IBM Europe Workers Strike

csimoes writes "IBM employees in Europe are on strike today. This is in response to the 10,000-13,000 job cuts that IBM is planning, most of them in Europe. Strikers will be wearing black and blue to signify their struggle. Here is their main union web site. Now I can't say I'm big union guy, but they do make some interesting points on their site. Such as: "IBM is a wealthy and successful company. Its first quarter profit for 2005 was $1.4 billion, and $9 billion for the whole of 2004. It increased the dividend to its shareholders, recently bought back $5 billion in IBM stock, and acquired 19 companies in 2004." The union also questions if other cost cutting mechanisms could achieve the same effect without cutting so may jobs."

Comments

Reduce expenses by cutting executive salaries?

[guyfromindia]

They could save a ton by doing so...

Re:Reduce expenses by cutting executive salaries?

[Dekke]

It's a sad thing these days but cutting executive salaries often hurts the company in the eyes of the economic elite. I suppose it's for two reasons:

1. Top-rank executives wouldn't want to work there because they wouldn't get treated like diamond-encrusted platinum-plated gold.
2. Investors might see it as the company dying, when worker layoffs means "streamlining" or some other mumbo-jumbo.

Even though cutting back executive salaries just a tiny bit would suddenly make up for all the workers laid off...

Re:Reduce expenses by cutting executive salaries?

[BoomerSooner]

I bet there are a couple of executives being laid off. Your opinion might change if you ever work 20 years at a company and actually become an executive.

Laying off 10~13K employee's will no doubt save a lot as well.

The employee's at my company cost roughly 1.3 times their salary. So if I have a support person that makes 36K a year they cost my company around 46K a year with benefits (we pay 100% at my company so there is no matching) and govt program matching, unemployment, workers comp, ...

Lets say these are the averages:
10K people, 30K salary, 36K salary with benefits
How much does IBM save? 360 Million a year.
That is a very low estimate not including any workspace costs, energy consumption, vacation, bonuses, ...

Start your own business then you'll see where most of your expenses are, in your employees. So make damn sure you need someone before you hire them.

Re:Reduce expenses by cutting executive salaries?

[Muhammar]

Comparison to US is misleading.

The average salaries in Europe are lower compared to US but overall cost is higher because of HUGE hidden taxes. It works like this: A company wants to give your employee a bonus, say 1000 euro, but the company will have to pay additional 800 euro to the government also. If the real taxation was included in the paystub, the average salary taxation level would be around 60-70%.

Re:Reduce expenses by cutting executive salaries?

[Carewolf]

No, it is the other way. The wages are the same or higher in Europe, but there are fewer hidden taxes.

The US hides it taxes by keeping a very low income tax, but having the worlds highest corporate tax.

Re:Reduce expenses by cutting executive salaries?

[PenchantToLurk]

In the spirit of comparing european salaries to US, one must consider the current strength of the euro in relation to the dollar. European jobs are more advantageous to cut for an american firm simply by virtue of the exchange rate.

Re:Reduce expenses by cutting executive salaries?

[prockcore]

Your opinion might change if you ever work 20 years at a company and actually become an executive.

The percent of money the average worker makes versus an executive has drastically shrunk in the last 20 years.

In 1980, the average CEO made 42 times the average salary of the regular workers at his company. In 2000, the average CEO made 419 times the average salary.

The pay gap between executive and regular workers has drastically gotten out of hand. We're at the point where nearly 40% of an entire company's payroll is going to one person.

Re:Reduce expenses by cutting executive salaries?

[Lemmy Caution]

The reasons are socio-cultural, as much as economic-rational. The executive class is pretty much the same type of people who are the economic elite. E-staff sit on the boards of other companies. They remind themselves of each other. Even fund managers are just that - fund managers who percieve themselves as largely in the same class as E- and C- level management.

In a word, it's log-rolling. It's the logical consequence of shareholder capitalism, and its leading to winner-take-all screw-the-worker approach.

Re:Reduce expenses by cutting executive salaries?

[mankey wanker]

The parent makes an excellent point and should be modded up. This same point has been made ad nauseam by traditonally conservative sources like The Economist.

You have a real problem when even The Economist thinks those at the top are being too greedy - The Economist is practically the propaganda arm of capitalist elite "free trader" psychopaths.

Re:Reduce expenses by cutting executive salaries?

[Anonymous Coward]

You can't really talk about "taxes in Europe". That doesn't make sense because taxes is out of the EU's jurisdiction, and there's MASSIVE discrepancies between the countries within the EU, never mind outside it.
Having said that taxes ARE huge in France, Germany, Italy... So , yeah, okay "in Europe".
However, what you're talking about is not hidden. It's all there on your payslip - more on that later...

If you're looking for hidden taxes, look at the health system in the US. Before somebody chimes in about welfare state this, communist that, I'm not arguing here that one system is better than the other. The life expectancy is pretty much the same on either side of the Atlantic, and up north in Canada and that's that. However, in Europe, nobody needs to sue to have somebody pay their medical bill, no money is wasted on lawyers, or medical personnel making you sign a contract before treatment... or consultation! That's what I mean by hidden taxes.

Now, the real problem in "Europe" is the monstrous bureaucracy. Here in Ireland my payslip is 8 lines - I got one today. That includes pension, health care, welfare, income tax, everything. In France it would take a fucking A4. Money goes all over the place to various agencies doing god knows what. Of course this means that people have to manage that stuff: write the law, write software to help do it, type the forms, look for fraud, the list goes on. In the end that's a whole lot of money spent for absolutely *no* work being done. That's what's hidden. And that's the real brake.

If you tell somebody who wants to start a business he has to pay even 80% tax on the payroll, that's huge, but if it's just one 80%, always, one check to one agency, and you get value for money, it might hurt the free market in you and me, but that would be okay. If it's 100 laws, statutes, whatever, to digest, 10 checks to write and then you're fined because you forgot an obscure one, even if the average is 30 to 40%, people won't even try. There's an article in The Economist this week (p 30, dead tree), that says it costs $306 to setup a business in France. Not expensive, now, is it? Pocket money! The catch is it also take 8 (eight!) days! For fuck's sake, what untold amount of paperwork do you have to fill in? Who with? And trust me, it gets much worse after you start growing. Companies are actually refusing business because of the unknowns of getting bigger!

