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The above defines carefully defines the changes for the year. Read both carefully to fully understand changes that may affect you and your family. Sears-Benefits will not issue a new Plan Booklet for 2001, thus you are urged to keep both pieces of the above with the year 1999 booklet. If you wish to make changes to your Sears medical choices as outlined in your Summary, you must contact the Sears Retiree Service Center at 1-800-762-7327 or at Sears retiree web site (www.retirees.sears.com) no later than Nov. 5, 2000. You do not need to call if you do not want to make changes. We will be referring to several web sites and if you do not have access to a computer, you may wish to ask a friend or visit your local library to assist you in your search. The BIG news is that many who were previously enrolled in an HMO, you may find yourself without a HMO in year 2001. Many plans are skipping out...again! And those in a Sears supported PPO or Plan "E" may find they do not have an HMO available. Costs have increased due to: HMO increases and Sears 1996 freezing of their portion of your health care contribution. Don't let anger color your better judgment! Your attention is further called to N.A.R.S.E.'s September 2000 edition of "STRAIGHT TALK" which offers further illumination. MEDICARE, POST- 65 years of age and over If a managed care plan leaves Medicare, your current plan will expire on December 31, 2000. You will then be covered by the original Medicare Plan. But if you want "extras" not covered in the Medicare program, you'll need to locally determine available Medicare managed care or supplemental plans. PLAN "E" Changes WHAT ARE MY OPTIONS? 1. Original Medicare Plan 2. Medicare supplemental insurance (Medigap) 3. Medicare Managed Care 4. The proceeding is not to be
considered a solicitation or support of AARP by N.A.R.S.E., but intended
as resource information only. 5. Sears has added a new retiree web
site that offers excellent links to appropriate areas. PRE-65 PPO Plan- ages 50 to 64 It is particularly troubling for those who are pre-65, and who did not previously continue with Sears PPO. Hopefully if you are not with Sears PPO Plan, you are able to research and locate a compatible HMO in your region. The following comment is not to be considered a solicitation nor support of AARP by N.A.R.S.E., but you may wish to call AARP at: 1-800-523-5800 to review Group plans they have available or visit their web site at: www.aarphealthcare.com/screen.asp?ReturnURL=hoption/options.asp Sears PPO Plan changes Sears has made some good enhancements to this year's plan. While there has been dropping of coverage's by some carriers, Sears-Benefits has lowered the Annual Deductible for individuals from $300 to $150 and cut in half the Annual Maximum of Pocket Deductible individuals from $2,000 to $1,000 and family from $4,000 to $2,000. Again, drug costs for name brand has increased by $5 with generic being held at the prior cost. Suggestions to look for before you join a plan Ask if your current physicians are in the network. Call the health plan's customer service for that Information, as most directories are outdated. Ask your doctors whether they are satisfied with the plan they are in and how long the contract runs. Doctors move in and out of networks depending on their level of satisfaction. Ask about prescription coverage or
discount drugs. A word of caution - Some HMO's have been
dropped by Sears.
Watch for the "Sears Retiree News" which the company is now in the process of mailing its Fall issue. It contains very important information which you will want read carefully and retain regarding the upcoming annual election period and Sears Preferred Provider Organization (PPO) and Group Medical Plan E. Sears-Benefits has advised that there will not be a new booklet this year, thus you should retain and mark any changes in the latest booklet issued in October 1999 upon receipt of your election kit. Annual election kits will be sent out in three waves commencing on October 9 through the 26th and some area elections can be made until Nov. 17. They are working on enrollment over the web. Allow for sufficient mailing time to your area. If there are questions regarding the Plans, please do not call the Retiree Service Center until you receive your package and had an opportunity to thoroughly review. There are some good enhancements in the Pre-65 PPO Plan. But, some HMO's for Post-65 Medicare have increased the rates so significantly that they have been dropped. Prescription drug prices from the manufacturers are skyrocketing. Those in Plan E will find an increase in prescription drug rates. 30-day supply retail over the counter will increase to $15 for generic and $20 for brand name, 90-day supply through the mail will increase to $20 generic and $25 for brand name Again, as we recommended in NARSE's
September issue of "Straight Talk", it is
strongly recommended that you attend local meetings or secure
information relevant to all HMO's that are currently being offered in
your respective areas. It may prepare you for any possible needed future
changes. Check for coverage, hospitals, physicians and specialist
available under their plans. Again, HMO's have vacated many markets.
Equal
Benefits for Retirees A U.S. Circuit Court of Appeals rules that under the Age Discrimination in Employment Act (ADEA), a company may not provide heath insurance for Medicare-eligible retirees that is inferior to that provided for younger retirees. Based on the act's legislative history, employers traditionally assume the ADEA applies only to active workers, not retirees. Therefore, many employers have reduced or eliminated retiree heath care benefits at age 65, when Medicare kicks in. Now, if the ruling stands, employers could be faced with the choice of increasing benefits for older retiree, slashing them for younger retirees or terminating them for all retirees. Gordon's Comments:
Envelope Stickers: Bumper Stickers: Send
your check to:
Articles
from NARSE Straight Talk
Medicare
Managed Care Plans In the recent surveys conducted by narse, the top burning concern of Sears retirees was the issue of health care. You and your spouse may be one of the thousands of seniors and / or disabled persons whose current Medicare managed - care HMO is not available next year. HMO's say they are leaving because they are not reimbursed enough by the HCFA. Medicare managed -care HMO plans have a one-year contract with the Health Care Financial Administration (HCFA), the federal agency that administers Medicare. HCFA reimbursements are difficult to understand as they vary by counties. For example in King County where we reside in Bellevue, WA the managed care plans currently receive approximately $482 each month for each Medicare member. Adjoining counties receive less. Other examples of the disparity are: California; Los Angeles - $640, Orange - $604; San Diego - $555, Florida; Broward - $636, Dade-$738, New York; New York - $777, Westchester $584. According to the Congressional Research Service, the average reimbursement to HMO's is $559. One has to question why it costs so much more to care for seniors and disabled in other areas? In our personal case over the last five years, because of HMO Plan changes, we've had to locate four new primary care physicians. Most of the notably good physicians already had a full patient load, thus you take whoever is available. One of the selected primary physicians was moving so fast in the office that he was out the door before you had an opportunity to fully describe your condition. One has to ask, "Where is he continuity of your health care"? "Who is ultimately responsible for your health care"? It has become abundantly clear that the individual has to take charge of their own health care. I've got some suggestions: B. Make a photocopy of your spouse's Medicare and current HMO Plan card. C. Keep these readily available for the next visit to the doctor or hospital. D. Regularly exercise, eat well-balanced meals, keep your mind and body active. E. Medigap. If you are currently enrolled in a managed care plan and may wish to purchase a Medigap plan now. Do not leave your current plan but maintain the coverage through December 31, no matter how frustrated you may be otherwise, you may lose the opportunity to purchase a Medigap plan. Shortly you should be receiving a letter stating your plan is leaving. A final notification letter should be received by Oct. 2. The letter will explain your rights to purchase a Medigap policy without fear of rejection. You should be aware that Medigap plans cost more than a managed care plan. F. When should you make a decision about a managed-care plan? You should review those Plans offered by Sears if you are still enrolled in Plan "E". If you've dropped Sears Plan "E" and its sponsored plans, review others plans available in your area and enroll by Nov. 30 to insure that coverage will begin Jan. 1, 2001. One word of caution is that if you are dropping a Medicare HMO to enroll in the traditional Medicare Plan, 30 to 60 days are required for the necessary paperwork to be handled by Medicare. It is a good idea to attend local HMO meetings checking coverage, physicians and specialist available under their respective plan. G. Sears Plan "E". However, if you retained Sears Plan "E", the current year 2000 program has an Annual Deductible of $250 per person per Plan year, an Annual out-of-pocket maximum of $2,000 per person per year, and a Maximum Lifetime Benefit of $150,000. Plan "E" will pay 80% of the covered expenses less the amount paid by Medicare or other primary plan. Prescriptions for 90 days through the mail is currently available at a $20 co-pay and is very inexpensive. A Summary Plan Description Booklet for calendar year 2001 is expected to be sent out through the Retiree Service Center in late September. H . Some feel that "Sears Plan "E" is getting very expensive". Would you recommend dropping it in favor of a locally HMO who offers a low out-of-pocket expense? Absolutely not unless you are opting for a Sears sponsored HMO! If nothing else, you will lose forever the opportunity to participate in Plan "E's" valuable prescription medicine plan unless you participate in a Sears sponsored HMO. You've dropped Sears Plan "E"; can you get back into it? If you've dropped "Plan E" to join a Sears sponsored Medicare HMO, you can rejoin "Plan E". Once you've dropped Plan "E" for those other than sponsored by Sears, you are out forever. There have been some retirees expressing concern about Sears and its retiree medical insurance. A Feb. 22, 2000question to Sears-Benefits was replied, "Although Sears intends to continue the retiree medical Plans, as always, we reserve the right to modify, suspend, or terminate the Plans at any time". I. What if I do nothing? If you do nothing, the government will put you back into the original fee-for-service Medicare. This means Medicare will pay 80 percent of medical bills it approves, and you will be responsible for the remaining 20 percent. J. About HMO's. You should remember that signing on to an HMO you will be restricted to choosing a physician that has signed with your specific plan. If you like your current primary care physician and he/she is not a member of the Plan, you have no choice but to switch. If your HMO primary care provider believes that you don't need a certain test or referral to a specialist, but you still see the specialist, you cannot be reimbursed for that treatment. In some cases, HMO physicians might be provided with financial incentives (or disincentives) to limit the services they provide the patients. They might have to play the role of "gatekeepers" to care, and, in the past, they have been restricted even in what they can tell their patients. Such policies limit the treatment options that physicians have at hand. These policies might diminish the quality of care provided within an HMO. K. For additional information, you can
reach Medicare by calling 800-633-4227 (hearing impaired 877-486-2048),
or visit their web site at www.medicare.gov or call Sears Retiree
Service Center at 800-762-7327 or visit the web site at http://resources.hewitt.com/sears
http://resources.hewitt.com/sears.
Facts
Support Sears Retirees Shock & Concern Regarding Health Care Changes Following are statistics obtained from a number of different sources that show major health care issues are not unique to Sears retirees. Health Care Facts for Total U.S.
