IBM Employee News and Links | November 21, 2009

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Highlights—November 21, 2009

USA Today: As pensions dried up, four firms paid top execs $49.5M. By Matt Kelley. Excerpts: Top executives at four companies that jettisoned their employee pension plans received $49.5 million in retirement and severance benefits in the years before the companies filed for bankruptcy, while retirees saw their benefits cut by as much as two thirds, congressional investigators conclude in a report released Thursday. The Government Accountability Office (GAO) reports that pensions at the companies, United Airlines, US Airways, Polaroid and Reliance Insurance, were underfunded by more than $11 billion when the companies turned them over to a government-backed insurance fund. The report says executives at those four companies and six others that abandoned their pension plans took in a total of $350 million in pay and perks in the years leading up to the bankruptcies.
"If the pension is getting deeper into trouble and the executives are getting richer, there's something wrong with that picture," said House Education and Labor Committee Chairman George Miller, D-Calif. Miller requested the report as part of an examination of the troubles facing the Pension Benefit Guaranty Corp., the federal pension plan insurer. The PBGC, which insures pension plans covering 44 million people, warned this month that it has a deficit of nearly $22 billion.
ComputerWorld: New H-1B hiring bill takes aim at tech firms. By Patrick Thibodeau. Excerpts: The two lawmakers who successfully added H-1B hiring restrictions to the financial bailout bill earlier this year have introduced legislation that would bar any firm that lays off 50 or more workers from hiring guest workers. This legislation, introduced by Sen. Bernie Sanders (I-Vt.) and Sen. Charles Grassley (R-Iowa), could potentially affect a broad swath of tech firms that have laid off large numbers of workers but continue hiring. The high-tech industry overall has laid off more than 345,000 workers since August 2008, according to the two senators in the unveiling of what they called the Employ America Act.
"With the unemployment rate over 10%, companies that undertake mass layoffs shouldn't need to hire foreign guest workers when there are plenty of qualified Americans looking for jobs," said Grassley, in a statement yesterday. ...

Grassley and U.S. Sen. Dick Durbin (D-Ill) introduced the H-1B and L-1 Visa Reform Act of 2009 earlier this year (S.887) that would set a number of restrictions on H-1B use, including the so-called 50-50 provision that would prohibit any firm with more than 50 workers from having more than half workforce on H-1B or L-1 visas. That provision is aimed at Indian outsourcing firms. The legislation also sets higher salary standards for visa workers as well as anti-fraud provisions.
Yahoo! IBM Employee Issues message board: "Re: Consultant: IBM data center contract unsustainable." (Editor's note: This posting refers to this article in the Austin American-Statesman.) By "nyjints5". Full excerpt: IBM probably did inherit poor conditions from the state of Texas. During a "Transition Phase", I was assigned to the account team of a different commercial account. (Transition is just prior to the "Steady State" phase when IBM is responsible for day to day operations, and delivery of IT Services according to the terms specified in the Strategic Outsourcing contract with the customer.) During Transition of this particular account, it became totally obvious to most of us on the account team that the customer's data center was in complete disarray. It was pure chaos everywhere you looked. So much so, that we all started looking to get off the account as fast as we could. Most of the promises made to the customer went undelivered. It got so bad, that the customer went so far as to threaten IBM with a lawsuit. Eventually all work came to a screeching halt while IBM and the customer renegotiated the deal.
But that's no excuse for anything!! IBM turned a deaf ear and blind eye to everything during "Engagement". Once the deal was signed, that horrific pile of dung was thrown over the fence into Service Delivery's (ITD's) lap. It was impossible to find someone on the IBM Engagement Team to inquire as to why IT service delivery had to be delivered the way the contract specified it would be. The boys and girls on the Engagement Team were long gone. (Not because they were RA'd mind you, but rather they had been assigned to another new deal.) They never returned phone calls, or answered Lotus Notes. And believe me, they knew full well what a piece of crap the deal they promised to the customer was. All they wanted was the customer to sign the deal. After that, all the completely unrealistic promises they placed into the SO contract became Steady State's problem.
Yahoo! IBM Employee Issues message board: "Re: Consultant: IBM data center contract unsustainable. By "ibmretiree2006". Full excerpt: Indeed. As in many parts of IBM the "sales" team wants to close the deal. They, for the most part, do NOT care about the aftermath. I was on an outsourcing team that was putting together a deal for a brokerage firm. While there were a great many "architects" on the team, there was NO ONE from the group that would have to make it work. All that was of issue was how to price it to win.
Yahoo! IBM Pension and Retirement Issues message board: "Re: FHA dollars, can it covers until 65 years of age?" by "pbc360". Full excerpt: Here is what I have gleaned as a best way to stretch your FHA dollars:
- Use COBRA for as long as possible, usually 18 months. This is a high out-of-pocket expense to pay the full employee cost of health insurance plus 2%. You are trading up front costs at employee rates now to extend FHA dollars at retiree rates later. This also has the risk that IBM will renege on the FHA dollars at some point.
- Next, pay for health coverage 100% with FHA dollars. With FHA it is use it of lose it. Just be sure not to spend the last FHA dollar or few dollars in your FHA account so you can always get back into the plan, paying out of pocket, as long as you hold continuous medical insurance coverage.
- It is difficult at this point to predict how universal health care will affect the above, but it looks like when it is passed it will not kick in until at least 2013.
Is there anything I am missing or other suggestions?
Center for Retirement Research at Boston College: The Wealth of Older Americans and the Sub-Prime Debacle. By Barry Bosworth and Rosanna Smart. Abstract: This study explores the consequences of the housing price bubble and its collapse for the wealth of older households. We utilize micro survey data to follow the rise in home values to 2007, observing which households enjoyed home price appreciation and how they responded in terms of equity withdrawal. We then use the SCF survey data on wealth holdings from 2007 in combination with national price indexes to simulate the magnitude and distribution of wealth loss from the 2008-2009 financial crisis. The collapse of the housing market triggered a broad decline of asset prices that greatly reduced the wealth of all households. While older households mitigated their real estate and equity losses with relatively stable fixed-value assets and pension programs, no demographic group was left unscathed.
Prior to the financial crisis, our study and others had concluded that the current baby-boom cohort of near retirees were surprisingly well-prepared for retirement compared with similarly aged households over the past quarter century. Unless there is a strong recovery of asset values in the next few years, that favorable assessment is no longer true.
Financial Times: Firms put premium on experience and specialist skills. By By Charles Batchelor. Excerpts: Graduate recruitment into consulting may have been hit by the economic crisis but firms continue to snap up experienced professionals from rivals and from industry. The fear factor that kept consultants and managers in posts that they were not happy with has started to abate and they are now willing to move to firms that can offer a more attractive deal, says Phil Dunmore, UK managing director at PIPC, a project and programme management consultancy.
“There has been a change in the last couple of months,” says Mr Dunmore. “Before, even if people did not like where they were, it was safer to stay because they did not want to move and find themselves in a ‘first-in, first-out’ scenario. But now people sense that it has got a bit easier.” “Experienced hires from other consulting firms” emerged as the most likely source of recruitment during 2009, according to a survey carried out by Top-Consultant.com, a recruitment website. Experienced hires from industry, government and other public sector bodies came next with MBA finalists and university leavers bringing up the rear. ...