That's the real drag on this Europe you're talking about.

Re:Reduce expenses by cutting executive salaries?

[Kadin2048]

And you're still mystified as to why IBM is cutting 10,000-plus jobs in Europe, while still actively hiring in the U.S....?

I'm not. The writing's on the wall. If you have to fire one employee, given a choice of one who will only work 35 hours a week and 10 or 11 months a year and has a union that demands raises annually regardless of individual performance, versus someone who'll work 45-50+ hours a week without being asked, 50 weeks a year, and only expects a performance based bonus if anything...it's hardly even a choice. An executive wouldn't be doing due diligence to the shareholders to hang on to the former employee at the expense of the latter one.

The Europeans have priced themselves into obsolescence as workers.

Re:Reduce expenses by cutting executive salaries?

[TeraCo]

The Europeans have priced themselves into obsolescence as workers.

Or maybe the American's have priced themselves into slavery as workers. 40 hours weeks, paid over time, 4 weeks leave a year, these are all things that other countries take for granted. How much leave do you get again?

Re:Reduce expenses by cutting executive salaries?

[Hast]

First off, Europe is not one country with identical rules. I live and work in Sweden and we have 40 hour weeks. There are weeks when I work more than that, and not many that I work less. OTOH I get paid for the overtime I put in. That seems somewhat optional in the US (re articles about working at EA studios).

In addition to my long vacation each year, when I get childen I have the opportunity to take time off work to spend time with them during their first years.

Besides it would be interesting to see some research regarding if more than 40 hours work week 50 weeks a year actually produces more in the long run. I do kind of doubt it.

Life is short and it shouldn't be wasted on holiday. It should be spent with family first and at work on something meaningful second.
God forbid that you should spend you holiday or extra time off with your family.

Currently economics is limited since it only place value on the bottom line. There is no concept of getting more work out of your employees since they are not over-worked and content with their life. I'm sure the rest of the world will catch up to European life-standards sooner or later.

Re:Europeans go on strike

[IdleTime]

Corporations don't give you vacation days in Europe, governments do. It's regulated by law. I know the word "law" is a difficult one for Americans to grasp. :-)

Who cares what IBM's profit margin is?

[BoomerSooner]

Isn't their job to be certain they can provide profit in the future for their shareholders (the owners of the company). Why would a company want to keep 10~13K employees that are obviously not necessary in the daily business? Simply because they are making a profit?

I'm not a fan of layoffs either but a company is there to make money, nothing else. If these 10~13K people banded together and started a competing company maybe they could make IBM pay in that direction. In the end employment is voluntary. I don't hear people screaming about someone quitting IBM when they take their experiences there and help another company use that knowledge. What about all the training and investment IBM made in those people, do they think it was free?

Seems like every time I'm in Europe there is a major strike happening.

Re:Who cares what IBM's profit margin is?

[spiffy_dude]

I think this is a funny point of view considering how many Slashdotters have complained about offshoring. This is almost the same situation as a company deciding they would be better off moving their jobs to India. When they offshore YOUR job they're simply being "certain they can provide profit in the future for their shareholders". I think some sympathy is in order for these folks.

Re:Who cares what IBM's profit margin is?

[ElMiguel]

I'm not a fan of layoffs either but a company is there to make money, nothing else.

You might be surprised but many people believe that ethical behaviour should also be a priority for a company. Perhaps this opinion is more common in Europe.

Re:Who cares what IBM's profit margin is?

[kindbud]

Why would a company want to keep 10~13K employees that are obviously not necessary in the daily business? Simply because they are making a profit?

Because their corporate charter is a social contract, issued in the expectation of receiving some societal benefit, like employment for citizens.

I'm not a fan of layoffs either but a company is there to make money, nothing else.

Not in Europe. They actually retained some ideals from the Enlightenment, beyond their immediate usefulness in fomenting rebellion. You know, things like human rights come before other considerations, like profits.

Seems like every time I'm in Europe there is a major strike happening.

Their workers are not as cowed as ours.

Re:Who cares what IBM's profit margin is?

[Anonymous Coward]

Speaking as a European who owns a business, exactly what compels me to employ people I have no use for, and why have I not heard about it until now?

Re:Who cares what IBM's profit margin is?

[Medgur]

Employment is NOT voluntary.

Feel free to try and attempt to choose unemployment, or to become unemployed when feeding a family and paying off a mortgage, I'm sure it'll work out well for you.

In a market where jobs are a commodity and prospective employees must compete for positions the notion of voluntary employment or unemployment is pathetically out of touch with the harsh realities of being middle or low class.

Re:Who cares what IBM's profit margin is?

[Anonymous Coward]

There's nothing unethical about laying off employees. Some high level executives should go with them too. If 13000 employees are unneeded then some high level mangagers screwed up long ago.

Re:Who cares what IBM's profit margin is?

[Bamafan77]

Isn't their job to be certain they can provide profit in the future for their shareholders (the owners of the company). Why would a company want to keep 10~13K employees that are obviously not necessary in the daily business? Simply because they are making a profit?

I'm not a fan of layoffs either but a company is there to make money, nothing else

The problem is that we still have a nostalgic view of employer loyalty to its employees. The way it's supposed to work is that you "do your time" and in X amount of years, you retire with a golden watch and pension.

Of course, in the 21st century, this is a myth. That's why I'm a proponent of Stephen Pollan's methodology in Die Broke -- be ruthless and mercenary about your approach to employment. He calls this the "Mercantile Ethic". Always be looking for your next job, and always take the job that's in your best financial interests, not because it's a better fit for your interests. While you should work hard, you shouldn't buy into the "holistic" view of work. Your work is not your life, no matter how much you love it or how many hours you put in. Work is work. It's an income generating stream, period. Don't get caught up in company politics because in the end, you'll be standing in the unemployment line right alongside the kissup and the quiet hardworker. You're a bean. He uses professional athletes as examples we should follow when pursuing jobs in this new reality.

