The Japan Times ran a curious post mortem on GEOS. After reading it, I'm left with the sense that everybody is disappointed the company didn't implode like Nova. If you've been following the bankruptcy, the articles doesn't add a lot of new information. It's a fairly long read, so let's look at it.
I agree with Ken Worsely's assessment of the factors in GEOS's end:
"Asymmetry in supply and demand (help explain the bankruptcy)," says Worsley. "The number of new students registering at conversation schools has declined in five of the past six years, and fell by 35.7 percent last year. At the same time, revenue at such schools has fallen by somewhere around 40 percent in the past four years."
"The demand for these services is shrinking due to a number of factors, including economic conditions, public perception of the industry . . . stricter consumer protection laws, the decreasing effectiveness of relying on sales of large contracts as a business model, and others," he adds.
The article then gets into a G.communication memo that shows that it agreed with GEOS to take over its operations four days before the bankruptcy was announced. To that, Adam Richards adds:
"Geos seems to have done relatively well by students and teachers by finding a backer before announcing the bankruptcy," he says. "That said, Nova's messy bankruptcy was such a nightmare Geos can't help but look better by comparison."
G.communication President Hideo Sugimoto pretty much said the same thing--that he took on GEOS to protect the students. I think Adam has it wrong here. GEOS didn't find a backer. Management was divided as to whether it should file for bankruptcy to the point that ex-GEOS president, Tsuneo Kusunoki is contesting the bankruptcy. Rather than finding a backer, G.communication saw an opportunity to take over a failing company.
No sooner does Adam say that things have turned out well for students and teachers, the article contradicts him:
After the bankruptcy, confusion among staff ensued.
"At this point, the GCI has been completely decimated," Junichiro Kase of GCI, Geos' corporate arm, wrote to teachers in an e-mail leaked to The Japan Times. "Our clients are outraged and our teachers left on standby."
In another mail, a member of the Geos human resources team wrote: "All of us in our division were dismissed. . . . At this moment, we don't know who will take over these positions (in HR), but someone in G.education or someone from our division will continue (to manage teachers' schedules)."
The worker also said that in the initial days of administration, no HR employees were allowed to talk to staff or access their offices without special permission.
For teachers, the situation was equally grim: The Kobayashi memo explained that employees' wages for hours already worked were not guaranteed to be paid, and that all staff were dismissed as of April 21. While some of those teachers now work for the reopened company under G.communication, 99 schools — employing 483 people — were closed down by Geos.
"The company said it was proud to have me working there, as an example of just how much students could achieve through study," says Ricardo Paes, a fluent English-speaking Geos teacher from Portugal. "That didn't change the way I was treated during the bankruptcy, though."
"In the days after the bankruptcy, we have been kept in the dark, we were stalled, and that seems to have been to keep control," he says. Despite this, he opted to sign the new three-month contract with G.communication. Hong did not.
"After the meeting with the new company, I felt the terms G.communication was offering were very vague," Hong says. "It felt like too big a risk to stay with them."
The article also goes on to describe the vague, one-page contract GEOS teachers were given. Combined with the above, it doesn't sound like things have turned out well for teachers.
I thought this was an insightful observation:
"There are two massive problems with eikaiwa policies: tie-ins (which commit students to staying at the same school for long lengths of time) and a complete lack of pricing transparency," says 39-year-old Patrick Sheriff, the founder of Tower English, a conversation school in Abiko, Chiba Prefecture. "It's ironic because they demand long-term commitment from their customers but, as many of our students have told us, they can't keep hold of their native English teachers."
That is eikaiwa in a nutshell--take the money up front and demand long-term commitment from students while treating the teachers as disposable employees.
Japan Economy News' Worsley agrees that the eikaiwa schools need to change to survive.
"The industry itself will continue to shrink as does the population and number of younger people in Japan. In order to avoid disappearing, language school operators are going to have to embrace new technologies, diversify their products and services, and appeal to new market segments," he says.
I have no idea what Ken is talking about here. This is the standard throw away comment you get from the talking heads on cable news. Embrace new technologies, diversify their products and service and appeal to new market segments? Baloney. The large eikaiwas have already been offering lessons over the Internet and appealing to different age groups has always been part of their renewal campaign strategies. Does Ken mean moving to Skype or a virtual classroom such as Moodle? The large eikaiwas have failed because of their greed and unscrupulous business practices. With Nova, it was the unfair refund policy and charging its customers outrageous prices for videophone systems they didn't necessarily want. More recently, with Fortress Japan, it was their pressure sales tactics and outright fraud. If the large eikaiwas are to change anything, they can start by having a more transparent pricing and refund policy, and try being honest with their staff and customers.
This, I don't get:
Despite criticisms leveled at G.communication on popular Web sites such as Let's Japan of disorganization and putting profit before quality and teachers rights, the demand for lessons remains, and the teachers The Japan Times spoke to about current conditions at Nova were generally satisfied.
What do all of the criticisms posted here on Let's Japan have to do with the demand for English lessons and job satisfaction? The answer is nothing, because the author is making a false equivalency. The fact that eikaiwa gets scrutinized here has nothing to do with demand or job satisfaction. When Chris and I created LJ 10 years, we did so to tell others the reality of eikaiwa. Sorry it's not all green tea and onsens. Is it possible, that people might actually enjoy their eikaiwa jobs? Absolutely.
This apparently is supposed to be an example of job satisfaction:
"The bankruptcy shook off a lot of the frat boys and the people just out of college looking to have fun for a year," said one teacher, who spoke on condition of anonymity, fearing a reprimand. "The teaching at Nova has much improved because the staff that have remained tend to have a longer-term investment in this country.
"My salary is as good as it has ever been. In the days of Nova, there were too many people collecting high salaries but doing very little. It seemed that departments in the company such as HR were very bloated," he added.
I find this passage ironic. It also illustrates why eikaiwia get criticized here. The teacher may be well-paid, but his employer clearly has him under their thumb as he fears being reprimanded for speaking out. Eikaiwas depend on useful idiots like this teacher so they can offer vague contracts and working conditions that benefit the employer, not the employee.
"When Nova came down, it was a huge story, it seemed to be big in Japan and internationally," says Hong. "I remember embassies and other organizations offering help to those that lost their jobs. Geos has been a strange situation; nobody knows where they stand. Some people are in the same situation as the Nova teachers were, but they aren't receiving the same help."
So, in the end, there's this sense of a let-down. The GEOS bankruptcy hasn't been the media spectacle like Nova's collapse. Nobody is teaching for food in a park and the students haven't really lost their tuition fees. Perhaps the author was trying to offer a balanced view by conveying the message that things aren't so bad, but on the other hand, there's loads of information that suggests otherwise. One thing is clear, however: the old model of large schools demanding upfront payments is dead. Maybe that's where the confusion comes from. Nobody is really sure what the next incarnation of eikaiwa will be.