent informant, SEC investigators have pieced together a series of episodes alleging to show how the defendants used inside information and well-timed trades to turn million-dollar profits. ...

  IBM knows Sun In January 2009, IBM was conducting due diligence on Sun Microsystems in preparation for an offer to buy it (Sun was ultimately bought by Oracle). As part of that process, Sun opened its books to IBM, providing its second-quarter 2009 results in advance of the scheduled Jan. 27 announcement. Because much of Sun's business is hardware, IBM's top hardware executive Robert Moffat was involved in the evaluation of Sun. Moffat allegedly had access to Sun's earnings results. He and Chiesi were also friends and contacted each other repeatedly during January 2009. The frequency of contact between the two increased just prior to the Sun earnings release, investigators say.

  On Jan. 26, New Castle began acquiring a substantial long position in Sun. On Jan. 27, after the market close, Sun reported earnings that exceeded Wall Street's estimates, posting a two-cent per-share profit when analysts had expected a loss. Sun shares soared 21% on the news. New Castle made almost $1 million.

• New York Times: An Arrest and an Earnings Puzzle at I.B.M. By Steve Lohr. Excerpts: Last Friday was not one of I.B.M.’s better days: One of its top executives was arrested in a sweeping insider trading case, and the company’s shares dropped 5 percent. The fall in I.B.M.’s share price probably had little to do with the arrest of Robert W. Moffat Jr., a senior vice president, and five others, who were charged by federal prosecutors in an elaborate insider trading scheme, mainly in high-tech stocks. All of those charged say they are not guilty. ...

  But I.B.M.’s ability to deliver strong profit despite a weak economy and eroding revenue has left many investors puzzled. And on that score, the insider-trading complaint has some intriguing passages.

  The suspected insider trading in I.B.M. shares focuses largely on a few days in January 2009, just before I.B.M. reported its 2008 fourth-quarter results. That quarter, of course, was when the economic tailspin resulting from the financial crisis really took hold. I.B.M., as the leading supplier of computer software, services and hardware to corporations, was presumably suffering mightily.

  But according to the complaint, a hedge-fund trader, Danielle Chiesi, was buying I.B.M. shares. Her purchases were not based on any confidence in I.B.M.’s superior prowess in weathering the economic storm. In conversations recorded by prosecutors, Ms. Chiesi said that without the information from Mr. Moffat, “I would be so short” the stock. Later she added, “I don’t know anybody talking about a beat this quarter,” referring to the company’s chances of beating Wall Street’s consensus expectations about its financial results.

• Yahoo! IBM Employee Issues message board post: "the perp walk for an IBM exec" by "cybertramp66". Full excerpt: The Moffat affair could easily turn into a biblical legal battle for IBM. As head of IBM corporate IT, Moffat had his hand in tons of dealings with external companies. Mergers and acquisitions, IBM contracts to use vendor products in IBM internal systems and service delivery centers, and packaging third party products with IBM services solutions. Every company that saw their stock price fall will litigate that IBM played a role by Moffat's knowledge of pending deals and insider stock trading. Fat Sammy has undoubtedly dispatched his army of flying monkey lawyers to silence anyone who knows anything.
• Yahoo! IBM Employee Issues message board: "Re: the perp walk for an IBM exec" by "bits_bytes_and_bugs". Excerpts: Moffat has at one time or another led nearly all the divisions at IBM (SoftWare Group SWG is one he hasn't), but he's been running Systems and Technology Group for a few years. For a while he ran Integrated Supply Chain ISC and Global Technology Services GTS (which included Integrated Technology Delivery). He's bounced around leaving a trail of destruction, probably because he was being groomed to be Sam's successor. But he doesn't run corporate IT, the CIO is Pat Toole.

  But yes, he's been a very dangerous person to work for - sort of IBM's equivalent to Chainsaw Al Dunlap - he's cut 25 to 30% of the headcount in every organization he's run.

  As for your quote "Every company that saw their stock price fall will litigate that IBM played a role by Moffat's knowledge of pending deals and insider stock trading.", I don't buy it. They just can't sue IBM for the fun of it - they will have to prove their case, which unlike the FBI, they won't have wiretap recordings.

