University of Michigan blue over money woes

ANN ARBOR - When Mary Sue Coleman became president of the University of Michigan eight years ago this month, auto sales were booming and John Engler was still governor.

Economically, it was a different world. True, there was mild worry because state unemployment had edged up to 5.7 percent, but things were still generally good.

Politically, a nation whose 9/11 bruises were still fresh was still rallying around President George W. Bush. And nobody, outside an inner-city Illinois district, had ever heard of a state senator named Barack Obama.

Eight years later, the state and world are different. For the University of Michigan, the state's oldest, largest, and richest public institution, life these days is all about financial challenges.

"It really isn't very sexy to answer 'money' when people ask what keeps you awake at night, but it does keep me awake at night," said Ms. Coleman, a biochemist by training who, these days, often has to sound like an economist.

Compared to other schools, "we're in a very good financial situation," she said.

But UM, which has 58,000 students on three campuses, is feeling the pinch.

Since Ms. Coleman, 66, arrived at UM, General Motors and Chrysler have gone through bankruptcy and the men who led Michigan's other major universities all have departed.

These days, Michigan's leaders dream of getting the jobless rate back to where it was when she arrived. The July figure - 13.1 percent - is down a fraction from the month before.

Affirmative action, which Michigan's oldest university had proudly used as a recruiting tool, has been outlawed by the voters, but embryonic stem cell research has been approved.

I talked with her for a story for Michigan Alumnus, the alumni magazine. The school agreed to let me share some of her comments.

Viewed one way, Ms. Coleman, who had previously been at the University of Iowa, is the CEO of a business with a $5 billion-a-year budget and is ranked by U.S. News and World Report as the 29th-best university in the nation.

There have been suggestions that UM cease being a public university, an idea its leader quickly dismisses.

"I am very proud of being a public university. This state has a huge investment in this university it has made over almost two centuries now, and that's a legacy of which I am very proud," she said. Yet she's aware that the school needs to change with the times.

"You know, every year our educational experience has to be better than the last year was. And that means recruiting the best faculty and retaining people, because it's a war out there for talent."

That takes money. Despite the times, Ms. Coleman has steered the university into some major strategic investments. Last year, it spent $108 million to buy the Pfizer corporation's now-abandoned 30-acre, 174-building site in north Ann Arbor, 2 million square feet of office and laboratory space. The university hopes to expand its research activities and perhaps start new commercial partnerships.

This summer, UM completed a three-year, $226 million renovation of Michigan Stadium that included new suites, outdoor club seats, and a state-of-the-art press box - facilities the university hopes will help fans forget the recent scandal, when football officials were cited by the National Collegiate Athletic Association for exceeding the hours college players can spend practicing.

Those investments are expected to pay for themselves. UM also is expanding its ties with China, particularly Shanghai Jiao Tong University, an engineering center.

And, in a move that is sure to be controversial, the school is thinking about increasing its percentage of out-of-state students, now more than a third of the total. That nonresident students pay higher tuition rates is "part of the temptation."

While Michigan's high school population is decreasing, Ms. Coleman said, "One of the things we can do that actually helps other state institutions is to edge up our out-of-state enrollment."

While stressing that no decision has been made, her theory is that it would mean other state universities would get better in-state students. But that would prove controversial with legislators and in-state students who are denied admission to the University of Michigan every year.

Despite the trials, Ms. Coleman loves her job. She has two more years on her contract, which pays her $760,196 a year. "I'm having the time of my life. This is an endlessly exciting place, and I couldn't go anyplace else. It would be a disappointment."

Jack Lessenberry, a member of the journalism faculty at Wayne State University in Detroit and The Blade's ombudsman, writes on issues and people in Michigan.

Contact him at: omblade@aol.com