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RBJ 75: Gleason proves tougher than the global recession

Rochester Business Journal
July 27, 2012

Gleason Corp. has added more than 200 employees at its Rochester headquarters over the past two years.
 
The employment jump is no small feat for Rochester’s oldest manufacturer, which has been forced to adjust to changes wrought by the global recession that took hold in 2008.
 
While the business climate is improving, being a global manufacturer still poses challenges, said John Perrotti, Gleason’s president and CEO.
 
Gleason faces fierce competition in overseas markets such as Asia and Europe, he noted.
 
“We are constantly challenged to stay ahead with technology and create the right value for our customer,” he said. “We continue to innovate and improve daily to meet marketplace demands.”
 
Perrotti, 52, has been with Gleason for 26 years and has been its leader since 2005.
 
The company has more than 720 local workers, up from 680 last year.
 
Gleason ranked ninth on the most recent Rochester Business Journal list of manufacturers and second on the list of exporters, with $99 million worth of goods exported in 2011. That is up 46 percent from nearly $68 million exported in 2010 and represents 60 percent of annual sales.
 
The business is still looking for local workers, although the pace of hiring has slowed. Gleason is seeking workers with particular skills, such as engineers and machinists for high-precision grinding operations.
 
Gleason develops, manufactures and sells gear-production machinery and related equipment. The company was founded in Rochester in 1865. Its products are used by customers in automotive, truck, aircraft, agriculture, mining, windpower, construction, power tool and marine industries, as well as various industrial equipment markets.
 
Gleason has manufacturing operations in Rochester; Rockford, Ill.; Dayton, Ohio; Munich and Ludwigsburg, Germany; Studen, Switzerland; Bangalore, India; and Suzhou, China. It has sales and service offices throughout North and South America, Europe and the Asia-Pacific region.
 
Perrotti declined to break out sales numbers by site but said the company had revenue of $625 million in 2011, up from 2010 but still lower than 2008 sales of more than $700 million.
 
The growth is coming from sectors such as automotive, farm and construction, Perrotti said. For its local operation, the growth in developing countries is helping boost sales.
 
China is Gleason’s largest end market, Perrotti said. The company this month held a grand opening for a new facility in Shanghai, after maintaining a manufacturing presence there in leased space for a few years.
 
The local site is currently Gleason’s largest in both employment and sales generated, he said. The Rochester plant posted record volumes last year, and Gleason companywide logged a double-digit increase in annual sales.
 
“Things went up almost as quickly as they went down,” Perrotti said, referring to the company’s recovery from the global slump. “The pressure to perform has been at an all-time high.”
 
Many customers rely on Gleason and its long history.
 
“The Gleason name is still very powerful in the manufacturing world,” Perrotti said.
 
With that recognition comes the responsibility to preserve and build the company’s reputation, he said.
 
“The greatest asset we have is the company’s reputation,” he said, and the firm has a passion for perfection. “We’re never satisfied. We always want to do better.”
 
The company has taken steps to expand its network internationally.
 
In March, Gleason announced it had started building its Genesis series of gear hobbing machines at its facility in Bangalore, India, for the Indian marketplace. The site has been rebuilding such machines for years and now has the skills to transition into building them, Perrotti said, noting that global automotive and truck companies are expanding operations in India.
 
In late January, Gleason announced it had formed a strategic alliance with the German company Manutec VaWe Robotersystem GmbH. The partners will cooperate in the development and sale of robots for processes done on large-module gears.
 
The products are sold through Gleason’s worldwide sales channels, with technical support provided by both Gleason and Manutec, the companies said. The alliance is one of two Gleason formed recently with German firms.
 
Previously, Gleason had announced a strategic alliance with the German firm Gebr. Heller Maschinenfabrik GmbH to serve the global gear-manufacturing technology market. The German company develops, makes and markets machine tools and manufacturing systems for metal-cutting processes. The firms are working together on developing and selling five-axis machining centers for gear-production applications.
 
Gleason also has grown recently through acquisitions.
 
Last September, it acquired the assets and business of K2 Plastics Inc., which company leaders said would broaden its reach in the gear market, particularly in industries such as electronics and medical equipment.
 
The firm in Bergen, Genesee County, employs 10 workers and produces precision plastic gears and other complex plastic parts.
 
Gleason occupies roughly 400,000 square feet of the 725,000 square feet at its site on University Avenue. The firm leases space to other businesses and has four companies housed there now. Roughly 25,000 square feet is available for lease, Perrotti said.
 
Gleason will continue to invest in its Rochester sites, he said, adding equipment and processes that can improve operations. The business has invested roughly $20 million in Rochester operations since 2006, he said.
 
Sandra Parker, CEO of the Rochester Business Alliance Inc., said Gleason is a business that has successfully reinvented itself. She recently met with Perrotti and was pleased with the local employment increase there and the strides the business has made in manufacturing.
 
“This is a Rochester-born and -bred business that has transitioned over the years, gone through difficult times and emerged successful,” Parker said. “The company is really thriving.”
 
In addition to its philanthropic efforts in the community, Parker said, Gleason also helps its local suppliers and vendors as it grows.
 
“It’s a wonderful story,” she said.

7/27/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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