  I can't wait for the transcripts of those conversations to be made public as part of the trial proceedings - although if the defendants plead guilty, the transcripts may never become public. Don't be surprised if more charges are filed, but I doubt that more IBMers would be involved - Moffat spilled so much that there would be no need of any other IBM insiders.

• Yahoo! IBM Employee Issues message board: "Re: the perp walk for an IBM exec" by "evil wizzard". Full excerpt: > As for your quote "Every company that saw their stock price fall will litigate that IBM played a role by Moffat's knowledge of pending deals and insider stock trading.", I don't buy it. They just can't sue IBM for the fun of it - they will have to prove their case, which unlike the FBI, they won't have wiretap recordings.

  I do buy it, especially for AMD and Sun. There are confidentiality agreements (CDA) signed between IBM and both AMD and Sun before they would open their books to IBM as they did. As an officer of IBM (legal representative), and by divulging material facts to outside individuals, Moffat has broken that agreement. There are usually severe repercussions for breaking confidentiality agreements. This opens a whole can of worms for actual and claimed damage by both Sun and AMD, would probably end up with massive amounts of disclosure and at least some very huge legal costs for IBM.

  Every company that has a confidentiality agreement with IBM - and there are literally hundreds - and that has a CDA document with Moffat's signature on it, or some involvement by Moffat in business partnerships with these companies, would have every right to investigate the situation. They would at least have a valid argument (precedent) for saying they are concerned about the disclosure of confidential information.

  Perhaps much worse is the damage to IBM's reputation as a Company that can be TRUSTED in business partnerships, even if there is a CDA. If I were AMD or Chartered or Sony or Microsoft or any one of a number of companies, I would be not looking at IBM in the same way now. I'd reconsider getting into sensitive information agreements with IBM.

• The Register (United Kingdom): Feds’ insider trading wiretap snares IBM heir apparent. Hedge fund chatter fingers Big Blue man. By Timothy Prickett Morgan and Cade Metz. Excerpts: The heir apparent to IBM CEO Sam Palmisano has been arrested and charged with insider trading, as US authorities cracked down on an alleged $20m scheme involving shares in some of the IT industry’s biggest names. ... Today, the Federal Bureau of Investigation and the US Attorney’s office in Manhattan filed insider trading charges against six people, including Robert Moffat, senior vice president and general manager of IBM’s Systems and Technology Group, and Rajiv Goel, director of strategic investments in Intel’s treasury department. Moffat had climbed the IBM ladder to the point where he was a prime candidate to succeed Palmisano as CEO. ...

  In both the first complaint and the second — which you can see here (PDF) — AMD's foundries spin-off plays a prominent role. In February, AMD spun-off its chip-making business, creating a new company owned by the Abu Dhabi-backed Advanced Technology Investment Company. ATIC also partners with IBM in developing up chip-making technologies. According to court papers, both McKinsey’s Kumar and IBM’s Moffat shared insider information involving the AMD spin-off, now called GlobalFoundries. Kumar passed information to Rajratnam, the papers say, and Moffat discussed secrets with Danielle Chiesi, an employee at New Castle Funds, formerly the equity hedge fund group of Bear Stearns. Rajratnum was also in touch with Chiesi, the papers say, even though they worked for different funds. According to the complaints, both were involved in insider trades.

  As of Friday afternoon, Danielle Chiesi, 43, of New York City, was the fourth most popular search on Google, one slot higher than IBM’s Bob Moffat (though two steps below Raj Rajaratnam). Moffat, 53, of Ridgefield, Connecticut, is accused of giving Chiesi private information about the AMD spin-off, IBM’s quarterly earnings, and Sun Microsystems’ quarterly earnings during the time when Big Blue was working to acquire Sun.