Population: Health Care Facts for Medicare Eligible Population:
Nearly 327,000 Medicare beneficiaries had to find new health plans as of January 1, 2000 because they were dropped by their HMO (41 HMOs withdrew from Medicare + Choice and 58 plans reduced the geographic areas they cover). Most of the affected enrollees - 248,000 - were able to join other HMOs in their area. Unfortunately, many will have to change doctors or travel farther for care. The remaining 79,000 beneficiaries live in places where no other HMOs are available and must enroll in the traditional Medicare fee-for-service plan which does not cover prescription drugs. (The upside to this is they have more choice of medical practitioners and an opportunity for better care than from a cost cutting HMO.) What Does All This Mean to Sears
Retirees? Hopefully Sears Benefit Administrators have enough leverage to negotiate the lowest possible premiums for us, and are able to provide reasonable alternatives when cost increases become exorbitant. The good news is, nobody age 65 or older can be turned down for Medicare, even if they were previously enrolled in a Medicare HMO that discontinued coverage. If you are dropped by a Medicare HMO, you are guaranteed the right to buy Medigap policies to cover some of the costs not covered by traditional Medicare (plans are not required to cover prescription drugs). If you are a member of a Sears offered Medicare HMO (pay premiums to the Retiree Service Center), you have the option to enroll in Sears Plan E which includes prescription drug coverage. (If you Sears offered HMO drops your coverage, and no other suitable HMO is available, you can enroll in Plan E and Medicare. For your future well being you should take the following actions:
Take charge of your own health care:
Health care is a major concern for all of
us and there is much more that needs to be addressed. Please let us know
what topics you would like to have covered in future STRAIGHT TALK
issues.
Lawsuit
Update All motions have been filed relating to the lawsuit regarding Sears' breach of fiduciary duty. As reported in the last issue of STRAIGHT TALK, it may take the court several months before the court issues its ruling. When issued we will post a copy on the NARSE web site location at www.narse.org. Fiduciary Trust Relationship
Explanation Such a relationship exists when a person
or entity, such as Sears, acts primarily for another's benefit and well
being. An example might be administering a life insurance program as a
benefit to attract and retain employees, or as an inducement to retire.
This status gives rise to certain legal obligations including to act in
the best interests of the other person, and, in lay terms, don't screw
him! In other words, when one places his/her trust and relies upon
another to their detriment, such relationship is breached and the person
or entity breaching this relationship, such as Sears, may be held
legally accountable.
And
the Planes Keep Our Message in Front of Arthur and Others Those of you residing or who have friends
in the Chicago area, are cordially invited on Sunday September 3, 2000
from 3:00 p.m. to 7:00 p.m. to look up into the sky along the lakeshore
during the "Jazz Festival" as part of Grants Park festivities.
The plane will fly between Navy Pier and the Adler Planetarium. NARSE is
again sponsoring a plane flight over Chicago trailing a banner
"SEARS UNFAIR TO RETIREES". It again reiterates the fact that
the National Association of Retired Sears Employees will not go away
until our long promised retiree benefits are restored!
Circuit
City to Cut 1,000 Jobs, Remodel; Shares Fall Richmond, Virginia, July 25 (Bloomberg) - Circuit City Group, the second-largest U.S. consumer-electronics chain, said it will close eight distribution centers and cut 1,000 jobs, or 1.7 percent of its workforce, as it remodels most superstores and quits selling appliances. "Circuit City should have never been in the appliance business in the first place, because too many people sell appliances,'' said Fredric Russell, president of Fredric E. Russell Investment Management in Tulsa, Oklahoma, which owns shares of retailer Dollar General Corp. ``The market for personal computers and wireless phones is so large, they don't need to distract themselves.'' Circuit City's warning also points to a slowdown in consumer spending, said Russell. News that Circuit City will exit the appliance business sent shares of appliance makers Maytag Corp. and Whirlpool Corp. lower. Shares of Circuit City fell 6 1/2 to 26 1/8 in New York Stock Exchange trading after dropping to 25 1/4, a 52-week low. The stock has fallen 42 percent this year. ``Appliances are the short-term reason, but the real reason for the problems is an aging store base they haven't remodeled and a nimble competitor in Best Buy,'' said John Glass, an analyst at Deutsche Banc Alex Brown, who today cut his Circuit City rating to ``market perform'' from ``strong buy.'' Best Buy Co. is the largest U.S. retailer of consumer electronics. Circuit City's inventory-turnover rate, which measures the number of times a retailer must replenish a store's inventory, lags Best Buy's, according to Bloomberg data. Circuit City is exiting appliance sales as Home Depot Inc., the world's largest home-improvement retailer, this year began selling appliances. McCollough told analysts and investors during a conference call that Circuit City also saw more aggressive competition recently in appliance sales from Sears, Roebuck & Co. and Lowe's Cos. Whirlpool and Maytag are major appliance suppliers to Circuit City and will lose business, said Justin Maurer, an analyst at Merrill Lynch & Co., who has a ``near-term neutral'' rating on Maytag shares. Whirlpool shares fell 8.1 percent and Maytag shares dropped 2.4 percent. Circuit City's exit is a $800 million to $1 billion opportunity for Sears, said Arthur Martinez, chairman of Sears, which has 35 percent of the appliance-retail market. `I'm going to be asking our team to devise the most aggressive selling and marketing plan we can,'' Martinez said. Circuit City will close six distribution centers by year-end, and two more centers in the next 12 months. The company said it will take three years to remodel its superstores. The new stores will have about 20,000 square feet of customer-accessible space, the company said. Distribution centers to be closed are located in: Atlanta; Brandywine, Maryland; Chehalis, Washington; Chicago; Columbus, Ohio; Dallas; Des Moines, Iowa; and Fort Lauderdale, Florida. The Richmond, Virginia-based Company also
operates 43 mall- based Circuit City Express stores and owns a 75
percent stake in the CarMax chain of used- and new-car dealerships.
Bob
Gurnee, NARSE Director We are very sad to inform the many
friends and co-workers of Bob Gurnee that he passed away in July in
Wilmington, Delaware. Bob's long service to Sears included officer
positions as Treasurer of Sears, Roebuck and Co. and President of SRAC.
Bob's family has our sincere condolences.
Membership
Update... Membership has grown
steadily but not as rapidly as it can. We again are requesting your help in locating retirees that may not have heard about NARSE. Look over your address lists. Ask your friends. And forward names and addresses (phone number if possible) to NARSE. We will gladly provide them with information that they would like to have about restoring and preserving the promised Sears retiree benefits. Thanks to you plus a lot of volunteers and donations, membership has grown, mailings approach 20,000 and Retiree Clubs are 233! Our goal set over a year ago was to locate at least 50,000 of the 133,000 (we think) Sears retirees. We started with only a few names, and Sears would provide none. While we have come a long way, "baby", you can see that we need an effort to get to 50,000. But with your help we can reach that number. We are all aware of the awesome strength of numbers! Clubs, we need your membership lists if you have not already sent it. I do want to assure every retiree that
the NARSE membership database is held in very strict confidence. It is
never shared or sold, nor even considered. And that includes Sears!
After member data is entered into our database, all applications and
envelopes are shredded before disposal. WE NEED YOU AND YOUR HELP.
NARSE
Chairman's Letter: It's hard to believe that almost two years have passed since Arthur Martinez made the fateful decision to renege on the Sears promised life insurance benefit for retirees. Arthur has stated that this decision was carefully considered for a year. A Senior Vice President whose legacy is one who takes away from others apparently heavily influenced Arthur in his decision. This VP employed a "benefits expert" who was given a personal choice of either the Sears' or the Allstate retirement benefit package. This choice was not available to the rest of us. We know of no retiree that was asked for input. So a person with choices was the "expert" in making decisions about earned benefits that meant so much to Sears retiree families. The previously offered excuse of "faulty advice" for another decision may be very appropriate and accurate in this case. The Sears retiree life insurance take-away decision made by Arthur Martinez severely damages many retiree families in a very real, practical and financial way, but he hurt us all just as badly in another way. Arthur also took away from all retirees and employees the life long trust and love for the Company and belief in the honor of management in making benefit decisions for employees and retirees. He ignited a "family feud" that has created a negative atmosphere, severely damaged relationships and forced retirees, their families and friends to choose other retailers for their many purchases. It is clear to all retirees and Sears associates that our battle is NOT with Sears the Company but with Sears current management, namely Chairman Arthur Martinez. He made the decision to convert "widow money" to a P&L profit. A decision that when reversed will allow Sears retirees to again be Sears Best Customers and most loyal friends. Arthur's unwarranted action has resulted in one plus for retirees ... the formation of the National Association of Retired Sears Employees (NARSE), the Sears retiree group dedicated to the retiree benefits. NARSE publishes four Straight Talk newsletters each year, maintains a web site at www.narse.org, provides speakers to bring information to local retiree clubs, and has a database of nearly 20,000 retirees that is growing monthly. It has reunited thousands of retirees with former associates and friends! One big plus and response! NARSE is also developing a strong coalition with organizations of other retirees. We continue to contact and build support with Federal and State elected officials. We have earned substantial support from organizations such as AARP and national church groups. NARSE enjoys a remarkable relationship with print and electronic media. We are very fortunate to have a large cross section of current Sears associates quietly supporting our goals Please allow a personal observation as I enjoy the privilege of serving Sears retirees and the NARSE organization. Like you, I am uncomfortable pointing out the causes and results of bad decisions that reflect poorly on the fine company that allowed me to send my kids to college. Sears the Company provided me with a work lifetime of pride, joy and dignity. But my discomfort pales by comparison to the obvious retiree rights and needs ... and the absolute necessity of the return of the life insurance that belongs to your family and mine. NARSE leadership gets a singular sense of purpose from your letters, your phone calls, your words and reactions as we meet or speak with retiree clubs. Our satisfaction is representing proud retirees in a fight that is right. I dedicate myself and the other volunteers at NARSE to the important task that Arthur created by his take-away decision. I sincerely thank you for your supportive words and actions that are the backbone for me and all of NARSE. We
all will continue to fight for a just cause.
A
Note of Appreciation I wish to extend to all of the fine folks at NARSE, my sincere thanks for the high honor granted this Appalachian. I will always cherish your faith in permitting me to be the first chairman of NARSE. I especially want to thank all of you who made my job so easy and spiritually fulfilling. Within the short history of NARSE much has been accomplished and there is much still to be done. I will fully and completely support our new chairman, Ev Buckardt, as he leads us to achieve our mission - the restoration of the promised life insurance and protection of our retirement benefits. The indomitable spirit of NARSE will succeed and we will prevail - the last few lines of Tennyson's Ulysses could easily have been written about Sears Retirees: Though much is taken, much
abides, Sincere thanks, Claude Ireson Editor's Note:
Club
Feature . . . About 1986 group of Sears retirees on the North side of Chicago were meeting rather regularly for breakfast. As a result of their mutual Sears backgrounds and enjoyment of being together, the Sears North Chicago Retirees Club was formed with Bob Wozny as president. They now have a mailing list of over 100, with 40 to 50 regularly in attendance at their meetings. The Sears North Chicago Retiree is a service club with their efforts directed toward improving the well being of its members. In the past, guest speakers have been attorneys (wills, trusts, etc.), urologist, chiropodist, HMOs hospice care, retirement homes, accountants, mortician, and so on. On the lighter side, presentations by Eli’s Cheesecake, Fannie Mae Candies, Mars Candies, Matt’s Cookies, American Airlines, our own NARSE George O’Hare ... you get the idea! The
Sears North Chicago Retirees Club meets for breakfast and a short
program on the first Thursday of each month at the Skylark Restaurant at
Higgins and Harlem, just off the Harlem exit from the Kennedy
Expressway. On occasion
they may skip a month. But
not August this year as Harry Volkman, a Chicago TV weatherman with a
great sense of humor, was the featured speaker with 47 in attendance. At their December meeting, a turkey or two are won by drawing.
