Speaking of Rochester; 129; James Gleason

How do you do ladies and gentlemen. This program is called Speaking of Rochester and I'm Barbara Connell. During the course of the program we try to explore with one of the pillars of our community the past the present and the future of the Rochester the greater Rochester metropolitan area. We are privileged to have today as our guest James S. Gleason The president and chief operating officer of of the Gleason Corporation which has been here for 130 years. It's an important manufacturing institution. And Mr. Gleason has not only had it for some time now but is very much involved in a large Leeson Foundation and a man who's doing a great deal of of study and work in the education field. I welcome the program Jim. It's nice to have you with us. Thank you very much. Delighted to be here.

Tell us a little about the Gleason corporation. It's it's a manufacturing group that employs about a thousand people here at the present time and that operates all over the world doesn't it. Yes. Well we have about 2600 employees worldwide and just under a thousand here as you said have been around for over 130 years and. Really have done so because we specialize in very very unusual perception capital equipment machine tools. Fundamentally that are used to make any kind of gearing. So if you're talking about an automobile a sewing machine a jet engine a tractor almost anything that moves requires gearing and the machines that make those gears. That's our special. Now this is a cyclical business and I have seen that you participated in the press parody of America for the protracted period of time that we've had it now during the 90s and therefore making a good deal a good many machine

tools for the for the world. During this period of time yes the past five or six years have really been very good ones although. I think one of the unusual things about our kind of company is that probably two thirds to three quarters of our product is sold outside the United States. On an average about a third in the Asia-Pacific about a third in Europe and about a third in U.S. So you participate in Rochester has a great reputation as an exporting community. That's our bread and butter. It is your bread and butter and you're part of the global economy in every sense of the word. Well and I think it's important to point out that frankly our ability to keep. The operation here in Rochester and in the U.S. in good shape and as a base for a lot of our technology is the fact that we have been aggressive in having a presence in other countries. Now Jim originally you didn't think you were going to go into this business you graduated from Princeton and when it was

1954 55 55. And and you were hoping to go into the Foreign Service or to to work for the State Department isn't that correct. That's true. And but but the pressure of your family has owned the business for ever since it was. Organized until it went public in 99 and 68. Is that correct that is correct. So it's now a public corporation with stockholders looking over your shoulder and that's right and you're participating in public financing and it's not a family corporation anymore. You have some fascinating forbears your great aunt was Kate Lisa who was a woman engineer and a pioneer and who who has made her mark here. She was one of one of those Rochester women that contributed a great deal to the environment of Rochester didn't she. Yes indeed and it's also true that. Kate and

her father were pretty good friends of Susan B Anthony big big supporters of hers some of that went to that small group of women I had a lot of leverage. Part of the famous upstate New York burned over district that they where pioneering thought was one of the most important products that New York contributed. Welp. You make that machine tools for the most part that's for the things that can turn out consumer goods that are part of the tremendously complicated process of manufacture. Is that is that generally yes although our specialty is principly And as I say the automotive every vehicle that moves in Scott gear is made on our machines so we have a focus and probably that's one of the reasons why we have been able to last 100 30 years. And your your employees have to be pretty high skilled people. Absolutely or

your payroll has to be a pretty high payroll and you can have it to Rochester's per capita income significantly through the thousand people that you employ here. Now you have employed more than that in the past haven't you. Yes we have all oh and it's true that some of those operations have now moved to other countries because of the necessity of doing so and the business is changing. Once upon a time the the number of people that you had to have to produce and the machine. Without the current automation that we now have it's very different. So that explains certainly part of it. But when you go abroad you still have to have an anchor here and probably you perform a lot of the most skilled parts of the operation here. Well this is probably the center of the most sophisticated of the technology that we use within the company. So and it undoubtedly will remain so.

So it remains an asset to America even though other people are working for you abroad. Well I certainly hope so. Well. And much of what you manufacture here is exported as you said. Yes I would say that we participate with Rochester in general and having a very high percentage of our product export. Now we've had other people on this program who've talked about the manufacturing climate here. Rochester is probably better that it is for most of New York State. But but New York State is a difficult place for manufacturing generally isn't it isn't a high cost area. It's high cost it's it's the regulatory environment is is quite severe. And frankly I can clearly say in a truly bipartisan sense that even though we've made some modest improvements in the tax situation that New York state still is essentially one of the truly most expensive places to do run a

manufacturing and therefore the future of your growth here is not great even though you may maintain a very important and sensitive and high paid base here. I would say that our long term plans do not include significant growth here in Rochester. But here they don't include plans to move either. No as it is your this is your locus. Well I think that the key elements of our technology and that sort of thing are likely to remain. It's important for people to understand this. We think that some progress is being made. One of the difficulties I've noticed is that as taxes go down here and they've gone down slightly not necessarily business taxes but individual taxes going down some is a tendency for the state government to mandate the services they were providing with the proceeds of these taxes over on to local government so that the cost remains the I still.