Lots of other good advice there too, much of it traditional (e.g. live beneath your means, kill your consumer credit, etc) and some definitely non traditional (e.g. lease your car rather than buy and never retire).

Re:Who cares what IBM's profit margin is?

[BoomerSooner]

I was laid off last year. After working for several companies I came to the conclusion that I'm better off failing by myself than working for companies that could give a shit about their clients or employees. I'm liberal on social issues and conservative on fiscal policy & economic matters (so I really hate this POS fucking administration we have now because they are shitty on both fronts). As such, before my company hires a new employee we make certain that 1) the job cannot be integrated into someone elses position, 2) that the person philisophically (sp?) matches our beliefs and 3) that no matter what the financial situation of the company that person will not need to be laid off. My companies profit sharing works different than most, since I own the company outright I don't distribute shares. We take a percentage of our semi-annual profit and distribute it according to a formula to our employees based on length of service, job position and overall attitude/work relationships. The pool for all the employees doesn't change if we hire someone new. So if the employees say they need someone to assist in a specific position they know it will cost them money (bonuses) if they don't make up the slack as a group and get more customers that generate profit to allow a larger bonus pool of cash. It is great incentive and people are rewarded based on the company's profit and their contributions.

Sometimes getting laid off is the best thing that can happen to a person so sympathy isn't necessary.

Re:Who cares what IBM's profit margin is?

[ribblem]

Think about it this way. Companies used to dump their waste into the nearest river because it was cheaper than properly disposing of the waste. Then society figured out that while this is cheaper for the company it costs society as a whole a lot more. I'm not saying that cutting a bunch of jobs is as bad as dumping waste into a river. I'm just saying I do think there are similarities as far as costs to society.

Re:Who cares what IBM's profit margin is?

[wheelbarrow]

ElMiguel, your sentiment is good hearted but naive. IBM, in this context, has several competing ethical interests. For one, IBM has an ethical obligation to the employees that survived the layoff to maintain a viable business. Perhaps if those 10,000 are not laid off, IBM will not have enough reserve cash to fight a brutal price war with their competitors. When that price war is lost then all IBM employees will lose their jobs. It's simple, lay off 10,000 to protect the remaining 100,000.

Re:Who cares what IBM's profit margin is?

[Bellyflop]

That really works well when you can evaluate how much a particular division generates in hard numbers. It works great in consulting firms since revenue is tied directly to hours billed. However, in a lot of large firms, entire divisions of people are support people who are not in a position to generate revenue for the company. They may be there to book the revenue or to prevent losses from legal issues or theft, etc.. The value that they add isn't so easy to measure. Now, you could argue that each division could hire their own set of such people, but many companies find that they get an economy of scale from having them all in one divison.

That being said, not every layoff is a terrible thing. I have some friends who were dying to get laid off from Deutsche Bank because of the generous termination packages and the abundance of positions elsewhere.

Re:Who cares what IBM's profit margin is?

[Jeff DeMaagd]

So you don't think it is possible for a company to need an employee, and then some time later, not need that employee any longer? Employment shouldn't be considered a lifetime entitlement.

Re:Who cares what IBM's profit margin is?

[rewt66]

I see your point. Well, not really a point... maybe a half a point... well, there's at least a tenth of a point in there.

Yes, when the citizens create the rules that allow for corporations to exist, they do so in the expectation that they will get a better society to live in. And the point is that if the existence of corporations is no longer a net good for the citizens, the citizens have the right and the power (and maybe even the responsibility) to eliminate corporations.

But saying that the corporations must increase the net welfare of society is not the same as saying that the corporations have to continue to employ deadwood. In fact, the overall welfare of society is increased by no longer wasting those individuals where they currently are, but rather making them find jobs where they can do some work that is genuinely useful.

Re:Who cares what IBM's profit margin is?

[smallpaul]

Because their corporate charter is a social contract, issued in the expectation of receiving some societal benefit, like employment for citizens.

Is IBM laying off everybody in Europe?

Not in Europe. They actually retained some ideals from the Enlightenment, beyond their immediate usefulness in fomenting rebellion. You know, things like human rights come before other considerations, like profits.

If a lifelong job with IBM is now a human right then where do I sign up? I'm not much for big companies but you can't beat the job security of an ethically mandated JOB FOR LIFE.

Re:Who cares what IBM's profit margin is?

[mpcooke3]

I'm one of those torn citizens of the UK wedged between crazy euro farm subsidies and the US capitalist pigs ;) I like to think a balanced a approach is possible.

I don't think it is a good idea to subsidise a loss making aspect of a country or a company indefinately but obviously the pros and cons should be weighed up and people should be offered alternative roles and retrained where at all feasible.

If for economic reasons IBM is outsourcing jobs to india they should look at what the european work force can offer that india cannot and consider retraining where possible as this will be cheaper than re-recruiting over the next few years. Also in some european countries legal action could be taken if IBM finds themselves trying re-recruit for the same jobs at lower salary levels.

Ultimately if these people don't have suitable skills for the region in which they work then they should retrain. If they stay at IBM and IBM doesn't offer retraining then they get fired in 5 years time they will be in an even worse situation as IBM will have sheltered them from the realities of the job market.

Although it seems incredibly harsh there may be some morale arguments in favour of a large cut if they fear the alternative is gradual cuts over several years. No one works well when they think their job is on the line every month.

I often wonder in these massive union/company disputes - does the company ever approach the unions *first* to discuss these kind of issues?

Re:Who cares what IBM's profit margin is?

[gregorlowski]

So you say that the workers' jobs are to provide profits for the owners of the company. Why do you think the "profits" of the company's shareholders are more important than the livelihoods of 13,000 people who work at the company?

If you trace your argument to its roots, it boils down to the idea that people in society should work for the profits of the small percentage of people who "own" companies. I agree with you that companies in our society exist to make money and nothing else, but maybe people who have worked hard to make the company run feel some sort of entitlement afterward and think that their needs are more important than the future profitability of the company.

