Job Discussion Forums

[edwinagirl]

I've just come back from Shanghai. I saw on the TV news last night there that one of the Canilx branches closed down. They couldn't pay the rent, it seems. Canilx is bankrupt, but they hang on because they do not have the cash to repay their debts or refund their students. These schools receive payments of one year or more in advance. Imagine what they would have to pay if several hundred students sudedenly wanted to withdraw their money.

This may signal the beginning of the end of this approach to teaching in China.

Here in Beijing, the stories about how Wall Street are struggling have been legion. Sure, they sold out to the Carlyle Group, but then all the top Wall Street guys walked. Even the founder has sold some or all of his shares. I met with some pretty depressed Wall Streeters - the local staff, that is. (The teachers don't give a 'toss', as our British cousins might say.)It is common knowledge that Wall Street worldwide lost 20 million dollars last year and they are still bleeding.

I still beleive what I have predicted on this forum before - that the Wall Street approach is fundamentally shot and will end up the same way here as it has in Spain and other markets. It is interesting that in Spain, the nearest competitor to Wall Street, Opening, also went belly up. Are Canilx the Opening to Wall Street China, or will it be WEb International? Either way, I foresee pain for the teachers and students involved.

Full disclosure: I'm working on a thesis for my masters degree on the different approaches in the TEFL world. I also have an axe to grind with Wall Street - my boyfriend and I (not to mention many, many students) got shafted by them in Brazil when they collapsed there. I hope to see them get their comeuppance. I also work in TEFL management and I have good contacts in some of these schools.

I enslose an article from the EL Gazette: WSI sold to venture capitalists
http://www.elgazette.com/ElNews/NewsStory.asp?StoryID=726

By Melanie Butler,13/05/2005
TROUBLED LANGUAGE school chain Wall Street Institutes (WSI)has been bought by a US venture capital company associated with President Bush Senior, former UK Prime Minister John Major and former US Secretary of State James Baker.

Carlyle Group, one of America �s largest private equity funds with US$24,8 billion under management, acquired WSI from Laureate Inc, previously known as Sylvan Learning Systems, which put the group up for sale in 2003 (see Gazette July 2004).

In 2002 the Spanish arm of Wall Street was sold back to Luigi Peccini, who founded the group in 1972 in 2002 (see Gazette Dec 2002), following a scandal over closures of multimedia schools. A number of Wall Street franchises in Spain closed in a collapse which saw WSI �s main competitor, Opening, forced into liquidation.

Last year fourteen Wall Street Insititutes in Brazil were also forced to close. Carlyle, which paid an undisclosed sum for the chain, is best known for its investments in defence which have
led to attacks by US anti-war campaigners such as Michael Moore. However, it invests in a range of industries and WSI is its fourth investment in the education sector.

Mr Bush severed his links with the company in April 2003 and John Major retired as chairman of Carlyle Europe last year but is still on a number of advisory boards.

[Babala]

I am sorry for your experience with Wallstreet but I don't see the demise of these schools anytime in the future. I work for one of these chain schools and our enrollments are up.

[edwinagirl]

Babala,

Thx for the supportive words. Obviously I have to be fair. I wouldn't want to wish ill luck upon every school of this type - there are, after all, lots of perfectly innocent teachers (like yourself) working at them. But I do sense an inevitability about where they are going in the longer term.

I think it's one thing to see students signing up at a school. Whether or not the school is operating profitably is another matter. The fact that they receive one-year up front tuition has led to disastrous consequences in other markets, where the owners have demonstrated a deadly confusion between cash and profits. They also tend to become obsessively sales-oriented under this model, because large, upfront payments are like a drug to a manager who has no other ideas. We're talking mis-management on a grand scale.

I think that that is exactly what is happening in China. The Web chain, for example, were spending cash (not profits) almost as soon as they got their hands on it - they were buying up buildings before the end of their first year of trading, so it would have been impossible to establish whether or not hey were actually profitable. They also sold franchises without testing the concept. Now it has the look of a grat big ponzi scheme - they have to keep selling franchises in order top keep the system going. As I mentiond before, everyone has known for months that Canilx were bankrupt. They just tried to stave off the day when they actually had to take the hit for it. Now it has happened. I think this discredits the whole approach, including Wall Street, Web, and the rest.

