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Highlights—December 18, 2010

  • Huffington Post: Just-Released IRS Data Show Effects of Our Radical New Greed-Is-Good Culture. By David Sirota. Excerpts: As the House considers a bill to extend the Bush tax cuts for the top 2%, slash corporate taxes and potentially make the Estate Tax more generous to billionaires than ever before, it's instructive to put the move into a larger cultural/historical context. And thanks to newly released IRS documents, we can do just that.

    As the Institute for Policy Studies reports, officials at the National Archives recently released a 67-year-old U.S. Treasury Department report detailing what the richest Americans once paid in taxes in the middle of the 20th century. IPS notes that "We have simply never had clearer evidence of just how much America used to expect out of individual wealthy Americans -- and just how little, by comparison, we expect out of our wealthy today." Here are some of the details:

    We learn, for instance, that 1941's top executive at IBM, Thomas Watson, collected $517,221 in compensation that year, about $7.7 million in current dollars. Watson paid 69 percent of his total 1941 income in federal income tax.

    Last year, today's chief exec at IBM, Sam Palmisano, took home $24.3 million for his executive labors. We don't know how much income above that sum Palmisano reported in 2009, or exactly how much of that total he paid in taxes.

    But we do know that the 13,374 Americans who reported incomes over $10 million in 2008, the latest year with IRS stats available, paid an average 24.1 percent of their taxable incomes in federal income tax.

    In other words, IBM CEO Palmisano last year took home, after adjusting for inflation, over three times more than his predecessor Thomas Watson took home in 1941. Yet Watson in 1941 paid almost three times more of his income in federal income taxes than Palmisano likely paid in 2009.

    So assuming that Palmisano pays roughly what his fellow millionaires pay in taxes, we've seen IBM CEO tax rates go from 69 percent down to 24 percent. That's a massive tax cut, and it's no coincidence that it came over the very same period we saw an explosion in federal deficits. And remember, these numbers compare the data that exists before this week's expected passage of even more new deficit-expanding tax cuts for the super-rich. ...

    Somehow, this assumption goes unquestioned at a time when we simultaneously wonder why we have huge deficits and why our economy is now faltering. We are so enthralled with preserving the riches of the so-called Masters of the Universe, and those Masters of the Universe have their wealth to buy off so many politicians, that we are now immersed in a culture of willful ignorance. We can no longer learn history's lessons about taxes -- even the lessons that are as crystal clear as this newly released IRS data.

  • When Fridays Were Fridays: The End of An Era – Mourning the Loss of the IBM Country Club. By Collette Martin. Excerpts: A letter arrived in the mail a couple of weeks ago, notifying us that the Casperkill Recreation Center in New York’s Hudson Valley would be closing its doors at the end of this year. The Poughkeepsie Journal also reported the closing triggering a flood of nostalgic memories.

    You see, before it was the Casperkill Recreation Center, it was the IBM Country Club. In the sixties, seventies, and eighties, IBM prided itself on being family-oriented. The company held annual family outing days, provided Christmas gifts and holiday parties for children of employees, and provided a recreation facility for families to gather and spend their summer days. IBM employees in the Hudson Valley were automatically members of the IBM Country Club. This was a class-blind facility, not just for managers and executives. Every employee and their family members could use the facilities, free of charge. ...

    The IBM Country Club was a benefit that most of us took for granted as employees, and some may not have appreciated it until it was taken away. Over the years, changes were made to make the club more self-sustaining. First, employees were asked to contribute to their annual membership; this started as a modest fee (I recall less than $10 per year) that jumped to a couple hundred dollars per year over time. But IBM couldn’t afford to keep the facility.

    Selected reader comments follow:

    • One Womans Eye said... A great post and yes another reminder...corporate America is not what it used to be which is why so many of us are willing to risk it on our own.
    • Tom said... Working in White Plains and living on Long Island, my work week was spent more or less mid-way between the Poughkeepsie and the Sands Point IBM Country Clubs. Obviously I spent more time at Sands Point than Poughkeepsie... but have fond memories of both. Sands Point lacked a swimming pool... but Poughkeepsie lacked the beach on Long Island Sound. I often wonder what happened to Sands Point? My guess is that it was sold off long ago... and is now probably some massive gated community of billion dollar homes! I agree with all.. "corporate America is not what it used to be"... in so many ways!
    • Anon_e_mouse said... I have fond memories of the Country Club... attending the holiday parties as an IBM brat (and the holiday gifts that the company gave us urchins... although the only one I actually member was the slot car track when I was about seven or eight years old). Another memory from about the same time or a little earlier: swimming in the pool with my father one weekend, and coming out to find that the parking brake on someone else's car had failed and rolled down hill into the front of ours. And, after I joined the company, going to the holiday party with my wife and our two older children (a Barbie for our daughter and a terrycloth bathtub toy for our infant son). And then we transferred to Raleigh in 1981, where there was no such thing as a country club, or even a holiday party as I recall.
    • Anonymous said... Nice post! Just yesterday, my daughter (who now has a toddler and is taking him to see Santa at her workplace - their sole Christmas benefit) and I were reminiscing about the fabulous Christmas shows and summer Family days she enjoyed as a child. We will miss the country club and what it stood for, and like you, I am thankful my children too enjoyed these benefits. Padmini
    • netmouse said... I remember as a child of the 1950's and 60's going for summer swimming, ballet lessons, the carnival in summer,and seeing great shows like the singing group, the Supremes. And of course, Christmas festivities with gift and candy. Really great club.
    • Tom said... I spent most of my pre-teen summers at the IBM Poughkeepsie Country Club. My Dad played in the Thomas Watson Twilight Golf League. We went to "Family Day" outings and Christmas Parties there - oh my the model train set up is still burned into my memory. I saw Frankie Valli and the Four Seasons there as well as Gary Lewis and the Playboys and the Diana Ross and the Supremes. I saw Mary Martin as Tinker Bell - flying across the stage of the field house there. Then, as a college student, I worked there. Dick Thomas and Claude Mulaney were my managers at various times. Red Lamont has an office there. Eventually it was the stepping stone to what became a 35 year long career until my retirement in 2005.
    • Anonymous said... The headline reads "... Mourning the Loss of the IBM Country Club"; if you read through it, IBM sold off the Poughkeepsie IBM Country Club years ago; the headline makes it sound like recent news. The POK facility was immensely better with swimming pool, etc. than the Sands Point facility, although Sands Point had a 9 hole golf course, but the beach while overlooking Long Island Sound was nothing to rave about. The facility was sold off by IBM years ago.
    • Liza said... Wow...I can't imagine have had such a perk. What a way to breed company loyalty. Sad when the things we use to have go away for ever. Thank you Colette for your comment on Middle Passages. It made me feel better...although I don't feel bad...just apprehensive about the change ahead, I think!
    • Liz Fichera said... In another life, I worked a lot with lots of IBMers. I was always in awe of their perks. And I never begrudged IBM for having them either--if they wanted them, that was up to their company and their shareholders. Not me or anyone else. But for those IBMers who once had the whole package, I would imagine it could be quite an adjustment.

