IBM Hides the Bodies, Eyes US Government Billions 410
theodp writes "As his company was striving to hide the bodies of its laid-off North American workers, IBM CEO Sam Palmisano stood beside President Barack Obama and waxed patriotic: 'We need to reignite growth in our country,' Palmisano said. 'We need to undertake projects that actually will create jobs.' While Sam positions IBM to get a slice of the $825 billion stimulus pie, Big Blue is quietly cutting thousands of jobs and refusing to release the numbers or locations, arguing that SEC disclosure rules don't apply since the US job cuts are immaterial in its big global picture. The layoffs included hundreds in East Fishkill, coming early in the year after NY taxpayers paid IBM $45 million not to cut additional jobs in East Fishkill in 2008. Some are questioning whether IBM incentives are worth the cost."
Time to tighten our belts (Score:5, Insightful)
It is far better to cut off a dying limb than to have the infection seep back into the whole body.
If the division was in such a pathetic state that the state had to beg IBM not to cut it in good times, is it any surprise that IBM decided to cut it in the bad times?
Business isn't charity, no matter what those enlightened European [timesonline.co.uk] countries may believe.
sharks circling (Score:5, Insightful)
Mini Ask /. (Score:1, Insightful)
Rather than tell you my background etc. I'll leave this as a blank slate: /.'ers what are good jobs to be in at these times?
Or maybe I'll reword it ... What are good skills to have at these times?
Re:Time to tighten our belts (Score:5, Insightful)
No, no it really isn't.
But I really don't see the point of the government giving international corporations like IBM money. I'd wager a bet that with those 45 million they could have helped the laid off workers for more and longer than giving it to IBM.
Same with GM. I have no idea how much your government spent on... 'that', but I just know that with one billion dollars you can give 20'000 people 50'000 dollars, each. I'm just asking myself whether rerouting such money directly into the pockets of those laid off wouldn't make more sense. Give them the opportunity to not worry too much for a year, get some additional education and try elsewhere.
Re:Mini Ask /. (Score:3, Insightful)
"what are good jobs to be in at these times?"
In a good future (defined as long recession, possible, but liveable depression): property & business lawyers, accountants, small time tradesmen like electricians and plumbers, government workers in countries where governments are still working, nurses.
In a bad future (defined as Mad Max-style Fallout 3 depression): outlaw motorcycle club sergeant-at-arms, Marine Corps platoon leader, gang leader.
"What are good skills to have at these times?"
In a good future: whatever skills are good now and have been in the past. This runs the gamut from liberal arts like history and philosophy to technical streams like programming, basic accounting, mathematics, etc.
In a bad future: social skills, electrical engineering skills (electronics, electrical repair, solar and other home energy tech, communications), animal husbandry, combat shooting skills, gunsmithing/mech eng/chemistry or chem eng for both ammo production, but also other areas like water and sanitation, farming.
...and might I add: (Score:0, Insightful)
1. There is nothing evil about having made money. Ask George Soros who has billions.
2. IBM is a privately held company, not a government entitity. If they want to buy a jet or rework a division or two, that's (literally) their business, and not the business of Congress, or the president, no matter who he is.
3. Sending money to Washington: not a smart way to create jobs. History shows that.
But never mind that. We've been sane a long while, and change will be good!
Re:Time to tighten our belts (Score:5, Insightful)
Uh, wait, you're calling Italy enlightened, even in sarcasm? The country with a government so far-right nationalistic that it's flirting with a return to fascism?
I mean, I'm not sure where you're from, exactly, but seems beyond belief that you'd lump them in with the mid-left 'enlightened' northerners. Perhaps you should consider breaking the continent down into slightly smaller slices.
Re:No, they're not *really* questioning it (Score:5, Insightful)
Are you honestly suggesting that duly-elected officials in this fine Christian nation would even consider putting corporate interests over the welfare of those they represent, should the two come into conflict?
More proof that executives don't do shit. (Score:5, Insightful)
Did you ever think that these huge corporations would perform just as well, or even better, if top executives didn't exist, or just never did anything? So, if the company has good products and the economy is good, it prospers. And if the economy is bad, or the products are bad, the company suffers. That's what a company without top brass with golden parachutes, would do. The absurdly overpaid executives should be the ones who can turn a company around, whose leadership actually makes a difference.
But, as we could see with the big 3 car manufacturers and basically every big publicly traded company (in private companies you can bet your sweet ass that there's an owner that will keep an eye on the managers), executives don't do a lick of a difference. When times are tough, these companies tank - and ask for bailouts.
It's a bailout for incompetence, and Obama's administration would be foolish to support them. But it's too late - from the way the big 3 car manufacturers have been bailed out, I see more incompetence being rewarded.
