Thread regarding ITT Educational Services Inc. layoffs

Just a quick point about the "Kevin and Gene" show. There was someone posting how they "had heard he (COO Gene F) used to be a good guy". I heard the same thing about him when I started and every encounter with Gene (and Kevin) has proven otherwise.

Both Kevin and Gene like to brag about their long careers in "education" (Gene likes to say over 30 years and Kevin over 15 years) yet both are run of the mill bachelor degree accountants that have never taught a class in their lives and have made a living milking a cash cow (that they apparently stumbled upon) to death. Both are just bag men that lie a lot. Neither gives a damn about education AT ALL. Kevin was asked once if he ever planned on furthering his education and he just blasted the guy asking the question and said "NO!" (great attitude for a CEO that supposedly believes so much in our "mission"). Kevin also likes to brag about his "humble" beginnings managing a whole bunch of people for his daddy's construction firm while he was "working his way" through school (wow cry me river Kev that must have been REAL TOUGH). In fact he whined in one interview that he had more responsibility working for daddy than when he he took over at ITT (unfortunately for all concerned Kevin did not return to daddy and earning his allowance but remained at ITT). Kevin's previous career just prior to ITT was in liquidating assets from company's going out business. I guess now he is back to something he actually has experience in. Job one is for them to retain their current paychecks because it is highly unlikely they are EVER going to land any other jobs that pay this good EVER again (unless Kevin's daddy is hiring I guess). The not so secret plan is to decimate everyone else's job to ensure this happens (i.e. the real undisclosed "mission").

See, they aren't all that bad after all...

ITT ESI has one true legitimate traditional college in Daniel Webster College as it is accredited by the NEASC. If they reactivated it's not for profit status and rebranded it ITT campuses to Daniel Webster College offering legitimate and accredited education then it could potentially be rescued. The big question is how they could by out its owners or investors in order to make this happen.

"These campuses can easily be run by functional managers only."

Maybe whatever goes on in admin office can be handled by functional managers (not sure what that means -- there are also dysfunctional managers?) But remember, this is supposed to be a college! This is what the actual ITT-Tech business is supposed to be about. It isn't a Staples store.

Each night 100 or so students show up, along with a handful of adjuncts, when the real business starts. No one is running this academic s__t show. Zero managers on campus with those students and adjuncts. Students and faculty are human beings -- and growing increasingly frustrated and disillusioned with the vibe of a failing business going on around them, with zero real information or guidance provided by managers.

Insanity!

I'm predicting more layoffs among the FA and CS staff after the current quarter. These campuses can easily be run by functional managers only.

The funny thing about those VIP Visit to the campus…. At least our campus at least, they would have them very early in the morning. Like before any of the employees got to work. Of course the managers had to be there, and they said that if you could come in early, you could but it wasn’t necessary. The last visit it was just the managers, district manager the admin assistant and two reps. They tried to get the few instructors who were hear to try to come in but they were trying to prepare for class.

We knew that they did not want any questions asked, so that is why the visit were so early in the morning.

COO Gene Feichtner had town hall at our campus a few months ago. No questions were on whiteboard. District manager and director kept their mouths shut. He seemed genuinely interested in answering our questions. Unfortunately, virtually everyone in audience was silent, or in s----up mode. Very boring at first.

But this meeting was in May of this year, only a couple weeks after ACICS had delivered show-cause to Modany. What an elephant in the room! Finally a few tough questions were asked, but only by people who were quitting soon, and had nothing to lose! His answers were very polished, like he had answered them a million times before.

No one really put him on the spot. Probably anyone reading this forum could have debated his answers to tough questions -- he spouted the company responses, like ITT-Tech is a victim, ITT-Tech is completely compliant with regulations, etc. Some of his data I knew was flat out wrong. But no point in contradicting him, that would be a losing game for sure -- he must know how to shut people down!

It was really interesting hearing what kind of misinformation he was confident about presenting. Like looking into the mind of a master scammer in real time. And I was surprised how much he revealed about company sleaziness, too! No shame! Confirming that all faculty were going to be laid off from small campuses to save money -- only adjuncts left. This seems so contrary to any kind of minimal accreditation standards, but he was not in the slightest concerned about it!