  • LinkedIn: The Greater IBM Connection. Comments on "Mourning the IBM Country Club and End of the Corporate Family". Selected comments follow:
    • Very sad to see the country club close. I was there in the 70's during basic training.What a beautiful place and wonderful experience to be in Endicott, NY. I do think the move a few years ago, to bring back the IBM club was a good one. We have had the IBM Holiday party for families in Cincinnati for many years now, and had over 150 attend this year. So the family of IBM still exists, it's just a lot harder to keep alive with all working from home. IBM's Centennial celebration is this summer, we are hoping many retirees will join the celebration to share fond memories of years gone by.
    • It is taking a little longer in those areas where IBM has a large presence, but the IBM family is not what it was, and I for one believe that it is a loss for the company as well as the individual.
    • That's because employee satisfaction is a distant second to stock holder happiness.
    • It has been 21 years since I worked in IBM-Endicott. I enjoyed the 5 years I had use of the IBM Club and IBM Homestead there in Endicott. The part I enjoyed most was the use of the IBM Club athletic facilities/programs, and taking my Syracuse graduate classes at the IBM Homestead. When I moved to Atlanta in 1989, I was surprised by the number of IBM locations and number of IBMers living here, but we did not have an IBM Club located here. The benefits of the IBM Clubs at the larger IBM locations is very much what Microsoft, Oracle, Google, HP, and other west coast companies provides for their employees today, and are modeled after what IBM does not provide anymore. Sorry to hear we no longer offer this benefit to our employees in the northeast
    • I am also saddened by the closure of the Poughkeepsie IBM Country Club. When we joined IBM...40 years ago(!), my friends and I looked forward to being able to use the facility. Watson trophy events, site meetings, Fourth of July fireworks, and then summer camp for our kids marked our history with the club. Let's face it, corporate America has become so anemic that the passing of bricks and mortar is not viewed with much more than a sigh.
  • Yahoo! IBM Employee Issues message board: "Re: The End of An Era – Mourning the Loss of the IBM Country Club" by "teamb562". Full excerpt: I still have a difficult time with understanding record quarterly profits, quarter after quarter, year after year yet, expense cuts are everywhere and growing
  • Yahoo! IBM Employee Issues message board: "Re: The End of An Era – Mourning the Loss of the IBM Country Club" by "phrl2009". Full excerpt: In today's IBM, expense cuts are what is making the profits possible. Since there is no (or very little) sales growth, IBM can only show profits by cutting costs through layoffs. In finance-speak, the quality of IBM's earnings is poor.
  • Yahoo! IBM Employee Issues message board: "Re: The End of An Era – Mourning the Loss of the IBM Country Club" by "finitewisdom". Full excerpt: It's not just the country clubs that are going away. A number of years ago, IBM sold Century Oaks Park, an area behind the original Austin facility on Burnet Rd. It used to have beautiful old oak trees, a softball field, lots of play equipment (including 2 or 3 now-banned merry-go-rounds). It's now an upscale shopping area with nice apartments above much of the retail space...and they tried to preserve some of the trees. A good use of the property (not to mention a close-by place for the remaining IBMers to go during lunchtime). Nope, I'm not one of them.

    There's also the large land mass in San Jose that went to Hitachi along with the buildings. Not the best use of space there, if memory serves.

  • Yahoo! IBM Employee Issues message board: "Re: The End of An Era – Mourning the Loss of the IBM Country Club" by "flatsflyer". Full excerpt: IBM Country Clubs were closed so that the Greedy Bastards could get free memberships at places like the Westchester Country Club, etc. I understand that Sam has a membership along with Three Finger Lou that costs IBM over $250,000 each along with $50,000 in annual dues. No self respecting Greedy Bastard would ever be caught playing golf on a course that allowed low life commoners to participate.
  • Yahoo! IBM Employee Issues message board: "Re: Buying Back Shares" by "madinpok". Full excerpt: Since Gerstner started the stock buybacks in 1995, IBM has spent $132 billion on them. In 1995, the company was still on the ropes financially and the stock price was around $23 (adjusted for splits). There were about 2.2 billion split adjusted shares outstanding at the end of 1995.

    By July of 1999 the price of the stock had risen to $137.88. At that point, IBM had spent around $32 billion on buybacks.

    In the 10 years since then, IBM has spent another $100 billion on buybacks. The share price dipped as low as $55 in October, 2002 and has since recovered to its present price of around $145.

    To me, this is evidence that buybacks have little effect on the stock price in the long run. IBM pissed away $100 billion for nothing, rather than investing that money in the company and new product development. It's pretty clear evidence that Sam has no vision and no ideas for how to grow the company.

  • Wall Street Journal's SmartMoney: New Worries for 401(k) Investors. By Sarah Morgan. Excerpts: Retirement savers have already learned how much damage the markets can do to a nest egg. But for anyone with a 401(k) plan, stock market performance may be overshadowed by other worries: fraud and theft.

    In the last three months, the Labor Department has launched 191 investigations into 401(k) fraud and theft, and secured 20 indictments – a whopping 43% more than the department has secured annually, on average, since 1995. The millions at stake in recent cases may seem small in the context of the $3 trillion 401(k) market, but observers say the indictments point to larger issues in the 401(k) marketplace, from lack of oversight and an understaffed enforcement agency to the larger risks that have shifted over time to individual participants. The cases, says Brandon Reese, deputy director of the office of investment at the AFL-CIO, “expose a more systemic problem in the defined contribution retirement system.”

