Forgiveness, generosity and stupidity
Mostly stupidity. From an article in Network World:
Can a $93 billion company be publicly shamed into charity? My guess is not, but the Contra Costa school district in California is hoping IBM can see it in its Big Blue heart to erase some $5 million in long-overdue debt.
[...] “Unlike corporations such as IBM – with revenues of $22 billion in the first quarter of 2007 alone – our schools do not have the ability to generate new dollars to fund projects or pay for employees,” the lawmakers wrote. “Our schools rely solely on limited state and federal assistance to educate our students and every dollar is precious.”
I’m sure IBM is the evil corporation here. Or are they?
In 1993 the district and IBM negotiated a long-term settlement that said the school district would pay the first of four $1.25 million installments beginning in 2008. Payments were deferred until then because 2008 was the year the district was scheduled to finish making state loan repayments under its previous loan plan, according to the Contra Costa story.
So basically, IBM gave the school district 15 year grace period, during which time they not only didn’t have to make payments, but they also didn’t owe interest. A quick “back of the envelope” calculation says that at only 5% interest, IBM forgave over $5M in interest payments alone based on compound interest, which I believe is the norm for this kind of financing. Now the school district, incompetent from the start1 thinks that IBM should “think of the children” and take a bath.
As a stockholder in IBM, all I can say is: Hell No. Pay up.
1 No matter what you say about IBM, they signed a legal contract to purchase equipment. If they think they were misled, lied to, or otherwise duped, they should have sued the company, and given California’s penchant for lawsuits, I’m sure they would have.
This entry was posted at 8:29 pm on 18 June 2007 and is filed under Social. You can follow any responses to this entry through the post-specific RSS 2.0 feed.
I disagree, as that would effectively be rewarding blackmail, which is all this is. This is simply an attempt to screw someone else for your own incompetence, and that’s never a good example to set “for the children.” If anything, I think IBM should donate equipment to a truly poor school district (which they frequently do), not one like Contra Costa, which is doing quite well.
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Perhaps a wise IBM would insist on the money but offer IBM products and services in return. Thus IBM would be able to say that it loved the children, but it loves it’s shareholders too.
Of course, I’d love to see IBM put lots of FOSS things in there :-) (and that would be good for the children too, IMO)