First, Pfizer recently told employees that severance packages would be reduced as of mid-May. Now, the big drugmaker plans to eliminate its defined benefit pension plan as of 2018 and will direct employees to funnel their money into a 401K investment account, according to a company memo. And the pending changes will apply to all employees, including the c-suite crowd, a Pfizer spokeswoman tells us.
"The pension changes apply to colleagues at all levels, including executives," the spokeswoman writes. "There are some exceptions, such as colleagues hired after (January 1), 2011, as they already participate in an enhanced savings plan, rather than a pension plan; certain union colleagues based in the US, per their collective bargaining agreement; and colleagues who were part of an acquisition and are not currently earning benefits under a Pfizer pension plan."
The plan has, not surprisingly, upset some Pfizer employees, but one could see this coming. The drugmaker is trying mightily to reinvent itself and slash costs in response to generic competition to several big-selling drugs - notably, the Lipitor cholesterol pill. For instance, Pfizer recently agreed to sell its nutritional business for nearly $11.9 billion to Nestle and is looking to sell or spin off its animal health business.
Both moves would shed numerous jobs, a trend that has been under way for several years. In fact, Pfizer has choppped some 57,800 employees since a cost-cutting program began in 2005 (see page 10 here). The effort accelerated with the 2009 acquisition of Wyeth. As reported previously, the drugmaker is in the process of slashing $1 billion in costs on top of the billions in expenses that have already been drained from operations (see here).
Of course, many companies have been eliminating or altering the terms of their defined benefit pensions plans in recent years as a way to cut expenses, a trend that has accelerated during the recent recession (here is a list of companies that, since 2005, have either terminated plans, frozen plans for new and/or current employees, or made changes to the formula by which pension benefits are calculated).
lost money pic thx to thethreesisters on flickr
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There have been many unprintable comments about Ian Read this week. Suffice to say they refer mostly to performing an impossible act involving a body part and an orifice.
Did your Galtian Overlords tell you to spew that hypocritical garbage, or did you overdose on bong hits and Rush albums again?
Libertarians are idiots.
http://www.taf.org/
Now that Barack Obama and Pfizer have taken away our retirements there is a new expression-"Going Galt", which means dropping out of society and keeping the spoils of the Galtian Overlords' hard-earned labor all to themselves. The Occupy Wall Street crowd says “see if I give a flying f*** about you selfish assholes.” To which I say you better give a FF because like them or not we need the John Galts of the world not to drop off the earth. We need their money to feed our families, be it steak or Ramen Noodles.
By the way, Pfizer employees make more than enough to save for their own retirement, and now their company is making prudent financial decision to ensure these same employees can draw down nice salaries.
The derivative and mortgage "libertarians" did not make anything worth eating, except perhaps themselves (but a lot of saturated fat).
Sorry to be so unpatriotic.
My father was an honest businessman of the "old school" sort--honor, value, and trustworthiness were his guiding virtues.
When his business grew, he began to deal with larger firms--some very large--who used racism in order to fend off unions. This was no secret at the time. They said openly and honestly to their employess that if they unionized, they would have to work alongside Ns. And surely they didn't want that.
This was a "small sin" in the scheme of things, as my father reflected toward the end of his life. He had many more "lurid" stories to tell. And he was no radical, but the kind of Republican that used to exist in visible numbers. No one called them "moderate" then, which itself makes the point.
One example of many, and certainly a long way from Pfizer and pensions. But if we're going to talk about what "free markets" really mean and the various ways they operate, we should locate the discussion somewhere on the planet rather than in ideological deep space.
To work in a free market system you have to have something to offer that system. Carrying a mail bag will no longer do it in the internet age. You have to look at your career, keep your eyes open and plan for the future-and I don't just mean the next job. Pasteur said that chance favors the prepared mind. You have to self-educate to stay ahead of the curve, so that you will have the "prepared mind" to take advantage of future opportunities.
"There's no better time to be a talented entrepreneur - and there's no worse time to be a middle-class person without special skills".
Amen.
Of course, having skills makes a big difference and so does the capacity to plan. At the same time, I think at least many of us would agree that "Survivor Island" represents a lot in contemporary workplaces as well as anything. Beyond skills and hard work, it's about "outwit, outlast," etc. And, indeed, the latter "survival skills" often trump the former in terms of who lasts and who advances.
If so, not surprising that the same mentality affects the relationship of companies with each other, with other stakeholders, and with their customers. Up to a point, it's about how well one "plays the game." And playing the game successfully requires more sociopathy than it used to.
Basel, I would say with supreme confidence that given the rousing success of the Occupy Wall Street movement, that Bolshevik 2.0 must certainly be around the corner. To paraphrase the late Gil Scott-Heron, the mantra of the proletariot will be "The Revolution will be Twitterized", or anything that can be said in 140 characters or less, since that is the attention span of modern day revolutionaries.