Maybe you're among the group of owners. But if you're not, then your point of view to me seems pathological. I think anyone who works at a company and then just passively accepts that they can be discarded inconsequentially is crazy. And it strikes me that our society seems pretty screwed up when programmers posting on /. espouse the view that there is something WRONG with their fellow programmers organizing to protect their own interests.

If I were in Europe now, I'd go to the picket line and show my support.

Re:Who cares what IBM's profit margin is?

[mcg1969]

Speaking as a citizen who votes and pays taxes, exactly what compels me to permit my government to grant you a corporate charter or a business license?

There is a balance of interests here, of course.

Sure, you can prevent IBM from laying people off if you choose. But they will also be less likely to hire in the future, or will hire less than their balance sheet might initially suggest, because the company knows it will have to retain those employees well past their usefulness, thereby increasing their expected cost to the company.

Re:Who cares what IBM's profit margin is?

[jhoger]

You are so bold as to use a professional athlete in your example... are you saying that a professional athlete does not take a "holistic" view of work, that they are not doing what they love?

Hey, you've got a finite number of hours on this planet. To get by, you sell x number of hours of your time in the marketplace per day, and you get 24-x to spend on leisure time, a normal good.

If you had your druthers you would spend all of your time on leisure time, period.

Is it such a bad idea to try to find work where you are doing what you would be doing in part of your leisure time at work?

Listen, I did the whole "work is just work" thing. You will burn out with that kind of attitude. You have to like it to some degree.

The mercenary attitude, being ready to move on and sell your time to the highest bidder is absolutely right though. None of these companies owe you anything, and you don't owe them anything except for the brief period of time every week where they have accrued a Wages Payable liability to you, or they have accrued a Vacation Wages payable to you. That's pretty much it.

The only real exception to that is DO NOT ditch a customer or employer in mid-stream, i.e. in the middle of a contract or project. Otherwise, your reputation will take a real hit and you're going to have trouble finding future work.

Re:Who cares what IBM's profit margin is?

[Duhavid]

How did they get to the point where 10 to 13k people were "suddenly" unneeded?

My arguement is that that did not just happen, management had it's eye off the bubble for a considerable period of time.

So, if management had been paying attention, perhaps they could have delayed some hiring or layied off few over a period of time, sometime a bit kinder to those being layed off.

Which brings up another point. The company wants to make money. To make money, you need productive workers. Workers that feel that management will treat them as people, with some modicum of kindness and respect will be busy working rather than looking for other work or worrying about being laid off, etc, etc.

A trim and a hair cut.

[Anonymous Coward]

"The union also questions if other cost cutting mechanisms could achieve the same effect without cutting so may jobs.""

Give upper-managment a pay cut.

Thought for the day

[kawika]

The limbs on a tree can always come up with a reason why they shouldn't be pruned.

If IBM thinks they don't need these workers, they should be able to eliminate them. If IBM is wrong then the company will suffer and the worker will find a better job. If IBM is right they will benefit and the worker will need to get their sorry ass in gear or work at a crappier job.

After being through a half-dozen jobs in my life I realized that a capable person losing a job is an opportunity, not a tragedy.

Re:Thought for the day

[Alejo]

Your personal experience is not enough to make a rule. Many have problems getting a proper job.

And remember, your taxes/tribute cover unemployment checks.

Re:Thought for the day

[owlstead]

Bet you aint 50 yet.

Re:Thought for the day

[Rich0]

After being through a half-dozen jobs in my life I realized that a capable person losing a job is an opportunity, not a tragedy.

Sure, if one person gets fired they'll bounce back - especially if their former employer gives them half-decent severance and all that.

On the other hand, if IBM closes down an office or otherwise terminates 2000 IT folks in the same town, there is no way that most will bounce back without relocating. No job market can absorb that many people when they have specialized jobs.

Cuts of that scale really are tragic. I'm not saying the solution is government regulation, but that doesn't mean that everything is swell either...

Re:Thought for the day

[Anonymous Coward]

Yeah, once you're 50, you have to beg for jobs. I'm watching my dad go through this now, he even went back and completed his P.E. so he can call himself a Chemical Engineer instead of just a chemist, and I make more money than he does.

My parents will probably end up living with me. Kinda puts a damper on the party plans.

Some sympathy

[Realistic_Dragon]

Corporations should have some social responsibility attached to their privilages - after all they are granted permission to exist by the people.

No 'make work' jobs should be encouraged, it's just a waste of economic resource, but strongly suggesting to such companies that they should look into retraining and redeploying their workers rather than just firing them en mass would be a good idea as the shock of such large events can permanently damage communities and economies.

That and I seriously hope the board of IBM is taking a huge pay cut. Lead by example and all that.

Re:Some sympathy

[jafac]

Governments know NOTHING about running business and should keep their noses out.

Judging by the crappy corporate performance and layoffs (along with massive runup in exec compensation) over the past 5 years, I'd say private business knows NOTHING about running businesses either.

If an employer makes a bad decision letting a good guy go, his competitors will benefit.

. . . and the exec who oversaw the layoff will also benefit with a fat bonus. . .

Re:Some sympathy

[jafac]

How is running a corporation a privilege?

Roosevelt said so over a century ago:

It is no limitation upon property rights or freedom of contract to require that when men receive from government the privilege of doing business under corporate form, which frees them from individual responsibility, and enables them to call into their enterprises the capital of the public, they shall do so upon absolutely truthful representations as to the value of the property in which the capital is to be invested. Corporations engaged in interstate commerce should be regulated if they are found to exercise a license working to the public injury. It should be as much the aim of those who seek for social betterment to rid the business world of crimes of cunning as to rid the entire body politic of crimes of violence. Great corporations exist only because they are created and safeguarded by our institutions; and it is therefore our right and our duty to see that they work in harmony with these institutions.

People can freely do business all they want. But a Corporate Charter exempts one from certain rules and taxes, and more importantly, liabilities (ie. RESPONSIBILITIES) - and it is, indeed a PRIVILEGE granted (and FAR too infrequently, revoked) by the government.

Shepard has one hundred sheep because...

[Toby The Economist]

...if even one goes missing, he spends ages searching for it.