PwC, the professional services firm, says it is keen to make better use of networking and referrals from its own staff in other areas to attract experienced recruits. “We want to build our own talent bank rather than rely on head-hunters and agencies,” says Marcus Robinson, consulting partner.

A bright spot for graduate would-be consultants is the return of the large accounting firms to the consultancy field. PwC sold its management consulting business to IBM in 2002 but is now rebuilding a presence in the sector. It has launched a graduate recruitment programme, signing up 42 graduates this year, rising to a planned 150 in 2010. It expects to double the size of its 1,400-strong consultancy team within four to five years.

“We never got out of the business of advice,” says Mr Robinson. “A couple of years ago we started thinking about consultancy. The partners have taken a small hit to invest in recruitment.”
IEEE Today's Engineer: Contending with the Downside of Offshoring. By Donald Christiansen. Excerpts: One area the study gave relatively less attention to, listing it last in a series of ten findings, was offshoring’s impact on national security. In that regard, its main concern seemed to center on the possibility of detailed plans and other information about U.S. buildings and infrastructure falling into “the wrong hands,” and that maliciously placed code might compromise the security of DOD networks. Yet back in 1988, the Defense Science Board called the dependence of the U.S. military on foreign parts dangerously high. ...
When Boeing downsized its Dreamliner project, a commercial jetliner to replace its aging 767, it expanded its traditional outsourcing to include not just parts, but both design and construction of major aircraft sections, including the wings. The idea was to have its suppliers share the risks by becoming partners in the project. But the Dreamliner is now two years behind schedule. Boeing’s CEO told a New York Times reporter that the company lost control of the process by farming out more design and production work than ever and not keeping close tabs on suppliers. The resulting delays caused financial difficulties for Vought Aircraft, manufacturer of the new fuselage, so Boeing bought the plant that made it from Vought. Major suppliers to the Dreamliner project include one Italian and three Japanese companies. ...

