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New
IBM CEO continues
Lou Gerstners’ policies of greed
03/23/2004
by John R. Kotson,
IBM Retiree and former IBM Manager
This
week Lou Gerstner announced he will step down as IBM board chairman at
this years end. Lou leaves with a huge fortune accumulated at the expense
of the thousands of people who built the IBM Empire. His hand picked successor,
IBM CEO Sam Palmisano appears poised to continue the corporate policies
of greed established by his mentor.
This
legacy of greed seems to be spreading all over the once great company.
The Mainichi Daily News (Japan) and the Dow Jones Business News report
that IBM Japan was forced to pay 1.5 billion yen in penalties and taxes
for cooking the books in an income-hiding scheme. This is strange since
IBM certified its 2001 financial report as being true and accurate to
the Securities Exchange Commission (SEC) in August.
The
Wall Street Journal reports that IBM’s pension fund has dropped from the
8th best funded plan at the end of 2000 to 344th
out of the 346 pension paying firms in the S&P 500 at the end of 2002.
An $11.2 billion surplus that existed at the end of 2000 has disappeared.
According to CNBC analysts, IBM must contribute $1.5 billion to the fund
to meet Government mandated minimum funding levels. This will be the first
contribution to the fund in 8 years.
IBM
is desperately looking for ways to make the profit statements look good
to investors. Even though the pension fund was losing money at a record
rate, IBM reported more than $1.4 billion in pension plan profits in 2001
pretax earnings according to the Washington Post. This vapor profit is
allowable under distorted Federal Accounting Standards Board rules and
is used in computing executive performance bonuses.
The
sell-off of large chunks of the corporation continues. IBM announced the
sale of nearly 13000 employees in the Data Storage Division to Hitachi.
These employees are not allowed to look for other jobs in IBM and they
have been told nothing about salary structures, benefits and if they will
retain their jobs with the new company.
IBM
has also announced the closing of its hard disk drive company in Hungary.
This will result in the loss of up to 3700 high tech jobs in the fledgling
democracy as reported by BBC News. Also, IBM has announced the closing
of its Mainz, Germany plant, once the largest manufacturer of computers
in Europe. This will result in the loss of 2000 jobs. Not exactly the
type of actions expected of a good corporate citizen.
Next
year, the cost of the promised free lifetime medical benefits for retirees
and their spouses will more than double for both premiums and deductibles.
Most retirees are finding the premiums totally unaffordable since there
has only been one small pension increase in 11 years. Since the details
of retiree medical expenses are not available to the public, no one knows
how much of these expenses are actually paid by IBM.
When
will this greed end? It will only end when President Bush appoints an
SEC chairman who has the integrity to end Corporate corruption and establishes
an effective Accounting Oversight Board that is mandated by law. It will
end when President Bush pushes legislation through Congress to back up
his statements at the New York Stock Exchange: corporate accounting reforms;
punishment for corrupt executives; independence between corporate boards
and executives; and expensing of stock options in profit statements. And
it will only end when our Congressional representatives quit political
mudslinging and begin to address the problems that the workers and retirees
of this country are facing.
John
R Kotson, 2227 Sunstone Drive, Fort Collins, Co. 80525
970-229-9352,
E-mail; jrkotson@yahoo.com
Originally
published in the Boulder Daily Camera
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