CWA to Mount Organizing Drive at IBM : Labor: Workers are angry about ‘cash-balance’ pensions. Senator predicts action by Congress.
Invited by IBM workers angry about changes in the company pension plan, the Communications Workers of America (CWA) said Tuesday that it will mount an organizing drive to form a union at one of the nation’s most union-resistant companies.
“All our resources, effort and manpower will be at your disposal,” CWA President Morton Bahr told a news conference attended by dozens of IBM workers from several states.
The International Brotherhood of Electrical Workers (IBEW) also has been contacted by some IBM workers in Vermont who are seeking a union.
The CWA announcement came after nearly four hours of Senate hearings at which IBM was criticized for imposing its new “cash-balance” pensions, which increase benefits for shorter-term and younger employees. Some companies have given all employees a choice of using the old or new pension plan, but IBM made the switch at the expense of some older employees.
Congress must force employers to keep their workers better informed of the complex changes they are making in pension plans, said Sen. James M. Jeffords (R-Vt.), chairman of the Senate Health, Education, Labor and Pensions Committee, which held the hearings. Sen. Tom Harkin (D-Iowa) said he believes “Congress is going to change the law. Older workers are being gouged.”
Offering IBM’s most detailed defense since an embarrassing wave of congressional and worker criticism swept over the company, Senior Vice President J. Thomas Bouchard told the committee, “There just isn’t enough money to go around to give a choice to everybody. Let’s get real.” IBM could not afford to give all its workers the choice of staying in the traditional pension plan or selecting the new cash-balance plan, he said.
“We don’t have enough money to give everybody what they want,” said Bouchard, who is in charge of human resources for the company. IBM is in a bitter struggle with its competitors, 75% of whom don’t offer pension plans or health benefits for retirees, he said. Bouchard compared it to a foot race in which IBM would be burdened with a backpack while its competitors wore lightweight running gear.
The pension argument illustrates some of the wrenching changes going through the economy as companies shift from a model of keeping workers for a whole career to a new corporate world in which mobile, highly skilled employees jump from job to job.
To attract younger employees, IBM in July began a cash-balance program in which the company will contribute money each year to an account, and workers can take the money when they leave. Because this means spending more for younger employees, IBM made the money available by reducing the final pension benefits of many veteran workers.
Originally, only those workers who were 50 and older could stay in the old pension plan. This meant workers in their middle and late 40s, many with more than 20 years of service, were facing pension cutbacks of 30% to 50% compared with what they would have received under the old plan. But after months of employee complaints, IBM announced it would relax the rules, allowing any IBM employee at least 40 years old and with 10 years of service to choose between the plans.
Nonetheless, “there are still thousands of workers at IBM who will not get to choose between the old and new plans--and that is just plain wrong,” Rep. Bernard Sanders (I-Vt.), told the hearing. Sanders and Rep. Maurice D. Hinchey (D-N.Y.) introduced a bill imposing a 50% excise tax on the pension surpluses of companies that create a new plan without giving workers the option to remain in the traditional pension.