The Duke Offshoring Research Network reported that the number of U.S. companies engaging in offshoring has more than doubled from 2005 to 2008, and few intend to return activities to the United States. The Duke report claims the two reasons for the increasing rate of globalization are speed to market and a domestic shortage of engineering talent. It omits mention of cost savings. Those conducting the NAE study wondered whether offshoring is negatively affecting the public perception of engineering and, if so, whether it has led to fewer talented U.S. students choosing to pursue engineering careers. Their conclusion, once again, was that data are too sparse to either confirm or allay these concerns.
The Register (United Kingdom): HP workers eye walkout over engineer jobs dispute. 'Sacrificial offering on the altar of stock exchange'. By Kelly Fiveash. Excerpt: Hewlett-Packard workers have voted in favour of strike action in the UK, following a ballot among members of the Unite union who complained about 150 customer engineers being shunted over to a subsidiary company. Unite said 77 per cent of members at HP voted for a staff walkout, while 85 per cent called on "action short of strike action". ...
Unite claimed last month that HP was removing pay and pension benefits, including a performance bonus scheme worth up to £2,000 and a final salary pension scheme.
Plan Sponsor: Employers Continue to Shift Health Costs to Retirees. Excerpt: Large U.S. employers are continuing to shift significant health coverage costs to retirees or exiting sponsored retiree health benefit programs altogether, according to Towers Perrin’s 2010 Retiree Health Care Cost Survey. According to a press release, the survey finds that pre-65 retirees, who are not yet eligible for Medicare, will be hardest hit as they attempt to balance fixed incomes with steady increases in health coverage costs. At the same time, the survey also reveals that many employers are missing significant opportunities to deliver retiree benefit value while saving money and improving program effectiveness.
Huffington Post: Obama, China, and Wishful Thinking About American Jobs. By Robert Reich, Former Secretary of Labor, Professor at Berkeley. Excerpts: President Obama says he wants to "rebalance" the economic relationship between China and the U.S. as part of his plan to restart the American jobs machine. "We cannot go back," he said in September, "to an era where the Chinese . . . just are selling everything to us, we're taking out a bunch of credit-card debt or home equity loans, but we're not selling anything to them." He hopes that hundreds of millions of Chinese consumers will make up for the inability of American consumers to return to debt-binge spending.
This is wishful thinking. True, the Chinese market is huge and growing fast. By 2009, China was second only to the U.S. in computer sales, with a larger proportion of first-time buyers. It already had more cell-phone users. And excluding SUVs, last year Chinese consumers bought as many cars as Americans (as recently as 2006, Americans bought twice as many)....

But the larger explanation for Chinese frugality is that the nation is oriented to production, not consumption. China wants to become the world's preeminent producer nation. It also wants to take the lead in the production of advanced technologies. The U.S. would like to retain the lead, but our economy is oriented to consumption rather than production.

Deep down inside the cerebral cortex of our national consciousness we assume that the basic purpose of an economy is to provide more opportunities to consume. We grudgingly support government efforts to rebuild our infrastructure. We want our companies to invest in new equipment and technologies but also want them to pay generous dividends. We approve of government investments in basic research and development, but mainly for the purpose of making the nation more secure through advanced military technologies. (We regard spillovers to the private sector as incidental.)

China's industrial and technological policy is unapologetically direct. It especially wants America's know-how, and the best way to capture knowhow is to get it firsthand. So China continues to condition many sales by U.S. and foreign companies on production in China -- often in joint ventures with Chinese companies.

American firms are now helping China build a "smart" infrastructure, tackle pollution with clean technologies, develop a new generation of photovoltaics and wind turbines, find new applications for nanotechologies, and build commercial jets and jet engines. GM recently announced it was planning to make a new subcompact in China designed and developed primarily by the Pan-Asia Technical Automotive Center, a joint venture between GM and SAIC Motor in Shanghai. General Electric is producing wind turbine components in China. Earlier this month, Massachusetts-based Evergreen Solar announced it will be moving its solar panel production to China. ...

The dirty little secret on both sides of the Pacific is that both America and China are capable of producing far more than their own consumers are capable of buying. In the U.S., the root of the problem is a growing share of total income going to the richest Americans, leaving the middle class with relatively less purchasing power unless they go deep into debt. Inequality is also widening in China, but the problem there is a declining share of the fruits of economic growth going to average Chinese and an increasing share going to capital investment. Both societies are threatened by the disconnect between production and consumption. In China, the threat is civil unrest. In the U.S., it's a prolonged jobs and earnings recession that, when combined with widening inequality, could create political backlash.
Wall Street Journal: How to Escape the Rat Race. By Brett Arends. Excerpt: Go on, admit it: You've thought about it. Maybe you've imagined quitting your job and easing into early or semi-retirement -- or starting your own business. It's a perennial topic, but it's especially timely now. Millions are either unemployed or working part-time. Millions more fear their job could be next.
Obviously there are a legion of complicating factors involved in anyone's decision. Sherrill St. Germain, a financial planner in Hollis, N.H. with a lot experience in the field, says the big issue for many clients is losing group health insurance. "That's the thing that keeps them stuck," she says. "That's the deal-breaker." Say what you will about healthcare reform: The present system is a huge drag on economic mobility and entrepreneurship. But even if you can surmount all the other complications involved in escaping your current situation, how much money would you need to have saved up to make it a viable idea?