I would not say it is true in academia, which is very far from being a "meritocracy" along the dimensions you note.
Comparing the two, the pharma meritocracy worked better for me, but there is still the requisite politicking and derriere kissing. At least we get paid well to put up with the garbage.
However, when your company yanks your $600,000 pension from under the rug like Pfizer did last week, I would say that's the equivalent of a tenured professor being fired.
Oh, and the best part? I don't have to deal with today's college students and their unrealistic expectations for hard work, diligence, climbing the ladder, and delayed gratification once they are in the work force, not to mention dealing with your students who come to class buzzed on speed or hung over from a three day binge.
As far as speed, many students get it (illicitly) from their parents, who have been convinced their kids need it to succeed. Obviously, this is one reflection of pharma's success, along with reflecting other things.
Another little secret is that a number of faculty also use illicit speed, especially in the professional schools. Some of them buy from students who have, as above, been "prescribed" by their parents.
So now we know another reason why college costs are rising.
Yes, and where the average prof at my alma mater makes $126,000/year they can afford to cop a few a-bombs from their on-campus drug dealing students so they can stay up all night and write the 40th worthless paper to submit to another garbage journal on the mythology of the life of Sisyphus.
Force be with you!
Companies used to offer pensions to attract and keep dedicated employees, Companies no longer need or want to attract employees and employees see no reason to be dedicted.
It is always bad business to blame the customer or in this case the beneficiaries for wanting to keep a promised benefit.
You must visit Wall Street blogs and made their latest talking point your own - "...without Wall Street, HUMANITY would still be living in caves...". Talk about being lost on the time continuum - they must have thought they landed 900,000 years ago and started from scratch
:-))
Man, I feel sorry for the poor schlubs getting into a fee for labor deal with you, oii. The way you chased down the 5 bucks you paid for Girl Scout cookies in order to find a way to have that 5 bucks flow back to you from her, the tree and septic guys don't stand a chance....hey, why not just do the work yourself? Better for your health than sitting around in front of the laptop....I consider it a bad day when I need to be chained to the craptop more than 2 hours a day....
I can even see a leveraged buyout of the entire company (since debt financing is dirt cheap now) to a private equity conglomerate, then the conglomerate sells off the pieces, Mitt Romney style, the Pfizer senior management gets their super golden parachutes, the equity firm cashes out, and tens of thousands of rank-and-file workers get pink slipped.
The man got a 44% bonus, before this annoucement and will be guaranteed a sweet Deal, after he's chopped up a company, laid off many workers and reduced their severance and dismantled their pension.
Why do we allow our corporate leaders to continue these traits?
ERISA (from Wikipedia)
The Employee Retirement Income Security Act of 1974 (ERISA) (Pub. L. 93-406 codified as 29 USCS § 1002) was enacted on September 2, 1974. ERISA is a federal law that establishes minimum standards for pension plans in private industry and provides for extensive rules on the federal income tax effects of transactions associated with employee benefit plans. ERISA was enacted to protect the interests of employee benefit plan participants and their beneficiaries by (lists protective measures, etc).
The irony is that in converting their pension plans to "enhanced savings plans" Pfizer et al have exploited loopholes in the ERISA law, originally intened to PROTECT retirement income, and in doing so have screwed workers out of their retirement money.
To those of you who say "be self responsible" or such I agree. If you know what the rules of the game are you can be self responsible. But if you would yell unfair if at the last minute, your ability to be self responsible diminished because someone else made a unilateral decision to change the rules making it impossible to recoup from the change.
Remember, not so long ago, a company's pension plan was sacred and it WAS the plan for self reliance. It was the smart thing to do. Let's see what happens when your current smart thing to do is suddenly non-viable.
One can understand if a company goes bankrupt, but come on people, this is Pfizer; a company with Billions in the Bank and whose CEO's run off into the wild blue yonder with outlandish Golden Parachutes.
There are many other areas to trim the Pfizer Phat.
Need to make the call to HR, but was waiting for the phones to die down.
Have you heard anything, Kenatpharma?
When companies become little more than traveling salesmen of the 1800's selling elixir's that may or may not be harmful, and may or may not be beneficial, they have chosen to reduce their stature to the model they've chosen. When they operate as transient day laborers, they should be treated as such.
Since they have not made any effort to avoid that kind of portrayal, and operate in every case to reinforce that portrayal of their corporate personality, they should be thought of as having that corporate personality. The proof is in the performance chosen, and that taken.
Congress should also take note of their chosen profile with respect to public welfare and taxpayer support. Why should they be given deference that is undeserved? Transient daylabor is little more than hobo-tech, here today, and gone tomorrow, and sometimes stealing in the process, and causing unnecessary harm. Companies that operate like gangs of hobos huddled around their man-made fire don't deserve more respect than that.