The Poetist

In my last post I mentioned a news broadcast wherein a commentator offered her opinion that students who lost money on their Nova lessons are facing greater difficulty than teachers who have not been paid.  That is so, absolutely ridiculous!!   These students chose to spend disposable income on Nova lessons.  Did they lose their source of income?  No.  So she needs to shut up.

In a few of the sources I’ve linked to people have reported on the amount of money students have paid for lessons.  The way Nova worked students paid for hundreds of lessons up front, spending thousands of dollars to do so.  I specifically remember one story of a man who spent $7,000 on a new contract in March.  He’s losing a lot of money.  I feel bad for him and other students (although not as bad as I feel for teachers and staff), but at the same time I’m a little surprised that people would suscribe to a contract that requires so much up front money for services that have yet to be rendered.  If I were to fork over $7,000 it would either be for a down payment on something (like a house or a car) or something I could own immediately (clothing, jewelry, a trip etc).  I just can’t believe people would spend so much money on something that would be intangible so far into the future.  But to be fair, students signed a contract with Nova and had every right to expect that contract would be honored.

The NHK news program that I mentioned earlier reported how Nova is hoping to re-structure so they can offer students their English lessons under a differently named country.  What I find ironic and very telling of the regard held for teachers is that ‘they’ (I’m not sure who, the Nova board?) seem to assume that they’ll have a supply of teachers.  They talk about the inconvenience to students and wanting them to be able to continue to study but they say nothing of thousands of teachers (or staff) who have been severely inconvenienced and wanting to make amends with them.  They are seriously deluded if they think it will be easy to convince any native English speaker to work for them again – under any name or other incarnation.

Unless, of course, they recruit heavily in America.  So far news outlets and/or the governments of Australia, New Zealand, Canada and Great Britain have reacted to the situation with Nova.  Only America has been out of the loop.  In fact, I searched the websites of major newspapers across the country and found only 1 story – a bland Reuters dispatch that doesn’t even mention that any Americans are involved.  Of the papers I searched it’s available at the New York Times and Washington Post websites.

This morning I received this message from one of the Japanese staff I used to work with at Nova:

” i must tell bad news to you.

NOVA went bankrupt today.

its only this now to understand.

every staff is confused now.

i tell you immediately if i get some information about your salary.

sorry adelle.
dont dislike Japan.”

At one of my friend’s branches the staff had been spending their day calling students asking them to cancel lessons, because there were no teachers.

But it finally happened. Nova has declared bankruptcy. Late Thursday night the Nova board of directors ousted the president, Sahashi, and then declared bankruptcy on Friday. The company filed for protection under the Corporate Rehabilitation Law, nearly ¥44 million in debt. Nova’s shares on JASDAQ have been suspended from trading and it will be fully delisted by the end of November. At this point all of the Japanese staff and foreign teachers are missing a paycheck; the staff will surely get unemployment benefits from the Japanese government but it’s unclear if or when teachers will finally get paid. Unfortunately the goverment only seems to be emphasizing the inconvenience to students, but this puts teachers in a really tight spot. Nobody has been paid since September 15th!  There is even a news report (the NHK link below) which shows the newscaster commenting on the story, saying that while it’s tough for teachers it’s even harder for students.  That made me so angry!!  It does suck for students but at the end of the day they chose to spend that money and they still have their jobs.  Teachers, however, have no source of income in a foreign country; and the job market for English teachers is terribly flooded.  Luckily for British and Australian teachers their governments are getting involved – there’s more information on that in my last Let’s Japan link below.

I’m going to try to get in contact with more of the staff and some of my former students to get a Japanese perspective on this. Until then, here are more sources:

The NHK report  (in English)
From Let’s Japan
Coup d’Etat: Sahashi Fired
Nova’s X-Day Arrives
Media’s Reaction to Nova’s Bankruptcy

From Ken Worsley at Japan Economy & News, his piece in Metropolis.

In about 1 hour it will be 12:01 am in Tokyo; the morning of October 25th, the day that Nova instructors have been promised their pay.  Do I expect it?  Of course not!

Rumors had been surrounding Nova for the entire time that I worked there.  I began in a period of ‘contraction’.  The company had expanded too rapidly and was scaling back… but that didn’t mean anything.  Still, people hypothesized, conjectured and gossiped about Nova’s viability but every discussion ended with these claims:
*Nova has enough assests to weather any storm
*Nova has such a huge market share that it couldn’t collapse
*Nothing has happened yet…

I’ve talked with some friends still *teaching* in Tokyo, and most of them already ceased going to work.  Some decided to call in sick, some just quit outright.  One friend gave his business card to the students at his branch in hopes of acquiring some private students.  I have other friends who are trying to get home but they can’t because flights are booked solid.  Any way you look at it it’s over.  Nova is being evicted left and right.  Teachers are quitting en masse forcing schools to close.  Whether or not bankruptcy is declared, whether or not the faxes promising paychecks keep coming, whether or not a small minority of teachers continue to go to work, Nova is over.  It’s over.

