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  • Janet Krueger
    Nice letter, Mike! http://www.businessweek.com:/print/magazine/content/02_49/c3811028.ht m?mz DECEMBER 9, 2002 READERS REPORT Just How Good Was Gerstner at
    Message 1 of 1 , Dec 3, 2002
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      Nice letter, Mike!

      http://www.businessweek.com:/print/magazine/content/02_49/c3811028.ht
      m?mz

      DECEMBER 9, 2002
      READERS REPORT

      Just How Good Was Gerstner at IBM?

      Louis V. Gertsner Jr., in his nine years at IBM, forced out
      thousands of loyal employees with layoffs and forced retirement in
      their late 40s and 50s. ("Lou takes the gloves off," Information
      Technology, Nov. 18). The object was not to "save the company." IBM
      has thousands of large corporations throughout the world using
      operating systems and hardware developed over many decades that is
      difficult or nearly impossible to replace, and IBM averages $14
      billion in profits every year.

      Gerstner used $43 billion from profits to boost the share price at
      IBM with stock buybacks in his nine years at IBM, used the $17
      billion in the "old money" pension surplus to boost the annual
      profits by 20% with "vapor profits" that boosted the share price of
      IBM stock. This same pension surplus is now less than $500 million
      today. Meanwhile, retirees received one cost-of-living adjustment in
      10 years, the same year IBM did away with promised medical coverage
      for retirees.

      Rather than rescuing a company in trouble, how about an "accounting
      illusion" to effect radical change? This is my opinion as an
      employee who worked at IBM for 32 years and fell victim to
      Gerstner's methods of wealth accumulation at the expense of a once
      most-admired company.

      Mike Saville
      Riverton, Utah
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