  • San Francisco Chronicle: New federal health law aids those close to retiring. By Victoria Colliver. Excerpts: People ages 50 to 64 are most likely to benefit from the new federal health law because they have the highest rates of long-term unemployment among working-age adults and are more likely to have health problems that would make it tough for them to buy individual coverage, according to a report being released today.

    The study, by the Commonwealth Fund, estimated that 18.3 million people in that age group stand to benefit from the provisions in the federal health law, including the expanded access to coverage, the elimination of lifetime and annual spending caps on policies and, eventually, the end of insurers denying people coverage based on their medical histories. "For most older adults who are uninsured or underinsured, the early provisions, many of which went into effect this year, will provide transitional relief," said Sara Collins, Commonwealth Fund vice president and lead author of the report. ...

    California is one of 16 states where the uninsured rate for people in the 50- to 64-year-old age group is higher than the national average of about 15 percent. The study contends that this age group has possibly the most to gain from some of the provisions in the new federal health law, which will probably end up before the U.S. Supreme Court. A federal judge in Virginia on Monday declared that the government cannot require Americans to buy health insurance.

    The mandate to have health coverage is an essential component of the law, which in 2014 will prohibit insurers from denying adults coverage due to pre-existing health conditions. Requiring everyone to buy coverage - young and healthy as well as older and sicker - helped cut opposition by insurance companies. Older adults are more likely to have pre-existing conditions that would cause them to be denied coverage, especially in the individual market where insurers can charge higher rates or deny coverage based on an applicant's medical history. "When you're 50 years old, chances are you have a pre-existing health condition," said California AARP spokesman Mark Beach. "Just being 50 years old may actually be a pre-existing condition for insurance companies."

  • Dubuque Craigslist: IBM = I've Been Mistreated (Dubuque). Full excerpt: I am a current employee of IBM here in Dubuque. I don't really like to brag much on myself, but it should suffice to say that I am a highly educated individual, with a very specific and valuable skill set. For those of you who don't know, many of us were lured here from other places around the country on the illusion of lower cost of living, and the out right lie of being that this is a new center there would be plenty of opportunity for advancement within the company. Before I accepted IBM's offer I (ignorantly) made the assumption that the initial offer was only temporary, and would go up drastically after a probationary period of 6 months or so. This was not the case. I have been identified by several of my colleagues and even my team lead as a top performer on my team, and still I am making about half of the average for someone in my role in the state of Iowa. While I suppose this is just a rant about how much my job sucks, I really hope people will read this and take some action. I hope the fine citizens of Dubuque will stand up for their new neighbors and protest the mistreatment that is taking place right downtown. I would like to see either IBM pay fair wages for the work people are assigned to do, or I would like to see people come out and protest IBM's false representations, and eventually drive IBM out of this city.

    I was not born to a well-to-do family, like most of the us, I’m sure. Since I was 20 years old I have been busting my ass getting my education and experience where it needs to be so that I might be able to provide a secure future for my family. All of this was funded by ME either from my own pocket, or through student loans. Just when I get to the point where my education is primed, and my experience qualifies me as an expert in Information technology, some fat corporate bastard with less skill than I have decides that everyone but him should do 3 people’s work for ½ a full time wage. He gets a million dollar bonus, in addition to the $750,000 he brings home a year…. While I’m worried about how I’m going to feed and house my children, while not going into default on my student loans. People always say life’s not fair, but damn that. Life can be as fair as we want to make it.

    I have no problems with the city of Dubuque, but I am currently, actively and feverishly seeking employment outside of Dubuque. Don't let IBM lie to anyone else. Did you know that they are no longer hiring Full time employees, only contractors? Did you know that the average salary for a non-manager is 28,500, when it should be about 45,000? Did you know that they are specifically seeking foreigners to take American's jobs because they will do it for less? How does any of this help Dubuque? I don’t consider this to be a political issue, this is a human issue. We cannot allow these large corporations to continue to rape our economy in the interests of “the shareholders.” Anyone interested in starting a union?

  • New York Times: Motorola's Labor War. Excerpts: The violence is over at Motorola Korea Ltd. - at least for now. There are no more workers dousing themselves with paint thinner, barricading themselves in the computer room and threatening to die for the right to form a union. But the fledgling union and management are no closer to agreement than before. The bitter conflict at Motorola is more than just a labor dispute in a country that has weathered thousands of strikes in the past year and a half. It is a reflection of South Korea's struggle to overcome a legacy of authoritarianism in labor relations, as well as in politics.

    When Motorola and other American companies like the International Business Machines Corporation set up shop here 20 years ago, they found an inexpensive, well-educated and malleable work force and a Government willing to use brute force to keep workers in line. Now strikes are legal, the Government usually stays away, and workers demand more from both South Korean and foreign employers. United States companies face an added twist - if negotiations are faltering, unions can always appeal to swelling anti-American sentiment.

    Companies like Motorola and I.B.M. - which offer top salaries and generous benefits here and have staved off unions in most of their operations worldwide, including the United States - have been confronted by political and legal upheavals in South Korea that change all the old rules. Last year alone, the Ministry of Labor counted 1,873 labor disputes. Last month, for example, a small group of white-collar workers at I.B.M. Korea went on an eight-day hunger strike that ended only when their union was recognized.