He was extremely well prepared, and charming, personable. I hear he was one time a good guy. Does he believe the company bs he spouts out? Baffling to me.

"HAHAHAHA open questions at a quarterly"

-To be fair, in the good old days, Kevin & sidekicks, did visit our campus a few times & took unrehearsed random questions direct from the audience...he seemed to give open & honest answers, even to some tough ones. One surprising one, was one staff asked why our tuition was too high--Kevin indicated we weren't considering it properly --"ITT tuition was actually too low", in his view & he had numbers to "support" some decent rate of return on a student's investment.

Pre-2014, Modany did take live questions at investor conference calls! And webcasts were live, seriously! Many people must remember these. I started listening to webcasts, around 2012, and realized then he is a total skank!

Remember when on-site students started getting dumped into online classes, whether they wanted to take them or not? ITT-Tech realized they could avoid paying a faculty person to teach small classes this way. Obviously, its a money saving scheme. In an investor conference call, back when that started, Modany revealed to investors that he had a scheme for dealing with student complaints about being stuck in an online class . Modany said he was training managers to tell students that employers were seeking employees with experience in online training.Twisted!

I used to get up early to catch these live events, because no local campus managers at ITT -Tech were providing real information about scams, while Modany proudly bragged about them. ANd investors ate it up, sadly enough, for many years.

HAHAHAHA open questions at a quarterly meeting.... that's funny. That's like a campus town hall meeting with VP representative or Kevin himself where the staff submits their questions to the DM and when you arrive the DM has placed canned questions that no one on staff asked on a white board. Joke. Double Joke. Like being threatened if you call someone at HQ to ask a question, or using there "anonymous" call line to report abuses and getting backlash for it. They are all secretive and protect each other. They cover up things and fire for unfounded claims. Shameful when many instructors generally want to teach. Curriculum outdated, equipment outdated, no workshops or anything to get students involved or excited.

What are the board of directors doing? Ever heard the term "window dressing"? It's all they ever did.

What does the board of "directors" have to say about the current mess--seems like you never hear from them? Maybe they are very busy making reentry calls.

Yes, the once proud brand is destroyed. Modany and the board of directors should have been replaced a long time ago. Ego maniacs once bragged how "data" made decisions and everything they did was based on it. Well if that was the case, they should have removed themselves and their salaries from the fray when ESI dropped from $165 per share to $1.50. The three of them "Kevin, Barry and Gene" ran a once proud company and name into the ground, with their bullshit "data" makes the decisions. More like greed made all their horrible decisions.

It seems ludicrous to me that campuses have "open house" invitation out, and have not stopped taking new enrollments entirely while this show-cause plays out.

ITT-Tech had to submit a teach out plan, as part of show-cause, and as adjunct faculty I want to know how that might play out. Instead of trying to keep the insane "code of silence" up. Management should have at least pledged to inform employees and students about developments.

"ESI is still working on step one: getting away from lunatic Modany. "

In that case the shareholders better fire the incompetent board which has kept him in office!

Anyway - the brand is destroyed and many faculty have written the company off so their chances of rebuilding a good image is approximately zero.

Modany is a pathological liar.

After Modany's webcast rant in April, ACICS had big actions taken against it by Dept of Ed. Appears Modany did not anticipate this, and expected to just go to DC in August and chat with his buddies at ACICS -- wink, wink, show-cause lifted.

Can ACICS lift show-cause because ITT-Tech scam college followed ACICS scam rules to the letter? Seems that won't work, because some of the wording in show-cause and accreditation criteria are vague enough to allow ACICS some wiggle room -- like criteria about stability of academic core. Seems ACICS can at least state that their recently departed leaders trusted ITT-Tech too much, and that ITT-Tech leadership fails to demonstrate compliance.

Probation almost certain for ITT-Tech. If ACICS does not act, then its even more certain Dept of Ed will revoke ACICS license. Either way, ITT-Tech has to go through big changes and Modany seems completely unable to do that. His silence now is either due to ESI board gagging him, or his scam is so intractable he has run out of lies to defend it.

Modany almost certainly will be out soon.