IBM make so much money because they keep themselves efficient. If you stop doing that, you eventually stop making money. It's not reasonable to argue "we're doing well now, so we don't need to fire people". Anyways, since these are the people who are going to lose their jobs, you can know a priori their perception of the state of the company is biased; they'd be inhuman for it not to be.

Personally, my take in this is very simple; you enter into a contract with another person (a company, as it happens, in this case, which makes no difference) and either of you are free to behave as you like as long as you honour your contract.

It is improper for one individual to use extraordinary means (going on strike in this case) because they don't like what the other person is doing, when they've agreed to the contract between them.

--
Toby

Re:Shepard has one hundred sheep because...

[neil.pearce]

It is improper for one individual to use extraordinary means (going on strike in this case)

Where exactly are the extraordinary means here?
Their right to strike is enshrined by law, provided due ballots have taken place (which I believe is the case)

Re:Shepard has one hundred sheep because...

[chriso11]

A union essentially exists to obtain for its members pay and priviledges in excess of those warrented by the work they do.

Surprisingly, CEOs and other high-level execs don't seem to need a union to do that - they can get on average 419x as much as the average worker. And when they leave, they get a great deal (Carly F. got $21million to leave, after doing a crappy job at HP).

So don't lecture about how unions are unfair without acknowleging the whole system is unfair, and so a union is an approach by labor to gain leverage. Remember, the lowest guys on the rung are the easiest to push around.

/.ed

[jzeejunk]

looks like IBM paid the poster to slashdot union website.

Re:Oh yeah!

[IdleTime]

That is how it works in USA, but IBM is a registered company of UK too and they have to follow the laws of the country. UK, as all the rest of the European cuntries have laws that regulatre what a corporation can do when it comes to layoffs. You can't simply dump employees for no reason and this is a no reason.

Another Lying Statistic

[Anonymous Coward]

To say that "IBM is a wealthy company" with "$9 billion in profit in 2004 is completely misleading. What IBM made in absolute dollars is not really relevant.

Let's say I offer you an investment. If you give me $X, I'll give you $X + 100 a year from now. What a great deal - you are guaranteed a profit. How could you possibly turn that deal down?

Sure, it's great if X = 100. Then you'll make a 100% return in one year. Cool.

What if X = 1,000,000,000. You give me a billion today, and I'll give you 1,000,000,100 in a year. Suddenly it doesn't sound like such a good idea, does it?

IBM made about $4.87 per share last year. At the current share price ($76.51), that means IBM's return was about 6.4%. Not too shabby, but not really all that great when risk-adjusted.

In fact, IBM's share price has gotten RIPPED in the last few months. A year ago it was trading ~90, which gives us a return of only about 5.4% - not very impressive.

Sure, $9 billion seems like a lot, until you realize how much capital is being employed to generate that $9B. And how many shareholders need to divide that up. Shareholders like pension funds, university endowments, and widows and orphans.

I'm not saying the workers are wrong here, I'm just pointing out that it's completely fallacious to call IBM a "rich company" just because it made a large number of absolute dollars last year. That money comes from or goes to someone - to everyone who holds an indexed mutual fund, for example.

Re:And you were expecting what...

[PornMaster]

As someone who quit his job at HP today, I'm not sure if I'm suffering from prefrontal lobe issues and missed the sarcasm, or if you don't know how it is to work for HP these days...

Take a look at the insider stock trading !!!

[gelfling]

http://www.marketwatch.com/tools/quotes/insiders.a sp?symb=IBM&vc=0&siteid=mktw&dist=dropmenu

$13 million in the proceeds of a stock grant sale and options exercize to J. Bruce Harreld alone.

Bruce Harreld came from Boston Market several years ago where he also helped drive that company straight into the shitter.

Most IBM employees got no annual increase last year and variable pay e.g. bonuses which is what most people count on, were cut to the bone - average awards were half what they were the year before and about one fifth of the people got them. This year IBM suspended annual increases to executives but stock and other equity awards were not frozen. In the meantime the employees are bracing for another year of no increases and no variable pay. Simultaneously, benefits cost were increased about 15-20% to employees. Moreover any employees sitting on options that were awarded after 1998 have worthless paper - priced around $132 which is where the stock was headed in 1999 before it had its relentless crash since then ($76 as of today). And there is a strong push to force employees to work from home so IBM can sell their real estate. Employees are expected to give up one room of their house to for a home office and the reimbursement of their office supplies to the employee is now imputed income.

Re:Take a look at the insider stock trading !!!

[johansalk]

"$13 million in the proceeds of a stock grant sale and options exercize to J. Bruce Harreld alone. Bruce Harreld came from Boston Market several years ago where he also helped drive that company straight into the shitter."

The US is diseased and along this line may eventually be deceased. This is something that I had observed for a long time; a short-sighted corporate culture in the US that rewards executives for self-serving, soul-sucking practices. US company after US company are being driven into the shitter; the exceptions seem mainly those companies that are run by their founders or their family, but for those in which management is recruited, there's too often a streak of executives whose sole concern is their rewards during their term, and to hell with any hint of a future for the company or anyone else. The US will pay for this, as US company after US company will fold. Look at GM and Ford suffering now thanks to the shenanigans of the 1980s and since; you could develop products that people want and grow a viable business, or you could cook the books, sacking left and right, playing with numbers to show what you want, and too often US executives have chosen the latter. It's a shame for Ford and GM; they've done every henious thing, from addresses in the Cayman Islands to blaming unions and social responsibilities and lobbying washington, eventhough their competitors in Europe and Japan face bigger social responsibitilies and higher costs of doing business, yet their companies have prospered and are taking US carmakers to the cleaners, thanks to a stricter set of legal rules that forced their executives to focus on the essential and true ways of running a company. Warren Buffet, a man whose preferred holding period for a stock is "forever", has been yelling for a while now that executives need to be disciplined by a new set of rules encoded into law; and I wholeheartedly agree.

Re:Outsourcing

[Chris Y Taylor]

I'm not sure this would be considered "sad" by either IBM stockholders or Indians.

Do you expect them to pay more for the same work just to get people with the "right" nationality or ethnicity?

