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Schott Corporation

Schott Corporation

3 Odell Plaza
Yonkers, New York 10701-1405
U.S.A.
Telephone: (914) 968-1400
Fax: (914) 968-4422
Web site: http://www.us.schott.com

Wholly Owned Subsidiary of Schott Glas
Incorporated:
1986
Employees: 3,200
Sales: $400 million (2001 est.)
NAIC: 327210 Glass and Glass Product Manufacturing

Schott Corporation, with its headquarters in Yonkers, New York, is the holding company for the North American subsidiaries of the major German glass manufacturer Schott Glas. Schott Corporation is comprised of 16 divisionswith subsidiaries in the United States, Canada, and Mexicoemploying some 3,200 people. It manufactures and distributes specialty glass and glass-related systems for use in electronics, energy, lighting, architecture, home appliances, optics, pharmaceutical, packaging, and transportation, and automotive applications. The North American market contributes 30 percent of the parent corporations worldwide revenues.

Otto Schott, 19th Century Glass Pioneer

The Schott Corporation derives its name from Otto Schott, who was born in Witten, Germany, in 1851 into a family of glassmakers. His father was a master in the craft of making window glass and became co-owner of a Wastphalia glassworks shortly after the birth of his son. Young Schott was fascinated by the properties of glass and devoted his education to it, eventually earning a doctorate for his study on defects in window glass manufacturing. In 1877, he opened an iodine and saltpeter factory in Spain, where he carried on a number of experiments involving glass-making techniques. Schott gained a place in history by applying scientific principles to the age-old craft of glassmaking and establishing it as a modern technology. He learned that lithium-based glass was especially useful in the production of lenses and in 1879 shared some of his samples with acclaimed mathematician and physicist Ernst Abbe, who was eagerly searching for glass with better, more consistent optical qualities in order to develop more sophisticated microscopes. At that time, Abbe was dependent on imports from French and British firms.

Abbe had become involved in the manufacture of microscopes when he went to work for German industrialist Dr. Carl Freidrick Zeiss in 1866. Twenty years earlier, Zeiss had opened a workshop to produce optical instruments, including simple microscopes. He made advances in microscopes, introducing the first compound microscope in 1857, and soon gained an international reputation for the quality of his instruments. Believing that in order to make further advances in optical equipment general advances in optical theory would also have to be made, Zeiss hired Abbe, a 26-year-old lecturer at the University of Jena, to serve as a freelance researcher. Within a short time, Abbe became research director of the Zeiss optical works, and within two years invented the apochromatic lens system for the microscope. Abbes research also established the theory of refraction of light, key to designing precise optical instruments. In 1872, he produced the first microscope built in accordance with scientific principles, ending the days of trial and error experimentation in the industry. By 1875, he became Zeiss partner, the same year that Schott earned his doctorate from the University of Jena, which was by now a major center for the study of optics. What frustrated Abbe in his research was the inferior optical glass with which he had to work. It would be Schotts contributions in glassmaking that would be the final step in launching the modern era of precise optical instruments.

Otto Schott Opens Glassworks in 1882

After corresponding for some time, Abbe and Schott finally met in 1881 and began working closely together. In 1882, Schott moved to a new glassmaking laboratory located in Jena. Zeiss and Abbe, along with the Prussian state government, were his chief financial backers. Within two years, Schott created new, marketable apochromatic lenses and by 1893 developed borosilicate glass, which was highly resistant to heat and suitable for use in thermometers, laboratory glassware, pharmaceutical tubing, and heat resistant cylinders used in incandescent gas lamps. The demand for the lighting products proved so great that the laboratory was quickly transformed into a full-fledged glassworks. For Zeiss, Schotts improved optical glass meant that his workshop turned into a industrial powerhouse. After Zeiss died in 1888, Abbe became the sole owner of the business and created the Carl Zeiss Foundation in order to fund scientific research as well as share the fruits of the business with employees. Both Zeiss son Roderich and Abbe turned over their shares of the glassworks to the foundation, and Schott pledged to do the same upon his death. With the rise of socialism after World War I, he transferred his share of the company immediately, although he lived until 1935. With mutual Foundation ownership, the Schott and Zweiss enterprises were linked not only financially and managerially, but their competitive edge was very much dependent on scientific cooperation as well.