Re:Time to tighten our belts (Score:4, Insightful)
this comes as quite a shock (Score:1, Insightful)
IBM have a history of being so patriotic [ibmandtheholocaust.com] (to the almighty Reichsma^Wdollar).
Let's get this quite clear: any major corporation would happily have (by act or omission) you and your family die if (a) it assisted with profit-making; (b) they could get away with it. Anything less severe, such as shedding thousands of US jobs while demanding money collected at the point of a gun (that's "tax" to you and me), is not even on the radar of morally questionable.
Re:Time to tighten our belts (Score:5, Insightful)
I have no idea how much your government spent on... 'that', but I just know that with one billion dollars you can give 20'000 people 50'000 dollars, each. I'm just asking myself whether rerouting such money directly into the pockets of those laid off wouldn't make more sense.
Because big screen TVs and beer sales would go through the roof?
More Corporate Welfare (Score:5, Insightful)
The incentives don't appear to work as several states have already found out. Invariably, companies receiving these incentives do not hold up their end of the bargain. And yet this practice continues. This is a kind of socialism too. Where's the outrage?
Re:No, they're not *really* questioning it (Score:5, Insightful)
Even in the linked article, they're only questioning how much to pay IBM -- not whether to pay them. It amazes me that local officials do this so often, when there's no real proof these sorts of incentives are a net gain. Localities pay hundreds of millions of dollar for sports team's stadiums and get no direct profit sharing, cities offer multi-million dollar packages - or in Seattle's case, even build an egregious trolley line - for businesses and don't even pretend to have a measure of the monetary benefit to the community for the given initial outlay. I always wonder how much these pointless incentives come from honest incompetence versus corruption of the government officials.
The fundamental issue is that these payments don't 'create jobs" but just decide *where* a company will locate. As a result, they are a net loss since most companies would locate somewhere and create the jobs; just not in *your* backyard.
If localities would all stop paying them I'd bet that many companies would locate in the same areas as they do with payments. Why? Companies still want low taxes, people who can do the jobs, access to transportation routes, etc. The cash is just a sweetener.
I've seen some economic "studies" done to support such payments and I wish I could sell whatever it is the localities are smoking cause they numbers have no relationship to reality.
So why do they do it? Politicians like to tout how many *jobs* they created. Especially near elections. Cities want sports teams, even if they are a net loss and will probably bail when a better deal come along. So we continue to transfer wealth from taxpayers to private corporations and ell good about it because "we're creating jobs."
Re:Time to tighten our belts (Score:4, Insightful)
...but I just know that with one billion dollars you can give 20'000 people 50'000 dollars, each. I'm just asking myself whether rerouting such money directly into the pockets of those laid off wouldn't make more sense. Give them the opportunity to not worry too much for a year, get some additional education and try elsewhere.
Wouldn't it be better if the government didn't to take half of people's money in the first place? Your average homeowner gets about a third of his income lopped off in withholding, then another chunk in sales taxes and property taxes take the rest. How great would it be if everyone's earnings were suddenly doubled?
Even when they have the best of intentions you can't rely on government to do the right thing - look at both of the trillion dollar bailout packages: pure pork and waste. The process of government is inevitably biased by the actions of special interests, self interest of the politicians and plain old human stupidity.
Unrestricted Welfare (Score:5, Insightful)
Re:More Corporate Welfare (Score:2, Insightful)
I would argue it's closer to corporatism...
Why would anyone want to work for IBM? (Score:5, Insightful)
Re:execs are stupid, so pass the control to gov't? (Score:1, Insightful)
But that would be work! No one wants to do that.
Re:Why would anyone want to work for IBM? (Score:5, Insightful)
Well, it's gotta beat the security guard job I ended up with after being laid off from HP. Not much of a market in tech for us over-50 geezers these days. If IBM offered me a job remotely resembling what I was doing before this, I'd take it in a shot.
This relentless pursuit of ever-fatter profits at the expense of the employees who helped get companies where they are is ruining our economy and our country. Sure, they may be helping their short-term bottom line and making the stockholders happy, but when every company is laying off massive chunks of their workforce, they're depriving each other of prospective customers. Somebody's gotta buy the stuff they sell for them to keep making money, but they're taking away people's ability to do that.
(Posting anonymously, just in case someone where I work sees this and recognizes my user name. I may be bitter, but I'm not stupid....)
Re:What a scoop! (Score:5, Insightful)
Man, the way they keep printing that money, I'm not really sure if I want to work for it any more. I mean, what's it going to be worth in 5 years? Why bother?
I'm going to make a still and go back to bartering. This money stuff is a total rip off.
Re:Time to tighten our belts (Score:5, Insightful)
Pretty great for a while. Less great when the roads start falling apart, criminals realize the police can't afford bullets, the jails have to release all the inmates at once, the number of under-educated people around you starts increasing because the schools have shut down, and half your family dies from tainted food because the agencies that impose quality controls have disappeared.