I'm surprised to hear that one of these chains are in Changzhou. This is not good news for the people of Changzhou.

The news on Canilx is getting nastier. I continue to maintain that this approach is doomed. We shall see.

[Babala]

I see nothing wrong with these types of schools and I don't think it's bad news for the people in Changzhou. Are you so against them because of the school's program or is it because you worked for a bad Wallstreet franchise?

[lowes13]

I think edwinagirl is making the point that, in her opinion, the business model of companies such as Canilx, Wall Street and Web is unsound and unsustainable. I would say that based on the posters description of their operating procedure that all may not be lost!
Rapid expansion is not a bad thing; �striking whilst the iron is hot� is in many cases very good business practise. The iron is certainly hot in China and economy of size comes in to play, the more centres these companies have the more efficient the business can become. As an outsider I would suggest that the business model is very basic and indeed straightforward; it�s very easy to assess the related costs of running a centre and to gauge the potential enrolment of students. The fact that the students pay in advance makes it even easier to project the profit margin and therefore why should these businesses get in to trouble unless the management is indeed incompetent in the extreme. The basic concept would be to replicate the existing successful model and to do that rapidly. Over-extension, based on the posters comments, seems to be the area of concern of the poster and could come about by the �greed factor� getting in the way of sound management.
Does the poster believe that the management is misappropriating the income also?

China being China I don�t believe these businesses will perish quickly if at all; too many people are involved to allow that to happen.

[edwinagirl]

It's a mixture of both.

Wall Street told us very clearly that we were not there to teach. "You are not teachers. Be in no doubt." The idea was that we were supposed to be 'assessors'. All we were allowed to do was to go through the lessons word for word and test the students on it. After you'd done this 4 or 5 times it became a total rigmarole. No creative input from the teacher, no spontaneity in the class. It felt very mechanical.

The experienced teachers began to think that this was all just a way to persuade students that they were learning even if we knew they were not. "You got this wrong, so you need to get back to the software" kind of thing. It dissuades students from asking for more teacher hours by convincing them the problem lay in their failure to use the software. The learner got no broader picture of his overall competence and no real conversation practice. It reduced the whole thing to small details that we could then fob off students with. This doesn't do much for learner motivation, and still less for their language acquisition. This also very conveniently had the effect of saving the school money - as long as people were trying to solve their problems through the (crappy) software, the school could save money on teachers - the system is designed to dispense with teachers.

You might assume the real value of this type of service must lie in the software. But it doesn't - the Wall Street software is an embarrassment. I used to cringe at it. In the end I began to see the whole thing as a giant, soulless scam.

I don't know which organization you work with but this was the deal with Wall Street.

[Babala]

I guess I have been lucky within my chain school. We also use computer courseware but we are allowed to supplement lesson plans with our own material, which I do all the time. We are hired to be teachers as opposed to be entertainers and because the students pay more, they also expect more. I have only slight knowledge of the Wallstreet chain, I have heard mixed reviews from teachers who have taught there. I teach at Web English.

[hollie628]

I applied at web and found the same thing was said to me - I'm not to be a teacher but a referee of sorts. Someone to correct or redirect, not instruct. Funny neough a degree and TOEFL/TOESL cert was required and rigorous questioning ensued. I only "taught" an English corner and a private meeting with 2 students and no preparation. This was not my call - I was thrown in. I did the best I could but really it was handled poorly - from the beginning. No good scheduling - I was called at random times and my schedule was altered 3 times adding and changing my teaching times. I missed a class thinking it had been dropped due to the confusion.

I can't say whether Web was a bad company, but I was never called again. I will say that I thought the education manager type of role was odd and not demanding enough for their regulations. However the pay was great and for that I could see why they want qualified people. Too bad the hours are not so favorable! I prefer freelance - same or more money and better hours!