The Schott Glassworks grew into an international business, and by the start of the 20th century more than half of its revenues came from imports. By World War I, the company was recognized as the most advanced maker of optical glass in the world. Because it was so expensive to produce, however, optical glass was not highly profitable, leading Schott to also manufacture mass-produced household and laboratory glass products. Up until World War I, the most profitable item, accounting for three-quarters of all revenues, was a gas bulb used in miners lamps. Not only did the war disrupt the export business, after the cessation of hostilities Schott Glassworks found that many of its erstwhile trading partners resented doing business with a German company and opted instead to rely on lesser quality wares from domestic firms that had cropped up to fill the gap during the war years. Trade restrictions on Germany also proved problematic, and a conversion from gas to electric lamps hurt the companys sale of glass bulbs. Schott Glassworks recovered along with the German economy in the 1920s, with Otto Schotts son Erick assuming control in 1927, but business again fell off with the advent of the Great Depression in 1929.

Schott Glassworks began to rebound in the 1930s, a period during which Adolph Hitler and the Nazi party came to power. The dictatorship was determined to rearm, in violation of the peace treaty that ended World War I, and the glassworks could not avoid becoming part of the Nazi war machine. Its products were deemed indispensable by the military. As a consequence, the glassworks became an allied target during World War II, although it was only late in the war that it suffered serious damage from bombers. With Germany defeated, the Schott Glassworks faced an uncertain future. In April 1945, both it and Zeiss were placed under the command of U.S. Air Force officers. The glassworks, possessing superior technological expertise, attracted a number of Allied experts, including commercial interests. Relations between the United States and Britain with the Soviet Union were already strained, and because both the glassworks and Zeiss were located within the Soviet sphere of influence in Germany, the U.S. military made plans for a partial relocation of the companies in what would become West Germany. Due to an agreement between the victorious powers, however, the Americans were hesitant to remove equipment from the glassworks. Pressed for time, they instead initiated an intellectual dismantling program. A list of 50 key scientists, technicians, and specialists was drawn up. Although most of the Schott employees were relieved to avoid Soviet occupation, nine of them did not wish to leave their homes and friends. The relocation trip became known in company lore as the Odyssey of 41 Glassmakers.

Despite their lack of equipment, which had to be left behind in East Germany, and the difficulties in procuring raw materials, the Schott employees, led by Erich Schott, soon began to build a plant in the town of Zwiesel. In Jena, in the meantime, the old glassworks was placed under the control of the Soviet Army, which proceeded to dismantle the plant (and conscript 17 specialists for five-year terms) and shipped it to the USSR to set up production there. The remaining Jena employees managed to restore operations at the old plant, but instead of ownership returning to the Carl Zeiss Foundation, the business was expropriated by the regional government in 1948. As was the case with Germany as a whole, the glass company founded by Otto Schott was now divided by an iron curtain. For the next several decades, both companies exploited the Schott name, often to the confusion of consumers. In the West, the Schott Group, under Erich Schotts leadership, built new, state-of-the art facilities in the city of Mainz by the early 1950s. In order to return to profitability and once again grow the business, the company manufactured parts for glass television picture tubes. Later in the 1950s, the Schott Group began producing baby bottles, tea glasses, and mugs. It also found new customers in the United States, not only for consumer goods, which would soon include glass-ceramic baking dishes, but also for its original specialty, optical glass, which found applications in the new space program.

In August 1963, the company opened a sales office in New York City in what was then called the Pan Am Building (now the Met Life Building). In 1967, the Schott Group established Schott Glass Technologies, its first manufacturing subsidiary outside of Germany, and two years later opened a 41,000-square-foot plant in Duryea, Pennsylvania, with 55 employees producing precision optical glass to be made into lenses, mirrors, prisms, and windows that could then be utilized in such equipment as cameras, photocopiers, and range finders. The subsidiary became involved in the prescription eyeglass and sunglass market in 1970 when it acquired the Ophthalmic Glass Division of PPG Industries. Business grew steadily, resulting in a major expansion in production, warehousing, and administrative space. With new facilities, Schott Glass Technologies was able to move beyond the manufacture of raw glass and enter specialty optical markets, including color filters, contrast enhancement filters, and CRT faceplates. In 1981, the subsidiary became involved in the glass ceramic and high energy laser glass sectors. It also opened a major development laboratory to foster further diversification efforts.

Company Perspectives:

Our purpose is to improve how people live and work through expert solutions in specialty materials, components, and systems.

Schott Corporation Established in 1986

Having outgrown its sales office in the Pan Am Building, as well as needing more warehouse space for its North America business, in 1982 Schott Group opened a facility on a dozen acres of land it purchased in Yonkers, located just north of the Bronx. To better organize its growing North American interests, Schott Group then formed Schott Corp. in 1986, the headquarters of the holding company located in the Yonkers site. Its growing assets soon included operations outside the United States. In 1989, Schott Canada Inc. was established in Toronto to produce a wide range of products, from consumer goods to specialty optical products. In that same year, Schott Mexicana S.A. de C.V. opened in Mexico City, offering a similar product line to its Canadian counterpart. To accommodate continued growth, Schott Corp. expanded its corporate headquarters in 1991. By now, the holding company controlled three distribution and six production companies. Most of the focus was on the eastern markets of the United States and Canada, but management also began to target the western portion of the continent, opening a regional office in Los Angeles to gain a toehold on the Pacific Coast. Furthermore, the company took steps to begin selling products that Schott Group had been marketing in Europe for the past few years.