  Selected reader comments for the above article follow:

  • Shame he didn't listen to TJ Watson snr. By Anonymous Coward. Posted Saturday 17th October 2009 22:23 GMT. "We call that strategy 'Think,'" said Bob Moffat, senior vice president of IBM's Personal Systems Group. Quoted by CNET on November 4, 2002, before he got elevated to Senior VP. Just think. When you have telephone conversations about illegal actions, for example. The new generation of people reporting to Sam is way less smart and technically rooted than the generation that Gerstner put in place. Mr Moffat has been referred to in the blogosphere as an "idiot exec" and "self absorbed turkey" well before this unfortunate event. Not having dealt with him personally, I can't say whether those comments are justified. But you do have to be pretty self-absorbed not to think that somebody might be listening.
  • Avarice, Plain and Simple. By Anonymous Coward. Posted Sunday 18th October 2009 16:51 GMT. Bravo, Register reporters and editors, for presenting the facts and the actual court documents. I would suggest a follow-up "inquiry" into why certain USA-based press conglomerates are virtually ignoring this story (e.g. CNN) while they replay trash re: "Balloon Boy". This speaks volumes about the inequality of compensation systems in the USA. Capitalism? Yes, fine. But when executive compensation isn't sufficient, and they choose to break the law, throw them in JAIL.
  • By George Schultz. Posted Sunday 18th October 2009 18:19 GMT. What bothers me about people like this is - they make enough in one month for me to retire for the rest of my life. Here we are talking about taking the $ and putting it in the bank and drawing the interest. Even at the miserable level it is at right now, I could replace my - and my wife's - salary. On top of this, we are among the high end wage earners in the US. (OK the low end of the high end - but nothing to sneeze at.)

    At some point I had heard that the top 400 wage earners took in 1% of all income in the US - in 1980. I believe that the top 400 wage earners now is close to 2% of all income in the US. While looking for something to confirm this I found that in 2000, those top 400 AVERAGED 174 Million dollars a year! ~70 BILLION dollars in income for just 400 people. (They paid on average 18% in taxes - and this was before the Bush tax cuts!) If the average income were $40k (it is not) than the total income in the US would be about 6800 Billion. The average is closer to 20K or 30K. Something is really Fvcked here. The real problem is that they (the CEO scammers) are treated better than bank robbers and drug dealers while they do far more harm to society.

  • But why? By Anonymous Coward. Posted Monday 19th October 2009 13:04 GMT. Given that some sources are saying that Bob didn't profit from the insider trading, it makes me wonder about his motives.... With the constant slide in server sales heading up STG must have been a thankless job, and given the general consensus that he wasn't going to succeed SJP, maybe he, like the rest of us plebs, got sick of all the bullshit. Maybe he got so sick of it he didn't care anymore if he leaked the inside information. Maybe execs can get disillusioned just like the rest of us... Or maybe he's just another arrogant exec that thinks the rules don't apply to them. Whatever the reason, I'd like to know.
  • oh come on. By Anonymous Coward. Posted Monday 19th October 2009 15:00 GMT. Please don't start making excuses for Moffat, he was a relentless cost cutter who made significant money in shares, options and salary by making other peoples lives a misery. There is no doubt he was talking to this "broad" because he expected to a). make money from it b). position himself in that crowd as a knowledgeable/credible mover and shaker c). get in her pants He did know better and even if he didn't make money directly, he was going to make money indirectly through the boost to IBM share price from his leaks.

• Poughkeepsie Journal: IBM puts executive on leave after charges. Excerpt: IBM Corp. has placed a top executive on leave after he was charged in an insider trading scandal for allegedly leaking secrets about IBM's earnings and financial dealings with corporate partners.

