NY Assemblyman demands investigation into IBM job cuts

Date: Tuesday, March 31, 2009 3:49 PM

<<<<< JOB DESTRUCTION NEWSLETTER No. 1997 -- 3/31/2009 >>>>>

State Assemblyman Gregory Ball is calling for an investigation into IBM for
offshoring jobs while at the same time taking taxpayer dollars from the
Stimulus Bill.

Before we get all excited about what Ball is calling for, let's think this
thing through first.

One of the big criticisms of Obama's Stimulus Bill is that it allows companies
to offshore jobs and to hire H-1Bs to do jobs domestically. It also turns a
blind eye to hiring illegal aliens. If Ball can prove IBM is engaging in this
type of federally approved behavior then what? The answer is "absolutely
nothing"!

The New York State Assembly has no jurisdiction over the federal government so
it's very doubtful Ball could do anything about Stimulus money going to India.
So what about state money? I'm not aware of any legislation in New York that
would help him on that one either.

"If they re taking New York state taxpayer dollars while it was
their intent all along to offshore these jobs, then those
dollars need to be returned," Ball said. "And we need to find
every means possible at our disposal to get that money back."

Ball also made the following statement that probably could use a reality
check. Small and medium sized businesses can offshore, outsource, and hire H-
1Bs also. They also tend to hire more illegal aliens. Focusing on corporations
like IBM is just going to allow the smaller wolves in the pack to go hunting.

"This is exactly why we should be focusing our energies on
supporting small and medium enterprises, small business
owners," he said, "instead of subsidizing large multinational
corporations with global reach, especially those with a
proactive offshoring plan, like IBM."

Looks like NEW YORK got snookered for a cool $1.5 billion. Fishkill is one of
the places that IBM is firing people.

Last July, New York said that it would provide $140 million
in grants to IBM, which in turn was investing $1.5 billion
to create 1,000 new jobs in nanotechnology. The agreement
also included $65 million in provisions to help IBM retain
jobs at its East Fishkill plant in Dutchess County, an area
also represented by Ball.

The news on the state level isn't good for Ball either. Even if NY taxpayer
dollars are being offshored to India he is unlikely to prove it, and even if
he could prove it, there is nothing he is going to be able to do about it. New
York, like many other states, has talked about offshoring restrictions for a
long time. In 2004 "Assembly Bill 9567" would prohibit business entities from
offshoring if they receive certain types of state assistance relating to
economic development (there are loopholes of course, and it didn't pass). More
recently some bills have been introduced to the assembly such as A04250.
Unfortunately there is no legislation that has passed that Ball can use to
make his case against IBM.

You can read about 4250 by going to the following webpage:

http://assembly.state.ny.us/leg/?bn=A04250

Scrolling down the page you will start to get the picture on that bill -- it's
the same one that has been bandied about since 2004. So, the bottom line is
that after 5 years of bloviating, New York has done nothing to stop
outsourcing!

PRIOR LEGISLATIVE HISTORY : A.11682 (2004 - Passed Assembly);
A.1213 (2005-06) A.1022 (2007-2008).

Don't get me wrong, I would love to see an investigation of IBM, if for any
other reason we might find out some juicy stuff to be angry about. Besides,
it's lots of fun to see rich CEOs in hearings. Of course at a state level
hearing about the highest level executive IBM would send would probably be VP.
If a House Representative and a Senator couldn't get Microsoft to give out
similar information (Sanders and Grassley), don't expect a state Assemblyman
to get anywhere with IBM.

Basically the best case scenario we could expect is for the New York Assembly
to give us a dog and pony show with lots of outrage and populism.
It would be more of a circus than the Senate banking hearings. If a hearing
does occur, expect IBM to give them the middle finger.

Since I'm all in favor of good theater over just boring reality TV, I
recommend all of you in New York to contact Ball other members of the assembly
to encourage them. It might make unemployed IBMers feel better if a hearing is
held. Here is Ball's website:

http://assembly.state.ny.us/mem/?ad=099

Speaking of reality checks, try this one on:

Martin Kenney, a professor of political economy at the University of
California, Davis, says IBM is likely facing new financial pressures
as large banks and financial firms -- some of its largest clients
-- continue to struggle. "IBM is looking at its cost structure and
making rational business decisions on what to do," Kenney says. "In
a recession you start to get rid of high-cost people where you can."

REFERENCES:

http://www.recordonline.com/apps/pbcs.dll/article?AID=/20090326/BIZ/90326058
Assemblyman demands investigation into IBM job cuts

http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9130639&intsrc=news_ts_head
IBM layoffs raise ire in N.Y. State Assembly

http://www.toptechnews.com/news/IBM-Cuts-Jobs--Seeks-Stimulus-Money/story.xhtml?story_id=13000DBKYZLG
IBM Cuts Jobs as It Seeks Stimulus Money

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://www.recordonline.com/apps/pbcs.dll/article?AID=/20090326/BIZ/90326058

Assemblyman demands investigation into IBM job cuts Outsourcing of jobs to
India raises red flags, he says By Christine Young Times Herald-Record March
26, 2009 5:02 PM Assemblyman Gregory Ball is demanding a state investigation
into IBM offshoring practices while taking taxpayer dollars.