New on the Alliance@IBM Site

Job Cut Reports
- Comment 11/15/09 Although the sale of the PLM group to Dassault Systems was mentioned when it was announced in October, the fact that it would add approximately 700 more to the count of ex-IBMers was never stated. Everybody was told they would keep their jobs, at comparable pay and benefits. Whether this actually happens, or is just the carrot on the stick, remains to be seen. The current date for the transition is the end of March. -anon- Alliance reply: You are correct. Our sources say 682 worldwide. Unsure of US number.
- Comment 11/15/09 Don't be surprised that the next round of RA's in 2010 get less severance (one week of service per year worked). Without a contract Mr. Joe/Jane Beamer you might not even get a severance! At least with a union contract you can collectively bargain for better severance. -anon-
- Comment 11/17/09 I have from 1 of John Ditoro's staff members that the Burlington, Vt facility is for sale. A buyer is close to acquiring and there will be 1500 to 2000 employees laid off. This is all from a reliable source at btv. -Joe-
- Comment 11/17/09 RTP news, RTP Globalization Center of Excellence for more than 10 years losing 50% of it's business to China, in 2010, most of the rest of business will be going to China as well. Over 100 combined years of globalization experience being s*canned to save a few dollars -Anonymous-
- Comment 11/18/09 -raleigh ibmer- If you get a PBC "3" and are RA'ed you can only get one week of severance pay per year worked (max. of 13 weeks pay). This has happened. Generally IBM gives the standard severance of two weeks pay per week of work (max. of 26 weeks pay). They can also change and give no severance whatsoever if their are no legal constraints. My post was to make the folks know that hanging around in IBM for the hope of getting a severance when RA'ed is not a sure thing, particularly if IBM has to RA to make their almighty EPS targets since severance payments bring down the EPS. -anon-
- Comment 11/20/09 The comment below about getting a PBC rating of 3 and only getting 1 week of severance per year worked is not accurate. If it is your 2nd PBC 3 rating in a row, management can initiate the separation based on performance, where they typically give the 1 week. As for the RA's, if you get tagged with a 3 at PBC time, especially if it is your first one, assume you are on the next RA list. Happened to me this year and I had an exceptionally strong year in 08 (should have received a 2+). I ended up with the standard severance package. For those of you left behind, it has been said over and over here, organize or you will continue to be picked off year after year. Can anyone left say that any part of the work environment has improved in the last 5 years? Don't be a sheep like I was or you'll become a statistic. -Incognito-
- Comment 11/22/09 "The comment below about getting a PBC rating of 3 and only getting 1 week of severance per year worked is not accurate". Really? I was RA'ed and was a PBC 3 for just past year and I was told on the last day by my manager that since I did not quite fully adequately train my replacement I did not fulfill all the requirements of the RA notice so I was given only one weeks pay per year worked after I signed the RA papers. My manager said I could have received nothing and manager said that "fought for me" to get the one weeks pay per year RA separation pay.. -RAed-
General Visitor's Comment page
- Comment 11/14/09 I hear they are hiring at the GDF in Dubuque, IA ,people right off the streets they are getting people with masters degrees starting out at $20 to 30K jobs and are excited to have a job even at that pay. IBM is taking pieces of my job and moving to Dubuque. It's obvious what IBM is doing, Unfortunately the poor economy is working in IBM's favor. This company disgusts me and yes I'm a union member. -Anonymous-
- Comment 11/15/09 For most of this year, Artech has been one of the go to contractor recruiters for IBM in their staffing/replacement of (much too costly) employees. They are very actively searching for people to staff the GDFs as well as people to take contractor positions to fill slots that were vacated during RAs in 2009 later found to be necessary to keep certain contracts operating. Watch out for their blanketing, global emails and feel free to tell them what you think… -MuffinMan-
- Comment 11/15/09 I have been resourced since July 09. This has been a roller coaster ride for me. Mostly I am sad to think that after all the years I put in that I have been discarded without any apparent conscience and replaced by some new hires offshore in India. These guys are doing what I was doing after 25 years of dedication and hard work, Those folks are new hires. I am sad and I miss my friends. I did not choose this. I wanted to work. I liked what I did. Now I am not sure I will ever find a job with the predictions of further offshoring and increased unemployment.
  The current estimation is 6 people for every job and that is a number that looms larger for higher paying jobs. I am training through free classes offered by the NYS DOL, but feel it is merely marking time and that it will not increase my chances of finding work, I am not a part of anything any more. Yes I have friends and family. But most do not get it about this unemployment thing and keep asking if I have found anything yet. Mostly you are on your own and it is a lonely place to be even with the most positive thoughts.
  