  Selected reader comments for this article follow:

  • Any other employee would have immediately been dismissed… just like in politics this shows us again rank has its privileges. This sleaze took great joy in axing hard working people, now I hope he ends up broke with no benefits like the rest of the people he’s ruined the lives of. Sam… look out your being watched and sucking up to Obama may not help you.
  • I like where IBM spokesman tells employees that Moffat was put on leave In view of a U.S. federal investigation into his personal activities, Bob Moffat, who has served as senior vice president, IBM Systems and Technology Group, has been placed on temporary leave of absence and is no longer serving as an officer of IBM. What a joke. He was the second in command at IBM and Palmisano put him there. IBM will not take responsibility and trying to put a spin on it to protect Palmisano and the other executives. the IBM board needs to clean the IBM house
  • Sorry, but Moffat exemplifies the mentality of the modern executive, and it's not just in IBM. Execs in all industries are paid to focus on the bottom line exclusively. That means that the people who succeed are the ones who are sociopathic, amoral, and in Moffat's case, messianic. It's a rare exec who actually cares about the people he manages. To the exec, his people are no more than cogs and widgets he can move around indiscriminately, just so long as it helps the bottom line. Do you really think Moffat thought twice about moving jobs offshore? Heck, man, his compensation metrics were based on moving so many jobs offshore every quarter. Just like all C-level and above execs are paid based partly on how many people they move out of the business. And do you think he thought he'd get caught divulging company secrets? Not hardly. He deserves a long stretch in jail.
  • I've been with IBM for 22 years. I remember how we used to have opinion surveys every year where, among other things, we were asked our opinion about the job management was doing and how we felt about the company. Well, it's probably been about 7-8 years or so since our last one. And I don't expect to be seeing one any time soon (most likely, never again).
  • An article in the Wall Street Journal (by bill.bulkeley@wsj.com) described Bob Moffat as "the quintessential IBMer". A quintessential IBMer puts his customers first, above all else. A quintessential IBMer puts the good of the company ahead of his personal good. A quintessential IBMer wants IBM to be a strong and vibrant company for his children and grandchildren. A quintessential IBMer treats all people with dignity and respect. Bob Moffat may be the quintessential modern corporate executive, but he certainly is NOT a quintessential IBMer. I am sick of reading about what a virtuous company IBM is by people that never bother talking to REAL IBMers. I plan on writing to Mr Bulkeley to put him right - maybe if enough IBMers do that as well, he might start to get a message.
  • One can only hope that the SEC will investigate IBM reporting’s, seeing Mr. Moffat signed off on SOX documentation and that AMD and Sun will file suit against IBM for violation on their confidentially agreements. 10/20/2009 6:39:26 AM

• Poughkeepsie Journal: IBM puts Moffat, its rising star, on leave. Rising star dims as insider trading charges stagger corporation. By Craig Wolf. Excerpts: Djurdjevic said he was “shocked” by the news about Moffat, who he said had worked closely with Chairman and CEO Samuel Palmisano on IBM’s supply chain overhaul. This tightened up purchasing and manufacturing and made manufacturing a globalized business. This accelerated Moffat’s career, and Djurdjevic believes Palmisano gave the Systems and Technology job to Moffat as a plum. It opened up when William Zeitler retired.

  Djurdjevic said while such behavior, if true, runs counter to IBM’s core values, it may well have stemmed from signals given by former CEO Louis V. Gerstner. “The blame goes to the man who starts to loosen the rules,” he said. That included letting IBM executives sell IBM shares they acquired as compensation.

  “Gerstner planted the seed of greed at Armonk. And it grew out of control in Moffat’s case,” he wrote to his subscribers. “What this IBM executive has allegedly done is simply an unlawful extension of the ‘anything goes’ greed-driven era the former IBM chairman had brought to Armonk.”

  How much money Moffat is making at IBM isn’t reported in filings IBM makes with the Securities and Exchange Commission, which only requires the top five to be itemized. But Moffat was, until after his arrest, listed within the company’s profiled executives reporting to Palmisano. These facts make clear his rank was somewhere below the top five but in the top 12.

  The lowest-compensated executive in the top five is Virginia M. Rometty, senior vice president for IBM Global Sales and Distribution. IBM’s proxy statement showed her 2008 salary at $617,500 and a summary of total compensation including various stock plans at $7.1 million. These reports suggest a likely total compensation of several million dollars for Moffat.