Well and what's even more difficult is that local government really has. True control over a very small portion of their budget. That's right. But because of mandates right. Well I think it's important people understand this problem. But but it's still the future of your company you would consider right would you not. Well I think we have in terms of the of the broad international market. We have a lot of long term. Good prospects and frankly we have made several acquisitions in the past few years and probably will continue to do that. Jim one of these one of the results of your activity here has been the creation of a foundation. The Reason Foundation I think is probably one of the biggest foundations in Rochester is it not. Yes I think I think that is indeed true we have a total market value of something in excess of 150 million dollars.

And so of course under the laws you have to distribute the income from that to a charitable purposes and you focus particularly on education have you not. Well we haven't and that's frankly certainly at the post-secondary level colleges universities particularly the local colleges. All right. Alrighty I know as you're but you're about to open a new Kate Leeson college engineer how age of engineering it are I.T. isn't that right. That will help that to some degree that will reinvent alrighty. It will change the the overall program there in significant way won't it. Well I hope so and I hope in addition to that we've got a. In engineering we have a huge on tap reservoir of talent out there in terms of women and I hope that this is an encouragement for at least more than are currently entering that field to do so you make special efforts to try to attract women as that.

Absolutely. Well I've noticed that at the Cornell School of Engineering There are many more women than they used to be when I went there that course that was a long time ago. But you also use foundation proceeds to benefit other other aspects of life here in Rochester don't you. Well we certainly try and certainly most of the most of the cultural institutions that we try to be helpful on very frankly. One of the areas that is of particular concern to me is the primary M and secondary education and the quality thereof. And so. Recently I've tried to involve a number of people in the community and getting together and taking a look at. And alternative ways of structuring our educational system. And of course the charter schools is one of those opportunities you see is that basically with our educational system here in New York State for instance. Well I think without point it probably fingers it could be pointed at every one of the

participants in the total system but I think that the total system has gotten very rigid very bureaucratic hasn't your Craddick it does not allow the kind of flexibility in terms of parental and student choices that I think are important in generating their participation and enthusiasm. It doesn't offer teachers I think a chance to express their views of how to educate better. And in general if it inhibits experimentation and in trying some new things. Well now tell us about the charter school movement. There are a limited number of charter schools are authorized in the state and there are well the current legislation at this point is presumably a pilot program and it authorizes up to 100. New charters to be issued. It allows any any existing public school to convert and the number of those is unlimited so.

So it's not necessarily in direct competition with public schools it could be said it could supplement them. Well I think that and I think one of the key points here is that that charter schools in this sense are indeed public they're not they're not a private school in that sense the funding mechanism is is simply the same one is for public schools. But on balance they they really are allowed to be relatively autonomous as an individual institution rather than being part of a total system. So it has a different kind of a charter than a public outright does. That's right. Is it catching on. Well certainly if you gauge the level of interest nationally it is I think it's fair to say that that current legislation in New York state would not have passed if there had not been some intense interest on on a growing number of people. And I think the recent polls have showed

that. Particularly in urban areas where minority parents probably have to see their children under the worst academic conditions. Are now becoming the most forceful advocates for an alternative to that to that system. You know as you. Know the functioning of a charter school would be different at least to the extent that it's almost totally autonomous is that is that yes obviously it has to meet the general standards that are say except at the state level in terms of of. Safety in terms of nondiscrimination in terms of all kinds of other things that are a general Stanton's But in terms of the specific. Curriculum for example there's or can be a lot of flexibility Jim. Or do you feel the failings of the public school system are if you're focusing the foundation

proceeds to some extent trying to encourage charter schools. Why are you doing that. Is it is it the result of test scores. Well I spend a lot of my life as you might expect traveling around the world and I have a chance just to see my students and lots of other countries and have observed for many years that frankly I think their academic performance in general is far better than the United States even though much less money is being spent on Oh absolutely. When there is some evidence of that isn't there. Well the so-called Timms tests the International Math and Science exams that would be of particular interest to your company. Absolutely. As you deal with engineers. Well last fall though the latest round of those test results came out and showed that. The fourth grade level US students are about at the at the median. My eighth grade they are significantly below the median and by 12th grade compared to

students all over the world they are almost at the bottom I think we surpassed two underdeveloped countries in the 12th grade level. Now that's pretty pretty bad. We are talking about large countries not to tell you and some you know I'm talking about about in some cases pretty small and primitive countries. Is it because they have focused their their energies and their resources more on education than Lee have. I don't think so I think the cost of schooling here in New York states about as high as anywhere in the world. Well I think it's for a lot of reasons and I think when you start to dissect it there are first of all in almost all cases the children spend many many more aggregate hours per year in the classroom. Number two they focus on a truly academic curriculum. I mean a lot of the socializing and adjustment sorts of things are are simply not part of their curriculum heavy math science