  I do try to remain positive and find joy where I can in the simple things of life. But I would rather be working and I am often spinning in a whirlwind of disbelief while at the same time maintaining a brave front for others whose worry although based on caring is only adding more stress to an already stretched mindset. I know I will survive this. I simply needed to "talk" to an empathetic arena of perhaps like minded others. Thanks. -RA'ed July 09-
- Comment 11/16/09 I agree with ignatz713. Dubuque will only last as long as Iowa keeps lining IBM's pocket with cash and other subsidies. But it won't be the last of race to grab the market share. You'll see sneakier things done by IBM to bring low cost labor to customers who don't want it. They have a new Initiative in place. Contracts that stipulate US labor only are being 'manipulated'. IBM is skirting around the contracts by having the off-shore workers do the work behind the scenes. They have technical I/T folks based in the US handling the specific accounts but that person is responsible for assigning the work to off-shore workers.
  The off-shore workers get the task done, then report back to the US contact. The US contact then goes and reports to the customer and closed out the problem and change tickets. All the while, the customer thinks they are begin a good corporate citizen and keeping work in the US and IBM lines their pockets with more cash from the cheap labor!!!!). It's disgusting. There is no such thing as t ruth anymore. It's all how they can manipulate things and make it appear they are keeping to the contacts. -dun-4-
- Comment 11/17/09 IBM treated me like dog crap for years. No matter what I did I continued to get abused by my manager. Finally I was RAed. While it was a painful experience I landed on my feet and got a new job. Now life is really good. I am respected in my job. I am no longer treated like dog crap. People, you have no one to blame for your mistreatment by IBM but yourselves. You really need to stand up and take on this evil monster called IBM. Pay your Alliance dues and join. Fight for a union contract. I guarantee that IBM will abuse you just like it abused me if you don't do something now. Stand up and fight! -exIBMer-
- Comment 11/20/09 Let's make a loud voice and tell Obama NO stimulus MONEY for IBM! IBM has cut 10% of it's USA workforce this year (over 10,000) and only hired maybe 3,500 or so this year. IBM continues to allow the decrease in USA jobs. This year is not over: IBM will most likely shed more USA jobs this year. If the economic stimulus funds are to improve the economy and create more USA jobs then Obama better make Palmisano accountable. Better yet why don't you folks that call yourselves IBMers (still) stand up, organize as ONE VOICE, work towards a contract and protect your jobs before more USA jobs are shed??? IBM was always a GLOBAL company. IBM never pitted USA employee jobs against those employees in other countries until Gerstner. Gerstner started the practice and Palmisano escalated the practice of pitting USA employees jobs and positions against the folks they could hire in the BRICs. So much for their RESPECT FOR THE INDIVIDUAL in the USA. It's unbelievable that our President can't comprehend this. What other company has shed more jobs that are being replaced elsewhere? -da_facts-
- Comment 11/20/09 Is it just me or did anyone else see the newspaper article that IBM'ers do not have to pay for Health Insurance premiums now? What is that about? Another perk for IBM for laying off their loyal workers for cheaper labor abroad? This makes me nauseated. This story ran in the Middletown Times Herald Record two days ago and also had a photo of happy workers on treadmills in Armonk with the caption underneath that IBM takes the health of their employees seriously and provides a multitude of avenues for them to stay fit. Does this include the health of laid off workers? Does this include the health of widows of employees that took their lives because of the stress on the job and pressures to either relocate or face being fired? I am just sayin'.... -RA'ed July2009-
- Comment 11/20/09 -RA'ed July2009- I haven't seen said article, but IBM has made a big deal this year about primary care being 100% covered. However, I believe this has been true in most of the plans offered by IBM for several years. There's nothing "new" about this, it doesn't get rid of premiums for additional coverage or care that goes beyond basic checkups and physicals. -new2rchland-
- Comment 11/20/09 Yes, the Google motto "Don't be evil" mystified me when I first heard it until I thought about it in the context of IBM, then its meaning and reason became perfectly clear. -exSVLer-
- Comment 11/20/09 This is in regard to the comment about 'free' health benefits for IBMers. Yes, for those who are looking to ensure only themselves, IBM has offered for years, a premium free options.. That does not mean, however, that the services are free. This year, for those in the PPO and PPO+, the employee and dependents will have no co-pay when seeing their primary in-network doctor. This does not mean that labs, etc., are free. Also.. premiums did go up; in my case about 15% for two of us, so it was no big bargain. -Anonymous-
Pension Comments page
Raise and Salary Comments IBM CEO Sam Palmisano: "I am pleased to announce that we will not only be paying bonuses to IBMers worldwide, based on individual performance, but that they'll be funded from a pool of money nearly the same size as last year's. That's significant in this economy -- and especially so, given the size of the 2007 pool. Further, our salary increase plan will continue, covering about 60 percent of our workforce. As always, increases will go to our highest performers and contributors. We should all feel good about the company's ability to invest in people in these very concrete ways."
- Comment 11/19/09: Salary = 69000; #Yrs Since Raise = 3.75; %Raise = 0; Band Level = 6; This Yr-PBC = 2; Job Title = Software Developer Years; Service = 4.5; Hours/Week = 40; Message = Only salary increase was end of probation in spring 2006. Going toward 4th year with same salary. Always got PBC 2 rating, with higher that average or average comment. Getting bigger and bigger work items and more responsibilities including training newer employees. And inflation has been higher than 0% in the last 4 years... Will start looking for a better job from January. Discussing it with manager didn't end up with anything. Unless thing change radically, I will have to leave a job, even though I do like the technical side of it. -Yo-
- Comment 11/22/09: -Yo- You'll probably never get a raise from now on based on your band 6 salary. You can also forget getting a promotion to maybe get a measly raise since you are a PBC 2. IBM would sure like you to leave before 5 years. Their door to leave is always open. -da_facts-
PBC Comments
- Comment 11/15/09: Have a nice Thanksgiving. Unfortunately, IBM is going to treat some of you like the main course since RA's are definitely on the way before year end. If IBM announces the RA's on 12/1/2009 they can save whatever bonus pay they might have doled out to the RA'ed PBC "2" and above since if you are not on the payroll on 12/31/2009 you get zilch GDP "growth driven pay". It is probably too late to avoid the inevitable for this year but how about making a Thanksgiving promise to join the Alliance for 2010? -gravy'n_stuffing-
- Comment 11/16/09: You know if the PBC was a true APPRAISAL system based on MERIT and SKILLS, then no PBC 2+ or PBC 1 would be RA'ed. If the PBC was a true APPRAISAL system one would figure it would be tougher to give a PBC "3" to someone who has been working for IBM for a few years as well since they must have had SKILLS and MERIT otherwise they would have been given the door earlier. Maybe if the person given a "3" was mismatched for their job as no fault of their own. Am I correct, or mistaken? Just Think. Think 2X. -Think2X- Alliance Reply: So, what's your point, ..the PBC system isn't fair or an accurate measurement of your work efforts? There aren't too many IBMers that haven't already figured that one out. BTW... You are correct.
- Comment 11/17/09: Band Level = 8; Years Service = 29; Prior Yr PBC = 2+; This Yr PBC = 2; This Yr Bonus = 1.5; Prior Yr Bonus = 4; Message = I feel that I am targeted this year. I am looking for a .prz or pdf that HR gives managers as talking points on delivering good or bad appraisals. Can someone point me to something? -pbcwhatawaste-
International Comments
- Comment 11/15/09: Country = UK; Union Affiliate = No; Job Title = Sales; IBM Division = STG; Message = Quote: "IBM the company that looks after its shareholders first and cares not a jot for its employees. A policy that is so shortsighted that will end in tears for all. -UKIBMER-"
  Hey UKIBMer, like you I jumped the ship and got a nice pay rise. I am guessing Brendon is having to bring in the ESP as they are losing good people. For reference when I left it cost IBM UK ?20m rev and ?8m profit, as I had a nice deal in the pipeline that I was 80% certain of winning - the person who took it over mucked it up. This is clear evidence that Palmisano is failing to provide shareholder value. He has driven down costs, but has failed to align the business with the market. If you want evidence, then ask why Apple's capitalisation is now higher than than IBM's. Palmisano has failed IBM's shareholders by failing to invest in IBM's employees and IBM's technology - I'd be as bold as to suggest IBM needs a new CEO. -Big Z-