Sears
Arizona Road Runner Retiree Club Formed in 1986 by Art Levin (Boston) and Bob Hart (Chicago), the club headquarters are in Phoenix. Roughly half are retirees from AZ and half from 29 other States! Each year four meetings are business lunches and four are social events. For the business meetings they have invited Sears officers, local Sears managers, AZ Attorney General, and representatives from insurance, AARP, medical and financial fields. And most recently Ev Buckardt from NARSE! An interesting, and appreciated, idea: at each business meeting they have a "50-50 Raffle". A special collection is taken from all the retirees in attendance. Half is sent to NARSE and the other half are door prize drawings (!st, 2nd, and 3rd). They characterize their social events as "interesting, entertaining and varied." Examples: cruise Canyon Lake, lunch at a Mining Camp, race day at Turf Paradise, bus tour to Indian Casino, plus theater, baseball, etc. And no surprise as Sears Retirees, the Club does volunteer work in several Good Samaritan projects: March of Dimes, Heart Fund, Cancer Fund, Alzheimer's Assoc., Westside Food Bank and the Arthritis Foundation. About greeting Arthur. Winter 1998 and winter 1999 when Arthur brought about 250 of his top executives to The Phoenician, a Five Star Resort, for a week of meetings ... these Road Runners were there with placards "to restore our life insurance." They did the same at the Paradise Valley store when Arthur brought the Board of Directors for an R&R meeting! Thank you, Sears AZ Road Runners for your
many efforts ... and your raffle! They are active ... and welcome
visitors and new members. Call Art Levin at 623/ 584-9410.
Retiree
Feature: After graduating from the University of Rhode Island, Art Levin joined Sears as a trainee. When he retired in December of 1985 he was on the Boston Group Staff and had devoted 35 work years to Sears. It was the only company that Art worked for after college. As he planned to move there, it was only natural that he looked for a retiree club in Arizona. Learning there was none, it was only natural that he found Bob Hart and one was started. After being President of the Club for nine years, he took a break but this year returned for a two year term. Art also organized the AZ Alumni Chapter
of the University or RI and has been the president since 1986. Art has
been involved with NARSE during its entire existence and is the Vice
President for the Southwest Region. Another Sears couple that remains active and involved. Thanks, Art and Laura, for representing all of us well! Editor's Note: This common thread
that we see is not a surprise to long-term Sears people. Family based,
we are active, care for each other and help others. It is why we are
staying with the correction of the life insurance injustice. Arthur, we
will not go away!
Sears
Informs NARSE of Actions Sears Senior Vice President of Human Resources, John Sloan, in a first positive gesture has informed NARSE of the following items/steps by the Company that they feel will better serve Sears Retirees.
Sears presented all of the above items to
NARSE. This is a welcomed step towards communication. Please let us know
how you feel about any or all of these items. NARSE will consolidate and
provide to Sears. Your comments and any Sears response would be in the
next Straight Talk. Retirees can always write directly to the Company. A
copy sent to NARSE would be included in any recap that we do for Sears
and Straight Talk.
Dean
Swift Passing Dean Swift, retired Sears president, passed away Sunday night, August 27, 2000, after suffering a massive cerebral hemorrhage stroke. He was 81. After Dean retired from Sears, he headed the Executive Service Corps of Chicago. Services will be held at 11 a.m. Friday, September 1, at First Presbyterian Church, 700 Sheridan Road, Lake Forest. (at Deerpath). There will be no visitation.
Comments About Martinez Tenure as CEO/President By Gordon H. Muschett, N.A.R.S.E. Communications - Aug. 25, 2000 For almost three years since Arthur Martinez made the decision to take away our long promised paid-up retiree life insurance and freeze Sears contribution to our health benefit, N.A.R.S.E. has attempted to keep you informed about current Sears information either through our newsletter "Straight Talk", our web site, meetings, planned events or email. As you are aware, Arthur Martinez has indicated he plans to retire at the end of this year and the company has hired an Atlanta based executive recruiting firm searching for his replacement. During his tenure, he has lost the faith in Sears of thousands of retiree families, as well as their friends and neighbors through his actions towards Sears retirees. In doing so, he has lost the advantages of not only sales, but a superb public relations asset called "Sears"! In this writer's opinion he's made some good efforts in improving store appearances and moved the company into some new opportunities. However, if you took a piece of paper and made two columns, one plus and the other minus, then list Arthur's accomplishments, you would have good reason to feel that at the conclusion, you'll draw up more minuses than pluses. A partial list in the plus and minus columns could include:
It appears that Sears is hurting on all fronts: from low end competitors such as Target and Wal-Mart, from high end retailers and boutiques, from appliance and electronic cut-throats such as Best Buy, Circuit City, Home Depot, Lowes and soon WalMart, and tool/hardware competition from Home Depot and Lowes. As illustrated by Costco's success, consumers will make purchases out of a warehouse providing the prices are competitive and right. Susan Chandler's Chicago Tribune August 20th article sent out to you on Aug. 21 (which appears in Breaking News) appears to hit home in most all areas and Sears is being attacked and surrounded by stiff competitive pressures. Progress at Sears must be made through people with the right vision and direction with confidence in their jobs, benefits, and the future supported by solid merchandising and operating. Sears must regain its position as "The Competition"! Your opinion counts and you may wish to email Arthur your thoughts. We hope you do so! His email address is: amartin@sears.com
The Retirees Battle
for Promised Life Insurance We are now
entering phase two of our battle to restore the promised retiree
life insurance benefit. A benefit that retirees were led to
believe was a “paid-up life insurance policy” for those who
had paid into the policy for 10 years. Yes, the class action suit
rulings went against Sears Retirees; however that was only phase
one. The Battle continues in the courts. The “live”, current
case pursues the issue of Sears “breach of fiduciary
responsibility” as it relates to our Sears Retiree Life
Insurance benefit. This case has “legs”---the documents that
retirees have produced for our lawyers. It
is very interesting to note that the four often referred to
“Benefit Bandits” primarily responsible for the decision to
destroy the Sears retiree life insurance benefit have left the
company to “pursue other interests” or announced their
intention to retire. Messrs. Bronson, Levin and Rucci departed
Sears in 1998 and Mr. Martinez announced his plan to retire before
the end of this year. Regardless
of the events to date, NARSE will continue to fight the just fight
for the 84,000 retirees who have been adversely effected by the
unfortunate decision that was made by a very small cadre of
short-service senior Sears Officers. NARSE
will aggressively pursue the retirees’ case in courts of law and
of public opinion. We will offer to meet with Martinez’s
successor, when announced. On behalf of all retirees, we will
present our position and see a mutually satisfactory resolution to
the life insurance issue and the protection of retiree health
insurance and other benefits. While
there is no assurance of success, we believe that reasonable
people can arrive at reasonable solutions. NARSE will continue to
pursue the course of reason . . . and fairness. All should be
willing to give their best efforts to undue the personal and
business damage that Sears recent management has inflected upon
its “family” in the past 3 years. Hopefully,
new senior management will recognize the tremendous value of the
Sears retiree family. Hopefully, new management will treat
retirees as respected humans rather than as “burdens” or
dinosaurs. Hopefully, Sears new management will treat retirees
with the same respect as they wish to be treated. Hopefully, Sears
new management will recognize the value of a supportive family.
Hopefully, Sears new management will reach out to Sears
retirees...Sears former “Best Customers” ...and could be
again! NARSE
is hopeful...and determined! Ev
Buckardt, NARSE Chairman P.S.
The
meetings are now history and Overview
of Events for the Two Days
NARSE Annual Meeting, Wednesday, May 10th1.
Open business meeting was held in the afternoon in a private room
at the Mill Rose Restaurant in Hoffman Estates. 2.
After the business meeting, dinner was served by the restaurant
in the same room. Attendees paid for their dinner and the beverage
service. Sears
Stockholders Meeting, Thursday, May 11th 1.
NARSE members gathered at the Restaurant at 7:00 a.m. for a
continental breakfast before leaving by bus for Sears Headquarters in
Hoffman Estates. 2.
For about two hours before the Stockholders Meeting, NARSE
members greeted all who came through or passed by the main entrance of
Sears. 3.
NARSE members attended the Sears Stockholders meeting, Arthur’s
last due to his announced retirement. Ev Buckardt welcomed all and introduced Clif Hooks to present four recognition awards. Distinguished Service Awards recipients Roy Harris and Bob Wozny were at the meeting but due to health reasons this was the first meeting that Buzz Williams missed. In part, his award read: “Buzz was one on the first to take legal action against Sears to protest the cut-back of promised and earned Life Insurance benefits. As a Charter Member, Buzz contributed to the organization of NARSE...Buzz has devoted his organizational abilities to developing NARSE’s Web Site...His untiring efforts on behalf of Sears Retirees are recognized and greatly appreciated.” The
Joseph M. Kehoe Annual Award was presented to Gordon Mushett . Ev then
recognized the efforts of Mel Schultz, Leo McCormick and George O’Hare
in preparing the signs in the room that would be used the next morning
at Sears. This was followed by Roy’s financial report and Ev’s
comments on how close our expenditures remain to budget. Then
Dave Silger, George O’Hare and Leo McCormack reviewed the many details
with necessary timing for the Shareholders Meeting the next day. Ev
presented a slate of directors for approval. He emphasized that to keep
NARSE active most positions need new persons. NARSE needs you to
volunteer! Bob
Wozny’s award recognized Charter contributions, plus Presidency and
leadership of the most supportive Chicago North Retirees Club. Roy
Harris received his Distinguished Service Award from Clif Hooks. Roy’s
award said in part, “Since the inception of NARSE, Roy has served as
Treasurer of the organization. He has given generously of his time and
experience, and his Stewardship as Treasurer has helped guide NARSE to a
solid financial footing...” Ev
introduced Mike Mulder, the lawyer in charge of the retirees lawsuit(s).
