Corporate Consultants Like Huron Set Their Targets on American Universities

Corporate Consultants Set Their Targets on American Universities

By Jaskiran Dhillon, Cinzia Arruzza and AAUP-TNS Media Collective October 23, 2020

The administration of The New School has sought the services of a firm founded by alumni of Enron-affiliated Arthur Andersen.

Last year, the leadership of The New School (TNS) celebrated its storied progressive history by organizing a centennial festival. The event, featuring artistic events, panels, and exhibitions, was intended to highlight its reputation as a quirky, heterodox university committed to social justice. “We ask the questions that lead to new questions, challenging the status quo,” said the announcement. The festival was also a hugely expensive event, promoted as a fundraiser, albeit one seemingly quite ineffective at its goal of raising money. Months down the line, the university is struggling with a projected budget shortfall of $130 million. But contrary to the celebratory spirit of its carefully crafted public image, the leadership is attempting to transform the university—without the input and against the wishes of faculty, staff, and students—into a corporate paragon of anti-labor austerity.

On August 6, employees of The New School received an e-mail from the new president, Dwight A. McBride, a long-time administrator as well as a scholar of race and literary studies. The e-mail announced that the school would undergo extensive “reimagining” and that it had hired Huron Consulting, “a firm with a dedicated practice focused on higher education,” to guide them. Many of us in the TNS community were flabbergasted by the decision to invest hundreds of thousands of dollars in an external consulting company in the middle of a purported fiscal crisis, rather than mobilizing resources and expertise already present in-house. Union members were concerned about the possibility for union busting given the new president’s stance on unions.

As it turns out, they were right to be worried. On October 2—five months after Huron was hired, and with the approval of the Board of Trustees—the school laid off 122 employees to offset the projected budget shortfall. More than a third of the laid-off employees were union members, and essential positions were eliminated in student advising, health services, and departmental administration. The total number of employees who have lost their jobs and health insurance in the middle of a pandemic is even higher because dozens of employees furloughed in March will not be recalled.

Taken together, the number of employees laid off to combat “administrative bloat”—the steady increase in spending on administrative positions, including substantial increase in salaries and related benefits for the leadership of the university—approximates 20 percent of The New School’s staff. The layoffs made minimal difference to the budget shortfall: In fact, they are only meant to result in annual savings of $12 million, starting from the fiscal year 2022. The decision to throw around 200 workers into unemployment in the midst of the worst pandemic in a century looks all the more cynical and shocking.

Huron, the shadowy entity in dialogue with the administration behind closed doors, is a corporate consulting firm that has been mired in corruption from the beginning. It was established in 2002 by 25 former executives of Arthur Andersen, an accounting agency that went under in 2001–02. The agency had been cooking the books for the energy giant Enron, a company that became a household name signifying corporate corruption, as well as the subject of a bestselling book and a documentary. Using “mark-to-market” (MTM) accounting, Enron was able to claim prospective future profits and list them on its current balance sheet, wildly and fraudulently inflating the company’s value. This was not its only crime. Enron routinely advocated the privatization of essential services and resources and expanded its operation to India, Mozambique, and Argentina. In India, Human Rights Watch accused the firm of paying police to violently attack protesters. By the time the company collapsed,shareholders had lost $74 billion, and its employees lost billions in pension benefits—all under the watchful eye of Arthur Andersen.

It didn’t take long for Huron to follow in the footsteps of its corrupt creators. In 2009, Huron became embroiled in its own scandal, accused of overstating pretax income from 2005 to early 2009. The consulting firm ended up having to pay out millions of dollars, between a civil fine and reparations to shareholders. Perhaps unsurprisingly, several of Huron’s executive leaders are Republican Party donors. In spite of the occasional donation to a Democratic candidate, Huron executives seem to be particularly keen on supporting Republicans like John McCain, Mike Pence, Mitt Romney, George W. Bush, and Ted Cruz.