• Wall Street Journal: Moffat Viewed as 'Classic IBM Executive'. By William M. Bulkeley. Excerpts: Within International Business Machines Corp., Robert W. Moffat Jr. was known as a "quintessential IBMer," rising to Big Blue's top echelons by relentlessly cutting costs to boost profits. To the rest of the world, he is becoming known as one of the highest-ranking executives to be embroiled in an insider-trading scandal since Wall Street was rocked by such schemes in the 1980s. ...

  An affidavit in the federal case, based on wiretaps, alleges that Mr. Moffat gave inside information about IBM and its partners to Danielle Chiesi, who worked for New Castle Partners, a former Bear Stearns Cos. hedge fund that was spun out last year. He allegedly told her confidential details about coming earnings for IBM and Sun Microsystems Inc., as well as plans for Advanced Micro Devices Inc. to sell its semiconductor factory to an Abu Dhabi fund. ...

  At IBM, based in Armonk, N. Y., and in nearby Ridgefield, Conn., the suburb that is home to Mr. Moffat and dozens of other IBM managers, the news shocked current and former associates. Rosabeth Moss Kanter, a Harvard Business School professor who examined IBM in her recent book "Supercorp," said, "It is astounding given IBM's emphasis on a values-based culture." ...

  Mr. Moffat, "was the classic IBM executive from the cookie-cutter school of management training," according to one former associate. Mr. Moffat continued to carry on the company's tradition of wearing a white shirt to work, even though a ban on colored ones was lifted two decades ago. He was sometimes mentioned as a possible successor to the CEO. A track star as an undergraduate at Union College in Schenectady, N.Y., Mr. Moffat joined IBM in 1978 in the finance department. In 2000, he became head of the troubled PC division. Within 18 months, Mr. Moffat arranged to outsource the company's desktop-manufacturing business in North Carolina and Scotland. Three years later, he managed the sale of the rest of the PC business to China's Lenovo Inc.

  Selected reader comments for the above article follow:

  • Richard Gordon wrote: Note to Ms. Kanter regarding IBM's "values based culture". That's only for the lower level folks to adhere to, not the senior execs. That culture was dropped several years ago -- it's now only a memory for most of the IBM Employees.
  • Thomas Herman wrote: Rosabeth Moss Kanter, a Harvard Business School professor who examined IBM in her recent book "Supercorp," said, "It is astounding given IBM's emphasis on a values-based culture." "values based culture" ? And what "values", exactly, would that be? Search for many articles at www.EEtimes.com, to see how manipulative IBM is for outsourcing USA jobs, stealth layoffs, and evading the WARN Act. When companies chest-beat and tout puffery such as "values" and "ethics" -- watch out! -- that is as much a red-flag, as "Honest John's Slightly Used Cars".
• Flash back in time... ChannelWeb: Up Close and Personal: IBM's Bob Moffat. By Robert C. DeMarzo. July 02, 2002. Excerpts: With a talent pool as deep as any, IBM is often pressed to find enough top spots for all its top people. The best technologists can hope to become IBM Fellows. The top finance people can hope for a seat on a corporate or community board. The best decision makers, however, distinguish themselves in another way: They run IBM's businesses. One of those with the toughest assignments within the company is Bob Moffat, senior vice president and group executive in charge of IBM's personal systems and integrated supply-chain initiatives. ...

  For much of his early life, Moffat made do with little. That discipline has given him the strength to do things others can't,or won't. Take the time, for example, that he directed a plane through a snowstorm that grounded others just to meet with a New York City customer to set the record straight about comments a rival made about IBM's future in PCs. (The customer was told that IBM was exiting the PC business; Moffat walked five blocks through driving snow to set him straight and won the customer's business.)

  Then there was the time he trimmed head count in his division by 20 percent. That same week, he was singled out by a real-estate agent trying to sell him a house as the man responsible for ruining the hopes of many in the community. (Moffat turned it around and reminded the man of how many jobs were saved by those cuts.) Then there was the time he decided that the PC company needed to try a different approach to competing. (It came to him one Saturday afternoon after 14 straight hours of work when he realized that his team couldn't work any harder and, even if it did, it wouldn't matter because the team had already reached the point of diminishing returns.)