  • Glassdoor: Best Places to Work – Employees' Choice Awards. Excerpts: Glassdoor.com is excited to announce our third annual Employees' Choice Awards for Best Places to Work. Our Top 50 winners were selected by the people who know these companies best — their employees!
  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Anonymous: (Current Employee) “Be Careful when your join.” Pros: Stable company to work for which has been growing and in recent time has had a lower number of layoffs as compared to other companies. Cons: It is a very process centric company and bean counters drive the processes and also there are little or no growth opportunity. Advice to Senior Management: Look at the individual as a person and not an employee number and also trust the employees more and respect them
    • IBM Senior Engineer: (Current Employee) “Not what it used to be.” Pros: Educational benefits are very good. Cons: Raises are almost nonexistent no matter how you perform. Feedback is usually ok, but the ratings are bogus, and feedback is often tailored to match the number your manager was told to give you. Rampant outsourcing outside of the US and layoffs to match. Advice to Senior Management: You're taking a sinking ship and making the holes bigger. It's going to bite you.
    • IBM Senior Software Engineer: (Past Employee - 2008) “Great place for minority or ethnic.” Pros: A lot of interesting problems for an engineer to tackle. The clients can also be very interesting. Patent submission can be very fun and is part of the review process. If you feel that you are creative this can be a hoot. Cons: A friend of mine once said that no one was willing to knife the baby. There is so much pressure to be on a wining team than its easier to tear down other groups rather than improve your own. I actually had a second line manager denigrate our 5x speed improvement because we didn't spec it at the beginning of the project. Advice to Senior Management: Find more objective ways to measure performance, the current process is way to political. Reduce pressure for groups to affect other groups. There is value in improving one's own group but the current management culture dismisses anything that's not outwardly visible. Also find some way to audit patent appraisal, current method creates "good old boys" that approve patents based on who submitted.
    • IBM Project Manager in Pune (India): (Current Employee) “Good Enough.” Pros: 1) Work Life balance. 2) Excellent learning portal. 3) Can progress very fast if you are lucky and have a supportive manager. 4) Not too much of variable component. Cons: 1) Pathetic appraisal system. 2) Huge crowd because of which you feel lost sometimes, especially when you join. 3) It takes considerable efforts to move from project to other. 4) RDM (resource deployment managers) are completely useless. Resources to them are groceries and they can put you anywhere to meet their goals. Advice to Senior Management: 1) Try to retain people, it's because of them IBM is progressing. 2) Fire incompetent managers. 3) Skill/project match is more important.
    • IBM Anonymous: (Current Employee) “It is an above average company.” Pros: It has many different departments and there are many new things to try out. it makes IBM a quite good company Cons: IBM has a lot of people and it is not easy to get a quick promotion. so it may take a while to move to the next higher position. Advice to Senior Management: Communications is very important. And try to show a clear career path to each employee
    • IBM Anonymous: (Current Employee) “good company for tech but cheap income.” Pros: latest technology, good teams and kind team mates. Cons: very low pay, no OT pay and uneducated managers.
    • IBM Data Security Administrator in Markham, ON (Canada): (Current Employee) “Worst place ever!!” Pros: Just a big name & providing good service to its clients. Cons: Everything! Worst salary for low level employees and contractors. No work life balance, they would want you to work 24/7 if you can till you die! Stressful work environment...Too much work that you can hardly take a 15 min break. They give you 30 Min lunch because it's mandatory by law. No Incentives, maybe nice word now and then when you do something GREAT! High layoff and firing rate. Advice to Senior Management: Take care of your low level employees and contractors. Because of them the work gets done! Treat your contractors as human beings and not resources like they are laptops! Increase salary rate to compensate for the stressful work environment.
    • IBM Staff Software Engineer in Austin, TX: (Current Employee) “disappointing outlook for future.” Pros: Clear career path. Usually flexible about work life/balance. Cons: Uninspiring workplace. Too much bureaucracy. Conflicting message from leadership. Short sided decisions. Advice to Senior Management: Care more about employees instead of just the bottom line.
    • IBM Senior Software IT Specialist in Beijing, Beijing (China): (Current Employee) “Good as a start for your personal career, not good to stay longer after 4 years.” Pros: Much resource to leverage, there will be answers always for the problems you meet. Some experts are good for your personal career development. Rich asset of learning. Cons: Too large to be distinguished, too many managers who will manage you. Sometimes it could not be fair for you to get what you deserved to have. Slow to act when changes happened. Advice to Senior Management: Invest more to keep most valuable person in IBM, increase salaries and stock options for oversea employees. Reduce the number of managers.
    • IBM Sales in Atlanta, GA: (Current Employee) “very good.” Pros: Flexibility; brand recognition; job opportunity; great solution offerings; proud to be an IBMer; allows for telecommuting. Cons: too political; pay scale unequal; too many people; minimal women in high management.
    • IBM Senior Software Engineer in Pune (India): (Current Employee) “Big name, nothing else” 0 of 0 people found this helpful Pros 1) Work life balance 2) Big brand name 3) Relaxed environment Cons 1) Lot of cost cutting 2) No free food, coffee, tea 3) Bad travel facilities 4) No career growth unless you are in good book of your manager 5) Arrogant colleagues Advice to Senior Management Enhance your interaction with employees.
    • IBM Senior Software Engineer in Pune (India): (Current Employee) “Big name, nothing else.” Pros: 1) Work life balance 2) Big brand name 3) Relaxed environment. Cons: 1) Lot of cost cutting 2) No free food, coffee, tea 3) Bad travel facilities 4) No career growth unless you are in good book of your manager 5) Arrogant colleagues. Advice to Senior Management: Enhance your interaction with employees.
    • IBM Advisory System Analyst in Kolkata (India): (Current Employee) “No longer a great place to work.” Pros: Flexible work timings. Good brand name (outside India). Opportunities to work on new initiatives (like Smarter Planet), though this is only an illusion and breaks fast as no one in the company will recognize these.

      Cons: Ridiculous concept of high utilization. On one side they give you 22 annual leave; on the other side the utilization target is set around 97%. Meaning out of 270 days you should be working for 262 days in a year. If you take out the 13 public holidays in India you will never meet your utilization target. (Yes, the management allows to book you 9 hours instead of 8 hours daily, which helps improve the target, but ridiculous). No fair process for role progress and salary increase. (Inflation in India is around 9% and your salary increases barely 4-5%, besides recession gives them a reason to say no salary hike) No relation to goals (PBC) at the beginning of the year and the assessment at the end. (The senior management simply sends a list of goals based on role for everyone...wonder why ask employees to set the goal at all..) Wide cost cutting... (Nothing is free, no tea, coffee... Heard probably will make the parking paid as well). No recognition of quality work. If you are at onsite, you will be not get any other benefits. (The management justifies that since you are on-site, you are already getting enough. so nothing else for you.) No scheme/rewards for motivating the employees. Dearth of challenging projects. The list can go on. IBM in India is a very different company than what it was.

      Advice to Senior Management: You are simply building a list of unsatisfied employees. Cannot only bank on the previous glory. The policies should also make sense to your employees. Change fast or deal with the high rate of attrition.

