PHOENIX (By Yvette Armendariz and Laura Houston, Arizona Republic) February 7, 2006 — The Valley's top international management school will sell unused land, cut millions from its operational costs and add programs to help it survive in the highly competitive world of educating graduate business students.

Thunderbird, the Garvin School of International Management, on Monday unveiled a plan focused on educating global leaders. The plan, approved by its board of trustees, has been in the works for months as the school works itself out of a multimillion-dollar financial deficit.

"Thunderbird cannot try to be just a plain vanilla business school. We would be in trouble if we just did that," President Angel Cabrera said.

The school showed losses totaling more than $11 million in the three years ending June 2004. Tax records are not yet available, but the school will show losses in fiscal 2005 and 2006, Cabrera said.

"(Fiscal) 06/07 will be the first in five to six (years) where we're going to have a balanced . . . in fact, a positive budget," he said.

That's possible even as enrollment continues to slide because of operational cuts. Cabrera has eliminated 17 staff members, offered about a dozen early exits, cut unprofitable programs and restructured the school's European and Mexican programs.

In some cases, classes were run in the headquarters in Archamps, France, with just three students, Cabrera said. Now, the headquarters has been moved to a smaller site in Geneva, and there is greater focus on East European programs in Prague, Czech Republic.

The Mexican program has been moved from Guadalajara to Monterrey, which Cabrera calls Mexico's business center.

The plan, called "Thunderbird 2010: A Truly Global Vision," includes introducing two new master-of-arts degrees aimed at students who have no practical business experience, as well as creating more certificate programs aimed at business managers.

Another focus is on executive education programs, which had been growing until last year. Classroom work, as well as consulting, is being emphasized.

Cabrera also indicated that more predominantly online degree programs could be in the works.

"We're aligning resources where the growth is," he said.

An undetermined amount of land adjacent to the campus will be sold and the proceeds will be invested back into the school, but no time frame was given for the sale. Cabrera also said that several donations from alumni, worth several million dollars, will help the school remain competitive in attracting top faculty.

The school has had to differentiate itself as competition grows. Many schools are adding MBA programs for the first time or are focusing on specialties, including international business and retail.

Some are offering shorter, less expensive programs. The University of Arizona, for example, is introducing a 14-month executive MBA program in the Valley this year.

Competition isn't just increasing domestically. Schools in Europe, India and China are implementing graduate business programs, said Bob Ludwig, spokesman with the Graduate Management Admission Council, which tracks admissions and MBA application trends, which are rebounding.

Thunderbird remains a top-ranked school by several business publications. Its latest ranking, by London's Financial Times, showed the school improving among global MBA programs. It ranked No. 54 overall, up from No. 66 a year earlier. In a ranking by U.S. News & World Report, Thunderbird has held the top spot for international business MBAs for nine years.

It also is accredited by three groups: AACSB International, European Quality Improvement System and North Central Association of Colleges and Schools.

In the meantime, criticism and rumors about the school's viability continue to surface.

Cabrera said the rumors about the school being near bankruptcy are false.

Those critical won't go on the record with their names, but one said the new vision is just "platitudes."

Cabrera acknowledged that about a dozen faculty members have been outspoken and have aired their concerns with one of the school's three accrediting institutions. But the school has retained all its accreditations.

Roy Herberger Jr., who ran Thunderbird for nearly 16 years, has heard many of the criticisms.

"I think what's causing it is anytime you see the speed go from 100 mph down to 50, you get into situations where people begin to doubt," he said. "That's why we teach business, we teach risk. There's no business that's up all the time."

Herberger said Cabrera is facing a challenging market but, with the support of the board, is making dramatic changes to stay competitive.

The school's challenge is that it has a much smaller asset base than top business schools such as Harvard Business School and the Wharton School at the University of Pennsylvania, Herberger said.

Trustees continue to show support for Cabrera, who took over the school's direction about 18 months ago, but deferred official comment to board Chairman John Berndt. He issued a statement saying the new direction is "a bold yet strategic move for Thunderbird."

Refining the school's mission will give incoming students a better idea of what they're paying for, said Matt Harker, Thunderbird's student body president.

"That's one of the frustrations when we're in such a time of flux," said Harker, 30, from Farmington, Utah.

After sitting in with the board, Harker said it was exciting to see how positive the board was.

"They're seeing the ship turning and correcting. They're confident with the leadership with the school," he said.

Increasing corporate partnerships could help students network with employers and land jobs, he said.

As recent Thunderbird graduate Jake O'Shaughnessy looks for a job, he believes the new plan will help carve a niche for the school and its alumni.

"Thunderbird never really has been the school to compete with your traditional top 10 MBA programs," he said. "Thunderbird has to be unique in (its) vision, mission and strategy."

With the school's mission hammered out, Thunderbird Professor John Zerio said faculty members can begin to put their energy, resources and research into meeting that goal.

"Now, the horizon is clear," he said. "There's a lot of work that needs to be done in building the strength of the faculty."