Mike pointed out that the two class action lawsuits were ruled in favor
of Sears based on the technical language of the plan. This is not the
end of the case. A new motion has been filed with Judge Moran that
addresses the fiduciary duties of Sears in administering the Sears Life
Insurance Plan for the participants. As previously, this will take some
time in the courts. Tony Debevetz then introduced our guests from AARP. Mary Ellen Signorille, AARP Lead Counsel in Washington, D.C., came to Chicago just to speak to the Sears Retirees. Mary Ellen explained the legislative process and AARP efforts in Washington. Ms. Signorille did not see any legislation happening for retirees, but felt that the solution was in the courts. She also reaffirmed AARP’s great interest in the Sears Retirees Life Insurance case and their support of Mike Mulder and NARSE. It was very apparent to all at the meeting that AARP is following our case very closely and feels that Mike Mulder is an exceptionally capable legal representative for all Sears retirees. Mary Ellen did feel that Medicare Prescription Drugs was getting a lot of attention now. She concluded with questions and answers. Ev
had Mel Schultz discuss the Sears retiree survey that he developed. It
was used by NARSE officers in a sampling of several clubs. Those
presenting results from clubs that completed the survey were Carroll
Elijah, Art Levin, Dave Micheal, Gordon Muschett, Ken Winkler and Bob
Wozny. Tom
Dowd presented important questions, that needed answers, that retirees
could ask at the Shareholders Meeting. Ev
adjourned the meeting at 4:30. You should have been there! A review of the court file shows that plaintiffs’ motion for partial class certification of certain issues concerning plaintiffs’ breach of fiduciary duty and promissory estoppel claims is now pending before Judge Moran in the Sears Retiree Group Life Insurance Litigation. The plaintiffs filed the motion for partial certification after Sears recently prevailed on a motion for summary judgment on the breach of contract and plan enforcement claims. The court agree with Sears that a reservation of rights provision in the Summary Plan Description booklets gave Sears the contractual right to amend the benefits, even to retirees. That decision is not yet appealable, as the fiduciary duty and promissory estoppel claims must first be sorted out. The motion for partial certification refers to an approach adopted by the United States Court of Appeals in Philadelphia. The Philadelphia court denied the plaintiffs’ contract claims because of a reservation of rights claim similar to the recent ruling in plaintiffs’ Sears case. But nonetheless the court allowed the plaintiffs to proceed with the distinct breach of fiduciary duty claim. For purposes of the breach of fiduciary duty claim the plaintiffs assumed the plans did not contractually vest benefits, and claimed instead that the company breached its fiduciary duty by leading employees to believe that the plans provided life time benefits. Back in January 1999 the court denied a motion to certify the Sears’ retirees’ breach of fiduciary duty claims. The plaintiffs’ motion for partial class certification seeks to answer the concerns the court raised in its prior ruling. The motion focuses on Sears written representation of the life insurance coverage as “paid-up” and asks the court to determine several common elements of the claim on a wide basis. For example, the court is asked to determine whether Sears’ written representations were materially misleading on a class-wide basis. The motion asks the court to take advantage of the efficiencies of a class action where it can, so that the common issues do not have to be tried repeatedly by each retiree. Then, the court can proceed with individualized procedures to sort out any remaining issues concerning harm to the retirees and their reliance on the misrepresentations. The case docket shows
that the parties are still briefing the motion. The last brief is due to
be filed by the plaintiffs on July 7, 2000. As with the past motions it
may take the court several months before the court issues its ruling.
Once the motion is resolved NARSE will post a copy on its web site.
Again we encourage you to check your web site periodically. Web site is
www.narse.org Charles “Chuck” Harrison, Sears retiree and NARSE Director, was featured in the Chicago Tribune and the Chicago Sun-Times Feb., 2000. Both newspapers ran pictures of Chuck. The Chicago Sun-Times article by Lee Bey, Architecture Critic, said: “Look around your home. Kitchen, bathroom, toy box, bedroom, backyard, den--it doesn’t matter. Charles Harrison has left his imprint. “Harrison, 68, is a product designer. He spent 33 years with Sears, creating countless lawn mowers, faucets, appliances. Before that, in the 1950s, he worked with such influential local designers as Northbrook’s Henry P. Glass. In 1958, Harrison, then 26, redesigned the dowdy, clumsy ViewMaster into a neat little essay in modernism. In Harrison’s hand, the toy became stylish, lightweight, colorful--and a cultural icon. .... ” ‘I’ve probably designed one of everything that exists in anybody’s home today,’ he said. “One more thing:
Charles Harrison is black. He belongs to an influential but unsung local
fraternity of black designers and commercial artists who profoundly
shaped the products and services we buy and use. ...” Help Wanted....Help Needed....Membership·
Retiree names and
addresses of Non-Members: The NARSE data base is growing slowly but
surely. Keep sending those names, addresses and phone numbers. We want
and need one and all. ·
Address changes:
Have you moved? Changed area codes? Please send in old and new addresses
and phone numbers. We want your information to be current on our mailing
list. ·
New or Renewal
Applications: Please fill in all information requested on the form.
When mail is opened, checks are sent to the bank and applications go to
the data bank operator for input to our membership list. ·
Applications with Straight
Talk: Inserted with each newsletter is a member application to
join NARSE. If you are already a paid member, please pass it on to
another Sears Retiree. We save more expense by sending it with all
rather than separating paid members. Of course, we would be grateful if
you used it to sent a contribution. ·
Membership Year: The
year begins May 1 of each year and ends April 31 of the following year.
New year membership cards begin mailing approximately April 1st. If you
have been missed, we apologize and ask that you tell us. ·
NARSE Office Address: We
are still receiving some mail sent to our old address. Please discard
any old applications and envelopes. The U.S.Postal Service will not
forward mail sent to the old address after July 1, 2000. The correct,
current address is: NARSE; 8700 W. Bryn Mawr, S-800 South; Chicago, IL
60631-3507. THANKS for all your support. Bud
Defano, Membership Arthur stated that the life insurance savings were $60 million annually. Ev requested the basis for this number! The same day
of the question Jeffrey N. Boyer, CFO sent Ev a letter that said,
“...The 10 year phase down will reduce Sears annual benefit expense by
approximately $60 million per year over the 10 year phase down period. On
an after-tax basis the annual savings is approximately $35 million. “The $37 million after-tax ($61 million pre-tax) of savings which you alluded to is the one-time gain recognized in 1997 for the elimination of life insurance benefits for active associates. ...” Copies went to Martinez, J. Day, A. Kelly. Ev replied May 16 stating that he could not find life insurance costs broken out. “The question of cost (pretax or after-tax) still remains. Question, ‘what is the savings in current premiums annually on a cash basis, for the post retiree life insurance benefit?’ ...how much has and will the annual cost to the company decrease...?” A second
request was made on May 30 but no reply to date. You can question Jeffery
also at Sears, 3333 Beverly Road, Hoffman Estates, IL 60179.
The people copied in Jeffrey’s letter Julian Day, Chief Operating Officer, hired in 1999, salary & bonus $933,000 plus long term incentive $5.4 million; immediate pension plan, no 1 yr. wait. Anastasia Kelly, General Counsel, also hired in 1999, salary & bonus $969,000 plus long term incentive $3.0 million; gets 2 yr. for 1 yr. service cr. to age 60. What about Arthur?? Not to worry! Arthur
Martinez, Chairman and CEO, hired in 1992, salary & bonus $3.4 mil.
plus long term incentive $4.5 million, received 10 service cr., no 1 yr.
wait. With 17 years service credit, his annual pension estimated above
$600,000. Long term incentives per 5/15 Crain’s Chicago Business
“Fortunate 100...” Can the Sears Board justify all this? Sears
Annual Meeting of Shareholders The
Shareholders Meeting was held in the Merchandise Review Center at the
Hoffman Estates Headquarters. Identification or tickets were not required
for entry. Playing before the official meeting opening was a very upbeat
video. Martinez kicked off the meeting stating that this was the first time the Sears Shareholders Meeting was being held at the Store Support Headquarters in Hoffman Estates. This would save the company over $250,000. Also this was the second year that anyone could watch the meeting and send questions through the Sears Website, along with being able to browse through and shop for thousands of pieces of merchandise. Associates were not allowed at the shareholders meeting “due to space considerations”, but could watch over closed circuit television. Actions
and Proposals voting was next. The first three were standard Company
proposals with “yes” votes recommended. The forth was a shareholders
proposal by Martin Glaser regarding the classification of the Board with
all directors elected annually. A “no” vote was recommended. While
the votes were being counted, Arthur went to some lengths in recapping
what he termed an “excellent year for our company”. The length may
have been due to the fact that Arthur had previously announced that he
would retire before the end of this year and wishes to be thought a winner
...correct, if you only look at his compensation. A few of his points: ·
Stock price now up
26% on YTD basis. ·
Focusing on
categories where we have clear competitive advantages. ·
Strong 4th qtr.
market share gains in appliances. ·
Managing overhead
costs aggressively and are enjoying benefits right now. Arthur
was questioned on items from stock price to the large Headquarters
addition that has been vacant for over a year (“25% occupied now”). Ev
asked for details when told that the annual savings realized by canceling
the retiree life insurance was $60 million. The Chicago Sun-Times reported the next day, “...shareholders lined up at microphones to question Martinez about lost life insurance, no-growth pension benefits and their concern that a proud culture is being lost. “For the first time, a majority also approved shareholder activist Martin Glotzer’s proposal to elect a new board of directors each year instead of having directors who serve staggered terms. The proposal narrowly failed last year. “Martinez
said the board of directors will consider the recommendation, but he noted
that it would require both the board’s approval and a 75 percent
supermajority of Sears outstanding shares to take effect. He sought to
minimize the impact of the vote by saying the 50.3 percent approval
reflected a majority of only the 60 percent of the shares that voted,
rather than of the total outstanding.” His comments were not well
received by the attending shareholders!
Calling
All Sears Retirees. . . One of the nation's largest retailers -- Sears, Roebuck and Co., which began business in 1886 -- has a large family of retirees ... more than 100,000 throughout the nation. Now a large and growing national organization, the National Association of Retired Sears Employees, Inc., (NARSE), wants to hear from them. Formed in 1997, NARSE now has more than 20,000 members and is looking for more to join them in a campaign to restore and protect retiree benefits. Ev Buckardt, chairman of NARSE, was
President of Sears Catalog and Direct Response until he retired in
1992. Buckardt said Sears retirees may contact NARSE at 8700 W.
Bryn Mawr, S-800 South, Chicago, IL 60631-3507 or by phone at
(773) 714-4987 or (847) 465-0790. The organization's web site is: www.narse.org.