[edwinagirl]

Iowes, you asked the question Does the poster believe that the management is misappropriating the income also?

I don't have access to their numbers, so I can only infer the mismanagement. Here are my reasons:

We all know that management in China is way behind - very few people can actually manage anything. TEFL is not an industry that attracts the career types. Locals with real management talent, go elsewhere. Most of the complaints on this forum have to do with bad management. Bad management is endemic to China generally and to TEFL in particular. Why? Becasue you have inexperienced local people with no real management experience, setting up schools, running a business for the first time, and trying to manage western teachers at the same time. Ouch!

Secondly, there is evidence. Canilx have just gone out of business, for example. Wall Stret are struggling worldside and in Beijing it is commonly known that they are struggling here too. Canilx were in the market before Web - in fact Web screwed them and set up their own. The stories are scary. I've interviewed at Web and I met he Gau brothers. I can assure you that there is absolutely not the slightest notion of understanding teaching, learning or anything of the sort in that organization.




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[peterpaul]

Talk about an Ax to grind! I seriously doubt these schools are going to go under anytime soon, as education seems to be one of the few things the Chinese middle class will splurge on!

As I understand it, talking to two soon to be ex-employees of Canilx, the school closed two branches because the owner also has invested in a large chain bookstore, Xinhua I believe (though possibly the troubled Scholar Books). The bookstore was hemorraghing cash and he borrowed money from the school to pay for the bookstore, the classic borrowing from Peter to pay Paul. It caught up with the owner and now the entire Shanghai operation is in danger.

As for the problems of CALL, I think you are blowing them a bit out of proportion. Firstly, a creative teacher could quickly find ways around the stifling SOP of the software based classes. Secondly, these systems for learning ESL, or learning systems such as primary school, a course program to earn a BA in sociology, or training for assembling cheeseburgers, are general guides for a large group. They do not engender desire, a work ethic, or add 25 IQ points to students who are obviously sub bar. Thus, not all will do well in them; some will fall through the cracks just as some will excel. Additionally, those who want tailored classes and a truely understanding teacher-at a cost of at least 200rmb per hour for an experienced ESL teacher in Shanghai. Think of the costs to achieve even an intermediate level of English!

Finally, I would hesitate to say that the locals can't manage anything. They have certainly managed to steal years of scientific development, destroy their environment, and piss off any assembly workers from slightly less impoverished 3rd world countries who are soon to lose their jobs... Seriously though, that comment about inability to manage anything is a bit harsh. The Chinese, for a myriad of reasons, seem to have done okay for the past few years.

[edwinagirl]

Point taken about management, Peterpaul. I did overstate the lack of management ability in China.

You're also correct that people will continue to spend on education (though I would call it training, rather than education). However, this does not mean that schools can get away with offering a lousy service indefinitely. Standards are low here (I'm obviously generalizng) with people 'founding' schools though they have no knowldege of teaching and could care less. The mentality I have seen in these franchised Wall Street clones is quite simply a way to follow a formula and make a quick buck. I find this weak and unethical. Any business has to make money of course, but there is also the obligation to approach a new business with an understanding of the service and the professional integrity to pursue it honestly. Anything less is simply not enough.

I would also argue that there is an analogous lack of professionalism amongst too many western teachers. Often they see teaching here as an easy gig. Too many of them actually know little about real teaching and are unwilling to make the effort to truly find out.

So, I suppose my picture of the indsutry is not a very pretty one.

Of course, the institutions who offer better training will win out in the end. The ones that don't will go under. The question of how all this plays out is what I'm studying at the moment.

CALL certainly has a future. However, the quality of the software used in these schools is poor. Have you seen the Wall Street materials? This is where the price premium comes from for these schools, but there is simply nothing in it to really deliver the value they claim for it.

I've heard that Canilx are trying to rescue what's left. There's no point.

I still maintain tha the Wall Street (Web, Canilx, etc) approach has the whiff of the over-priced scam about it and I continutue to prdict the collapse of the model if it doesn't modify itself.