The structure of Schott Corp. underwent an ongoing evolution in the 1990s. Two subsidiaries, Schott America Glass & Scientific Products, Inc. and Schott Zwiesel Glass, Inc., were merged into Schott Corp., with the former becoming the Technical Glass Division and the latter the Consumer Glass Division. The Technical Glass Division would supply specialty glass for science and industry, while the Consumer Glass Division was responsible for the production and marketing of Schott Cristal glassware to both the household and institutional markets. In 1992, Schott Corp. formed a joint venture with the West Company to produce packaging products made out of specialty glass for use by the pharmaceutical industry. The enterprise, located in Puerto Rico, was originally the New Jersey-based OSullivan Glass Company, founded in 1945. Schott Corp. bought out West in 1995 and renamed the operation Schott Pharmaceutical Packaging Incorporated. Prior to the buyout, Schott Corp. had acquired from the West Company Tri/West Systems Inc., developers of a patented system for producing syringes with pre-filled dosages.

In 1994, Schott Corporation purchased a glass tubing plant located in Parkersburg, West Virginia, from Corning Inc. The facility produced scientific glassware and tubing, and began operating as a subsidiary, Schott Scientific Glass, Inc. In 1996, Schott Corp. added to its holdings Schott Gas Systems, Inc., dedicated to the development and manufacture of high tech burner media and gas burners, used in such applications as glass-ceramic gas cooktops, firelogs, space heaters, and dryers, as well as in industrial heating systems. In 1997, Schott formed a joint venture with Chicago Miniature Lamp Inc., called Schott-CML Fiberoptics Inc., to complement its other fiberoptic production unit, Schott Fiber Optics Inc., located in Southbridge, Massachusetts. The Southbridge operation would soon take on the sales responsibilities for Schott Corp.s entry into the automobile air bag equipment business, following the holding companys 1998 acquisition of the glass header business from Colorado-based Coors Ceramics Co. In that same year, Schott Corp. acquired Baron Industries, a Georgia company that produced gaskets and seals for ranges, ovens, and other consumer appliances. To take advantage of the robust data/communications technology sector, Schott Corp. launched a start-up business in 2000 called Schott Communications Technologies Inc. The focus was on producing high-capacity optical interconnects to replace copper wires in short-distance data transfer. With the demand for broadband increasing, the need for such high performance optical products was projected to enjoy significant growth in the coming years.

While Schott expanded in North America, the parent corporation experienced a noteworthy change. In 1980, the competing Schott entities in a divided Germany signed divorce papers, with the Schott Group gaining the rights to the Schott trademark and the East Germans securing the Jena Glass trademark. The split appeared permanent but with the sudden collapse of the Soviet Union later in the decade and the reunification of Germany in 1990, negotiations commenced to reunite the company founded by Otto Schott as well as the Carl Zeiss Foundation. The transaction was complicated but finally, on January 1, 1995, the Jena operation was fully integrated into the Schott Group. The company, already a major player on the international stage, was now even more formidable. Clearly, a major factor in its future growth would hinge on the success of its North American business, coordinated under its Yonkers subsidiary, Schott Corp.

Principal Subsidiaries

Baron Industries Corporation; Schott Scientific Glass, Inc.; Schott Lithotec USA Corporation; Schott Applied Power Corporation; Gemtron Corporation.

Principal Divisions

Technical Glass Division; Schott Home Tech North America; Schott Canada; Schott Fiber Optics; Schott Glass Technologies; Schott Pharmaceutical Packaging; Schott Fostec; Schott Gas Systems; Schott Electronic Packaging.

Principal Competitors

Corning Inc.; Pilkington plc.

Key Dates:

1882:
Otto Schott forms German glassworks.
1945:
Schott Glassworks is divided following World War II.
1963:
Schott Group opens a New York sales office.
1967:
The companys first U.S. manufacturing subsidiary formed.
1982:
Schotts sales office is moved to Yonkers, New York, site.
1986:
The holding company Schott Corporation is formed.
1989:
Canadian and Mexican subsidiaries of Schott are formed.
1995:
German Schott companies are reunited.

Further Reading

Hagen, Antje, Export Verus Direct Investment in the German Optical Industry, Business History, October 1996, p. 1.

From Jena to Mainz and Back Again, Schott Group, 2000, 27 p.

Schott Hoists Flag on U.S. Headquarters, HFD, November 25,1991, p. 88.

Ed Dinger

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