    • IBM Managing Consultant: (Current Employee) “Good learning experience.” Pros: IBM brand name is spectacular and IBM has stood the test of time. Decent opportunities for growth and development. Flexible and it has work-life balance. Cons: The business model is changing to outsourcing. At times you get lost in this giant organization. Salary is less than market.
    • IBM Anonymous in Hyderabad (India): (Past Employee - 2010) “IBM gives opportunities but not salary.” Pros: Good growth opportunity and learning activities. Cons: Salary and Perks, Senior Management.
    • IBM IT Architect in Essex Junction, VT: (Current Employee) “Great professional environment if you can survive lean belt-tightening” Pros: IBM might have the best internal support system for IT professionals - lots of ways to share and get info and support so you can do your best job. Management works hard to stretch limited resources to meet employee needs. Climate encourages innovation and leadership development. Cons: This varies wildly from one part of the company to another, but centralized IT management has led to cutting IT funding in ways that hamper growth in other parts of the company. The pendulum might be swinging back, though.
    • IBM Anonymous: (Past Employee - 2010) “How much can they take away before an employee quits?” Pros: Big name. Global Reach. Ability to be exposed to different cultures and mature business processes. Good ability to have work/life balance. Cons: Senior management's need to show increasing profit causes them to look at employees as expenses and not as people. Raises are pathetic or non-existent. Promotions are next to non-existent. They try to add expenses to you (most recently they stopped reimbursing for internet access). They also modify their sales plan almost annually to ensure associates make less money each year, give huge year-to-year quota increases, and will manage your earnings by raising your quota on the last day of a year to ensure that you do not have a huge performance and therefore make a lot of money. So you always have a big year-to-year increase, if you don't make your number you are paid less, if you exceed your number your pay is reduced, and then they increase the number next year again. Advice to Senior Management: Your business model is unsustainable.
New on the Alliance@IBM Site
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  • To Alliance@IBM supporters: The Alliance is the only organization that advocates and supports IBM employees and ex-employees. In fact, there are few like it in the Information Technology field. It is always difficult to keep an organization like this alive, but as a supporter you know how important it is that we exist. We are calling on you today to help keep us alive another year by joining as a member or associate member. See our online forms below. As our membership has dropped, it is imperative that we gain new members or this organization and web site will cease to exist. Help us keep our organizing and advocacy work alive!
  • General Visitor Comments: Due to a lack of membership growth the comment sections will be closed until we see sufficient growth in full membership, associate membership or donations. Many of you that visit our site have not yet joined, but seem to value its existence. The only comment section that will remain open will be Job Cuts Reports. If you have information that you want the Alliance to know about please send to ibmunionalliance@gmail.com. Information of importance will be put on the front page of this web site. To join go here: Join The Alliance! or here: Join The Alliance!
  • Job Cut Reports
    • Comment 12/12/10: Internally, IBM is suffering and there is no doubt about it. The share price appreciation is notable and significant but it comes at a cost in brand and reputation. News on the State of Texas client they have and other states is a significant tarnish on what was once indisputable. By moving to offshoring as part of their DNA, IBM is commoditizing that which was sought after the most; their people!

      Documented procedures, patents, innovating methods - all meaningless without the right people to perform that work. Its pretty telling at Alliance@IBM's web site that IBM is reshaping their DNA at the expense of their employees. And the stories are, shall we say, compelling.

      Not so much each individual story but that they all show a clear pattern that executives are focused on short-term gains at the expense of clients and employees. About the only people making much on IBM is their shareholders. All 3 elements of a brand, employees, customers and shareholders need balance. IBM does not have it; and it is by choice, not necessity. -Anonymous-

    • Comment 12/13/10: "Sam Palmisano is clearly BAD FOR AMERICA. He has created IBM India and is now stealing away more US jobs forcing more layoffs!" But who gets all the good attention? IBM and himself always seems to get good spin and all the headlines. Palmisano gets Bernanke's attention, he gets invited to give economic and job employment input to the President and then essentially insults the President and the office of the President when he tries to sell"free" services to the President for the USA government to clean up health care fraud, he sells IBM to USA customers as an unpatriotic outsourcing model, etc. And when IBM doesn't get headlines? They do when they execute an RA. Tens of thousands of USA IBM jobs just disappear without a mention in the news. The employees in IBM have to get some headlines. The employees can only do it with the Alliance so True Blue and the rest of IBM employees who have not been whacked with an RA yet this is your chance to take your IBM back from a despicable Gerstner robot CEO. Think Twice and make this your New Year's resolution. -IBMUnionYes-
    • Comment 12/13/10: I heard from a close friend that their last day is December 31st. They were warned 6 months ago that there was very little work and they might be in jeopardy. They were an admin in STG Poughkeepsie. They are eligible for full retirement - 32 yrs service, but no FHA (too young).

      "Assuming that the Clinton era tax rate is what the tax rate should always be is a bad assumption. Tax rates do change on an ongoing basis in America. Substitute the words "Current tax rate" for the rhetoric" Bush tax cuts for the rich"

      Sorry I don't buy this. Rich people would need to move to the 3rd world to find lower tax rates than the USA. Did your dad and mom retire with nice benefits? You can credit smart and progressive taxes in the 50s and 60s that taxed wealthy people more than they are taxed today. I may end my life in a fancy cardboard box thanks to the "let them eat cake" attitude that prevails in this country; but at least I don't have to support my parents. They have pensions and social security. But with people supporting lower and lower taxes on the wealthy, where will our safety net go? Pension? I'll believe it the day the first check comes. Social Security? It's being raided and people want me to think like a 'Stepford American' with glazed over eyes and say: current tax-rates instead of "Bush tax cuts for the superwealthy". Well sorry, your kool-aid isn't quite strong enough. Or should I say "Tea" instead of Kool-aid.?

    • Comment 12/15/10: Received an organizational announcement today that applauds yet another transition offshore. TADDM group within Tivoli organization is moving to Poland. Employees in US are "looking for opportunities in various groups within IBM". -insideibm-
    • Comment 12/17/10: IBM lost the BP Amoco account to HP - this is the US and Europe. Announcement made in a call earlier this week. Not good for all the fine folks working in that environment. -Anonymous-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
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  • Kaiser Health News, courtesy of MS-NBC: 1.5 million to be notified their insurance is below standard. New rules require letters to be sent to those with policies that have low caps. By Julie Appleby. Excerpts: At least 1.5 million people will soon receive notices from employers or insurers that their health plans fall short of meeting a key standard in the new health overhaul law — and by how much. The Obama administration on Thursday outlined what must be in the notices sent to people with limited-benefit plans, which cap coverage for medical care, sometimes to as little as $2,000 a year. The law bans annual limits entirely in 2014, but restricts them in the meantime: the current limit is $750,000 annually. ...

