The Business of Education

Published March 1, 1999

Freightliner Makes School Buses Safer

School districts throughout Florida have ordered more than 300 new Freightliner school buses with improved safety features, including increased driver visibility and maneuverability. Although Freightliner did not enter the school bus market until 1996, the company already has captured over one-fifth of the school bus market by offering improved safety features such as standard anti-lock brakes, a chassis that maximizes forward visibility, and a heavier bumper.

“The bus has a sloped hood that dramatically increases a driver’s ability to see children and other objects in front of the bus,” according to Billy Savage, fleet maintenance manager for Hillsborough District Schools, which ordered 92 Freightliner buses for the 1999-2000 school year. As well as improved visibility, drivers like the adjustable steering wheel and the sharp turning radius, which reduces the need to back up.
Freightliner Corporation
News Release, February 1, 1999

A Billion Here, a Billion There . . .

School uniforms rang up almost a billion dollars in retail sales last year, or about 7 percent of all dollars spent on children’s clothing, according to the NPD Group Inc., a marketing information firm in Port Washington, New York. The $900 million school uniform market is expected to continue to grow.
Wall Street Journal
February 4, 1999

Homeschooling Market Growing Fast

Brian Ray of the National Home Education Research Institute in Oregon estimates that the number of homeschoolers is growing at the rate of 15 percent a year and that homeschooling families spend $543 per year to educate each child. With the number of homeschoolers currently at 1.2 million, this represents a fast-growing market segment with annual revenues of $650 million. With a 15 percent growth rate, revenues could exceed $1 billion a year within four years.

“That’s enough to pay attention to, for darned sure,” Dick Spaulding of Scholastic Inc. told the San Francisco Chronicle.

Jane Williams of Bluestocking Press reaches this market with an annual “Home School Market Guide,” which lists hundreds of suppliers, including publishers and software companies. Another compendium of homeschooling resources is the 865-page “Complete Home Learning Source Book” by Rebecca Roup, which also lists hundreds of products from educational books to games, videos, and curriculum guides.’s website provides a link for homeschoolers.
San Francisco Chronicle
January 29, 1999

More Than Tutoring at Sylvan Learning Systems

Although Sylvan Learning Systems Inc., started off with tutoring centers, CEO Douglas L. Becker says the publicly owned company now offers three broad categories of service: tutoring, testing, and specialized training. The company has approximately 700 learning centers where families pay directly for tutoring services to help their children do better in school. In addition, schools themselves pay for other tutoring and educational services from Sylvan to help children who otherwise couldn’t afford them.

Sylvan’s testing services consist of tests for academic admissions, professional licensing, and computer/information technology. In the company’s specialized training segment, teacher training is the biggest service.

Barry Fowler–who started Sylvan in 1978 and sold the company in 1985 when it had only 65 learning centers–recently launched a new franchise chain that would compete with his old company by having teachers offer lower-cost tutoring from their homes. Fowler’s new business, A Thousand Points of Knowledge, hasn’t sold any franchises yet.
The Wall Street Transcript
January 20, 1999

Detroit Board Faces $10 Million Lawsuit

On February 2, Detroit’s M2 International filed a $10 million damages lawsuit against the Detroit Board of Education, its general superintendent, and a deputy superintendent for 14 counts of alleged illegal conduct that led to M2’s dismissal as co-program manager of the board’s $1.5 billion schools Capital Improvement Program. The 70-page suit alleges violations of board bylaws and policies and procedures, violations of the state’s open meetings act, breaches of contract, defamation, and intentional interference in a business relationship.

Detroit voters approved up to $1.5 billion in bonds in 1994 for repairing public schools, purchasing equipment, acquiring and developing sites, and building new schools. On the recommendation of the former schools superintendent, the school board in 1996 appointed M2 and A-MAC Sales and Builders Company, Detroit, as co-program managers for the project.

“We brought projects to construction at twice the rate of A-MAC,” said M2 International CEO Sharon Madison Polk. “But our contract was the one that was terminated after illegal board actions that violated Michigan law and board bylaws,” she added, noting a district official had announced termination of the contract in a national publication before the board took action. That official has said that M2’s dismissal had nothing to do with performance.
M2 International
News Release, February 2, 1999

Educational Face-Off in Connecticut

The city board of education in Waterbury, Connecticut, is setting up an educational face-off between the for-profit Edison Project and the local teacher union by giving them both the same resources and the same requirements to run their own public schools. After the Waterbury school board gave Edison a contract to run one of its schools, the Waterbury Teachers Association negotiated a contract requiring the board to fund an experimental pilot school that the union would run under the same terms as the Edison contract.

Each school would receive the same amount of money to operate–$8,300 per student–and would hire from the pool of teachers currently employed in the city. The aim of each school would be to improve student achievement . . . a big challenge in a city with the highest dropout rate in Connecticut–16 percent–and only 27 percent of fourth-graders meeting state reading goals.

“Teachers always say ‘if only I could run it myself.’ Here’s the chance,” union president Jack Cronan told the Hartford Courant.

Edison is an eight-year-old company with 51 schools in 26 states serving about 24,000 students. Backed by $160 million in private investment, the company emphasizes computer technology, reading, and a longer school day.
Hartford Courant
January 30, 1999

More Schools Use PLATO

Increased demand for PLATO Learning Systems pushed fiscal 1998 sales to over $39 million, according to TRO Learning, the Edina, Minnesota developer and marketer of the computer-based products and services. PLATO offers more than 2,000 hours of comprehensive academic and applied skills courseware designed for adolescents and adults. Available via networks, CD-ROM, or the Internet, the systems are marketed to middle and high schools, colleges, job training programs, correctional institutions, military education programs, and corporations.

Among the key PLATO contracts announced by TRO in January was one with Ombudsman Educational Services of Libertyville, Illinois for use of PLATO in alternative education programs the company runs for school districts on a contract basis. Ombudsman, which is fully accredited, develops an individualized education plan for each student that is based on a set curriculum and presents competency-based, computer-assisted instruction.

Other new customers include the Merrillville Community School Corporation in Merrillville, Indiana, which will use PLATO for math instruction and remediation; the Cabarrus School District in Concord, North Carolina, which will use PLATO to teach basic skills and test preparation; and Utah’s Davis School District, which will use PLATO for primary instruction as well as for enhancement, credit remediation, and adult education programs.
TRO Learning Inc.
News Release, January 21, 1999