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform

New York Times: Drug Makers Raise Prices in Face of Health Care Reform. By Duff Wilson. Excerpts: Even as drug makers promise to support Washington’s health care overhaul by shaving $8 billion a year off the nation’s drug costs after the legislation takes effect, the industry has been raising its prices at the fastest rate in years. In the last year, the industry has raised the wholesale prices of brand-name prescription drugs by about 9 percent, according to industry analysts. That will add more than $10 billion to the nation’s drug bill, which is on track to exceed $300 billion this year. By at least one analysis, it is the highest annual rate of inflation for drug prices since 1992.
The drug trend is distinctly at odds with the direction of the Consumer Price Index, which has fallen by 1.3 percent in the last year. Drug makers say they have valid business reasons for the price increases. Critics say the industry is trying to establish a higher price base before Congress passes legislation that tries to curb drug spending in coming years.
New York Times editorial: The Drug Industry Cashes In. Excerpt: The drug industry has been ramping up its prices in advance of any health care reforms that might clamp down on its profits. The industry’s rapid price escalation over the past year threatens to make a mockery of its deal with the Senate Finance Committee and the Obama administration to contribute $80 billion over the next decade to help pay for covering tens of millions of uninsured Americans. ...
Now come the price increases. As Duff Wilson reported in The Times on Monday, the industry has raised the wholesale prices of prescription drugs by about 9 percent in the past year. That appears to be the highest annual increase since 1992. The industry contends that it must raise prices to finance research on new drugs, and that may hold some truth given the dearth of promising new drugs in the pipelines of major manufacturers. But the increases also look designed to establish a higher price base before reform bills, if passed, try to reduce drug spending.
Physicians for a National Health Program: Simple, Fair, and Affordable. By John A. Day, Jr., M.D. Excerpts: With the election of Barack Obama as our 44th President and the installation of a new United States Congress has come renewed attention to health care reform. Appropriately, there is a sense of urgency regarding the 47 million Americans without health insurance and the millions more underinsured, and to make matters worse, it is inevitable that both numbers will increase due to rising unemployment. In response to this crisis, most health care reform proposals attempt to guarantee at least some health coverage for all Americans. Yet nearly all proposals achieve this aim in large part through the current private insurance system. It is well worth asking: exactly what value does the insurance industry bring to health care in this country? And if it contributes little of consequence, is there another way?
Using the private insurance industry to achieve universal coverage would require that all financially able U.S. residents or their employers purchase health insurance. Americans unable to afford health insurance, the poorest and potentially the sickest among us, would be covered by the government—most likely by incorporating them into a public insurance system, although a government subsidy (in all or in part) could be used instead to purchase private insurance coverage. If, as seems likely, a current or future public insurance program is used for this purpose, then this construct amounts to a massive preemptive bailout of health insurers. These private entities would profit by adding relatively healthy young people to their rolls, while potentially bankrupting the public systems that are charged with paying for the care of these unprofitable patients.

