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IBM employees challenge outsourcing, retiree issues at IBM annual meeting
April 27, 2004
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Providence, R.I.-- Employees of IBM Corp., who are members of the Alliance@IBM, CWA Local 1701, have a sharp message for management that they will deliver at the IBM annual meeting today.

Alliance members will leaflet shareholders as they arrive and address the meeting on key shareholder proposals.  Following the meeting, they will join members of the Programmers Guild, Jobs with Justice and other union supporters in a rally opposing the offshoring of American jobs by U.S. high tech companies.  The rally will be held outside the rotunda entrance to the Rhode Island Convention Center, beginning around 11:30 a.m.

There are two critical issues for IBM employees and former employees -- the loss of jobs through IBM's increased focus on outsourcing and cost cutting that has hit retirees hard, according to Lee Conrad, National Coordinator for the Alliance.

"IBM has admitted that thousands of jobs are being sent offshore to India, China, Brazil and other countries, with plans to increase this outsourcing,” says Conrad. “This raises serious concerns about the long term job prospects for workers in the United States and also about the need to ensure that customers have the quality service they expect to receive from IBM."

He cited the decision by Dell Inc., which recently announced it was shifting some of its corporate customer service work back to the United States from India, to address a huge volume of customer complaints.

One of the proposals that shareholders will address, calls for a special review of IBM's executive compensation policies to determine whether they create an undue incentive to make short-sighted decisions -- including an over-reliance of offshore employees -- by linking the compensation of senior executives to measures of performance that include net earnings, cash flow and earnings per share.

That proposal, submitted by James J. Mangi, Alliance Secretary, was initially rejected by IBM, however, the Securities & Exchange Commission then determined that shareholders should have the opportunity to discuss the issue.

The demonstrations also will focus attention on the crisis that IBM retirees are facing. 

"The people who built this company are taking the brunt of IBM's cost cutting moves as company executives enrich themselves.  Retirees have had no cost-of-living increases in their pension checks for many years.  Meanwhile, the out-of-pocket costs and medical co-pays that retirees must pay are eating away at what little money they now receive," says Conrad.

IBM retirees were hit with a health care premium increase of 29 percent in 2003 and a whopping 67 percent in 2002, the Wall Street Journal reported on March 16, 2004.  And IBM, like other companies, will get a subsidy from the federal government under the Medicare program, even if it transfers even more costs to retirees.

The Alliance also is urging shareholders to support resolutions on full disclosure of executive officer compensation, on providing to retirees the pension and retiree health care choice available to workers before IBM adopted changes in 1995 and 1999 and to exclude pension income from the calculation of executive compensation.

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