• Flash back in time...Lobbyists and The Law, by Marie Cocco. July 7, 2005. Excerpts: In May, IBM employees who've so far convinced the federal courts that their company's pension cutbacks illegally discriminate against older workers struck a settlement deal under which the technology giant could pay out as much as $1.7 billion. In June, a House committee decided it would settle the long-running argument over converting traditional pensions into less generous cash-balance plans differently: With the stroke of a pen, the committee changed the definition of age discrimination. And it put corporations on notice -- even those still facing challenges in court -- that if they acted quickly to conform to the "new" discrimination rules, damages against them could be capped. With friends in Congress, who needs to worry about losing a lawsuit? ...

  By and large, companies that converted their pensions weren't fretting over the health of their traditional pension funds. They were figuring out how to boost the corporate bottom line. Documents that surfaced in the IBM suit show that executives there considered the conversion a cost-cutting measure that would save $2 billion over a decade. But they simultaneously worried about how the pension reductions would affect upper management. They plotted more generous 401(k)s and creation of a supplemental pension system for executives. The rich are (still) different from you and me. ...

  His career, begun 31 years ago after he graduated from Union College, where he majored in economics and became a track star, had in recent years gone to the fast track on the strength of his reorganizing of much of IBM’s manufacturing operations, a task that resulted in thousands of jobs being surplused and in many cases, being sent to low-cost overseas areas. By Monday, his photo and bio were missing from the company’s Web page.

• Associated Press, courtesy of KXLY (Spokane, Washington): Critics: Failed Indiana-IBM Deal Can Warn Others. By Deanna Martin. Excerpts: Indiana said it was going to get outsourcing right when it turned welfare eligibility services over to a private contractor in 2007. Now critics say the failed move is the latest warning that states should not allow for-profit companies to run social services. The ambitious, $1.34 billion effort to automate applications for food stamps, Medicaid and other welfare benefits was being closely watched after states such as Texas had problems when they tried similar plans. Indiana fired IBM Corp. as the lead contractor on the project Thursday over problems including lost documents, delays in benefit approvals and poor service. "Other states should beware," said Jim Wallihan, an advocate for senior citizens in Indiana. "Indiana's been a good demonstration, along with Texas, that there's some variables involved that just don't take well to privatization." ...

  Both Indiana and Texas -- where thousands of children lost health insurance because of problems from an outsourcing experiment that ended in 2007 -- learned a costly lesson, said Celia Hagert, a senior policy analyst at the Center for Public Policy Priorities in Texas. Yet more states could still consider privatization -- touted as a way to save money -- as they search for budget cuts during the economic downturn, she said. "These two huge and costly errors in Texas and Indiana should give any state pause when it thinks that privatization is going to save them money, because it's not," Hagert said. "It causes a lot of damage."

• EE Times: Is IBM handing over key IC technology to China? By Mark LaPedus. Excerpts: IBM Corp. has struck its second major chip deal in China, leaving some to wonder if Big Blue is handing over technology to that nation without thinking about the possible consequences. China's CSMC Technologies Corp. has signed an agreement with IBM under which Big Blue will license its 0.18-micron radio frequency (RF) CMOS semiconductor technology to the specialty foundry vendor. This is the second foundry licensing deal for IBM in China. In 2007, Chinese foundry provider Semiconductor Manufacturing International Corp. (SMIC) licensed IBM's 45-nm bulk CMOS technology.
• Poughkeepsie Journal: Earnings rise 18% in 3Q on cost cuts. By Craig Wolf. Excerpts: Higher profits on slumping sales may sound like a contradiction in terms, but not at IBM Corp. Cost savings across the business - much of it from disappearing jobs - helped IBM to report an 18 percent gain in earnings per share of stock to $2.40 in the third quarter. Overall revenues were down by $1.7 billion to $23.6 billion, a drop of 6.9 percent that spread across-the-board in all five of IBM's segments.

  But profit margins expanded nonetheless, with the gross margin growing 1.8 percentage points to 45.1 percent and the net margin growing 2.4 points to 13.6 percent. Margins have grown in 20 of the last 21 quarters, IBM said. ...