"We intend to submit a comprehensive and timely response, demonstrating that ITT has been and continues to be in full compliance with ACICS standards of accreditation."

...this seems relatively true...our campus would jump through hoops to ensure we met all ACICS requirements.

............except a that sleepwalker could probably meet them. Apparently it is OK with ACICS to lay off most of your chairs, all of your full time faculty, have 8 different deans in 9 years, multiple directors, an endless number of "academic representatives", to have chairs be pressed into making thousands of recruiting calls (minimum ITT requirement 10 hours/week) per quarter, to list long gone faculty, deans and chairs in your catalogs as current staff...to claim active industry advisory board members who are not.... little things like that.

"the claims against ITT elevate ideology over evidence and ignore ITT’s long and exemplary record of helping students "

..........of course ACICS has not bothered to look at that evidence. If ITT would address these issues they would be able to much better serve their students & probably would not be in the position they let themselves get into.

Selling the company? Who knows. ESI is still working on step one: getting away from lunatic Modany. Don't try and predict ESI actions, or expect any rational behavior from this corporation, until CEO Modany is fired.

Modany says the ACICS show-cause hearing this week is result of a political witch hunt being waged against both ITT-Tech and ACICS. He literally says that in his April 29th 2016 webcast. Is this lunatic now representing ITT-TEch, before ACICS, in DC, at this very moment?

ACICS at least had sense to show "reform" in multiple ways over last few months, including dumping long-term leaders.

Here's some Classic Modany for your afternoon coffee break! This is from 3 months ago, the most recent speech available. (Sources given after quote.)

"At this point, I’d like to shift gears and take this opportunity to provide a few thoughts and comments regarding the ongoing media and political environment, and we believe continues to impact our ability to execute on our mission of helping students, improve their lives to the pursuit of high quality career based education.

Over the past several years, ITT Technical Institute has been the target of various allegations, many of them concerned private education loans a third-party lenders issued the ITT Tech students, when the private loan market dried up in the financial crisis of 2008 and 2009. The accusations are persistent despite the fact these loans have not been originated for approximately five years. Unfortunately the claims against ITT elevate ideology over evidence and ignore ITT’s long and exemplary record of helping students to better their lives. We categorically deny any allegation ongoing.

Many of ITT’s critics are Washington insiders and the media and political allies, who have an ideological bias against the for-profit higher education sector. These individuals ignore the fact that for-profit colleges and universities are tax paying institutions that achieve better outcomes for non-traditional students than many non-for-profit schools and community colleges. Most of these individuals have never set foot in one of our schools, who haven’t spoken with our administrators, faculty staff or employer partners. First of all, these individuals are determined of a barred ITT and the sector as a whole, with one sided attacks, even in the absence of any proof of our ongoing.

The single minded objective of individuals behind these baseless attacks is simply this; to eliminate for-profit education in America. While America is going through a period of political change, we still firmly believe that the overwhelming majority of our society respects due process as a fundamental American principal. Due process requires four depriving a citizen of life, liberty or property that government must follow fair procedures. IT means that the government may not dispense its owned freewheeling brand of justice according to the political passions, but follow the law. It means the accusations are not proven with ideology and work, but with facts and evidence.

Unfortunately due process is woefully lacking in the political witch-hunt that is unfairly targeted ITT. Last week our creditor, ACICS issued ITT what is known as a show cause direct letter. The letter requires us to explain why our accreditation should not be suspended or otherwise conditioned. The letter sites a grab bag of unproven accusations against our organizations including a local news report about a small number of disgruntled former students. In that respect, the request channels the same guilty until proven innocent mindset that has been shown by opponents of the for-profit sector. Having said that, we are sympathetic to ACICS given the enormous ideological pressure they are under as an accreditor of ITT, and others in the sector.

Make no mistake, we take ACICSs request for information very seriously. We intend to submit a comprehensive and timely response, demonstrating that ITT has been and continues to be in full compliance with ACICS standards of accreditation. We at ITT Technical Institute are proud of our 50 year history as postsecondary institutions. We’ve worked hard to help hundreds of thousands of students, improve their lives through high quality career based education, while staying true to our core principles of quality, compliance and customer satisfaction. We are confident that if we receive fair treatment in due process, the cornerstones of this great country’s legal systems, ITT’s history of service and success will continue."