Martinez's
Last Annual Meeting Sears Chairman Arthur Martinez chaired his last annual meeting Thursday, and the tale of two employees tells plenty about what his legacy will be. Karen Pitts started working at Sears, Roebuck and Co.'s store in Tucson, AZ., only three years ago. On Thursday, she attended her first annual meeting ever, as the winner of a $10,000 company-wide award for customer service. Pitts was frustrated last year when a customer dearly wanted a particular mountain bike, but her store was out of stock. Pitts called around to a couple of Sears stores but struck out. Then her grandmother died, and Pitts traveled cross-country to Asheville, N.C., for the funeral. While there, she stopped at a Sears store, and wouldn't you know it, there was the bike: shiny, silver, independent suspension, a 24-inch frame. Pitts shelled out $200 for the bike, paid a $60 oversize-luggage charge to get it home on the airplane with her, and ultimately got it to her customer. "My family laughed at me for doing this," Pitts says now. "`Well,' I said, `Wouldn't you like to be treated like that?'" Pitts got the last laugh when her heroics won the $10,000 customer-service award. The trip to Chicago and a meeting with Martinez also came as a bonus. To Sears people, stories like Pitts' provide comforting proof that the Sears "family" is still very much alive more than a century after Richard Sears sold his first pocket watch in 1886. Mel Schultz attended the annual meeting, too. He's part of the Sears family--the estranged retiree branch. Schultz spent 36 years in the advertising department at Sears' headquarters. He loved the company. All that time, Schultz could have walked to many annual meetings, but he never bothered. He started attending the meetings three years ago, though. Along with dozens of retirees, he showed up to protest Martinez's decision in late 1997 to nearly eliminate life insurance benefits for 84,000 Sears retirees. Schultz didn't get a company prize at the annual meeting. But his fellow retirees should consider awarding him one for creative sign writing. "Abandon All Benefits Ye Who Enter Here," read one of the plastic signs Schultz made for some 50 retirees who demonstrated before the annual meeting Thursday. "Associates: Think Your Benefits are Secure? Ask a Retiree, or a Lawyer," another almost rhymed. The retirees have pursued a vendetta against Martinez in the three years since he abruptly took away their life insurance. There is a big lawsuit, and a retiree boycott of Sears stores. It irks them, too, that Martinez has slashed pension benefits for current Sears employees. The retirees have become skilled conscientious objectors. "I don't at all like being in an adversarial role," Schultz says. "But they have just written off the entire retiree population." Martinez does his best to ignore the rancor. He says the insurance cutbacks save Sears $60 million a year. This may sound like a lot, but it barely registers at a $41 billion retailing giant that so desperately needs a strategic turnaround. Martinez hasn't found the answers to Sears' big problems. He has developed some promising strategies-- the new Great Indoors stand-alone stores, and even shopping carts. But those weren't enough to save his job when a restive board tired of waiting for results pushed him into early retirement. So this was Pitts' first annual meeting, a happy family affair. Pitts and thousands like her can give the Big Store a bright future, if Martinez's successor can just find a winning plan. It was the third annual meeting for Schultz and many retirees. They'll stalk Sears' meetings until they win back their benefits, or they all die. Martinez won't chair another Sears annual meeting, and he'll leave behind a mixed legacy. He'll be remembered for the spectacular early turnaround, and his inability to repeat the feat. And among 84,000 retirees, at least,
he'll always be remembered as the CEO who fractured the family.
Shareholder
Plan on Elections Goes to Board at Sears Almost 53 percent of Sears, Roebuck and
Co.'s shareholders voted for a shareholder proposal requesting that the
Hoffman Estates-based retailer's board hold annual elections for all
directors. Currently, one-third of Sears' directors are elected each
year. But shareholder approval is not enough to change Sears' charter,
said Chief Executive Arthur Martinez: If the board agrees with
shareholders, there will be another vote that requires approval of those
holding 75 percent of outstanding shares, not just the shares being
voted.
It is with the deepest regret that we must inform you of the passing of Arthur "Bud" Few on Jan. 15, 2000 in Huntington Beach, CA. He was a resident of Rancho Mirage, and formerly Glendora. Many of us became acquainted with Bud through his widely traveled visits to Sears unit across America as a vice president for 17 years of Sears Savings Bank outlining D/707 approved Sears Balanced Benefit Program to prospective retirees. Bud had filed a deposition with our legal team in support of Sears retirees relevant to Sears promise of paid-up retiree life insurance prior to his passing. He married Barbara Milward on Jan. 9, 1952 in Albuquerque, NM. He is survived by his wife Barbara; a daughter, Janet L. of Palo Pinto, TX; three sons, Eric F. of Glendora, John D. of Desert Hot Springs and Randall G. of Huntington Beach, and brother Nick E. Few of Albuquerque, NM. Bud was U.S. Army a veteran of of World War ll and the Korean Conflict and was a member of VFW; chairman of the Boy Scouts of America, San Gabriel Chapter; Covina Rotary Club; chairman of the American Cancer Society; and commander of Civil Air Patrol Squadron 11 of Palm Springs. Family suggest donations be made to the
Palm Springs Civil Air Patrol Squadron 11, P.O. Box 2663, Palm Springs,
CA 92263, or the American Diabetes Association, 6300 Wilshire Blvd.,
Suite 100, Los Angeles, CA 90048
March 29, 2000 We are entering the second round in our battle to preserve our promised retiree benefits. Judge Moran ruled in favor of Sears on the retiree class-action suit. The Judge's decision does not come as a total surprise. This is just round one! The Court has set status for the case on April 3rd, when we expect the Court to turn its attention to breach of fiduciary duty and other claims in the case. These are legal issues the Court separated at the beginning of the original class-action suit. The breach of fiduciary claim contends that Sears, as trustee over the plan, had a duty to adequately represent to the people (employees), train and communicate the plan, and that Sears breached that responsibility. Mike Mulder, lead attorney for Sears retirees, will be one of the guest speakers at our N.A.R.S.E. Annual meeting scheduled for Wednesday, May 10. Following Sears announcement of Arthur Martinez's retirement, on March 21 we wrote to Sears Director Michael Miles, who is heading the search for Arthur's replacement. The letter included the sentence, "Even though Judge Moran found in the company's favor, the retirees will not go away, and plan to pursue every legal avenue to receive a fair settlement." As elected spokespersons for N.A.R.S.E., we will keep that commitment to Sears retirees. Please mark your calendar and plan to attend the following meetings. This is a most critical time and year for maximum representation at the N.A.R.S.E. Annual meeting, and the Sears Annual Shareholders meeting. This year we must send a powerful message to Sears Board of Directors that Sears retirees are committed in spirit, demonstrated by numbers, and will not go away until our benefits are restored. Your presence and support is vital in sending that message. This is "Full Participation" time. Information on accommodations at LaQuinta Inn, at Hoffman Estates and other locations can be found in "Straight Talk". Your participation at these meetings is needed and appreciated. Please call Ev Buckardt (847-465-0790) to confirm meeting attendance, arrangements, dinner, special needs, etc. Thank you for your continuing support. Ev Buckardt, Chairman Claude Ireson, Vice Chairman Clif
Hooks, President
Comments: I truly believe Mr. Martinez's only goal is to "rape" and ruin the company. There is no direction; all actions appear to be reactionary.Just look at the performance of the competition in good times - then look at Sears. It truly is a sad commentary on management. And the Board of Directors allows it to happen. It seems odd to me that upon Mr. Martinez's arrival all the management of Sears became incompetent and "outsiders", who could make the company successful were brought in and it has been on a steady downhill roll since. How can this happen if it is not the management? WHO IS RESPONSIBLE? Any person can take away and sell off to
make themselves look good in the short term while enjoying a great income
but it takes a true manager to grow the business and make a profit.
Judge Rules in Favor of Sears
in First Round Judge Moran has ruled in favor of Sears on the initial retiree life insurance class action lawsuit. The Judge's ruling does not come as a total surprise. This is just round #1! The Court has set status for the case on April 3rd. We expect the Court to turn its attention to breach of fiduciary duty and other claims in the case. Sears had trustee over the plan and had a
duty to adequately represent to the employees, train and communicate the
plan. We contend that Sears breached its fiduciary duty.
narse Website Visitors' Thoughts About Martinez Mar 20, 2000 I thought you may like to see some of this week's unedited comments from our survey regarding Martinez's effectiveness. None received were positive for Arthur. ... Sears was my whole life...I will never get over leaving; never get over never seeing the REAL SEARS again...and I'll never forget the great leaders we HAD! ... Who knows what the inside issues are.......... but the surface sure looks good to me. Alan Lacy is one sharp dude. I think Arthur is just following ............. aka" flawed advice" - if it doesn't work out.. or what a brilliant move I made if it does. ... Couldn't happen to a better guy....hope those stock options continue to be almost worthless. He's screwed the stock holders, the retirees & deserves all he gets. ... There is no doubt in my mind that without N.A.R.S.E., Arthur would have conned his way through all of his bad judgments. We were able to keep the board informed of the facts. We did gooooooooooddddd. ... King Arthur hardly got enough pay last year to live on......Only 4 plus million plus stock plus other compensation. Maybe NARSE could help him out with some extra cash. ... the giant retailer has gone to other ones. morale in stores is terrible. maybe sears can again reach it's potential....I hope so.. ... no other comments...it's time to get on with the change...hopefully, we can find someone who can get us "back-on-track" to respectability as a company !!!! ... He has the chain of NTBS (National Tire and Battery Stores) and is not using the name of Sears in the Title. This must prove that he has no merchandising Sense. Sears uses the Sears name for the Sears Hardware Store. Logic would say, That we should name the NTBS as Sears NTBS Stores. Is he ashamed of the Goodwill of Sears. It is about time that he be replaced. I'm surprised that it took this long. ... a very poor showing for a number of years ... Mr. Arthur Martinez chairman of the board has led to the ruination of the high standards and morality that Sears had once maintained. Mr. Martinez has caused much friction with the management at Sears, as well as its employees. Mr. Martinez's stubbornness and his ability to side step the important issues has made him ineffective as a leader. Mr. Martinez has managed to irritate a number of board members, some of whom were very dedicated and concerned members of the board with a long track record who were forced to step down from there positions, Rumnfeld being one of them. Sears has lost its respect and perspective, its stock price is an indication. Mr. Martinez should have been given the heave how a long time ago. I am not optimistic about Sears being able to turn things around. Home Depot and Walmart have gained and surpassed Sears. I believe it is too late for Sears to regain the position it once help in high regard. ... He like a lot of other front office people, have only personal gain as a motivator. With this board he did not have to improve anything, he could and did ruin the company with their approval. Too bad. ... Sears needs a leader that can take the
strengths of "Sears Past" and apply them to the 21 century. No
retailer has the foundation that appeals to all groups and ages. The cross
selling of merchandise that Sears has lost, i.e. Auto Center, Furniture,
Seasonal lines. Has resulted in their loss of market share. The loss of
trained dedicated help has stripped Sears of its future. We don't need
Saks, Neimen Marcus, Lord and Taylor. We need someone like General Wood
who developed people that made Sears what it was. We don't need another
MBA, He's with Dean Witter making more money than Ed. Our Family had 130
years with Sears {Some still there}. It's Sad.
Visitors
to the narse Website The narse web site, like most major web sites, automatically generates activity logs that show the internet service provider where its visitors are coming from. According to its logs over the last 8 months, the #1 referral service is from America On-Line generating 32% of the visits with 7,958 visitors. What's interesting, is that the second highest referring web service is sears.com, which generated 7.4% of the visits with 1,830 visitors. Thus, for the 8 month period, that averages out to be 10 visits from Sears a day (assuming they're not working at Hoffman Estates on the weekends). Below are the visit details since last July through February (8 months):
Note: The last confusing line merely means that 35% of the visits come from web services where their proportion is less than 0.5% of the total.