It's not like bailouts are the only thing we fund with taxes, you know. There are actually a hell of a lot of services that benefit you directly on a daily basis. Eliminate taxes and you'll end up either losing those services entirely, or else paying for them out of pocket anyway.
Re:Time to tighten our belts (Score:2, Insightful)
Re:Time to tighten our belts (Score:3, Insightful)
Yeah, 'cause our roads are in such great shape now, the cops are doing a bang-up job, we're producing public-school Einsteins at the rate of E=mc^2, and by golly were going to eat to the bottom of this jar of salmonella-laced peanut butter if it kills us.
Re:What a scoop! (Score:1, Insightful)
The money bubble hasn't hit us yet. But although it will, it's probably a few months out. It really depends on how much synergy the president can get from his former friends.
Anyway, the point is that the solution is not to not earn money, but simply to not hold it. Buy lots of stuff that's cheap now. Like land, and stocks.
Re:Time to tighten our belts (Score:4, Insightful)
The New York Legislature never should have given that 24 million dollars to IBM. (Or the Pennsylvania Legislature give 10 million to save Boscovs.) The jobs "saved" do not earn 24 million dollars, so it's a lossy investment. Only an idiot would invest 24 million to get back only 1-2 million dollars worth of wage taxes.
Re:Time to tighten our belts (Score:4, Insightful)
Slashdot needs a "-1, Wrong" moderation option.
Definitely for your post there it does.
So tell me, how did the US do without income tax until 1913? Was the family death rate at 50% due to a lack of FDA to make sure they didn't buy poisoned food? Was the prison population more than half its capacity composed of non-violent drug offenders there due to Federal minimum sentencing laws? Was private education non-existent or worse than the complete fail of the 'Hold-all-children-behind' public monopoly?
Basically only the posting of roads is the non-foolish part of your post, and a 1% uniform non-protective tariff would be more than enough for the Federal gov't to cover the US in tarmac, if they could restrict their spending to their strictly limited and enumerated powers under the US Constitution.
Re:Selling to both sides? Brilliant! (Score:4, Insightful)
What were the German IBM managers supposed to do? Say "no" to Hitler??? I don't think that would have worked.
Re:Hold on... (Score:4, Insightful)
Re:Time to tighten our belts (Score:5, Insightful)
I think you meant:
Remember, the money the politician spent on keeping the company in the area doesn't just translate into increased taxes from wages.
It doesn't just translate into increased taxes on materials spent, and other service and supply industries feeding into that company.
The money spent translates into a situation the politician can point to and say "I just saved your job, vote for me!".
Re:Time to tighten our belts (Score:4, Insightful)
But since the financial sector isn't working, so if someone saves, the bank just sits on the money and it disappears. Because of that, a large increase in savings would cause a rather large decrease in aggregate demand, which would causes businesses to close, which causes further decreases in aggregate demand... that process ends at the great depression.
To prevent that, we want the government to spend their money boosting aggregate demand to compensate. Government spending is one way to do it, but there are limits to how many roads you can build within a couple months. So some money will be given to individuals.
But the key point, is that the money given to individuals needs to be *spent*, not saved!
Re:Time to tighten our belts (Score:5, Insightful)
The average Joe *did* support it and got behind it when the Bush Administration sent everyone a $600-$1,200 "tax rebate" last year. There was a measurable spike in electronics purchases. So much so it was named as a reason there isn't going to be another such direct payment in Obama's stimulus package. All those precious electronic gadgets are made overseas, mostly in China. The money barely slowed down as it exited the country. The gov't was hoping people would purchase things like durable consumer goods made in the U.S., or put it towards a down-payment on a car, etc.
Suckers.
For my part I purchased a new American-made deluxe Weber grill and bought it at a local, independent shop. Both factors (local purchase, American-made) *were* important factors in my purchase. Lots of local farms in the Midwest to purchase grill supplies like ribs, steaks, burgers, bratwurst, etc. Mmmmmmm...I gotta brush the snow off later today and fire that puppy up!
Re:More proof that executives don't do shit. (Score:5, Insightful)
One thing to remember, is that the car manufacturers, as opposed to ALL the other bailouts, asked for short term low interest loans to keep going, because the credit market had frozen, and they couldn't get the loans they needed.
Every other bailout was a free handout to the company (including AIG TWICE!). While I'm not saying I supported the money paid to the car manufacturers, there is a world of difference between what they were asking for and got, and what other companies got almost without asking for it.
Re:Time to tighten our belts (Score:4, Insightful)
90% of the federal budget is spent on Health Care, Pensions, and Defense. Before 1913, the government(state, local, or federal) spent money on all of these things, and there was a national consensus that these things were a public priority.
