IBM Workers in Burlington Fight Pay Cuts
By Ralph Montefusco

The Burlington organizing committee has been very active since our last update in the August/September issue of Think Twice. That issue featured an article reporting that, thanks largely to the efforts of Sharon Stevens and other members of our organizing committee, concerns were raised over cuts in premium pay at other loca­tions. Our site manufacturing management team held a series of employee meetings at which they made the commit­ment that cuts in premium pay would not be done in Burlington. We took IBM at its word.

Unfortunately within a week, there were another series of meetings at which it was announced that one day of work, with all associated pay, would be removed from the work schedule of those working 12-hour shifts in selected manufacturing areas. For those affected, it amounts to a pay reduction of approximately 18%.

There was much anger and shock in reaction to the pay cuts. Several people reported having to take second jobs in order to make up for the loss of income. We held several special meetings to mobi­lize people and plan actions. As a result, we were able to staff a booth at the Champlain Valley Fair. This allowed us to get our mes­sage out to a broad range of people, includ­ing many retirees.

We held a rally after the Fair ended, with Congressman Bernie Sanders as the featured speaker. Other speakers included members of our chapter's organizing com­mittee, representatives of other supporting labor organizations, and repre­sentatives of the Alliance. Following the speakers, there was an open mike session, during which we heard from many of those affected by IBM's decisions over recent years. We also heard a wide range of support from other members of the community.

As a result of these and other recent activities, we have expanded our organizing committee and increased the number of dues- paying Alliance members in our Chapter. We have developed a work plan to continue expanding our organization, to build a structure throughout the site and to reach out to non-man­ufacturing employees. The recent pay cuts have justifiably brought our focus on those affected, but it is important to remember that the Alliance is for all non-man­agement employees. We are all best served by building a strong, inclusive organization. The true issue is that we do not have a seat at the table when decisions are made about our livelihoods. The solution is to negotiate a contract.

