Sunday, February 21, 2010

Eddy Groves

I don't know who Eddy Groves could be. I'll have to go and see.

Oh goodness. This is probably going to get me rambling on and on. Lord Wiki says that Eddy Groves was the CEO and founder of ABC Learning...that big childcare company.

I think MAYBE we've had personal experience with this company.

Okay never mind. According to this website, we didn't. When Jack was about three-and-a-half, I put him in a summer day camp at a place called Children's Courtyard. Later, Tim told me it was owned by ABC Learning in Australia. But now I see that they didn't acquire it until 2006. That would have been after we went. Well, that's good because our experience at Children's Courtyard wasn't at all positive.

Baby Eddy was born in South Africa on 16 June 1966. Ah....notice the three sixes in his name. That's like Rosemary's baby. Although I think little Andrew was born on 6 June 1966. Well, actually both Andrew and Groves have FOUR sixes in their birthdate. I guess that still counts for something though. What about baby's born on 6/6/06? That would be even more devilish.

The Groves family moved to Canada when Eddy was a baby. They stayed there for a few years. By the time he was around four, they had moved to Queensland. I wonder why they moved around so much. What's was going on with that?

For school, Groves went to a Roman Catholic boy's school called Padua College.

When Groves was done with Padua, he went to a university to study business. Lord Wiki doesn't specify which university he went to. But he dropped out, because he decided he'd rather do business than learn about it. I admire that.

Groves took a job as a bank clerk. Then later he became a milk man.

You know, I just realized how young Groves is. I guess I'm used to CEO's who are much older. Groves is not much older than me, and just a year older than Tim.

Well, I was picturing him as a milk man like in the 1940's and 1950's. Then I realized he was probably doing his milk man thing in the 1980's.

In 1985, Groves got married. He was only nineteen. At this time, he borrowed money from his new wife's father, and started his own milk distribution company. This was called Quantum Food. Lord Wiki says it's the largest milk distributer in Queensland. It's kind of strange though. I can't find their website, although they are listed in this business directory. You'd think if they were such a big company, they'd have their own site. Maybe it's there, and I just can't find it.

Groves and his wife ended up having two daughters. The marriage didn't work out though. They divorced in the late 1990's, and the ex-wife is suing Groves for unjustly enriching himself. I'm not exactly sure what that means in the context of a marriage. Maybe it's taking more than your share?

All right. Here's the bit about the child care centers. I do know things didn't work out well for them. I saw the news reports. I don't know the details though. I guess now I shall learn.

Mr. and Mrs. Groves opened up their first center in Brisbane in 1988. It was used as a franchise model, and soon other centers opened up. By 2001, they were on the Australian stock exchange. Groves became one of the richest men in Australia.

Then in February 2008, things went sour. How did they go sour? I don't really know, because I don't quite understand this area of economics. Oh wait. No, I think I understand. The stock prices went way down. This was due to a 42% fall in net profits. Because of this, Groves and his wife had to sell their shares. That's something I don't really know about, but I guess I can guess why they'd have to do that. It makes sense. If your company is failing, it makes sense that you should not be swimming in money.

If I'm reading Lord Wiki right, there might have been some illegal stock trading going on. People sold their shares before the public announcement of the share prices falling. I guess that would be insider trading?

Groves was on top of the world, and then he fell. In September 2008, they left the company. In November 2008, it was said that Groves owed banks a billion dollars. Yikes.

Besides owning ABC Learning Centers, Groves also owned the Brisbane Bullets...a basketball team. When the ABC stuff was going on, Groves tried to sell the Bullets, but failed.

Groves loves expensive and exotic cars. This has earned him the nickname "Fast Eddie". Although now he probably can't afford the cars.

Lord Wiki has an entry on the ABC Learning Centres. I'm going to read that. It might give me more insight into things.

Well, there's more details about the company's growth. It started with one in 1988, and by 2001 there were forty-three centers. By 2005, there was 697. That's a lot.

At some point, ABC Learning purchased a company in the United States called United States Learning Care Group Inc. I'm betting they owned The Children's Courtyard.

Yep. This career builder website says I'm right.

ABC also bought other childcare companies in Australia. It's kind of scary when one company owns so much.

Now Lord Wiki talks more about various controversies. One of them has to do with government funding. I don't know I fully understand this. What I'm getting is that the government somewhat helps pay for childcare. Therefore, the ABC corporation ended up getting a lot of government funding.

There was controversy about there being a monopoly. I do find that disturbing. What if you don't like the program or philosophy of ABC Learning Centres?
 And what if they own all the daycares near you? Then what do you do?

In 2006, a two-year-old escaped from the school. The Victorian government imposed a fine on ABC, and ABC tried to fight this. They said their company does all that can be reasonably expected, and legal liability should go to the staff member. Yeah, but it's ABC who hired that staff member. They are responsible. Now I wouldn't blame a company if they paid the legal fine, AND then fired the staff member....if she/he deserved it. But I wouldn't want my child sent to a program in which the company felt they were not legally response. Yikes.