The thing is, that all of these things have gotten *a lot more expensive* relative to the rest of the economy, since the price of labor has skyrocketed. This is a rather textbook case of http://en.wikipedia.org/wiki/Baumol's_cost_disease/ [wikipedia.org] . It's why the British army was able to fund an army of a couple million a century ago for a fraction of the cost that they now spend to maintain an army of 200,000.
"Was private education non-existent or worse than the complete fail of the 'Hold-all-children-behind' public monopoly? "
Private education was essentially non-existent, and probably less prevalent then it is now. Wide-scale compulsory public education became widespread way before 1914.
The reason costs have exploded, is that the productivity of labor in teaching doesn't increase very much over time, while the productivity of labor in the general economy has skyrocketed. Once again, http://en.wikipedia.org/wiki/Baumol's_cost_disease/ [wikipedia.org].
Re:Selling to both sides? Brilliant! (Score:4, Insightful)
Re:Nobody... (Score:1, Insightful)
Re:What a scoop! (Score:4, Insightful)
So it's not just China, rather Japan and China.
Nobody is proposing to abolish money and go back to bartering. I'm not even sure this stimulus is such a terrible idea, maybe it will work (though we'll never really known either way). What worries me is we've been doing this since the 80's (Reagan), long enough to know that even in good times, we never quite get around to repaying the debt we rationalize in the bad times. Where will it end?
Re:Time to tighten our belts (Score:4, Insightful)
Really do you want our corrupt government to decide more loosers and winners? I'd rather decide the loosers and winners with my dollars than having the government take them and decide for me. I know more about the companies I like than they do.
Re:More proof that executives don't do shit. (Score:5, Insightful)
Buffet is about the only executive who actually has a clue about management, business and economics. I respect Warren Buffet a lot, and would not be surprised if that quote was true.
He was livid at the groundless bonuses and golden parachutes handed out left and right in the US corporate world, and articulated his anger very clearly. He's one of the good guys.
Re:Selling to both sides? Brilliant! (Score:4, Insightful)
What were the German IBM managers supposed to do? Say "no" to Hitler???
Yes. Yes, they were.
Re:Time to tighten our belts (Score:3, Insightful)
Re:Time to tighten our belts (Score:4, Insightful)
Eh, that sound-byte breaks down when under the second scenario, you don't have any dollars to decide with. You need some sort of policy measure that addresses the breakdown in aggregate demand. Otherwise, you've got nothing but old slogans.
Re:Time to tighten our belts (Score:3, Insightful)
Fixed that for you.
Re:Time to tighten our belts (Score:5, Insightful)
We doesn't the government just not take the money from joe six-pack in the first place? It's not like he would save the extra 10-15%.
Because you have no paychecks to cut taxes on when you've been laid off or have graduated into a recession and can't find a living wage.
Tax cuts are just like health savings accounts: they're designed to quell the concerns of those who don't actually need the help while screwing everyone who actually does.
tax cuts do nothing to restore quality of life to those truly disenfranchised by this economic disaster.
Re:More proof that executives don't do shit. (Score:3, Insightful)
I hate to be the one to have to break it to you, but somebody has to steer the ship. The fact of the matter is that most people are not good at leading, and are not good at making correct business decisions. A company without people in a leadership position would quickly falter because resources would be unevenly applied.
This is regularly seen in companies run by engineers. What generally happens is that the engineers believe that they can handle everything, after all they're certainly intelligent enough to handle any job in the office, so they don't hire a sales force or support staff. What ends up happening is that the very smart, very highly paid engineers spend a great deal of time on menial office tasks and sales, which results in the product being of excellent quality, but behind schedule and over budget with no public awareness.
Re:What a scoop! (Score:3, Insightful)
You mean, US banks print money on a grand scale, and trade that money for real goods from foreign nations who never redeem them for American made goods because they'd rather trade them back and forth for oil, so the devaluation effects are never felt in the US?
Sorry, that was last millennium. This is the new millennium. The money is starting to come home. Those greenbacks are now bad cheques that MUST bounce, and so protectionism is the new order of the day.
Re:What a scoop! (Score:2, Insightful)
Re:Time to tighten our belts (Score:3, Insightful)
Hey we agree! :-) I also want to add that a lot of Canadian and EU patients are being turned away by Government Hospitals, because politicians have decided cutting expenses is more-important. They are false-calling it "universal" even though it clearly is not.
Where do you get this information? I haven't heard anything about patients getting turned away from hospitals and that is the kind of thing that would make the news here in Canada.
Using your pacemaker example. Someone I know recently went to the doctor, was diagnosed that they need a pacemaker now. Less then 12 hours later he had a temporary pacemaker. Couple of weeks later he had a permanent pacemaker installed. Total cost to him, zero dollars.
We also seem to have less taxes then Americans from what I read here.