A few minutes ago, Ball, R-Patterson, said he was drafting a letter to
Chairman Richard Brodsky of the Committee on Corporations, Authorities and
Commissions to request bipartisan hearings on the matter.

"IBM seems to have a long-term approach to outsourcing," Ball said, "and my
fear is they re actually using taxpayer funds to subsidize offshoring good-
paying American jobs."

IBM did not reply to e-mails requesting comment.

Ball is particularly disturbed by the $45 million Empire State Development
Corporation paid IBM on Dec. 15 in return for not cutting jobs in East
Fishkill in 2008. Only weeks after cashing the check, IBM slashed hundreds of
East Fishkill workers.

"If they re taking New York state taxpayer dollars while it was their intent
all along to offshore these jobs, then those dollars need to be returned,"
Ball said. "And we need to find every means possible at our disposal to get
that money back."

Ball is also concerned about IBM s treatment of terminated workers over age
65.

V. Gordon Sears, 68, was dismissed from IBM in February after 40 years. His
separation package stated he would receive 26 weeks of severance and one year
of subsidized medical coverage, paying the same rate as when he was an active
employee.

But Sears later learned that fired workers 65 and older would pay a much
higher monthly premium and receive less coverage than those under 65. IBM
forces the older workers to make Medicare their primary provider while
refusing to pay the one-year subsidy.

"I pay $135 a month versus the $38 I was paying before," Sears said. "That
doesn t match up. Not only that, but my coverage is nothing. I have to run up
$750 in bills out of of pocket before they ll pay a dime."

"They re once again breaking their trust with the community and not providing
basic coverage to those 65 or older," Ball said. "The New York Attorney
General needs to do a thorough investigation of the millions of dollars that
have been handed to IBM."

Ball said Big Blue behavior highlights the need for reform.

"This is exactly why we should be focusing our energies on supporting small
and medium enterprises, small business owners," he said, "instead of
subsidizing large multinational corporations with global reach, especially
those with a proactive offshoring plan, like IBM."

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9130639&intsrc=news_ts_head

IBM layoffs raise ire in N.Y. State Assembly Fallout from the job cuts spread
over social networks Patrick Thibodeau March 26, 2009 (Computerworld) Social
network Twitter and message boards brought the fallout of IBM's layoffs on
Thursday to life, as employees posted the news about their job losses in real
time.

But there was political reaction as well. A state Assembly member questioned
how a company that receives taxpayer assistance can also cut employees and
move jobs overseas.

New York State Assemblyman Greg Ball, a Republican whose district includes
IBM's home county of Westchester, called for a legislative hearing to look
into IBM's layoffs in light of the state's multimillion-dollar investments to
help the company.

"My fear is that IBM has planned to offshore large portions of [its] business
and meanwhile [is] accepting taxpayer dollars under a guise of keeping those
positions here," Ball said in an interview. "And if that's the case, then
those dollars should be returned."

IBM officials could not immediately be reached for comment.

Last July, New York said that it would provide $140 million in grants to IBM,
which in turn was investing $1.5 billion to create 1,000 new jobs in
nanotechnology. The agreement also included $65 million in provisions to help
IBM retain jobs at its East Fishkill plant in Dutchess County, an area also
represented by Ball.

IBM confirmed its job action but declined to provide any detail about how many
employees were affected or where they were located. The Alliance@IBM, which
was expecting between 4,000 and 5,000 layoffs, said by Thursday evening that
it had counted 3,251 workers who had been laid off and given a severance
package.

The union believes that IBM is shifting jobs overseas. One IBM employee, who
wished to remain anonymous, said managers were vague about the reason for the
layoffs, citing the economy generally. "All I am hearing is they have to make
hard decisions based on the economy," the employee said. But the employee also
pointed out that IBM's services unit was doing well and making a profit --
something the company has cited in its financial reports.

Ron Hira , an assistant professor of public policy at the Rochester Institute
of Technology and author of Outsourcing America, said IBM has spelled out a
plan to shift jobs to India and "they are executing on it:
Jettison high-cost workers in the U.S. and substitute them for workers in low-
cost countries like India."

IBM's offshoring could also raise questions about projects funded under the
government's massive stimulus plan. "If policymakers want to create jobs with
taxpayer dollars, then they ought to ensure this creates jobs in the U.S. and
not in India or other countries," said Hira. "IBM is clearly trying to hide
the fact that stimulus dollars it receives will actually create jobs overseas
rather than here in America."

On a union message board, layoff news was shared.

"I just [received a] call from my manager and got 30-day notice. ... Good luck
to all," wrote one, anonymously. There were messages on Twitter as well, with
one person lamenting how he wished he hadn't turned on his cell phone to hear
the bad news. Another asked people on Twitter to re-tweet news of his layoff.

Like others, he is now looking for a job.