Here's the ABC Learning Centre website. So, they're still in business. Did the government buy them out? I remember reading something like that; or that they've been taken over by some nonprofit group. Well, maybe the site will explain things to me.

Here's all their recent media releases. They're PDF files, so that's kind of a pain for me. But anyway, they were taken over by a nonprofit group called GoodStart. And Goodstart is part of a group called Mission Australia.

I'm going to explore the ABC site. I used to be a preschool teacher, so I'm kind of interested in this stuff. I like what they say here: ABC is committed to ensuring each child is loved, nurtured, educated, entertained and protected. If I was a parent sending my child to a daycare center, I'd want my child provided with all of that. I am tending to read things here with a grain of salt though. The Children's Courtyard website made their program look ideal. It seemed to be very much what I had been seeking. But the actual program was awful, at least with what we experienced. From what I saw, the children there were not loved and nurtured. I already rambled on about this in my Mem Fox post, so I won't repeat the whole story again. I'll just say that a program can look great on a website, but you really need to watch the program in action to know if it's okay or not.

Here's an ABC transcript from 2008. It was done after Groves announced that they'd be increasing their childcare fees by 11%. I wonder if this is the news that made the profits and stock shares fall.

Wow. This announcement came after the government announced it would be increasing their childcare tax rebate. That's nasty. The government probably did that to help families. And then Groves comes along and tries to take advantage. I'm pretty disgusted.

Groves defended himself. The transcript says, The company's CEO Eddy Groves denies he's profiteering, saying the move, which standardises fees across the group centres, is to cover higher costs. Yeah. Sure. Maybe they are trying to cover higher costs. But why did it happen around the time of the rebate announcement?

Groves continues to defend his company in the interview. He says they always increase the fees, and it has nothing to do with the rebate.

He says, There has been substantial wage increases in the childcare sector over the last two years, and deserved wage increases for the very hard working early childcare professionals.
I wonder if that's true. I was not paid well as a preschool teacher.  In NYC, the director of the school did give us a fairly reasonable salary...at least compared to what preschool teachers usually make. I think what she did was pay me a full-time salary when I was really working part-time. So that was really nice. In Fort Worth, my salary at the two centers I worked at was ridiculously low. I didn't understand it then. I don't understand it now. Maybe it would help if I knew more about economics. But here I worked at what was known as one of the most expensive preschool in Fort Worth. The parents paid a lot of money. Yet I hardly got any money. So where the hell does the money go? I know there's materials and building expenses. Insurance. I would like to know how much the director and others in management were paid though. Was it a lot? Were they putting money into their salary that should have been more evenly distributed? Or did they struggle like their teachers?

The two centers I worked at were privately owned. In the first, the director and her husband owned the center. I'm not sure about the second. I wonder though who gets paid more, child care workers at private centers, or corporate ones.

Now there's a bunch of business stuff in this transcript. It goes over my head. It's something about them selling discounted stock shares to Morgan Stanley. There was also talk of the company being greatly in debt. Well, if you're in debt, it might help to increase your childcare fees by eleven percent!

Here's an article from June 2009. It says ABC has 1.6 billion dollars of debt. That's kind of a lot. The Australian Securities and Investments Commission filed an application to get permission to seize Grove's passport. They don't want him fleeing the country. There's also concern that Groves may try to sell or give away his assets. I guess maybe he fears they'll be taken away. Maybe if he gives them to someone else, the government can't take them?

The article says that the NEW Mrs. Groves is devastated by all the news. I can't say I fully understand what they're losing? Do they still have a lot of money? Cars? Houses? Why should they have that if they left a company so much in debt?

The first Mrs. Groves sued her ex-husband for 44 million. She claimed he didn't pay her dividends from ABC.

This is so....disgusting. The article says the Australian taxpayers had to pay 56 million to keep ABC Learning Centres afloat. So this all happens, and Groves still has assets? He shouldn't have anything! Well, I wouldn't want him to be homeless and starving. But he should be living a VERY modest life right now.

Now we can rewind back to this article from January 2009. It talks about the new marriage. Despite him failing the childcare centers, and the basketball team, he still managed to have a luxury wedding at an expensive venue.

Parents weren't happy with this. Taxpayers weren't happy with it. Shareholders weren't happy. One investor lost thirty million dollars. It wasn't fun for her to learn that Groves was having this elaborate wedding.

Now I can see what the ex-wife meant when she sued Groves for unjustly enriching himself. So we know what this guy did to the general public of Australia. What did he do to his own wife and children? Did he hold out on them? You hear stories of divorced men refusing to pay their share of childcare, and they sometimes hide their assets to achieve this.