Huron turned its eye to the field of higher education in 2015. Remarkably, Huron’s own primers point to post–Hurricane Katrina dispossession as a model for universities looking to navigate the crises brought about by Covid-19. In a report titled “COVID-19 and Hurricane Katrina: Parallels and Lessons Learned,” Huron advocates that universities immediately institute aggressive measures such as staff and faculty layoffs, program closures, salary reductions, and hiring freezes. The fact that “renewal plans” engineered by private and public entities in the aftermath of Hurricane Katrina exacerbated racialized dispossession seems not to have been a concern.

In 2017, under the watch of the reactionary, “right-to-work” Governor Scott Walker, Huron was hired by the University of Wisconsin—historically a exemplar of the state-funded, public institution serving the poor as well as the affluent—to manage a state-driven austerity plan. In addition to laying off a hundred employees, reducing employment for non-tenure-track staff, and forcibly reassigning tenured faculty, Huron’s plan shuttered thriving programs in humanities and social sciences and drove mass faculty layoffs at the university’s Stevens Point Campus.

The University of New Hampshire (UNH) didn’t fare any better. In 2019, UNH paid Huron $600,000 to produce a cost-saving, “reimagining” assessment that Huron claimed would save the university $12 million over two years. The solutions proposed in the report included cuts to research and libraries, layoffs of facility and maintenance staff, and adjustments to the faculty mix (the combination of tenure track and untenured positions) based on a merely quantitative criterion for cost efficiency, credit hour production (CHP) per faculty member. CHP is the total number of credit hours produced in a semester and is calculated multiplying the number of students enrolled by the credit hour per course.

Huron’s business model for restructuring higher education also emphasizes the expansion of the market through online learning and the development of global education platforms. It not only suggests that universities use the strategy of their “Fortune 1000 counterparts,” it advocates fostering corporate educational partnerships. This is plainly at odds with The New School’s historic commitment to promoting and defending the values of intellectual and academic freedom.

Outside of corporate and institutional boardrooms, fierce resistance to the “reimagining” is mounting across The New School. Employees, students, and faculty are demanding to have a voice in shaping the future of their university. In an unprecedented display of solidarity among students, faculty, and staff members, the unions present on campus (UAW Local 7902, Teamsters Local 1205, and AFM local 802) and The New School’s American Association of University Professors Chapter have come together under the umbrella of the New School Labor Coalition, organizing a campaign to force the school’s leadership to recognize the community’s needs and to bring its workers to the table.

In a couple of emotional Zoom meetings, laid-off workers described the effects of the university’s austerity measures, the imposition of what Ruth Wilson Gilmore refers to as “organized abandonment.” Some employees have been working at the school for up to 20 years or more, only to find themselves with no retirement, no income, and no health insurance. Underfunded graduate students expressed rage about the number of teaching fellowships that have been canceled, one of the few sources of income for international students on a visa. And an exhausted faculty body, whose salaries have been cut, retirement contributions halted, and research funds eliminated, expressed their concerns about being confronted with an institution they no longer recognize as their own.

Despite repeated requests, university leadership has yet to meet with the labor coalition. Demands for financial transparency and meaningful participation in decision-making have been similarly deflected. Crucial information has been withheld even from the task force of faculty, staff, and administrators created by the administration to help “reimagine” the university, leading all faculty and staff representatives in the task force to send a letter to the president and the provost explaining that they find it impossible to fulfill their mission without access to transparent and reliable data about the school’s finances.

The administration’s actions add up to what Naomi Klein calls the “shock doctrine”—the tactic of using a supposed crisis to “push through radical pro-corporate measures.” Corporate sharks like Huron have been helping university bosses across the country implement different versions of this austerity-driven doctrine, and The New School is clearly no exception. This vision of the future is not only borne on the backs of the most vulnerable in our communities; it threatens to undermine higher education itself. To remain true to its historical commitments, The New School needs to dispense with corporate models that cut to the bone, and begin listening to those who make the institution, against all odds, a place of humane, progressive education.