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://www.toptechnews.com/news/IBM-Cuts-Jobs--Seeks-Stimulus-Money/story.xhtml?story_id=13000DBKYZLG

IBM Cuts Jobs as It Seeks Stimulus Money

By Moira Herbst

March 27, 2009 7:11AM

Digg It! Bookmark to del.icio.us

Big Blue's efforts to trim costs by sending work overseas are not new. For
several years it has been working to improve efficiency through computer
automation, business-process optimization, and job transfers from expensive
locations to offshore. CEO Sam Palmisano said those plans are part of an
effort to make IBM a "globally integrated enterprise."

Reports of deep job cuts at International Business Machines come at a

potentially delicate time for the company -- just as it is hoping to secure
money from the federal stimulus package. The company will lay off as many as
5,000 U.S. workers in its Global Business Services unit, transferring some of
the work they performed to India, according to media reports.
IBM spokesman Mike Fay declined to confirm or to comment on any job-cut
plans, which were reported on Mar. 25 by The Wall Street Journal and Bloomberg
News. The cuts will affect mainly information technology and consulting work
in such areas as customer relations management and supply chain management,
says Lee Conrad, national coordinator of Alliance@IBM, a group that is seeking
union representation at IBM and is allied with the Communications Workers of
America Local 1701.

Any job transfers IBM may make to India would occur at a sensitive time, as
the recession deepens and as the U.S. unemployment rate climbs. Moreover, the
company would be cutting high-skill positions domestically as it and others
jockey for new business from the $787 billion stimulus package Congress
enacted in February -- primarily to help create U.S. jobs.

Workers Ignited

The news -- even without IBM saying anything -- provoked criticism from worker
groups. "It's all about greed," Conrad said Wednesday. "They're moving work
offshore to pay lower wages and lower taxes. IBM shouldn't have their hands on
stimulus money if they're offshoring work." Alliance@IBM has been trying to
organize IBM employees since 1999. It has 350 dues-paying members at IBM and
5,500 supporters, workers who have registered on the group's Web site but do
not pay the $10 monthly dues.

Big Blue's efforts to trim costs by sending work overseas are not new. For
several years the company has been working to improve its efficiency through a
combination of computer automation, business-process optimization, and job
transfers from expensive locations to offshore. Chief Executive Sam Palmisano
has said those plans are part of an effort to make IBM a "globally integrated
enterprise ." Since 2003, the Armonk [N.Y.] company has hired approximately
90,000 people in India and more than 5,000 in Brazil to do IT and business-
process outsourcing [BPO] services work.

In the meantime, the company has trimmed its U.S. workforce. According to its
annual report, IBM had 398,000 workers worldwide at the end of 2008, up from
386,558 at the end of 2007. At the same time, U.S. employment has declined, to
115,000 at the end of 2008, compared with 121,000 a year earlier.

By Moira Herbst
March 27, 2009 7:11AM

Big Blue's efforts to trim costs by sending work overseas are not new. For
several years it has been working to improve efficiency through computer
automation, business-process optimization, and job transfers from expensive
locations to offshore. CEO Sam Palmisano said those plans are part of an
effort to make IBM a "globally integrated enterprise."

Currently, 29 percent of IBM's workforce is in the U.S., down from 35 percent
in 2006. The fact that IBM has built up large workforces in such low-cost
countries as India allows it to shift work abroad more easily, says Ron Hira,
assistant professor of public policy at the Rochester Institute of Technology.
He says the current economic climate allows IBM to position itself as one of
many firms squeezed by the recession and forced into layoffs. IBM "can now
blame the layoffs on the economy, masking the reality that it is offshoring
high-wage, high-tech jobs to low-cost countries," says Hira.

Martin Kenney, a professor of political economy at the University of
California, Davis, says IBM is likely facing new financial pressures as large
banks and financial firms -- some of its largest clients -- continue to
struggle. "IBM is looking at its cost structure and making rational business
decisions on what to do," Kenney says. "In a recession you start to get rid of
high-cost people where you can."

But while offshoring has been on the rise for decades, the economics of the
recession are creating a new political climate that makes such moves more
controversial. That's because, as IBM and others continue global
restructuring, they're working to secure pieces of the $787 billion stimulus
measure enacted in February.

IBM is seeking a share of the $8 billion the U.S. plans to spend on high-speed
rail and part of the $20 billion in the stimulus plan to digitize the U.S.
health-care system. Palmisano was one of 13 executives who met with President
Barack Obama in January in an appearance aimed at pressuring the House of
Representatives to pass the economic stimulus bill.
He joined the CEOs of Xerox, Motorola, and Google.

Kenney says the political climate may make IBM's global restructuring touch
raw nerves. Some economists have estimated that taxpayers are paying an
average of $225,000 for each job created in the economic stimulus package.
Says Kenney: "Taxpayers are saying, 'I don't want to give them money if
they're moving jobs offshore.'"

- - - - - - - - - - - - - - - - - - - - - - - - - - - - Newsletter Homepage:
http://www.JobDestruction.com/shameh1b/JobDestructionNews.htm

Support this Newsletter and www.JobDestruction.com by donating:
www.zazona.com/Donations.htm

To Be removed from this mailing list, reply to this email with UNSUbSCRIBE in
the subject window

Back to archives