Info on the union web site.

[winkydink]

Does this look familiar? US union, Euopean issue. YEt another attempt by the CWA to organize industries that have little interest in unions.

Domain ID:D9294190-LROR
Domain Name:ALLIANCEIBM.ORG
Created On:20-Aug-1999 14:42:38 UTC
Last Updated On:15-Apr-2005 14:30:15 UTC
Expiration Date:20-Aug-2006 14:42:38 UTC
Sponsoring Registrar:Network Solutions LLC (R63-LROR)
Status:CLIENT TRANSFER PROHIBITED
Registrant ID:5621098-NSI
Registrant Name:Communications Workers of Amer
Registrant Organization:Communications Workers of Amer
Registrant Street1:Attn. Beth Allen
Registrant Street2:501 3rd Street NW
Registrant Street3:
Registrant City:Washington
Registrant State/Province:DC
Registrant Postal Code:20001
Registrant Country:US
Registrant Phone:+1.2024341000
Registrant Phone Ext.:
Registrant FAX:
Registrant FAX Ext.:
Registrant Email:ballen@cwa-union.org

Re:Info on the union web site.

[redbeard_ak]

The unions (multiple) in Europe are doing the striking. They are faced with these layoffs and are responding.

The IBM employees in this country that have joined CWA through Alliance@IBM (a grassroots group that _choose_ to affiliate with CWA) are simply supporting their fellow employees - at the very least by publicizing the strike. That is what workers in unions do - they help each other out. That's the point. To work together to make things better for everyone at the workplace, even in the industry. Instead, the parent chooses to throw stones. Nice guy.

s/on strike/wearing black and blue ties/1

[sparkz]

That is not a strike. A 10 minute break at lunchtime and wearing black-and-blue ties.

RTFM (strike-HOWTO-1.4.23, by N. Kinnock)

Mod up insightful

[geekee]

I just saw Roger and Me, a Michael Moore film where he criticizes GM for laying off workers in Flint Michigan. He starts the movie showing the place where the UAW had a major victory in the 30s, but didn't seem to see the connection between the union activity and the fact that the plant were being closed in Flint because Mexican workers will do the same job for much less. American and Eurpoean workers have been priced themselves out of the market. To continue receiving these exorbitant salaries, they need to be more productive than people who are willing to work for less.

Re:Mod up insightful

[Tom]

What an excellent strawman!

That's a great argument if you think shallow, it really is. I'm sure it convinces a lot of people.

Until, of course, you start realizing that the very same companies who don't want us "expensive" europeans as workers at the same time crave us as customers. Ironically, for the same reason - high income.

So, from a "tragedy of the commons" point of view, these companies - collectively, mind you, not individually - are destroying the very market they need to survive.

Unfortunately, we have quarterly statements and quarterly business reviews, and stock prices changing by the minute and second. If we would count in years and decades and estimate share values at similar intervals, a lot of things would change.

except IBM GS isn't putting money into employees

[cecirdr]

My spouse just left IBM global services. They've laid off so many people and had talented people opt to leave the company, that the folks who are left are *way* overutilized. Before she left, my partner was pulling 60 hour work weeks as the norm, while 70-80 were frequent. The endless round of meetings was taking it's toll since the folks who've been spared the ax aren't the doers. They're terrified to make a decision so they just waste time twirling and having meetings about the same issues over and over. They appear to be under the illusion they can keep doing the same old "nothing" every day and wake up one morning and somehow the work will magically have gotten done.

There may have been some dead wood in the company that needed to be culled, but quite a lot of those people are brown nosers who have figured out how to misrepresent their skills to managers who have no technical experience. Laying off massive amounts of people, hoping to cull these folks is like playing a shell game. It ain't working. It's demoralizing the employees that are left and the people with real talent are jumping ship...fed up with over work, pathetic management, endless meetings, and not enough talent left to actually implement designs.

So...if that's the results of appeasing stock holders here in the states, why in the world would you want to do the same thing in Europe? Yeah, there's a lot of peple just getting by; never really doing anything. But if management is not competent to figure that out and the en masse layoffs to get rid of them are failing and demoralizing...then you're possibly causing more harm than good by doing it.

IBM is too full of processes, too top heavy (duh as if y'all didn't know that already), and people are constanty job hopping in the company every year or two (or being restructured) with the result that no one know how the hell to do their job.

Let's see here...

[rewt66]

According to IBM's website, they have 319,273 employees. Laying off 15,000 would be 4.7% of their employment.

So, um, doesn't Intel lay off 5% of their employees every year? So why is it different when IBM does it?

Re:Europeans go on strike

[Aldric]

Agreed. Most Americans seem to feel resentful about Europeans because we don't let employers walk all over us. If a US corporation wants to have a branch in Europe, they have to deal with European work views. They don't get to import the US view of work your emplyees like slaves then fire them when they complain. IBM can either accept this or piss off back where they came from.

Re:Outsourcing

[Edward Faulkner]

IBM just wants to make it's profit even bigger. By employing Indian's and sacking European's, they are doing just that. Sad but true.

Sad if you're a European. Excellent if you're an Indian.

How should a poor country try to get richer? By building up skills and capital to attract industry, which is exactly what India has done. More power to them. TANSTAAFL.

I find it amusing that many self-avowed liberals decry economic inequality, but then they complain when the market starts to shift wealth away from their own rich countries.

Why you should care

[redbeard_ak]

Any tech worker, employed or not, should care when 13,000 tech workers get laid off. No, I'm not talking about moral sympathy, I'm talking plain old self-interest.

Because 13,000 more unemployed will be 13,000 more competing for what open jobs there are. Knowing that there are 13,000 more desperate workers, companies will adjust the salaries they offer at whatever openings there are.

Furthermore, the same amount of work, or more, is going to be done at IBM Europe (unless they are closing a division, which I'm not aware of in this case). That means the standard job at IBM will either be that more intense or require more of that wonderful unpaid overtime. That also changes the job market, as other companies will begin to expect that same work load out of you.

Even if you work over here, as I do, better believe that conditions in other countries effect the job market here. Can you say India?