Arthur
Wanted The Plane Shot Down! Air Craft Fly Around NARSE received more than its full value with this exercise. Prior to the Sears meeting, and while the executives were having breakfast, they noted the aircraft and its banner. Noses were very evidently noted pressed against all the windows at Hoffman Estates, and Arthur made mention of the flight during the managers meeting. To the assembled executives, usually reliable insiders reported Arthur asking, "Is Gus Pagonis in the room? Pagonis, (now retired from the U.S. Army and who was a 3-Star General of Logistics during Desert Storm, and who had one of the most difficult positions in the Army at that time) was recognized. Arthur asked Pagonis in front of the assembled group, "Pagonis, where is your anti-aircraft guns? You are now a 2-Star General". Later in the day, Arthur said, "Pagonis is now a 1-Star General". It is very obvious that NARSE's aircraft fly around got Arthur's ire and attention! It may have been funny comments to Arthur, but having served as an Aide-de-Camp to a General Officer and know how many work and think, I am confident the comment was not funny to Pagonis, nor does it enlighten his respect of Sears' leader or endear Arthur further to the other Sears' executives assembled! NARSE "Straight Talk" Delivery NARSE was questioned by the hotel, "If we wanted the newsletters thrown away, or do we want to come and pick them up?" Of course, we went to pick them up. Out of this, perhaps a better plan has arisen! As soon as we get our hands on a current computer printout of Sears Internal Address Book, we'll be sure to send all Sears executives our current and future newsletters. If any recent retiree has a computer printout of the current Sears Internal Address Book, please immediately send to:
Please confirm this email address if you are in possession and are now releasing. As we receive further confirmation from reliable inside sources, more information regarding the meeting will follow. Editor's Note
Q&A with the Presidents Spring Sales Rally SEARS, ROEBUCK AND CO. To:
Arthur, Mary, Lyle, Mark, Jim, Alan Store managers were asked to send a couple of their most important questions in advance, so that we could be sure to answer the most popular queries. Here is a recap, in their own words: Organizational Structure "There have been lots of rumors regarding the composition of the District and Region staffs. Will there be any staffing changes coming this year? Can you respond to this in a broad way?" Company Strategy Stores "What enhancements will be made to our
computer system to allow for SGM¹s to make more timely/specific business
decisions?" "It was just told to me that the buyers (at least in Brand Central) are not incented on sales. If this is true, why wouldn¹t the buying team be incented on sales as the store managers and their sales managers are? We¹re pulling on oars that go in different directions." Training
Local Club/NARSE Membership Expansion Idea Art Levin of Arizona came up with a GREAT idea of how to secure new membership into NARSE and local clubs! He's contacted unit managers that he knows and asked them if they have any personnel retiring this year and may wish to join the local club and NARSE? The initial response was very good and he was able to secure some names for follow-up. Just imagine if everyone on the NARSE email loop, who were on speaking relationship with unit managers and HR people did the same, what you could do for your local club and NARSE! Great idea, Art! Art, "YOU DONE GOOD" coin is coming your way!
There
are two issues that will be dear to our hearts and our pocket books
before it is done. Please pass this on to all you
know since many of us use e-mail for business and to keep up with friends
and family, I thought you'd like to know the following. Please jump on it
right away and forward this to others. Please visit the following web
site and file a complaint. Complain to your Congressperson. We can't allow
this to pass. The following address will allow you to send an e-mail on
this subject DIRECTLY to your Congressperson http://www.house.gov/writerep Wait, there's more. In addition, The last few months have revealed an alarming trend in the Government of the United States attempting to quietly push through legislation that will affect your use of the Internet. Under proposed legislation the U.S. Postal Service will be attempting to bill email users out of alternate postage fees". Bill 602P will permit the Federal Govt. to charge a 5 cent surcharge on every email delivered, by billing Internet Service Providers at source. The consumer would then be billed in turn by the ISP. Washington D.C. lawyer Richard Stepp is working without pay to prevent this legislation from becoming law. The U.S. Postal Service is claiming that lost revenue due to the proliferation of email is costing nearly $230,000,000 in revenue per year. You may have noticed their recent ad campaign "There is nothing like a letter". Since the average citizen received about 10 pieces of email per day in 1998, the cost to the typical individual would be an additional 50 cents per day, or over $180 dollars per year, above and beyond there regular Internet costs. Note that this would be money paid directly to the U.S. Postal Service for a service they do not even provide. The whole point of the Internet is democracy and non-interference. If the federal government is permitted to tamper with our liberties by adding a surcharge to email, who knows Where it will end. You are already paying an exorbitant price for snail mail because of bureaucratic inefficiency. It currently takes up to 6 days for a letter to be delivered from New York to Buffalo. If The U.S. Postal Service is allowed to tinker with email; it will mark the end of the "free" Internet in the United States. One congressman, Tony Schnell has even suggested a "twenty to forty dollars per month surcharge on all internet service" above and beyond the government's proposed email Charges. Note that most of the major newspapers have ignored the story, the only exception being the Washingtonian which called the idea of email surcharge "a useful concept who's time has come" (March 6, 1999) Editorial. Don't sit by and watch your freedoms erode away! Send this e-mail to EVERYONE on your list, and tell all your friends and relatives to write to their congressman and say "No!" to Bill 602P. It will only take a few moments of your time, and could very well be instrumental in killing a bill we don't want. Pass
this on to everyone you know who uses email.
NARSE
Chairman Ev Burkardt Writes to Sears Directors Dear Sears Director, Last August, Sears Chairman, Arthur Martinez announced the "Strategic Cost Initiative" that would mean unemployment to over 1200 associates. On that day in August, he communicated verbally and in writing his decision to terminate all relationships with consultants and to eliminate all travel expense that was not approved by "executive committee". The "Strategic Cost Initiative" was detailed enough to even minimize office trash pickups and eliminate the watering of ice plants and trees. It is time to introduce you to Bill Parke. Parke was one of the 1200 terminated by the Martinez cost initiative. Parke was a director level executive in charge of financial news and other matters in the Public Affairs department. Less than 90 days after the pronouncements on cost, Bill has been rehired by a Sears hired consulting/advertising firm and given the charter of determining the best way to accomplish the return of retirees to the Sears fold. Parke's first official act was to arrange a trip to Los Angeles for a three-hour Friday, December 17 meeting with five retired Sears executives. Will his next scheduled meeting be in Florida? In the L.A. meeting he sought their opinions on a quarterly Sears to retirees newsletter, some type of retiree annual meeting with Arthur Martinez (with attendees expenses paid for by Sears), some town hall type informational meetings, and the establishment of a retiree advisory board comprised of retired checklist and retired time card associates from 6 regions nationwide. He suggested Al Stewart as the possible chairman of the advisory board. The irony here is that N.A.R.S.E. officers Ireson and McMahon promoted several of these Parke offered suggestions to Arthur Martinez in person more than a year ago. The Parke L A. audience recommended that the N.A.R.S.E. Chairman chair the retiree selected group and repeatedly advised Parke that the best and only way to reunite with retirees would be to return the promised earned and paid for life insurance benefit to their families. This incredible situation invites some obvious questions that require answering. Why does it take a committee to have Arthur Martinez admit a mistake and accept financial responsibility for a bad decision? Arthur Martinez has often displayed to retirees the touch of a blacksmith and sensitivity of a grizzly bear. Might this then be a "flawed" public relations strategy based on "flawed advice"? Is this an awkward strategy to disenfranchise the too successful and growing national retiree organization (N.A.R.S.E.) that regularly communicates with over 20,000 retirees who want their life insurance returned before they return to Sears? We know that Arthur Martinez has contempt for retirees but does he think we are fools? Do the people that Parke is proposing to participate/run proposed committees know that their names are being used? What happened to the "no consultant, no travel rule"? Does Sears Public Relations department have lots of folks working at Hoffman Estates but on some ones else's payroll? Aren't disguised consultants still consultants? Couldn't Parke have found thousands of Sears retirees within ten miles of his Chicago home? What does a round trip flight and 2 days in L.A. cost in December? Most of all ... when can we expect an "integrity initiative" that would return what has been taken from our families? Sincerely,
CC: Arthur Martinez (Dec. 23)
No Wonder Sears is in Trouble!
Can you believe that Sears has to advertise and use agencies to find Store Managers??!! This is a site called www.monster.com. They have a lot of listings for all kinds of positions at Sears. US-CA-San Francisco Additional Information Position Type: Full Time Ref Code: SGM Contact Information Deron Mellinger DMellin@sears.com Sears Roebuck & Company, 3333 Beverly Road, D4-180B, Hoffman Estates IL 60179, Fax: 847-286-4864
November 26, 1999 Dear Chairman Martinez, At the Atlanta Sears annual shareholders meeting you responded to my question concerning promotion from within, by stating that Sears has a strong internal bench. Why is it that you now must advertise for Sears Store Managers on the web site? What happened to the "bench"? What incentive is there for "insiders" to make a career with a company that hires coveted positions from the "outside"? Is there no room for the Sears Heroes you dutifully recognized at the Atlanta meeting? Maybe a Human Resource sensitivity course for Sears Office of Executives would be in order. It is little wonder that Sears is struggling and was replaced by Home Depot on the DOW 030. Are the chickens finally coming home to roost? Everett L. Buckardt cc: Sears Board of Directors
Clue:
Company is an Illinois-based retailer.