    Sen. Jay Rockefeller, D-W.Va., held a hearing last week in which he said that those enrolled in such coverage often mistakenly think they have financial protection. “It gives people a false sense of security — it lets them think they have health insurance when they really don’t. By the time they realize they don’t have real health insurance, it’s too late," he said.

  • AlterNet: Judge Who Struck Down Health Care Funded Anti-Health Care Candidates. Excerpts: The Virginia judge who declared certain parts of health care reform unconstitutional yesterday is a major stakeholder in a firm that donated money to anti-health care right-wingers like Michelle Bachmann, John Boehner and John McCain. As Gawker digs up, Henry E. Hudson owns up to 50 grand in a GOP consulting firm called Campaign Solutions, Inc, which not only boosted the conservative presence in Congress but also helped Sarah Palin jumpstart her PAC. Meanwhile, the attorney general who filed the suit that prompted Hudson's decision, pumped $9,000 into Campaign Solutions over the past two years. Apparently the ruling was not just hateful, it was potentially corrupt. ...

    And as the attorneys in the Virginia case bad-talk the health care plan for being too “big government,” Benin notes that the tenet Judge Hudson struck down––an individual mandate that everyone must purchase the health care insurance––was initially the idea of conservatives like Bob Dole, W, Mitt Romney, even McCain.

  • New York Times: Opposition to Health Law Is Steeped in Tradition. By David Leonhardt. Excerpts: “We are against forcing all citizens, regardless of need, into a compulsory government program,” said one prominent critic of the new health care law. It is socialized medicine, he argued. If it stands, he said, “one of these days, you and I are going to spend our sunset years telling our children, and our children’s children, what it once was like in America when men were free.”

    The health care law in question was Medicare, and the critic was Ronald Reagan. He made the leap from actor to political activist, almost 50 years ago, in part by opposing government-run health insurance for the elderly. ...

    We’ve lived through a version of this story before, and not just with Medicare. Nearly every time this country has expanded its social safety net or tried to guarantee civil rights, passionate opposition has followed. The opposition stems from the tension between two competing traditions in the American economy. One is the laissez-faire tradition that celebrates individuality and risk-taking. The other is the progressive tradition that says people have a right to a minimum standard of living — time off from work, education and the like.

    The federal income tax, a senator from New York said a century ago, might mean the end of “our distinctively American experiment of individual freedom.” Social Security was actually a plan “to Sovietize America,” a previous head of the Chamber of Commerce said in 1935. The minimum wage and mandated overtime pay were steps “in the direction of Communism, Bolshevism, fascism and Nazism,” the National Association of Manufacturers charged in 1938. ...

    In truth, the law is quite moderate. It is more conservative than President Bill Clinton’s 1993 plan or President Richard Nixon’s 1974 plan (in which the federal government would have covered anyone who wasn’t insured through an employer). It’s much more conservative than expanding Medicare to cover everyone. It is clearly one of the least radical ways for the United States to end its status as the only rich country with millions and millions of uninsured. ...

    Guaranteeing people a decent retirement and decent health care does more than smooth out the rough edges of capitalism. Those guarantees give people the freedom to take risks. If you know that professional failure won’t leave you penniless and won’t prevent your child from receiving needed medical care, you can leave the comfort of a large corporation and take a chance on your own idea. You can take a shot at becoming the next great American entrepreneur.

    With every previous major expansion of the safety net, history has had a chance to prove the naysayers wrong. It may yet in the case of universal health coverage. But the decision now seems to rest with the nine members of the Supreme Court.

  • New York Times: Flirty Models Were Hired in Bid to Find Bone Marrow. By Abby Goodnough. Excerpts: On its face, it seemed reasonable enough: a bone marrow registry sending recruiters to malls, ballparks and other busy sites to enlist potential donors. But the recruiters were actually flirtatious models in heels, short skirts and lab coats, law enforcement officials say, asking passers-by for DNA swabs without mentioning the price of the seemingly simple procedure. And the registry, Caitlin Raymond International, was paying up to $60,000 a week for the models while billing insurance companies up to $4,300 per test. ...

    James T. Boffetti, the state’s senior assistant attorney general, said the registry had hired models based on their photographs and had given them “explicit instructions” to wear heels and short skirts. The registry paid the models to approach potential donors at dozens of malls and events throughout New England, Mr. Boffetti said. “The models worked the crowds, if you will,” he said. “We were told basically they would engage a lot of younger men with some sort of flirtatious thing: ‘Hey, don’t you want to be a hero? Come on, do this!’ ” ...

    If people expressed interest, Mr. Boffetti said, the models — who, for reasons that remain unclear, sometimes also wore electric-blue wigs — would hand them off to registry employees who would take mouth swabs. “They got people to do this without telling them it could be a charge of $4,300 against their insurance,” he said.

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

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

  • New York Times: A Secretive Banking Elite Rules Trading in Derivatives. By Louise Story. Excerpts: On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan. The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential.

    Drawn from giants like JPMorgan Chase, Goldman Sachs and Morgan Stanley, the bankers form a powerful committee that helps oversee trading in derivatives, instruments which, like insurance, are used to hedge risk. In theory, this group exists to safeguard the integrity of the multitrillion-dollar market. In practice, it also defends the dominance of the big banks. The banks in this group, which is affiliated with a new derivatives clearinghouse, have fought to block other banks from entering the market, and they are also trying to thwart efforts to make full information on prices and fees freely available. ...

    The marketplace as it functions now “adds up to higher costs to all Americans,” said Gary Gensler, the chairman of the Commodity Futures Trading Commission, which regulates most derivatives. More oversight of the banks in this market is needed, he said. But big banks influence the rules governing derivatives through a variety of industry groups. The banks’ latest point of influence are clearinghouses like ICE Trust, which holds the monthly meetings with the nine bankers in New York.

    Indeed, the derivatives market today reminds some experts of the Nasdaq stock market in the 1990s. Back then, the Justice Department discovered that Nasdaq market makers were secretly colluding to protect their own profits. Following that scandal, reforms and electronic trading systems cut Nasdaq stock trading costs to 1/20th of their former level — an enormous savings for investors.