It's the prisoner's dilema. Remember your game theory? You succeed together, or you both fail. That's what the job market does when it's moved by the invisible hand job. Said invisible hand job being the result of decisions like these by IBM management.

Re:Flawed Logic and More

[MemoryDragon]

Actually unions are important, otherwise we will run again into manchester capitalism at its worst, but the main problem is that unions used to be effective, but are not anymore because they only act on a local scale, they need to act globally nowadays, companies do, unions do not. A local strike only causes a laughter, a global strike really could hurt.

Absolute numbers

[vlad_petric]

Sure, IBM has made a profit of 9 billion, with a global workforce that's estimated at around 300K

By comparison Google had a gross profit of 1.73B last quarter, with a couple thousand employees.

While IBM is doing fine, it's NOT very efficient these days.

Re:Europeans go on strike

[ctr2sprt]

No, it's not difficult. The way I see it is as an alternate form of compensation. When the government doesn't mandate vacation days, you, as an employee, can negotiate with a prospective employer to get something that you both think is fair. For example, you can agree to get one less week a year of vacation time in exchange for a slightly higher salary. If the employer doesn't agree, then you go find one who will.

Believe it or not, most people do not take jobs based simply on salary. They consider the benefits package, location, and a host of other factors. It's very common - in the States anyway - for someone to take a lower-paying job because it doesn't require him to move or because it has a better health insurance program. The employee says, "It'll cost me $X to move and get insurance on my own, and that's more than the amount I'm 'losing' by taking the lower-paying job. So this is the best job to take."

It helps out the employee by letting him choose the best job for his unique situation; it helps the employer by giving it the freedom to offer the package it can afford. Thus people who are maybe "marginal" applicants can get jobs where otherwise they couldn't (because nobody could afford to take a chance on them). That's how I got my job. No severance package, retirement, or anything else, but in exchange I got a job, with zero experience, that usually needs five years of experience.

Note that I'm not saying our way is better than the European way. But many Europeans don't seem to understand that there are some advantages to the free(r)-market approach, and I wanted to explain some of them.

Re:US company / Euopean strike

[grahamsz]

Hmmm i moved from the UK to the US (with the same company) and didn't notice much difference in my paid vacation.

In the UK i got 30 days + xmas and new year

In the US i get 16 days + MLK Day + Memorial Day + Presidents Day + Independence Day + Day after Independence day + Labor day + Thankgiving + Day after thanksgiving + 5 days for xmas and new year.

UK Total 32 days
US Total 29 days

Plus once i hit 8 years of service i'll get another week, bringing the us total to 34.

Now i rather the european model of not giving you pointless days here and there, and actually giving you enough to take a 1 month break every year... but that's just me.

May not be the same everywhere but i'm looking at another US company that's going to offer me 30 total.

Re:Outsourcing

[MasterOfUniverse]

The problem is that its not the case that rich people in wealthy nations are losing thier jobs. Its the middle class people. So basically total sum of poor people still remains the same. They are just getting transfered from india to europe. So who does it benefit? ofcourse the very few rich folks who owns these corporations. Face it, middle class folks does not own millions of dollars of stocks. Its the very few rich people. Globalization is suppose to help everybody. It is suppose to create jobs. But globalization is only helping very rich to move jobs of the middle class very easily. But whats happening is that the middle class people are sacrifising. And just wait few years, when they find more cheaper countries than india/china, they will just move thier.

ps: I'm an indian.

It's called a Standard of Living

[Urusai]

I don't want to live like a Mexican peasant in a maquiladora. Neither does he; he would rather live like an American. We will BOTH be forced to enjoy the peasant lifestyle if wealth becomes too polarized, and that's what's happening. The rich are only rich at the sufferance of a populace that either cannot or will not give up its wealth to them. Democracy is the great pacifier in this regard. However, with the present oligarchical manipulation of democracy, it is failing.

Rich people tend to use their money to take money from other people (consolidation of wealth), and fundamentally this activity is antisocial and evil. Disguising it in layers of Adam Smith pie-in-the-sky theories about invisible hands and shareholders' value doesn't justify activities that harm many for the benefit of few.

Geez, these bleeding heart conservatives...

Management/Employee Relations

[cmholm]

All unions do today is drive a wedge between employees and management.

This is a classic anti-union argument, and can be quote verbatum back to the "robber barron" days of the late 1800s. On its face, it assumes that the union leadership dictates, and the rank-and-file follow like sheep, being too stupid to consider their "best" interests. If true, then one might as well eliminate the middle man since management is already perfectly capable of dictating.

On the other hand, it just might be that the rank-and-file are as capable of recognizing their best interests as a stock market is at allocating capital resources.... that is to say, usually they can, occasionally they lack 20/20 vision to think through new circumstances, and sometimes a small clique can fool everyone for a while.

Circumstances since the end of the Cold War shows that you can only count on management (and stockholders) to look after their own interests. Now that there's not even the mirage of "another way", w/in the US at least quite a few of them seem to feel that putting the screws to their employees isn't only possible, it's a mandate from the Almighty.

I'm sure that a portion of the labor pool doesn't want to work in a union shop. The size of that portion is difficult to assertain, given the tread towards smaller work sites (you're easier to single out) and legal roadblocks (in legislatures, executive branches, and courts).

Equity Strike

[Doc Ruby]

Their union should invest their pension plan in mutual funds that own IBM stock. Then they'd be owners, and the company might listen to them. Especially if firing them meant they might dump all their shares, sending IBM's price down. That would, of course, hurt the union, but the union would be diversified through the different funds, multiplying their power by joining with all the other owners, too. Labor strike brinksmanship would change to equity strike brinksmanship. And actually be based in laws and economics the corporation can't really ignore.

unethical my ass

[EccentricAnomaly]

when you are making $9 billion in profit a year it is bloody unethical to lay off the people who help make that profit

It isn't unethical if those people are just free riders. What if that $9 billion in profit was mostly because of the work of the people who didn't get laid off?? Is it ethical to to keep on extra people who aren't really contributing to that profit at the expense of those who are doing the hard work??