Health insurance as a commodity is particularly unsuited to the so-called “wisdom of the market.” Private insurers are dutybound to maximize profits for their shareholders, and profits are best achieved by minimizing risk through cherry-picking the healthiest enrollees and denying payment for services whenever possible (1). These goals are clearly not in the best interest of individuals seeking reliable health insurance coverage, enrollees who require ongoing or complicated care, or the taxpayers subsidizing care for those denied coverage.

Furthermore, health care reimbursement funneled through a private insurance industry does not necessarily lead to improved health. Thirty-one percent of United States health spending goes toward bureaucracy (2). Such remarkable inefficiency is directly attributable to the overhead and profit of the health insurance industry (3) and wasted clerical time, as providers must deal with a multitude of different insurers and health plans.
New York Times op-ed: The Wrong Side of History. By Nicholas D. Kristof. Excerpts: Critics storm that health care reform is “a cruel hoax and a delusion.” Ads in 100 newspapers thunder that reform would mean “the beginning of socialized medicine.
The Wall Street Journal’s editorial page predicts that the legislation will lead to “deteriorating service.” Business groups warn that Washington bureaucrats will invade “the privacy of the examination room,” that we are on the road to rationed care and that patients will lose the “freedom to choose their own doctor.”

All dire — but also wrong. Those forecasts date not from this year, but from the battle over Medicare in the early 1960s. I pulled them from newspaper archives and other accounts.

Yet this year those same accusations are being recycled in an attempt to discredit the health reform proposals now before Congress. The heirs of those who opposed Medicare are conjuring the same bogeymen — only this time they claim to be protecting Medicare. Indeed, these same arguments we hear today against health reform were used even earlier, to attack President Franklin Roosevelt’s call for Social Security. It was denounced as a socialist program that would compete with private insurers and add to Americans’ tax burden so as to kill jobs.

Daniel Reed, a Republican representative from New York, predicted that with Social Security, Americans would come to feel “the lash of the dictator.” Senator Daniel Hastings, a Delaware Republican, declared that Social Security would “end the progress of a great country.” John Taber, a Republican representative from New York, went further and said of Social Security: “Never in the history of the world has any measure been brought here so insidiously designed as to prevent business recovery, to enslave workers.” ...

Similar, ferocious hyperbole was unleashed on the proposal for Medicare. President John Kennedy and later President Lyndon Johnson pushed for a government health program for the elderly, but conservatives bitterly denounced the proposal as socialism, as a plan for bureaucrats to make medical decisions, as a means to ration health care. The American Medical Association was vehement, with Dr. Donovan Ward, the head of the A.M.A. in 1965, declaring that “a deterioration in the quality of care is inescapable.” The president of the Association of American Physicians and Surgeons went further and suggested that for doctors to cooperate with Medicare would be “complicity in evil.”

The Wall Street Journal warned darkly in editorials in 1965 that Medicare amounted to “politicking with a nation’s health.” It quoted a British surgeon as saying that in Britain, government health care was “crumbling to utter ruin” and suggested that the United States might be heading in the same direction.

News and Opinion Concerning the U.S. Financial Crisis

"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.