Arthur the Financial Genius ???????? Arthur prides himself as being a "financial" genius. Let's review his financial track record:
Arthur has sold or closed businesses that are now intrigal to competing in the exploding e-commerce arena. The good news is there are few Sears businesses remaining for Arthur to close, sell or give-away such as; Sears Credit, Sears Canada, Sears Home Services and Real Estate. Based on a 7-year track record, Arthur will find the means to dispose of the remaining segments of a once great company. If and when the financial genius rides off into the retirement, employees and shareholders may have an opportunity to hear "the rest of the story". (Nov 20, 1999)
Janet Harrison, wife of NARSE Board Director, Chuck Harrison passed away November 24 after a lengthy illness. A memorial service was held on Saturday, November 27, 1999, at the Unity church in Evanston, Illinois. (Nov 26, 1999)
November 4, 1999 Dear Sears Director, Sophism: An argument that is correct in form or appearance but is actually invalid: specious reasoning; clever device or artifice. Sophism is a very sophisticated word and quite clear in its definition. I prefer the more common and understandable meaning, "talking out of both sides of ones' mouth." I was reminded of this fine old homily recently while reading another conflicting proclamation from Prairie Stone. In a business column on work/life benefits in the Chicago Tribune of Monday, November 2, 1999, Stephanie Springs, Sears vice president of people and cultural diversity (?) said, "benefits are needed even more in times like this because they increase productivity and help recruit and retain employees." Retain employees? Didn't Sears just recently lay off several hundred people? How's that for classic sophism? Oh well, hope springs eternal. In the article, Springs pointed out that Arthur C. Martinez, chairman and CEO personally heads the giants work/life balance committee which, she said, "helps people understand its a business issue." On what scale do you weight life/work benefits such as parental leave, flexible hours, telecommuting and on-site child care (fully paid for by the parent) all of which bear little direct cost to the company against good health and hospitalization insurance coverage, life insurance and a pension plan that will permit retirement with a modicum of dignity? Wells let's get back to sophism. Arthur created a triumvirate to rule Sears providing in his words, ... "more time for me to become intensely involved in our stores and our retail operations." An thus, sly old sophism sets in. He has significantly reduced employee health and life insurance while ham-stringing the pension program. Moreover, he has deliberately set about to dis-mantle all of the retiree entitlement programs by capping the companies contributions to the retiree health plan, reducing the life insurance over 10 years to $5,000 - hardly enough for burial expenses while the poor Sears retiree, living on a fixed income (without cost-of-living increases) is faced with extraordinary increases in cost of health insurance, particularly this year, in plan "E" for those over sixty-five years of age. Many retirees, including this one, were shocked to discover that the plan "E" increase was in excess of 20%. Yet, Arthur is extending his energies to micro-manage the life/work balance committee. Sophism? Crains Chicago Business, in their November 1, 1999 issue wrote, "Even as Sears, Roebuck and Co. reels from its expulsion from the Dow Jones Industrial Average, the retail grant prepares to dump some business of its own - estimated $1 billion worth of product lines sold at its struggling department stores." Crains reported that among those lines of goods that are suspect were cosmetics. How about that? In his first restructure of the Sears store, Arthur added cosmetics including the much heralded, "Circle of Beauty." Is the circle broken? In addition, other lines cited for the trash heap of Sears brand of retailing are, according to the article, dresses and men's and women's suits, fine jewelry, computers, ready-to-assemble furniture, sporting goods (except fitness equipment), paint, electrical equipment and floor coverings. Mr. Martinez, in a recent associate publication observed . . . "customers are not entirely sure of what we stand for." How true. After all, if Arthur continues to cull the assortments as he culled the other Sears businesses - what will be left? What foresight! Certainly this cannot be sophism . . . or is it? Great leaders have almost always failed when they tried to micro-manage. Mr./Ms. director, you are great leaders. You have an important fiduciary responsibility to Sears Shareholders. It is long past time for you to take action to save a great American Institution. You can start by telling Arthur to "write the check" - return the life insurance benefit to the retired Sears employees. With hope and confidence, Claude Ireson (Nov 4, 1999)
Former Sears Benefit Bandit Can't Stay Put!!! A Sears Benefit Bandit is once again on the move! Tony Rucci, one of the former Sears executives responsible for the demise of Sears Retiree Life Insurance promised benefit is off to another job. Tony Rucci, in the span of less than two years, resigned as Sears V.P. Human Resources to join Fidelity as V.P. Human Resources, he resigned from Fidelity to join University of Il. Chicago as Dean of Graduate School of Business, he has now resigned from U. of I, Il. to become the V.P. Human Resources at Cardinal Health in Ohio. Four different companies in two years....go figure! (Nov 22, 1999)
Ev Burkhart October 26, 1999 was a very sad day for Sears, Roebuck and Co. Seventy five years ago Sears had the distinction of being one of the first retail companies to be listed on the DOW industrials. Today Sears is a retail embarrassment, being de-listed from the prestigious DOW industrials. To add insult to injury, a company that Sears might have purchased in the mid 80's (according to recent publications) Home Depot replaces Sears as a retail company on the DOW 30, effective November 1. One can merely speculate on Chairman Martinez and the Sears Board reaction to such humiliating news. How will Martinez respond to such a defeat, especially in his yet to be published ego trip book "The Hard Road To The Softer Side of Sears"? Even the Softer Side of Sears has been "de-listed". What will Arthur tell the troops in his internal e-mail message? Did the Wall Street Journal act on "flawed advice?" A familiar phrase at Sears when events don't turn out as planned. Will the Office of Executives accept responsibility for Sears fall from favor? The last two years of Chairman Martinez's "watch" has been rife with disappointments. Maybe it is time for a resurgence of dinosaurs. In view of the above, one might question who is the burden today? (Oct 27, 1999)
This is an answer to the questions Walter Wroblewski raised about not receiving a 10% discount from the Sears Optical Dept. Active and retired Sears Associates participate in a special plan which provides close to 50% off of frames and glasses. The $45 examination fee is also reduced to $40. This results in a much greater savings than the 10% discount. It is possible that special coupons would offer substantial savings that combined with a 10% discount could equal or beat the price of the special plan. Generally it is more beneficial to take advantage of the special plan available to Sears Associates and retirees than it is to receive the 10% discount. Please let me know if you have any questions. Dick Bruce
Penney's
Sells Credit-Card Division J.C. Penney Co. Inc. will sell its credit-card receivables operation to GE Capital in a deal that will help cut the troubled retailer's debt. Editor's Comments: Could Sears be next?
Sears
Associate Presents Another Version of Steve Clapp who is still an active manager with Sears and who is responsible for the accounting center and the accounts payable in Dallas sent the following to me after I forwarded a recent comment. In fairness to the system I felt that you should have benefit of the other side of the coin. I have a lot of faith in Steve's perspective. I sure hate to see friends (first) and fellow Sears mates get worked up over what is, in my opinion, flawed information. There are indeed benefit changes that are being made that affect medical coverage for part-time associates. However, associates 50 years old or older with 10 or more years of service are grandfathered with no change. After reading your note regarding what appeared to be subterfuge on the part of our management team, I did some checking on Friday, since the comments made no sense whatsoever. I know in our unit we covered these changes over two weeks ago and received no direction whatsoever to hold the information until after the holiday season. I checked with a very responsible member of the Dallas district staff along with a couple stores as well, and found that the changes are being covered with everyone now, not after the holiday season. Does it make any sense to send materials to the units and then ask them to hide them until after the holiday season? Certainly doesn't to me, and yet with a little "he said, she said" from one person, it becomes the company's position. Personally, I think that is pretty sad. Not that it matters to some, I guess, but none of our key competitors provide medical coverage at all for their part-time employees, and the new policy will affect only 3% of Sears workforce. It is tough out there, and we need to do everything we can to stay competitive. If Sears as a company doesn't make it, nobody wins, and benefits become a non-issue, since there won't be any at all. All of us, active and retirees alike, need to pull together to make things better. That seems to be very difficult to do these days. Editor's Note: Our thanks to Steve for this corrected story. To err is human, to not admit it is sinful! (Oct 18,
1999)
Effective April of 2000 all medical benefits will be removed from anyone working less than 32 hours. A current associate who works at a Sears store saw a bulletin left in the breakroom. Someone who was not supposed to have these out yet, left a stack of them in the breakroom. A manager told the associates that "yes this was true but it was not to be made public to employees until after the holiday season." Editor's Note: Martinez's Benefit Bandits are back at work! (Oct 13,
1999)
Date: September 24, 1999 Subject: Wastebaskets For Your Information Gray Cans: Will be emptied on Monday and
Thursday evenings. THERE WILL BE NO CANS EMPTIED ON WEDNESDAY EVENINGS. These are the new rules set forth by the Executive Committee per the Office of the Bldg. Thanks! (Sept 27, 1999)
Date: 9-22-99 The purpose of this memo is to update you regarding our progress toward implementing the PLS strategy. Planning is moving ahead aggressively, and I am pleased to announce a number of key developments. "Shopability" enhancements will be implemented in up to 75 stores by end of Q1 2000. These enhancements will include shopping carts/bags, modified cash wrap locations, new way-finding signage and a number of other potential changes. Test stores have been identified within each district, and that list is now under review by our senior field team. Then specific store list will be announced shortly. The comprehensive strategic repositioning effort will be implemented in 20 to 30 locations by August 1, including totally overhauled assortments, a new physical store design, and revised marketing. We will be putting in place a revised print and broadcast program including a discrete ad version developed for these new stores. Cincinnati and Indianapolis have been selected as two of the initial markets. A third market is under consideration and will be selected for proximity reasons. It will not receive the new marketing program but otherwise will be completely overhauled. As you know, I am in the process of assembling the implementation team for finance/administration; and will draw heavy on store planning/visual/construction, marketing and logistics organizations for critical support. I am delighted to announce these initial appointments to the team. Barbara Pizzella will rejoin Sears to lead the softlines remerchandising effort in these stores. Barb¹s comprehensive merchandising background, particularly in Home Fashions, coupled with her experience at Sears and her relationship with our key softlines merchants will be critical to our efforts. Barbata will be restarting the week of October 4. Her counterpart in hardlines will be named shortly. Gary Bosak will be contributing his considerable talent and experience to the team as our operations lead. In this role, Gary will be responsible for developing operational implications arising from the reassortment/redesign, and working with all the necessary groups within Sears to accomplish that goal. Gary will also be developing and coordinating our ongoing internal communications about this initiative. Our final staffing announcement at this time is that Andy Andress has joined our team from the corporate strategy group to provide overall project management and financial planning support. Andy joined Sears earlier this summer from the management consulting firm Bain & Company. He brings considerable strategic and operations planning experience to this assignment. Please join me in expressing your congratulations and support to all of these associates as they embark with me on this important initiative. The remaining member of our team will be announced shortly. Finally, I am pleased to announce that after considering proposals from a number of leading outside design firms we have selected The Retail Group to work with us on developing a "break-through" store design to complement our revised assortment emphasis. The Retail Group developed our store design for The Great Indoors, and is well known for their expertise in the home fashions and home electronics categories. Among our five "leadership" categories in the new strategy (appliances, electronics, kids apparel, tools and home fashions), home fashions and electronics are the two departments in the new strategy where we anticipate the most dramatic change. Over the next several weeks we will be undertaking a broad-based communication program to more fully brief the organization on the basic elements of the new full-line strategy and our implementation plans. Thank you for your support of this critical initiative. Editor's Comment: Who¹s running the store? (Sept 27,
1999)