If those people who are laid off were contributing to that profit, I'd expect to see IBM's profits to go down in the long term. If they weren't I'd expect the profits to go up. We can wait and see what happens and find out if IBM is making a mistake... but either way they aren't being unethical.

I know what it's like to work with dead wood. And I think it's perfectly fine to get rid of the dead wood. Now, some of those laid off are probably not dead wood, but they can get another job (maybe even with IBM). Skilled, hard working people are always very hard to find.

What is unethical is how so many people think a job is an entitlement and drive whole companies under with their selfishness. When whole divisions fail, it's because of a pervasive culture of this selfishness. It's because of free rider leeches who do nothing but enrich themselves at the expense of the common good.

(bracing for negative mods... but please look up what troll and flamebait really mean before hammering away at my rant)

Sympathy doesn't mean IBM is wrong

[Mr. Underbridge]

I think some sympathy is in order for these folks.

Yes, sympathy is justified. And I say this as my brother in law was just laid off. But just because we feel sorry for them - and I do - doesn't mean IBM is wrong to let them go. The unionists point to the fact that IBM is making a profit to justify their jobs. But that's irrelevant - should IBM wait until they're in the red overall to reduce their payroll? Is the situation of the overall company more important than individual divisions? What if IBM is okay but they have a division hemhorraging money? Can they get rid of that division or not?

Bottom line, there comes a time when a company needs to change direction, and unfortunately that means bad things for people. And yes, we should feel sorry for them. And yes, IBM should provide them with decent severance. But it doesn't mean that IBM has to keep them on forever.

there's a limit to cutting executive salaries

[EccentricAnomaly]

There is definitely a pervasive looter mentality in corporate boardrooms in setting these outrageous salaries... these salaries are for the most part too high. However, barring the current abuses, good leaders should make a lot more than most other employees. There is a severe shortage of them, and they can increase profits by way more than they're paid.

Just look at Apple pre Steve Jobs vs. post Jobs. How much was his leadership worth? Apple's massively turned things around... not only protecting the jobs it had, but adding tons of new ones around the world.

Of course, since they're on such a hiring binge now they surely are not always hiring the best people... and they will probably lay off a lot of people as soon as their growth slows enough to let them do so. If such layoffs are unethical, they should not be hiring people that they don't plan on keeping around... but that sort of wrong-headed ethic would be bad for Apple and bad for the people who are going to get laid off (they wouldn't have a job right now).

Re:Europeans go on strike

[dcam]

This assumes that you are bargaining from a position of equal strength. While this might certainly be the case, I think that more often than not the employee is at a disadvantage.

US is low-tax compared to EU

[BreadMan]

Here's an cite (you may need to watch a ad) for this claim. This is % of GDP taken by taxes, thus avoiding the corporate/sales/income tax shell game.

From the article:

The average tax burden throughout the OECD was 37% of GDP in 1998. In the European Union it was 41.3%, whereas in America it was 28.9%. Sweden takes the prize for the highest tax burden in 1999, at 52.1%.

The data's a bit old, but I don't think things have changed that much since the survey.

Re:Ok, wait a minute...

[Lemmy Caution]

What should happen is that you should have to compete with people willing to work for a fraction of your income, and then the market will decide that you are overpaid.

That's the scenario we are moving to: a few very wealthy executives in the first world essentially making money off of work done by people in the third world. You think that CEO's who are making in the low 7 digits aren't getting paid enough, and that Europeans getting paid in the mid-5 digits are overpaid. I thik this suggests a kind of fascination with authority and power that has distorted any sense of fairness, or any idea that economics should serve people, not vice-versa.

Re:Ok, wait a minute...

[Lemmy Caution]

Don't be disingenuous. There is a real prescriptive aspect to economics, as well as the analytic one. The prescriptive one is the one that treats people as both completely rational and completely instrumental: as both agents and resources, and advocates for political choices based on the optimization of certain statistics. The term "standard of living" is just one of those statistics, since often, in practice, it relies on some standard of gross productivity over lifetime, or gross income.

There's nothing wrong with efficiency, but turning efficiency into an end rather than a means is part of the pathology of the modern.

No shame anymore

[pkphilip]

At one time not so long ago companies took pride in not laying off people. The boast was that X company hasn't laid off a single work in so many decades.

Management tried not to layoff people as much as possible because laying off people was seen as a shameful thing to do - an admission of failure on the part of the management to run the company profitably.

To avoid this loss of face, companies resorted to cutting management pay, selling assets and so on. The moment a company announced a layoff, it would appear all over the papers - the market will see it as a sign that the company is down in the dumps.. analysts would rate the company down.

But now the situation has completely reversed. When a company announces huge layoffs, analysts actually rate the company higher. Also, the management will now gloat about how they have "streamlined" operations.. cut of the extra "fat".. become "lean and mean".. etc.. The implication is always that the layoffs were a smart thing to do.

There is no shame anymore..no accountability on the part of the management. The fact that thousands just lost their jobs because the business strategies framed by the suits came up a cropper does not seem to fill the management with a sense of shame or remorse. Fact is, after a round of layoffs, the executives might even give themselves a pay hike!! They will also announce proudly about how they have "increased" their profitability and worked on the "bottomline".

It is quite sad. There is very little honour anymore.

Humbug

[DABANSHEE]

The US is full of hidden local & state taxes that can really addd up, that of course never get counted because they're not universal nation wide. Do any sort of transaction in the US & it always worked out higher than the agreed price because all of a sudden these state 'n county fees, surcharges & taxes pop up from nowhere. Even things like a county road surcharge & a state emissions surcharged added to cab fares in some places. Then there's the local land taxes to fund local public schools (that can vary by a huge degree between even 2 neihbouring satalite towns with similar socio-economic mixes), where as in the rest of the world public schools are mostly simply funded directly from consilidated revenue of the national treasury.

Ontop of which employers in the US have to pay for the employees healthcare insurance, in a country with the highest health costs in the world, both per capita & as a percentage of GDP, both by a significant margin than anywhere else too. Where as in much of Europe employees healthcare is covered again by consilidated revenue of the national treasury.