Brattleboro (Vermont) Reformer, courtesy of U.S. Senator Bernie Sanders: Too Big to Exist. It took the House nearly 2,000 pages to draft a health care reform bill. Vermont Sen. Bernard Sanders needed far less paper to come up with a bill calling for the breakup of failing financial institutions within a year. Sanders introduced the "Too Big to Fail, Too Big to Exist Act" on Friday. In just two pages, he outlined a simple remedy to avoid a repeat of last year’s massive taxpayer-funded bailouts. If enacted, the bill would give Treasury Secretary Timothy Geithner 90 days to "submit to Congress a list of all commercial banks, investment banks, hedge funds and insurance companies that the Secretary believes are too big to fail." The treasury secretary would then have one year to "break up entries listed on the Too Big To Fail List, so that their failure would no longer cause a catastrophic effect on the United States or global economy without a taxpayer bailout."
"If an institution is too big to fail, it is too big to exist," Sanders told Bloomberg News last week."We should end the concentration of ownership that has resulted in just four huge financial institutions holding half the mortgages in America, controlling two-thirds of the credit cards, and amassing 40 percent of all deposits," Sanders said, citing Bank of America, Citigroup, JPMorgan Chase & Co. and Wells Fargo & Co. "We should break them up so they are no longer in a position to bring down the entire economy."
Wall Street Journal: Goldman Holders Miffed at Bonuses. Some Investors in the Stock Urge That More of the Riches Be Passed Along to Them. By Susanne Craig. Excerpts: Some of the largest shareholders in Goldman Sachs Group Inc. have urged the Wall Street firm to reduce the size of its bonus pool, arguing that it should pass along more of its blockbuster earnings to investors, according to people familiar with the situation. The investors hold tens of millions of shares in Goldman Sachs, which is on track to make the biggest employee payout in the firm's 140-year history.
Their complaints in private conversations with the company and at analyst meetings show how anger over its big-money culture is spilling into the ranks of investors who typically shy away from debates over Wall Street pay. One frustration: Despite record net income and compensation at Goldman as markets rebound and the firm outmuscles weakened rivals for business, analysts expect its 2009 earnings per share to be 22% lower than in 2007 and roughly equal to its 2006 earnings, according to Thomson Financial. ...

Some major Goldman shareholders also are concerned about a little-noticed change in the company's financial statements that increased the firm's total head count by adding temporary employees and consultants. The change reduced per-employee compensation, making it look like Goldman employees earn less than they actually do. The figure is a lightning rod for criticism of Goldman because its staff is on pace to earn about $717,000 apiece for 2009. Excluding temporary employees and consultants would increase compensation per employee to about $775,000. ...

In October 2008, Goldman received $10 billion from the U.S. government as one of the first nine recipients of taxpayer-funded capital injections under the Troubled Asset Relief Program. Goldman repaid the money in June but continues to benefit from government help. For instance, it has the ability to borrow from the Federal Reserve. Goldman and other firms won that access after Bear Stearns Cos. collapsed and was sold to J.P. Morgan Chase & Co.
The Hill: AFL-CIO wants TARP funds to target small businesses, not Wall Street. By Kevin Bogardus. Excerpts: AFL-CIO President Richard Trumka wants lawmakers to redirect bailout funds for the financial sector to small businesses. Trumka said money from the Troubled Asset Relief Program (TARP) needs to be plugged into economic programs that will help "Main Street," given reports that despite the infusion of federal funds, it is still hard for businesses and consumers to get credit.
“Banks aren’t lending to small business. We should establish a fund to lend TARP money directly to small- and medium-sized businesses at commercial rates, managed by the community banks left out of the Wall Street bailout, with the banks taking first-dollar risk,” Trumka said in prepared remarks before a conference hosted by the Economic Policy Institute on Tuesday. "If small businesses can get credit, they will create jobs. And we need jobs now.”

Vault Message Board Posts

Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. Sample posts follow:

"Raises are effective 7/1" by "bigbertha92". Full excerpt: Don't expect a raise if you're a 2 performer. Only top contributors (1 & 2+) will receive a raise. The raise will most likely be around 1%. No kidding. Executives are not getting raises this year.
"IBM Just don't get it" by " Toa". Full excerpt: If you get the same money for a half ar*ed effort as you do for a good effort then why bother trying to do a good job! I've even seen 2+ being downgraded to a 2 because the manager didn't believe the 2+ was valid.
"Let's Go Global!" by "bigbertha92". Excerpts: Everything is "global" - from EO training to forced-by-mgmt-to-take IBM learning courses. Learn when no means yes, how not to be offensive, and watch slang!
We all have to play nice-nice with our GR (global resource) peers. and when your GR team lead sends notes to IBM US mgmt that they need MORE WORK from their US counterparts, IBM mgmt. rolls over and gives them more work. Reminds me of an old CCR song: Fortunate Son.

And when you ask them, how much should we give? Ooh, they only answer more! more! more. What a sad, pathetic, f'ng company.
"The Truth Can't Be Told" by "Frank_Reality". Full excerpt: Yes, even though the GRs in India can't handle simple tasks on time, with adequate quality and within cost, they are given more and more responsibility they cannot begin to handle. And of course when they screw up and fail as often happens, it's always the US teams' fault. It is pathetic (and clueless) to reward this incompetence with more work and more responsibilities.
What's more pathetic is how India is not held accountable since they are Sam's chosen ones and how anyone who reports problems with India are considered anti-team, racist and uncooperative.

The sacred cows over in India aren't cattle, they're the "office boys" pretending to be IT professionals working for IBM. What a sad, pathetic f'ng company indeed.

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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