IBM union criticizes new CEO choice :: The Skinny at WRAL Tech Wire

Updated Oct. 26, 2011 at 1:23 p.m.

IBM union criticizes new CEO choice

On The Web

Site Search

By RICK SMITH, WRAL Tech Wire

Note: The Skinny blog is written by Rick Smith, editor and co-founder of WRAL Tech Wire and business editor of WRAL.com.

RESEARCH TRIANGLE PARK, N.C. – IBM (NYSE: IBM) workers who chaffed under Chief Executive Officer Sam Palmisano and his offshoring of U.S. and European jobs in order to pursue global results, will see little relief under new CEO Ginni Rometty, says the union seeking to represent Big Blue workers.

“Welcome the new boss, same as the old boss,” Alliance@IBM executive Lee Conrad told WRAL Tech Wire on Wednesday the day after Rometti
was named to succeed Palmisano, who will remain chairman.

Rometty, who will be the first woman to lead the 100-year-old technology giant, takes over as Jan. 1.

“We feel that Ginni Rometty, who is a champion of offshoring, will continue the policies of Palmisano and that IBM U.S. employee population will continue to decline as work is offshored and employees fired,” Conrad said.

Ginni Rometty

“There has not been an IBM CEO who has been supportive of IBM employees for many years,” added Conrad, who was a long-time IBM employee but is now retired and focused on building Alliance.

“The slogan ‘respect for the individual’ was erased from IBM when [Lou] Gerstner took over,” he added. Gerstner ran IBM from 1993-2002. Palmisano succeeded him.

“CEO Rometty will be no different.”

In an interview with Bloomberg, Rometty said she would continue IBM's strategic plan as put in place by Palmisano.

“I’ve been head of strategy at IBM and together with my colleagues built our five-year plan,” she said. “My priorities are going to be to continue to execute on that.” (Read the Bloomberg story here.)

Analysts Praise Rometty for Similarities to Palmisano

On that very point, Bobby Cameron, an analyst at Forrester Research who has worked with IBM, praised Rometty for her similarities to Palmisano.
"I think she's smart,” Cameron told The Associated Press. “She asks questions; she doesn't just come in with an agenda, and she's interested in the leading edge, not just what's driving volume - all those things are important for a CEO to have.”
Further, Cameron said he doesn’t expect big changes under Rometty.

"I think it will be more of the same,” he said, “and I think that's a good thing.”

Another analyst concurred.

“I don’t think much changes, and that’s a good thing,” said Brad Zelnick, an analyst at Macquarie Capital, told Bloomberg. “The leadership team has acted in a very cohesive fashion over the years. Especially with Palmisano remaining as chairman, I would expect that the strategy keep consistent.”

Krista Macomber, an analyst at Technology Business Research, also praised Rometty.

“Although remaining true to IBM’s broad-based, long-standing initiatives, Rometty will also be charged with uncovering new growth avenues for the company. TBR believes Rometty’s experience in defining new markets for IBM will help sustain revenue expansion while navigating an the evolving IT landscape, shaped by cloud and analytics.”

Shrinking U.S. Work Force

No such praise came from Conrad, who expects Rometty to cut American jobs.

The Alliance estimates that the IBM work force in the U.S. dropped below 100,000 this year to 98,000. Big Blue no longer discloses how many employees it has in specific global areas – by country or location. Best estimates are that IBM has around 10,000 workers spread across North Carolina, including its RTP campus.

Based on figures published by IBM from 2005 to 2009, the U.S. work force shrank from 133,789 to 105,000.

Alliance estimates that the total fell to 101,000 as of 2010.

IBM continues to financial growth although its most recent quarter produced revenues slightly below Wall Street estimates. That news drove IBM stock down from a 52-week high of $190.53 shortly before the earnings report. Shares traded under $180 on Wednesday..

No “resource actions,” which is IBM’s term for layoffs, have taken place recently. But Conrad won’t be surprised if more occur.

“We expect continued resource actions as IBM downsizes in the U.S. for cheaper labor out of country,” Conrad said.

Get the latest news alerts: Follow WRAL Tech Wire at Twitter.

Tags: IBM, Opinion Analysis

The Skinny

WRAL Local Tech Wire Publisher and Editor Rick Smith dishes out tidbits from the local technology sector. Read more articles…

WRAL Tech Wire