International Business Machines Corporation (IBM) develops and manufactures information technologies, including computer systems, software, networking systems, storage devices, and microelectronics worldwide. The company was founded in 1911 as Computing-Tabulating-Recording Company and changed its name to International Business Machines Corporation in 1924. IBM is based in Armonk, New York.
It was formed by Charles Flint, a noted trust organizer, who engineered the merger of Hollerith's Tabulating Machine Company with two others - Computing Scale Company of America and International Time Recording Company. Based in New York City, the company had 1,300 employees and offices and plants in Endicott and Binghamton, NY; Dayton, OH; Detroit; Washington, D.C.; and Toronto. The combined company manufactured and sold machinery ranging from commercial scales and industrial time recorders to meat and cheese slicers, along with tabulators and punched cards.
IBM would continue to grow over the next few decades and build new devices such as calculators and typewriters. This would lead the company to develop mainframe computers for use by companies and the military. In 1981, IBM developed its own personal computer (PC) using a processor from Intel and Disk Operating System (DOS) software from Microsoft. This would kick off a new era of technology by bringing computing to the masses.
(http://nyjobsource.com/ibm.html).
31 IBM Timeline
1911/06/15 - IBM incorporates in New York as the Computing-Tabulating-Recording- Company.
1915/11/12 - IBM stock begins to sell publicly on NY Stock Exchange for $46 a share.
1924/02/14 – Computing – Tabulating – Recording - Company changes its name to International Business Machines.
1964/04/07 - IBM introduces System 360, first large family of computers.
1981/04/14 - Space Shuttle Columbia, aided by five onboard IBM computers, launched in first Shuttle flight.
1981/08/12 - IBM introduces the personal computer.
1984/05/05 - In Tokyo, IBM workers hold first international meeting.
1987/01/12 - IBM workers from around the world discuss union issues at London conference.
1991/01/31 - IBM announces 10% reduction in pension benefits
1991 (or 1992?) – Elimination of medical plan's "coordination of benefits".
1993/04/01 - Louis V. Gerstner Jr. becomes IBM Chairman and CEO.
1994/02/17 - 320 employees laid off at IBM Endicott.
1994/07/27 - IBM announces Kingston, NY plant closing1996/02/11 - IBM's "Big Blue"
beats world chess champion, Gary Kasparov, marking a machine's first victory over a world chess grandmaster.
1999/05/10 - IBM stock splits 2 for 1 (15th stock split).
1999/05/18 - IBM employees establish pension bulletin board at Yahoo.com.
1999/07/01 - Pension reductions for employees under 40 due to Cash Balance Plan conversion.
1999/09/17 - Bowing to protests by employees, IBM partially restores "pension choice"
to employees.
2000/03/27 - California pension system announces decision to vote 9.2 million shares in favor of IBM employee stockholder resolution to restore pension and medical benefits.
32 Louis Gerstner
Louis Gerstner, Jr., served as chairman and chief executive officer of IBM from April 1993 to March 2002, when he retired as CEO. He remained chairman of the board through the end of 2002. Before joining IBM, Mr. Gerstner served for four years as chairman and CEO of RJR Nabisco, Inc. This was preceded by an eleven-year career at the American Express Company, where he was president of the parent company and chairman and CEO of its largest subsidiary.
Gerstner is credited with saving IBM from going out of business in the early 1990s. In his memoir, “Who Says Elephants Can't Dance?” he describes his arrival at the company in April 1993, when an active plan was in place to disaggregate the company.
The prevailing wisdom of the time held that IBM's core mainframe business was headed for obsolescence. The company's own management was in the process of allowing its various divisions to rebrand and manage themselves — the so-called "Baby Blues."
Gerstner reversed this plan, and the subsequent refocusing on the IT services business (which grew to nearly 50% of the IBM's revenues), the embrace of the Internet as a business phenomenon, and a broad effort to revive the company's culture are widely seen as having resulted in one of the most remarkable turnarounds in business history.