  • Alabama Live: Spencer Bachus finally gets his chairmanship. By Mary Orndorff -- The Birmingham News. Excerpts: It's taken 18 years of accumulating seniority, backbench toiling on policy issues large and small, generous campaign donations to fellow Republicans and a GOP takeover of the U.S. House, but Rep. Spencer Bachus will finally get the gavel he's always wanted. House Republicans on Wednesday promoted Bachus to chairman of the House Financial Services Committee, which has wide jurisdiction over banks, capital markets, housing, consumer credit and the overall health of the American financial system. Come January, the 62-year-old lawyer from Vestavia Hills will be in the national limelight as the new Republican majority prepares to rework the landmark Wall Street reforms passed earlier this year. ...

    Bachus, in an interview Wednesday night, said he brings a "main street" perspective to the committee, as opposed to Wall Street. "In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks," he said. ...

    In the 2009-10 election cycle, the finance/insurance/real estate sector gave Bachus' campaign account $752,200, most of it from political action committees, according to an analysis by the Center for Responsive Politics.

  • Wall Street Journal: Obama Woos CEOs as Frictions Ease. By Elizabeth Williamson. Excerpts: President Barack Obama will convene a one-day summit of corporate chief executives Wednesday as part of a renewed White House effort to build support among business leaders for his economic agenda. Chief executives from Google Inc., Cisco Systems Inc., International Business Machines Corp., American Express Co., Dow Chemical Co. and Pepsico Inc. have been invited to the meeting at Blair House, next to the White House, to discuss trade, tax, regulatory issues and the deficit. ...

    Mr. Obama has met with chief executives since the start of his administration, but some who attended those meetings have complained that he didn't take their views into account in policies that resulted. Corporate leaders have expressed dismay at Mr. Obama's sometimes sharp criticism of multinational corporations and his administration's regulatory and tax policies, such as a proposal to raise taxes on income that corporations earn overseas. ...

    Since the election, Mr. Obama "has done the right thing to reach out to people in both parties….I think he is going to be more experienced and build more coalitions than he was before," U.S. Chamber of Commerce President Tom Donohue said Friday on Fox News. The White House and the chamber are discussing dates in January for Mr. Obama to address the group on jobs and the economy. That would expand an emerging détente with the group, after a campaign during which they feuded bitterly over the chamber's bankrolling of Republican candidates.

  • Huffington Post: Obama and the CEOs: Looking for Love in All the Wrong Places. By Robert L. Borosage. Excerpts: The president kicked up his "corporate charm offensive," meeting for hours with 20 CEOs yesterday. Characteristically, he started with an apology for not "finding the right balance" in addressing business. "We want to be boosters," he said, because "when you do well, America does well." The president and the business leaders talked about free trade, fiscal discipline, and relief from regulation. The White House let it be known the president was considering a speaking gig at the board meeting of the Chamber of Commerce, the right-wing corporate lobby that had accused him of waging a "general attack on our free enterprise system."

    You can't fault the president for showing a little love to America's corporate leaders, but there is one small problem here: The entire premise of the meeting is wrong. The reality is that the corporations are doing extraordinarily well -- and America is in trouble. US corporations recorded the highest profits on record last quarter, while more than 20 million people were in need of full-time work, and poverty is at record heights. What is good for General Motors or General Electric or IBM is no longer necessarily good for America.

    In fact, these executives and their companies are more part of the problem than part of the solution for this country. They've been making out like bandits, but Americans are less and less the beneficiaries of their success. As President Obama has stated, if we are to revive an America with a vibrant middle class and a widely shared prosperity, we need fundamental reforms to build a new foundation for growth and prosperity -- an agenda the country needs and the CEOs he met with largely oppose. Consider:

    • Unsustainable Trade Deficits and Massive Job Loss to Offshoring. America was running a trade deficit of more than $2 billion a day when the economy collapsed, borrowing that sum from abroad, largely from Chinese and Japanese bankers. We've been hemorrhaging manufacturing jobs for years. Now the big companies are offshoring information technology and back office jobs in large numbers. We're running a growing deficit in high technology goods with China. The CEOs the president met with -- from General Electric, IBM, Cisco, Intel , Boeing -- have been at the front of this trend. As Andy Grove, the former head of Intel, warned, there are now fewer manufacturing jobs in the US computer business than there were when the first PC was assembled in 1975. ...
    • Gilded Age Inequality and a Declining Middle Class. In the five years before the financial collapse, when the economy was growing, the wealthiest 1 percent of Americans captured a staggering 2/3 of all income growth. Household income for the typical family actually lost ground over the course of the decade. Corporate and Wall Street executive compensation practices allowed the top executives to capture excessive rewards, while workers were facing lay-offs, wage and benefit cutbacks, and greater insecurity. ...
    • Corporate Power and Corrupted Democracy. Corporate lobbies and corporate money are corrupting our politics. Over the last two years, we've witnessed graphic scenes in how powerful and entrenched corporate lobbies could fend off common sense reforms in health care, energy, finance and trade. The decision of the conservative Supreme Court gang of five in Citizen's United, overturning settled precedent to declare that corporations had the same free speech rights as people and could spend unlimited amounts in independent expenditure campaigns to influence elections, contributed to the flood of corporate money that helped to bring Republicans the majority in the House.
  • New York Times: Tax Package Will Aid Nearly All, Especially Highest Earners. By David Kocieniewski. Excerpts: The deal to extend the Bush-era tax cuts for two years includes a bevy of additional credits and deductions that will reduce the burden on nearly all households.

    But the tax benefits will flow most heavily to the highest earners, just as the original cuts did when they were passed in 2001 and 2003. At least a quarter of the tax savings will go to the wealthiest 1 percent of the population. ...

    The wealthiest Americans will also reap tax savings from the proposal’s plan to keep the cap on dividend and capital gains taxes at 15 percent, well below the highest rates on ordinary income.

    And negotiators have agreed that the estimated $900 billion cost of the cuts will simply be added to the deficit — not covered by reductions in spending or increases in other taxes. That is good news for hedge fund managers and private equity investors, who appear to have withstood an effort to get them to pay more by eliminating a quirk in the tax code that allows most of their income to be taxed at just 15 percent.

    In fact, the only groups likely to face a tax increase are those near the bottom of the income scale — individuals who make less than $20,000 and families with earnings below $40,000. “It’s going to look like the rich are getting richer again,” said Anne Mathias, an analyst for MF Global Inc. ...