SOURCE: this quote comes near end of April 29, 2016, webcast for ITT Educational Services, Inc. 2016 First Quarter Earnings Call (available for anyone to listen to at http://www.ittesi.com/index.php?s=19). Text is from Seeking Alpha transcript (http://seekingalpha.com/article/3969696-itt-educational-services-esi-ceo-kevin-modany-q1-2016-results-earnings-call-transcript?page=5)

What really intrigues me is Modany's silence. Has this happened before, where no comment is made from Modany after an earnings report comes out?

Every ESI quarterly or annual report for years, to my knowledge, has been accompanied by a web conference, until last week. Modany used to take live questions at these web conferences, and anyone could tune in -- I always did. Lately, he has read prepared statements at these conferences rather than take live questions, ever since his fraud accusation and "resignation" in 2014. But he still said something "live" on a web conference, held on same day as earnings report is published, for past few years. And transcripts of conference would be published online, by various organizations. Not last week!

Not only did Modany comment in web conferences, but in the published quarterly and annual reports and accompanying press releases, there has always been some statement clearly attributed to CEO. Sure, it was in investor gobbledygook and filled with bs, or rage against regulators, but always interesting.

Can anyone find a quote by Modany regarding the quarterly report? Maybe I missed something. If he is silent, I think it is significant. He has been scamming for a decade, and always found plenty to say regardless.

In the last quarterly report, ESI was unusually transparent -- admitting the lay-offs of recruiters was for short term cash, and was going to result in enrollment decline, and was not a sustainable long term plan. And they actually made some comment that focusing on students is important. Usually the financial documents don't say anything like that -- Modany has continued the same approach for years with investors -- Modany openly portrays students, in his comments to investors, as objects in a profit-making plan, to be manipulated as necessary to please stock-holders. And he has always attributed any enrollment decline to everyone else's actions, rather than his own -- regulatory pressure, "headwinds" of various sorts.

Very interesting!

That is how sleazy companies act, duh.. You think they are going to volunteer to admit they're running a scam? They go dark because there is nothing to say.

Speculation is all we can do! Management provides ZERO information to staff or students. Crazy!

My email from management is about stuff like how many guest speakers came to campus last quarter, and how we rank compared to other campuses in the district had. BFD.

This is the weirdest company I have ever worked for. Carmel office either provides BS through Nicole Elam or remains silent. Complete lack of support for students and employees. Either heartless executives, totally incompetent. Or there is mercury in the drinking water and they have gone mad?

The new director at my campus, hired right before lay-offs started, initially bragged he got job by convincing headquarters he could double the campus enrollment. He had taught years at campus previously. He considered this promotion his big break, a chance to prove himself. Three days after he got the offer, half the recruiters are laid off at the campus. But even that didn't seem to worry this new director too much. Then late last week the company itself declared they anticipate 50% drop in new enrollment, due to layoffs. Now the director is looking shell-shocked. I have never seen him this way before, jumpy and nervous and saying nothing about his new job. He used to always be an upbeat person, no matter what, whether teaching or managing.

This new director had gone on an interview in Indiana, talked with all the big players, met Modany. He sincerely believed he had sold executives on his campus growth plans. Three days later these same executives executed their massive enrollment shrinkage plan. This is the way ESI executives treats its loyal employees -- complete insincerity, no concern or empathy for the role this new director was going to be playing in the coming months. ESI has made a joke out of the positions such as dean and director, combing them into one position, seemingly with little guidance on how someone is supposed to oversee multiple diverse departments, especially when one department is supposed to represent students and others represent sales, especially when the company is totally tanking on all sides.

Yes anything over 400 dollars. True it could be normal. Just very odd timing. But maybe we are all looking at the pieces and trying to make them fit even if they don't. Just interesting.

"Could ESI dodge US regulations by going off shore?"

No.

Zhang Yude buying ESI out? He just bought another 114K shares last week. Could ESI dodge US regulations by going off shore?

By assets, do you mean desks, printers, copy machines and such? They do check those occasionally, to ensure they don't walk off or at least get disposed of properly...so this may just be normal routine.