Rep. Bernard Sanders' Speach Friday, September 7, 2001 Good evening. And thank you very much for inviting me to be with you tonight. Tonight I want to make only a few points. The first is that I am not here to micromanage IBM or to tell them how to run your company in a competitive global economy. That is NOT what I am here to do. But what I am here to say is that, increasingly, American workers are becoming more and more concerned about the state of the economy, about their job security, and about their wages. And they are demanding that their employers treat them fairly. They are tired of companies all over this country being run on a principle of greed -- designed to benefit a few CEOs at the top at the expense of the employees, of the consumer, and in fact of our entire country. Workers want justice: they are tired of being taken for granted and having their pay and benefits constantly eroded. Before I say a few words about IBM in particular, let me touch for a moment on what is happening in our country today. The truth is that real wages, after accounting for inflation, have declined by 8 percent since 1973. Because of lowered wages Americans now work 160 hours a year more than they did 20 years ago and have the dubious distinction of working longer hours than the people of any other country. Despite the long hours of work, however, more and more workers are going deeply into debt. That is what is happening to millions of American workers. Sadly, the United States now has, by far, the most unequal distribution of wealth and income in the industrialized world. While workers have seen a decline in their real wages, the richest one percent now own more wealth than the bottom ninety-five percent, and the CEOs of major corporations now earn over five hundred times what their employees make. In recent years we have seen a proliferation of millionaires and billionaires, while at the same time more and more working families lack health insurance, and the number of working people sleeping out on the streets has significantly increased. Let me give you just a few examples of what greed is about, and how it affects the people of our state and our country. General Electric, the largest corporation, in the world, between 1975 and 1995, reduced their American workforce by 270,000 people as they moved their manufacturing facilities abroad to China and other countries. That's the bad news. The good news is that in the year 2000 their CEO, Jack Welch, and his top two assistants received $550 million in salary, stock options and executive benefits. In other words, Mr. Welch and his friends rewarded themselves for selling out hundreds of thousands of American families. As some of you know I have been working hard to lower the cost of prescription drugs in this country - where our people pay, by far, the highest prices in the world for medicine which they need to ease their suffering and often to keep them alive. At a time when the top ten drug companies earned $26 billion in profit last year, millions of Americans were unable to afford their prescription drugs. And yet when older women in Vermont have to cut their prescription dosages in half because the prices of drugs are so high, the CEO of Bristol-Myers-Squibb, , had unexercised stock options of $227 million. And the top 25 drug company executives combined had almost $1.6 billion in unexercised stock options. Drug company CEOs make out like bandits while Americans suffer and are unable to afford the high price of pharmaceuticals. Now, let me say a few words about IBM and why we're here tonight. Sadly, tragically, corporate greed has reared its ugly head at Big Blue-and the results are being felt by all of you and your families. At a time when IBM's pension trust fund had total assets worth $69 billion, and a surplus of $10 billion --money above and beyond what is needed to pay out all benefits to all eligible employees -- IBM made devastating cuts in the retirement benefits it promised its employees. But those of you in this room, and other IBM employees around the country, fought back, and the result was that the company was forced to restore benefits to 35,000 of those employees. Your efforts have not only saved tens of millions of dollars in pension benefits for the employees of IBM, but they have had a major effect on other corporations throughout the country who were giving thought to doing exactly the same thing that IBM tried to do. Unfortunately, we were not successful in maintaining pension choice for some 30,000 other employees. I congratulate you for all of the work you have done in this area. I have been enormously proud to have worked together with you in this effort. But the corporate greed of IBM's top management did not stop at the pension cuts. It spread to other areas as well. Although IBM profits are up by $2 billion over last year, the company management continues to renege on the promise made to all of IBM's employees and retirees by slashing lifetime retiree health benefits. Over the past several years Lou Gerstner, the CEO of IBM, received $8 million in bonuses and a $1.1 million pension for himself. Yet, during that time, IBM has shipped good paying jobs from North Carolina to Mexico, and has sent jobs from its facility in Endicott, New York to Shanghai, China. In fact, IBM now has more workers overseas than it does in the U.S. - 155,000 to 145,000. And what is happening now? Why are we here tonight? As everyone here knows, IBM management has recently decided that it needed to save approximately $29.6 million dollars by reducing work hours for the 3,700 manufacturing workers in Essex Junction. They have done the same thing in other plants around the country. This action has resulted in a reduction in take-home pay of 18 percent. It was apparently not enough to slash pensions; it was not enough to cut retiree health care that had been promised to workers. Now, all over this country, hard-working, loyal IBM workers, who are trying to keep their heads above water economically, are seeing an 18 percent reduction in their income. But I want to know one thing. If the management of IBM doesn't have enough money to keep its pension promises to its workers; if they don't have enough money to keep their health care promises to their retirees; if they don't have enough money pay their workers the wages they had been receiving, how do they have enough money to provide Lou Gerstner, the CEO, with over $260 million in stock options? That is wrong. And that is unacceptable. I know the families in the state of Vermont because it is my job to represent them. I know how hard our people work, and how they are trying to save up to pay their mortgage, send their kids to college, take care of their parents, and maybe take a vacation. No one, no one, can tell me that it is right that one man on top should receive $260 million in stock options while at the same time thousands and thousands of families in this state and across the country are forced to suffer. This is wrong. And this is unacceptable. Frankly, I do not believe the founder of IBM, Tom Watson, Sr., were he alive today, would stand for this outrageous level of corporate greed. As many of you know, Mr. Watson told his employees that "IBM's constant purpose is to relieve its people of fear for the care of themselves and their families." Unfortunately, Tom Watson's IBM is not Lou Gerstner's IBM. Concern for the workers and their families has been replaced by same approach that exists today throughout corporate America - outlandish benefits and compensation to the people at the very top, while squeezing the average worker as hard as you can. I understand that efforts are being made by the Communication Workers of America (CWA) to organize a union at IBM. As you know, it is not my job to tell you what to do. Whether or not you decide to form a union is your choice, not mine. But I do want to say this: if you do decide to form a union, if you do feel that standing together and bargaining collectively to negotiate a contract is what is best for you and your families - I will be there with you.