Rally Signage from Mel Schultz Thanks to the creative efforts of Sears Chicago retiree Mel Schultz, here are some preliminary rally, protest, letter endings to the Sears board, etc. Copy suggestions all ending signed "SEARS RETIREES":
(Oct 11,
1999)
NARSE Loses a Valued Member - Don Wright Don Wright passed away October 1, 1999 after a 6-month battle with in-operable lung cancer. Don was NARSE Region Vice President and one of the first supporters of our effort to reinstate the retiree life insurance benefit. He coordinated, printed and mailed our early releases at his own expense. Don communicated with retirees and was a valued member of NARSE. He will be deeply missed. (Oct 6,
1999)
Ev Comments on the "Store of the Future"
Editor's Comments: Ev has shared his letter with NARSE Communications and I thought it may be of interest to Sears retirees as he is continually fighting to get back our long promised benefit. It relates to NARSE’s Sept. 28th email of Sears Sept. 22 internal corporate letter from Atkins entitled, Sears new “Store of the Future”. At his own expense, he has dedicated hundreds of hours communicating not only by letter, but meeting with Sears retiree groups and Martinez. Why not think about taking your time now to write the Sears Board of Directors and expressing your opinion? (Sep 30,
1999)
Reliable inside sources at Sears advised that last week 7 to 10 Regional Managers were slashed and released from employment. The message is, "Perform on the bottom line or you're gone". They are to be replaced.. Appears that ther are dark clouds hovering over many management people at Sears and the action will undoubtedly have a trickle down effect in the entire organiozation. Personnel in stores feel threatened. Turnover in Sales Mangers was very high prior to this action. (Sept 28,
1999)
Reliable inside sources at Sears advised that last week 7 to 10 Regional Managers were slashed and released from employment. The message is, "Perform on the bottom line or you're gone". They are to be replaced. Appears that there are dark clouds hovering over many management people at Sears and the action will undoubtedly have a trickle down effect in the entire organization. Personnel in stores feel threatened. Turnover in Sales Mangers was very high prior to this action. Will advise further details as specifics become available. (Sept 28,
1999)
Rumors Heard in the Prairie Stone Halls
(Sept 25,
1999)
Sears PPO Plan Booklet - Any Catches? I received in the mail on August 16 a booklet entitled "Sears PPO Plan And Sears Group Medical Plan E." I've carefully read the booklet trying to learn whether there are any new broken promises or other things to fear regarding my Plan E coverage. So far I can't see anything revolutionary based on the contents of the booklet. But I'd appreciate it if any other retirees have found something I didn't. Sorry to say, I've become paranoid whenever I get anything in the mail from Sears expecting it to mean something new taken away. I tend to hold onto my wallet whenever Sears sends me mail. If there's anything I missed, I'd appreciate hearing from you about it. Otherwise, lots of luck, hang tough, and don't let the "B'stards, git ya." Lloyd VanSchoyck (August 19,
1999)
Sears takes the following action to cut costs at giant Hoffman Estates headquarters:
The following documents one retiree's reaction to the undignified and miserable treatment of Home Office associates:
(August 10,
1999)
Recommendation for Repeal of Income Tax on Social Security and Medicare Benefits A NARSE member has submitted the following information for retirees to consider: Currently our Government representatives and political leaders are debating what to do with the growing budget surpluses-whether to finance runaway entitlements, launch new initiatives, cut taxes, or pay down the debt. To date, neither party has proposed the elimination of the income tax on Social Security benefits, which tax negatively impacts the lives of millions of senior citizens and retirees. With one hand the Government provides seniors with Social Security benefits including the cost of Medicare, but then taxes up to 85% of those benefits as income, in a complicated and difficult calculation. This vicious circle results in higher income taxes on seniors and retirees, at a time in life when they can least afford to pay them. This vicious circle continues when seniors and retirees are forced to make IRA withdrawals to pay the taxes. The amount of the IRA withdrawal is added to taxable income, and significantly increases the tax on Social Security and Medicare benefits. Seniors and retirees are encouraged to contact their Government representatives and political party leaders immediately to urge the repeal of the inclusion of their Social Security and Medicare benefits as taxable income (July 12, 1999)
Thurston Blakely I very good friend of mine who worked for sears as a Regional Executive for many many years, died 19 years ago. His widow has been using their Credit Account (CLC) for all of those years. Because the magnetic strip had worn out on the card my friends wife was using she requested a new card. During her conversation with Credit they discovered that 19 years ago her husband died. They immediately closed the account because the principal card holder died . They didn't give a flip that the bill had been paid in full every month for the nineteen years. They just closed the account. They have finally agreed to issue a new card with much less credit limit and some other possible restrictions. She was told that she could still use her associate discount card but would have to pay cash. No one in credit could use common sense. They just closed her account. A word to the wise for all of us. Any of us that opened accounts at Sears when we were working that haven't specifically added our wives name to the account can have the same thing happen. If something happens to us they can and will close the wife's account without batting an eye. I am in the process of reverifying all of my accounts to be certain that my wife's name is a part thereof, just to avert such a disaster. I thought this would be an alert that you can send to our NARSE members.
Two Retirees Send their Reaction to "Retiree News" The following two letters are typical reactions:
A Powerful Communication to the Board!
Narse
Street Rally Speeches to Retirees On Street Remarks Before
Sears Shareholders' Meeting Just as free people throughout the world are united in dedication to undo the persecution of innocent people by a self-serving tyrant whose name starts with an “M”, we, the National Association of retired Sears employees are equally united and dedicated to righting wrongs perpetrated upon innocent Sears retirees by a corporate tyrant whose name also starts with an "M"… one who has his own warped theory of how honest profit is created. And, as NATO continues to send the explosive message to the evil "M" in the Balkans that they will not go away until he relents, NARSE continues to send to the avaricious "M" at Hoffman Estates, IL the message "Arthur, we won't go away" until you return to the 84,000 deserving Sears retirees you robbed their life insurance benefits. -- benefits which retirees honestly earned through years of devotion to a company they held in reverence ... a company that was family. Arthur Martinez has ignored life insurance correspondence from thousands of Sears retirees. In a major speech, he read a portion of one of General Woods’ (Sears chairman who created the Sears retail store system) major speeches. If he had kept reading, he would have come to these words from the general "only second to our customer is our employee...in addition to the pay envelope, there must be as liberal employee benefits than any other large corporation in the country." He went on to list those benefits including life insurance. We call upon Arthur Martinez to return integrity to Sears, Roebuck and Co … and to restore retirees’ life insurance. On Street Remarks Before
Sears Shareholders' Meeting My comments are varying brief and the very direct. Our battle is not with Sears. Dedicated Sears men and women spent over 100 years building a proud, ethical, and trusted company. Our battle is with one man, Arthur Martinez. In six short years he has reneged on promises made, sold valuable assets, blamed faulty advice for billion dollar write-offs, and, at the same time, he showered himself with tens of millions of dollars in benefits, perks, and stock. He is personally responsible for a company whose December stock price for each of the past five years has been stagnant between $39 -- $42 a share. Under his tutelage, Sears ranks as one of the worst performers on the Dow 30. It's time for Arthur Martinez to make money the old fashioned way and not at the expense of employee and retiree benefits! Our message to Martinez remains a very clear "Arthur, we will not go away." We demand the return of our retirement benefit, a benefit that we paid for and were promised at retirement. What kind of a man would make a conscientious decision to take widow money from retirees, many who have been retired up to twenty years and now are in their 70’s and 80's? Answer, an unconscionable decision maker. Ladies and gentlemen, if we allow Arthur Martinez to get away with retiree "benefit cleansing" at Sears, every company in America may do the same to its retirees. Join our battle for benefits, and stand firm against executive greed. On Street Remarks Before
Sears Shareholders' Meeting (The instructions to the audience were for them to say "give us back our benefits" whenever they heard the word “Arthur” … you would not believe how much noise Sears retirees can make!) What wonderful group of people! There are Sears retirees here from Boston to California. Thank you for being here today. Thank you for telling Arthur Martinez what you think of his decisions to take money from your families... and make no mistake about it, whether it's his decision to freeze company contributions to your health care plan or his decision to reduce your earned retiree life insurance benefit to a maximum of $5,000, he has his hand in your families’ pocket. Let's take a minute to review Arthur’s track record with retirees and let's inventory some of the new things he has brought to Sears. Arthur arrived at Sears about six years ago and began his cultural cleansing with a 1.9 billion dollar reserve to restructure the company. He then flooded the company with some very high-priced executive talent from the outside … which would be fine if they stayed; most did not. Arthur introduced across the board senior management turnover to a company that had zero experience in senior management turnover other than retirements. So many key executives have left Arthur's side that we have christened Arthur’s “new Sears” as the “revolving door Sears”. All but legally required communication to retirees stopped upon Arthur’s arrival. His initial strategy loaded the company with millions of poor quality new customer credit accounts; he enjoyed the resulting sales and profits and incentive payouts for two to three years, and then let Sears pay a huge price in credit delinquencies in years 4 and 5. Arthur introduced Sears to embarrassing legal settlements and consent decrees. The company signed a consent decree and absorbed 475 million in expense in the handling of bankrupt credit customers. Another 154.5 million settled the legal case when Sears bought an Arizona bank so customer balances transferred there could be eligible for higher interest rates. Most recently, the state of Florida got $985,000 to settle a case involving the alleged practice of selling used batteries. Another major class-action involving tire balancing is pending. We Sears retirees initiated a class-action suit and received certification as an effected class. That case is moving through Judge Moran’s court in Chicago. It almost seems as if the new Sears waits for judges and consent decrees to tell it what is the right thing to do. In 1995, Arthur made the decision to freeze the company contribution to retiree health care plans. The softer side of Arthur’s Sears has become its sales and profits. For the last two years, in an almost perfect retail environment, Sears sales have been flat and its profits have been poor. Apparently, there is a price to be paid for turnover and poor leadership. Arthur has taught Sears how to sell assets at fire sale prices. Home life and Western Auto were sold in 1998 for a combined after-tax loss of $590 million. Sad but true ... Western auto made 85 million in profit three years ago. Folks the whole company is for sale. In September 1997, Arthur announced his decision to reduce our life insurance. His decision reversed the promises of his predecessors, disrupted the lives and plans of 84,000 retiree families, materially impacted old people, sick people, rich and poor people, and made many chose, literally, between the purchase of medicines or life insurance, between their own needs and the desire to do for their families. The contribution that Arthur brought to Sears and most regrets is in front of me. His decision to raid retiree benefits to produce profits and incentive payouts has united the retiree family as nothing else could. We are in lock step in our desire to regain what we earned for our families. Arthur’s greed gave birth to the National Association of Retired Sears Employees and motivated so many retirees that we will win the return of our life insurance. Arthur wrote a book called “The Hard Road to the Softer Side of Sears”, the subtitle is "The Transformation of an American icon." Although we can agree that he took all of the softness and compassion from Sears, would you agree with me that Arthur truly has transformed an American icon? Sadly that transformation is, in large part, ugly. That casket over there tells the story of many of the values lost in the transformation. But, this is hardly a funeral -- today is a celebration of a proud group of people who built a great company -- people who will do those things necessary to reverse bad decisions. I promise you that when you leave today's annual shareholders meeting, you will feel 10 feet tall because you will have expressed to Arthur and his Board your resolve, your integrity, your honest reactions to threats to your families’ well-being, and your promise to stay the course until a very bad decision is reversed. I thank you and salute you. Let's go see Arthur!
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