    The estate tax — which was allowed to lapse this year and was scheduled to resume at a rate of 55 percent on most assets above $1 million — will be reinstated under less onerous terms. Estates over $5 million will be subject to a 35 percent tax.

    Under Mr. Obama’s failed proposal, which would have raised the rates on income over $250,000 for families and $200,000 for individuals, the taxpayers at the top 1 percent of the income scale — those with incomes above $564,000 — would have received an average tax break of $28,000. Under the agreement reached with Republicans, the top 1 percent will receive breaks of about $70,000.

  • truthout: Why America’s Two Economies Continue to Drift Apart, and What Washington Isn’t Doing About It. By Robert Reich. Excerpts: America’s two economies are getting wider apart. The Big Money economy is booming. According to a new Commerce Department report, third-quarter profits of American businesses rose at an annual record-breaking $1.659 trillion – besting even the boom year of 2006 (in nominal dollars). Profits have soared for seven consecutive quarters now, matching or beating their fastest pace in history.

    Executive pay is linked to profits, so top pay is soaring as well. ...

    And Wall Street is back. Bonuses on the Street are expected to rise about 5 percent this year, according to a survey by compensation consultants Johnson Associates Inc.

    But nothing is trickling down to the Average Worker economy. Job growth is still anemic. At October’s rate of only 50,000 new private-sector jobs, unemployment won’t get down to pre-recession levels for twenty years. And almost half of October’s new jobs were in temporary help. Meanwhile, the median wage is barely rising, adjusted for inflation. And the value of the major asset of most Americans – their homes – continues to drop.

    Why are America’s two economies going in opposite directions? Two reasons.

    First, big profits are coming from overseas sales of goods and services made abroad, not here. The world’s fastest-growing markets are China and India, whose inhabitants are eager to buy “American” products, and just as eager to work for the American companies that sell them. The U.S. market is barely moving. Increasingly, American corporations are able to extract healthy gains from their global operations without adding much in the United States except executive talent. ...

    So what is Washington doing about all this? ...

    It’s extending the Bush tax cuts – the lion’s share of which go to the very wealthy; reducing the reach and rate of the estate tax; and giving corporations additional tax breaks for investing in software and equipment. Meanwhile, the states are cutting back on pre-schools, firing teachers, and yanking up tuition and fees at public universities.

  • MS-NBC: Wealth gap becomes chasm at Christmas. Luxury retailers see strong demand as lower-income shoppers hunker down. By John W. Schoen. Excerpts: With just a few days left in the holiday shopping season, reports from retailers suggesting strong sales are prompting analysts and investors to declare that “the American consumer is back.” Make that "some consumers." With unemployment stuck near 10 percent, home prices falling and foreclosures still rising, holiday shopping this year has brought into sharper focus the divide between upper- and lower-income American households. ...

    That gap is showing up in the bottom lines of American retailers, some of which generate as much as half their annual profits from the holiday season. Though retail sales are expected to show healthy gains of 4 to 5 percent this year, retailers who cater to households at the bottom of the economic ladder are seeing very different results as their customers struggle to make ends meet. ...

    Luxury retailers, on the other hand, are having their best year since the bottom fell out of the financial markets in 2008. “The market for the luxury sector is holding up quite nicely,” said Saks Fifth Avenue CEO Steve Sadove. “We’re seeing very solid growth, and we're seeing good full-price selling. So the consumer is feeling very good at the high end. That’s tied to how they feel about their net worth, and that’s tied to the stock market.” ...

    Free-spending, high-end consumers are also helping fatten the bottom lines of stores specializing in luxury brands. While households at the bottom of the ladder on tight budgets are squeezing every dollar by looking for the most aggressive mark-downs. high-end shoppers are apparently more inclined to pay full price. “The more high-end you go, the less promotional it’s been,” said McGranahan. “The real high-end guys — the Burberrys of the world — they don’t have any inventory. Business has been so good, they’ve actually had to shut down some of the stores some days because they didn’t have anything left to sell.”

  • Wall Street Journal: Luxury Stocks Flying High. Excerpts: While many on Main Street are struggling, companies that sell to the biggest spenders–from Tiffany & Co. to Cartier and Louis Vuitton to Remy Cointreau–are having themselves a merry little Christmas. Luxury sales are surging here and abroad. Profits are widening. And stocks are flying high. How high? Take a look at our chart. ...

    Luxury goods companies are selling to the two groups of people who have any money left: The rich, who are getting richer and richer, and consumers in emerging markets, who are getting richer. ...

    Sales at Tiffany's flagship New York store are up 8%. Luxury giant LVMH, which has more than 500 U.S. stores, and whose brands include Fendi, Givenchy and Donna Karan as well as Louis Vuitton itself, says U.S. sales have jumped 15% this year. The Swiss watch federation says exports of Swiss watches to the U.S. are up nearly 15% through the end of November. ...

    Who's buying? Hardly the middle-class. With unemployment high, home prices slumping and the economy sluggish, too many are either struggling or watching their pennies. But the elite have money. And they are starting to spend again. The rich and the very rich–the latter having more than $30 million to invest–have seen a sharp rebound in their fortunes following the crash, according to the most recent wealth report from Cap Gemini, the consultants. ...

    Pictet's Ms. Reyl notes that the luxury retailers seeing the biggest gains are often those at the top of the tree. We're not talking about "mass affluent" retailers like Saks & Co. or Neiman Marcus, but the kind of companies–such as those run by Richemont or LVMH–which have their own stores.

  • AlterNet: Inside the Mortgage Monster. By Michael W. Hudson, Times Books. Excerpt: Back in the days of the home-loan boom, loan officers at Ameriquest Mortgage worked hard and played hard. They put in ten- and twelve-hour days punctuated by “Power Hours”—frenzied telemarketing sessions aimed at sniffing out borrowers and separating the real salesmen from the washouts. A frat-house mentality ruled, with liquor and cocaine flowing freely. “It was like college, but with lots of money and power,” one former Ameriquester, Travis Paules, recalls. In this excerpt from his new book, The Monster: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America--and Spawned a Global Crisis, investigative reporter Michael W. Hudson tells the story of Travis Paules’ first year and a half inside America’s biggest—and most predatory—subprime mortgage empire.
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