Earl Mongeon's Speach Friday, September 7, 2001 Hello everyone in my names Earl Mongeon I've worked at IBM for 22 years. I got involved in union organizing two years ago when the pension and medical rip off had taken place. This was the last straw for me. Because when I looked back at all the reductions in our compensation and benefits over the last 10 years I saw a trend of constant losses to the employees. As you all know the outcry was loud enough that IBM did back down, and gave 35,000 employees a choice in the pension, but not the medical and not all of the employees. This outcry also got government agencies like the EEOC, the IRS, The Department of the Treasury, and The Department of Labor along with Senators and Congressmen now starting to look at cash balance conversions. To me this was just an example of what people can do when they stand together. I got involved because I knew IBM would continue to reduce our compensation and benefits. Now here we are again two years later and IBM has taken from the employees again. This time they took from the employees that make the least amount of money. The management in Burlington tried to tell the media that this was only a reduction in hours and not a cut in pay. But if you're one of these employees that work the 12hour schedules you have just taken in 18 percent pay cut and it's that plane and simple. This was done only to 3700 employees and not the rest. This could have been done with a smaller cut across the board so it would have been a lot less painless to everybody including management. Not only has IBM been taking pay from employees it is also taking benefits away from retirees. This year IBM had given some retirees a cost of living allowance, and then turned around and sent them a letter stating that they would have to share in the cost of the medical insurance. In talking with these retirees they told stories of getting a $20 or $30 increase in their pension and then being charged $140 or more a month for their medical CO-pay. Sorry I mean cost sharing. Many of these retirees were told when they left IBM that they wouldn't have to pay anything for their medical insurance. Shortly after the 18 percent cut in pay the plant manager Hank Geipel and John W. DiToro sent a letter to manufacturing telling us it was unfortunate and that they had all intentions of informing the employees through management meetings of this 18 percent cut. But some employees took it upon themselves for their own personal agendas to notify the media. In this letter they also stated that they understood the impact this would have on employees and their family. So I responded with some of my thoughts on this. I told them I don't think you even begin to understand the impact this has on employees and their families. Because unless you are walking in their shoes and have taken a 18 percent cut in pay you have no right to say you understand! I also questioned IBM's concept of team. I told them I noticed that when times are good and IBM needs us to pull together and work harder we are referred to as a team. But when cuts have been made we are referred to as employees or colleagues. My concept of team has always been when you win as a team you all win, and when you lose as a team you all suffer the loss not just part of the team. I think the IBM employees in Burlington have contributed a lot to the IBM Corp. These employees really do work as a team. I have seen it in many ways. Here's a good example; IBM has cost saving teams and every year these employees the ones that have just had the 18 percent pay cut. Save the company over a hundred million dollars every year. They do this with teams that get-together and brainstorm their ideas that save the company money. And every employee has to participate in this because it is part of your performance plan. I remember years ago if you had an idea and you submitted it under the suggestion program you could make $150,000 and today for that same idea you might get $150. I believe in working hard for your company and being recognized for that hard work. I'm not here to destroy IBM I'm here to work with IBM and to help it prosper. But I want to be treated with respect and dignity for the hard work we do. I feel now I can no longer work with a promise and a handshake like men of honor could years ago. So like our CEO Lou Gerstner I too want an employment contract that is legal and binding and guarantees that my benefits cannot be taken away indiscriminately and without justification. We are here tonight to discuss some of those ways we can all take a part in saving this company. One way to do this is by joining the Alliance@IBM So employees and retirees can get together and discuss the problems that face us now and in the future. The next thing is to educate ourselves about what we can do as a union and to know that we have the legal rights Under the National Labor Relations Act. And to protect are self's from what's going on at IBM. The most important thing is that we need to take action by standing up together and speaking with one voice to tell the company that we are no longer going to take this unfair treatment. Here are some of the ways to do this: We can picket the Company. We can circulate and sign petitions. We need people to hand out literature and make calls. We need to form committees: for organizing events like this, political committees to communicate with politicians, Education, Safety and Health, and a communication and action committee. I could go on but we can discuss it at the next meeting which will be Tuesday Sept. 25 at the Lincoln Inn the Times are 5:00 to 6:30pm and 7:30 to 9:00pm So please come and join us. Thank you

"IBM Workers in Burlington Fight Pay Cuts" is written By Ralph Montefusco and owned by © CWA News, used with permission

The "Rep. Bernard Sanders' Speach" was submitted by Dean Corren, Outreach Director; Office of Congressman Bernie Sanders, 1 Church St. Burlington, VT 05401 ; 802-862-0697 / 800-339-9834 / fax 802-860-6370

The "Earl Mongeon's Speach" was submitted by Earl Mongeon.

Photos © Clydemoore.org, Used with Permission.