  IBM's job cutting appears ready to continue. Loughridge said IBM is on track to take out $1 billion from shared services and back-office work globally across the business. No specifics were given as to when and where. Loughridge said he expects IBM will realize $3.5 billion in cost and expense savings "from actions we've taken." "We've got a lot of opportunity to reduce structure and make our business more efficient," he said.

  He mentioned "rebalancing our work force," which is lingo for IBM's way of firing with one hand and hiring with the other, often in different locations, and more often than not overseas. IBM is the largest private employer in the mid-Hudson, but a shrinking one because of hundreds of job eliminations early this year.

  More such cuts are expected broadly, said Lee Conrad, national organizer for Alliance@IBM, a workers' group. "We expect the cuts to continue throughout the year," Conrad said. "IBM's been cutting just about every quarter. We know the offshoring of jobs is ongoing, so we expect more IBMers in the U.S. to be unemployed."

• Poughkeepsie Journal: Reader comments for "Earnings rise 18% in 3Q on cost cuts". Selected comments follow:
  • whybother2day wrote: Companies continue to find ways to remain profitable at the expense of the average working american. The so called economic recovery is just widening the gap between the haves and have nots. Cutting jobs to maintain profitability is a dead end solution. Eventually, companies like IBM will no longer have any consumers to buy the products and services they are selling and where will that leave our U.S. economy?
  • fogitit wrote: IBM's exec's know that they cant continually save their way to a profit. But they're not concerned about that. In the longer term, IBM's revenues can only grow by IBM selling more of it's goods and services. However IBM's exec's are incapable of growing profits in the traditional sense (selling additional goods and services) therefore they resort to the short term strategy that they know will work. They simply fire American workers and hire cheap labor in Brazil, India or China. The short term result? Share prices climb, IBM's exec's meet the profit targets stipulated in their employment contracts and subsequently collect enormous bonuses on top of their multi-million dollar salaries. Not to mention benefiting from the sale of stock options with an artificially inflated price per share.
  • allrightythen wrote: It's funny cause I work in services, we are in the process of or are losing accounts due to lack of experience and communications that is due to the global resources. Its also taking several new employees to cover one experienced one that was let go. We have also seen experienced IBMers being hired back in the same position as contractors after IBM discovered the loss of that employee (there should be a law against that) They are also a major part of the problem with the shrinking middle class. I really don't know how these execs can sleep at night after what their employees did for the company to make it what it is. Soon the only employees left will be the CEO and exec's when they keep trying to pull a profit by cutting skilled US employees.
• BusinessWeek: Investors See IBM Outside Tech's Recovery. Third-quarter earnings beat expectations and IBM raised its full-year profit forecasts, but a decline in contract signings disappointed Wall Street. By Arik Hesseldahl. Excerpts: Try as it might, IBM couldn't make a convincing case to investors that it's reaping the benefits of the economic recovery that is lifting other tech companies. Even as it raised full-year profit forecasts and beat expectations for third-quarter earnings, IBM also reported a decline in contract signings, a yardstick of future business. Investors and analysts took the decline as a signal IBM isn't seeing demand rebound as quickly as some other tech providers. "The signings number was pretty low," says Brian Marshall, an analyst with Broadpoint AmTech Research in San Francisco. "Today's announcement will be viewed as a disappointment." ...

  More Cost-Cutting. During the conference call with analysts, Loughridge was asked by Bernstein Research analyst Toni Sacconaghi whether he believes corporate IT spending has recovered in light of what he called "tepid guidance." Loughridge said IBM is seeing an overall stabilization in the economy. He reiterated that the revised earnings-per-share (EPS) guidance reflects "the confidence we have going into the fourth quarter." Loughridge also hinted at further savings and acquisitions. He said IBM expects to finish the year having reduced operations expenses by $3.5 billion. The company cut 9,000 jobs in the first half of the year. Loughridge suggested more cost cuts could be in the offing. "We've got a lot of opportunity to continue to reduce structure and make our business more efficient," he said.