The number of mis-steps and management faux-pas that it took to get to this point is staggering.  Here are some of the latest stories:

• “A do-or-die situation” – students are confused, schools can’t operate because teachers have quit, and Osaka canceled its ALT contract with Nova.
• the government is finally making Sahashi explain himself.  Whether or not this means anything is anyone’s guess.
• “Sahashi has all but signed Nova’s death warrant…” something about stocks…
• Shinjuku Honko closed!  A Yakuza connection?  And other bad news
• Sahashi readily admits that Nova lost its “cash flow mountain.”
• There are some really shady stock deals being made
• “Nova in Flames”

My question: where was the effort to retain students??  Contract cancellations are a huge part of this mess.  Nova might have been able to survive with a significantly reduced cash flow but the loss of contracts put too much stress on the company.  So why didn’t Sahashi do anything to keep students from leaving?  How about free voice tickets?  Bringing a friend to Nova for free?  Having a month of free Level-Up lessons?  Free special Ginganet lessons?  Or heck, a free keitai charm?  All these things should normally cost students extra money but in a situation like this is it not better to freeze profit but keep students?  Then at least you’re not losing millions of yen in canceled contracts.  Rather, Sahashi chose to lose money, lose students, essentially lose everything – and take all his employees down with him.

*all the above links are from Let’s Japan.org.  Here are stories from the Japanese media:

• Cash Strapped Nova Fails to Honor Contract to Public Schools After Teacher Exodus – the Mainichi Daily News
• Labor Standard Watchdogs to Question Nova President Sahashi – Japan Today
• Nova Gets the Web Talking – the Japan Times

Damned If You Do, Damned If You Don’t

I’ve noticed that on a lot of online forums and message boards people criticize teachers who have not quit Nova, but that can be a tough call to make. Sure they’re not paying paying teachers so in that respect it behooves everyone to get another job. BUT if you voluntarily terminate your contract with Nova you are not eligible for unemployment benefits – even if the company’s situation indirectly drives you to unemployment because it’s a more secure position; at least you can spend your time looking for a job rather than wasting time in one that no longer pays. News reports and blog posts talk about how Nova must pay its staff, creditors/students and teachers. Somehow former teachers don’t seem to figure into this. Why we’re not considered creditors (they owe us for labor, according to the contract) or employees (again, they owe us according to the contract) I don’t know. Even when students cancel the contract they’re supposed to get the money that they are owed, so how come when teachers resign we don’t get the same rights and consideration? That seems like an unfair penalty for just trying to make a secure living. In American law you can ‘plead the 5th’ – that is, to engage in self-preservation by refusing to provide information that could incriminate you. It seems as though teachers will now be penalized for engaging in self-preservation, for refusing to work for a company that will not pay them.

In light of that I don’t find it so remarkable that some teachers are choosing not to quit.
Nova Update
Oh Nova. There is yet another development in the Nova story… there will continue to be developments until they finally file for bankruptcy and just end the suspense. Until then…

Teachers received another fax on Friday (oct 12) saying that paychecks would not come on the 15th (Monday) but would be delayed until the following Friday (Oct 19). Before this fax however, plans for a walkout were already being arranged through another wordpress blog, http://novawalkout.wordpress.com/. The walkout was scheduled in the case of non-payment by 3pm Monday. I can only assume it still happened; the last posted comment is at 1:36pm and by now its about 8pm there.

Just in case there was some glitch or slip-up I checked my Japanese account and sure enough nothing had been deposited. And just for the record, the union is planning “legal action to demand wage payment.”
Additionally, news about Nova in the Japanese press is increasingly being reported in crime section of various newspapers. Most recently, someone posted this information, from Yahoo Japan, at letsjapan.org:

“This guy named Nishida has been arrested for stock manipulation,and there are now strong suspicions that he has been involved “in an attempt to raise funds for a different JASDAQ-listed company this month.” (Any guesses as to what the name of that company might be?) This unnamed company “has been hit by scandal this year and seen its business suffer, with its share price at one point falling to just 15% of its 2007 high. The company has announced a massive injection of capital to take place this month in an opaque deal using two companies registered in the Virgin Islands.”

Also, “Prior to his arrest on the 11th, Nishida was scheduled to meet with the president of the company in Tokyo.”

Oh, and Nishida is reportedly involved with crime syndicates.”

That information exactly mirrors the details of Nova, although of course, without confirmation everything is more or less just speculation.

*a note about the title: I’m more or less referring to an earlier post at LetsJapan.org, “The Fat Lady Hums a Few Bars.” What/who is the Fat Lady? I’m thinking an official declaration of bankruptcy. The Greek Chorus is all the bloggers who provide the information that doesn’t come from Nova or the mainstream media. Maybe the Fat Lady is singing somewhere, softly; but the Greek Chorus is certainly drowning her out.