orientation. In the middle school level. For example there are far more aggressive in terms of presenting new material so that by the time the hip equivalent of our high school they're clearly into well into calculus and the owl expects spectate sions are that that that's going to be done at that level. So there are there are some very fundamental differences. This over the long term would have a significant impact on America's capacity to manufacture and to produce with high tech. I think workers Well I would broaden it I'd say they have a huge impact on our ability to compete anywhere. Literally. Why is America doing so well now. I think because we have a economic system which has a very open capital availability in general as is readily relatively except successful like accessible so that you can you can

afford to buy the tools of manufacture. Well and I think that we put very few constraints that say people have almost any opportunity and besides entrepreneurs don't necessarily require highly sophisticated degrees in engineering or physics. Are you spending quite a bit of your time on education at this point. I know you're spending a good deal of your interest on that. Well I'm frankly most of my time is taken up by the company. The business is seller. But are you the head of the foundation or do you. Yes yes you're the head of the foundation. And about two thirds of your grants are going to education generally are they. Well yes I would say that that that is fair it varies a little bit from sometimes but on average that's true. You know Jim I often think that it's particularly interesting that problem solving in the United States comes from so many sources. It's one of the great American secret

weapons instead of relying on the government for everything. We have a lot of foundations we have a lot of social. Agencies that represent grassroots democracy pushing for this or that agenda and the result is that we have a good deal more ferment in the countries that have depended on the government for the resolution of their problems almost entirely. I agree fully. If there is no comparable tradition or. Unity in almost any other country than I'm aware of. The interesting thing is that that a company like Gleason which has one of those great cold technical instrumentalities for generating a lot of manufactured has created on the side a problem solving agency of some dimension. Well I think my the members of my family over time were most appreciative of the fact that this community has

fundamentally allowed them to do very well. So that was one way of. Putting something aside that could be used to try to be helpful in reverse. Aside from your interest in charter schools as much of the benefit of the Gleason foundation gone into Rochester in the Rochester area you've already referred to the fact that you're creating a new engineering school alrighty. Oh I get it. Not sure of the percentage but I would say that probably well over 90 percent of the Foundation funds have tended to be this community in general. Well that is a part of our heritage there and that's pretty pretty important to maintain. Looking ahead Jim what do you see. Prosperity is remarkable here in this country compared to other places now. Do you think. America is likely to continue to be the competitive giant that it is that is able to benefit Americans with the

proceeds of our manufacture sold all over the world. Well I would worry long term about the question of. Of the end of highly trained technical skills availability necessary to support that this is the educational concern that you have outside of that I think we have a lot of advantages that are going to keep us a very important economic factor for a long time. But you have tough competition in the machine tool business. Absolutely. Where is it mostly centered in places like Sweden and. No you're actually at this point Germany Switzerland. Actually Japan. So that it's it's tough and aggressive. Are you planning to go into other countries as you look ahead to try to expand your participation in the global economy as a whole. Yes we are third world markets are growing much faster than in

the developed markets of the world. At this point. Well certainly. Some of the really most interesting markets are places like China India Brazil. And I think it's absolutely crucial for any global company to have a significant presence and in those not so you will be considering opening operations in other countries. Well we already have a small manufacturing operation in India. That's a tough that's a bureaucratic bureaucratic country. Well it is but if you if you keep low and low enough the you stay out of the bureaucracy. The potential there is great because it has a staggering numbers of people and because they're right people too. Absolutely. Lots of well-trained engineers. So you expect that operation to grow. Absolutely. Do you see any change in the mix that you're likely to have here in Rochester.

No. As I say we are not planning on any fundamental expansion of the size of operations here in Rochester and I think it's clear that the opportunities for growth in general internationally are outside the U.S. certainly Asia-Pacific as the as the best long run potential. So that those are places that we're going to have to keep but focused on and focused on and how do you reach your marketing there and that's a lot of you know you participate in the development of those countries as well as the maintenance of your operation here. Now it's that you have a. Global perspective obviously even though you made such a contribution here in Rochester and I think your contribution here is dependent on your continuing your global perspective so that you can continue to grow and continue to to

participate in markets that are expanding faster than ours. Is it likely there will be more Gleason's in your in your operation here locally. No actually I'm the last member of the family to be part of the company. Our two daughters are are both living in California and I'm very happy to be there. And I think as you know but the company will go on. Oh absolutely. Now that's a public company got we've got a lot of very talented people. Yes and I'm sure they're proud to be there and to be making the contribution they make not just in the community but. Really ladies don't our guests have been James S. Gleason The president of the Gleason corporation. We thank him for the leadership here in Rochester

his leadership in education his leadership in the foundation movement and for his contributions to the greater Rochester area generally. This is a barber accountable. Thank you for listening. Please tune in again. If you'd like a copy of this program. Send 995 to WXXI post

office box 21 Rochester New York 1 4 6 0 1 0.