The Sydney Morning Herald has a LONG article on Groves. It's from March 2006....when things were going well for Fast Eddie.

I like this paragraph here: The director of this centre is Maria Pender, a feisty campaigner for community centres such as Clovelly, a woman with close-cropped grey hair, a master's degree in education and little time for the large corporations which have muscled in on child care in recent years, turning a feel good cottage industry into a stockmarket play.

I'm tempted to agree with the negativity there....just based on my experience at Children's Courtyard. But who knows. Maybe other corporate childcare centers DO work well. And I've worked at privately owned centers that didn't impress me at all.

The article gives some childcare history of Australia. In 1990, privately owned centers were given subsidies by the government. Then in 1997, John Howard put a stop to all that. The small private centers had a major struggle after that. It was hard to stay in business, and they were forced to raise fees.

So here you have the government making it very difficult for private centers to thrive. Then you have a rich mogul come in and buy out all the centers. Lovely.

The Maria Pender mentioned above did not want to sell her daycare centre, and at the time of the article she was still holding out. I wonder if eventually she had to sell or shut down. I hope not.

This article says it is not the cars that gave Groves his nickname, but the fact that his company grew so damn fast. While things got better for Groves, thinks did not get better for parents. It might have been nice if the increased amount of childcare centers lowered the price. Instead, it got higher. Grove got to celebrate. Parents did not.

In 2004, there were complaints from staff about being underpaid. The staff protested by handing out pamphlets to parents saying they weren't paid enough, and that Groves was greedy. Groves responded by suing them (the union) for defamation. I guess his tactic worked. Later the Sydney Morning Herald tried to get interviews with the staff about their wages, and the staff refused to talk. Groves had scared them.

I don't like Groves.

But I'll try to remember that he COULD have some decent aspects of himself. He might not be as bad as the media portrays him. From what I'm reading though, he does sound very awful.

The article also mentions some very negative stuff about the childcare centers. The company was sued for seventy-six thousand dollars after an inspection of one center resulted in some negative findings. There were mouse droppings on the floor and bedsheets. In a storage area, there were redback spiders. If that's not bad enough, the place had no smoke detectors. What the hell?! Now I can kind of excuse the mouse droppings, and spiders. Maybe that was just overlooked. Maybe someone forgot to vacuum one day. I don't know. But no smoke detectors? That's crazy.

The center also was accused of having dangerous cleaning supplies and other chemicals that were possibly accessible by children.

Yeah. This is why parents need to really examine the center in which they're sending their children. I think we get this idea that since we're paying a lot of money for a service, it must be decent. But that's not always true. This can go for not only child care centers, but private schools and nursing homes as well. The money might not be going towards decent staff salaries and adequate and safe equipment. It might be going to the CEO so he can buy more cars.

This parenting message board has some very insightful comments about ABC.

Jarrahsmumma says, My sister worked for them and from her stories I would NEVER place my child in their care.

DramaQueen has some wise words. It will just depend on your individual ABC centre as I too have heard some horror stories. My local ABC centre is fantastic, I honestly cannot speak highly enough of ALL the staff and their policies and procedures. I guess you will have to go and see for yourself how your local centre runs. Everybody will have an opinion on whether you should or whether you shouldn't. You will have to see for yourself.
Yeah. I think that can be very true.

Bearsmummy says, In my personal opinion, they try too hard to make the centre look like this big colourful, educational centre and lack in the caring, friendly personalities they should have. That's very much how I felt about Children's Courtyard. It looked good, but the staff was cold and unloving. I didn't like the way they treated Jack. I didn't like the way they treated me. I did not like the way they treated ANY of the children.

ShadyCharacter says, Interesting isn't it - some parents that send their children to them think they are great, but you will never come across a former staff member who would agree. Perhaps because one of the worst things about them is that they staff are consistently instructed to lie and hide things from parents :banghead:
I think he/she has a very insightful point there. Although I'm sure you could find SOME staff members who were okay with their job. Never is a little too strong of a word. Still I think parents sometimes shut their eyes to what's going on in daycare centers. They don't want to know the truth, so they'll believe the happy things the staff tells them.

Mamabare backs up what ShadyCharacter says. I'm an early childhood teacher and have done relief work in a number of ABC centres and I would never ever send my child to the ones that I have worked in. Too much emphasis on making things look good for the parents; they seemed to have lost track of the fact that they are there to provide high quality care to the children. All about keeping the parents happy, and what they don't see won't hurt them.

Well, one thing I can say for Children's Courtyard. They didn't try to put on a show for me. On Jack's last day at the center, I stayed with him to see why he wasn't happy with it. Even with me there, the staff was awful. I was incredibly unimpressed. Were they just honest people? What you see is what you get. Or DID they put on a show? Maybe they treated the kids better since I was there watching. That's a scary thought.

Do any of you have any interesting childcare horror stories to share....or any positive ones?