In his memoir, Gerstner described the turnaround as difficult and often wrenching for an IBM culture that had become insular and balkanized. Before he arrived, over 100,000 employees had been laid off from a company that had maintained a lifetime employment policy from its inception. Layoffs and other tough management measures continued in the first two years of Gerstner's tenure, but the company was saved, and business success has continued to grow steadily since then.
Upon his departure from IBM, Gerstner received a 10-year consultancy contract worth up to $2 million annually, plus expenses and full use of IBM facilities and services, such as office, cars, aircraft and financial planning. He is only required to work one month out of the year.
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Lou Gerstner personifies the new global corporate leader: a change agent whose vision, strategy and determination tamed shifting economic and marketplace realities and reinvented IBM in the process.
Setting the Vision: Direct and intensely focused, Lou Gerstner is the quintessential global corporate leader: a swift-acting change agent who sets the vision for the new reality. He created IBM’s future by moving it from product manufacturer to service provider, opening up totally new opportunities in the process.
Managing Risk-Reward: Pursuing growth and maintaining profitability is a matter of setting strategy, aligning resources, solid execution and dealing with an increasingly complex global marketplace in a competitive industry. Gerstner weighs in on the challenges of today’s business environment and offers advice based on his experience.
A Life of Purpose: Gerstner is a champion of quality education and created the Commission on Teaching, in order to help solve America’s growing education crisis. His best-selling book, “Who Says Elephants Can’t Dance?”, chronicles IBM’s incredible rebound and provides a thoughtful look at leadership in action.
IBM’s Board of Directors
IBM’s Board of Directors consists of 10 members, and it is responsible for supervision of the overall affairs of the Company. The Board held 10 meetings during 2007. To assist it in carrying out its duties, the Board has delegated certain authority to several committees. Overall attendance at Board and committee meetings was 92%.
Attendance was at least 75% for each director. Directors are expected to attend the Annual Meeting of Stockholders, and all directors attended the 2007 Annual Meeting.
Following the Annual Meeting in 2008, the Board will consist of 11 directors. In the interim between Annual Meetings, the Board has the authority under the by-laws to increase or decrease the size of the Board and to fill vacancies.
(ftp://ftp.software.ibm.com/annualreport/2007/2008_ibm_proxy.pdf)
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IBM’s Employees
IBM employees have earned three Nobel Prizes, four Turing Awards, five National Medals of Technology, and five National Medals of Science. Hence, the men and women around the world employed by IBM have been a priority. For example, IBM’s founder, Thomas J. Watson, told employees in October 1926 “They say a man is known for the company he keeps. We say in our business that a company is known by the men it keeps”.
IBM is committed to a diversified workforce and actively seeks qualified candidates who reflect the various markets served, including women, minorities, people with disabilities and gays and lesbians. Each year, IBM recruiters attend more than 40 diversity focused conferences and career fairs to recruit from these constituencies. Its Project View, a national university recruitment program targets graduating seniors of diverse backgrounds for employment in a variety of technical fields.
In 1999, for the second year, WE Magazine recognized IBM as the best employer in America for people with disabilities.
The value placed on IBM employees was codified in one of IBM’s three fundamental principles. In 1969, IBM chairman wrote to his management team: “Our basic belief is respect for the individual, for his rights and dignity. It follows from this principle that IBM should help each employee to develop his potential and make the best use of his abilities; pay and promote on merit, and maintain two-ways communications between manager and employee, with an opportunity for a fair hearing and equitable settlement of disagreements”.
The company and its US subsidiaries have defined benefit postretirement plans that provide medical, dental and life insurance for retirees and eligible dependents.
It is the company’s practice to fund amounts for pensions sufficient to meet the minimum requirements set forth in applicable employee benefit and tax laws, and such additional amounts as the company may determine to be appropriate from time to time.
The assets of the various plans include corporate equities, government securities, corporate debt securities and income producing real estate.
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