Liberal Arts College Finds Itself in Business
ROCK ISLAND, Ill. (AP) _ Augustana College boasts 2,000 undergraduates, a strong Swedish-Lutheran tradition, a solid reputation in the sciences _ and a multimillion-dollar electronics business.
``It’s an improbable story,″ college president Thomas Tredway said. ``You wouldn’t think a bunch of people interested in Chaucer and particle physics would be able to make a company run.″
The college, with a yearly budget of just $40 million, made $1 million from Schonstedt Instrument Co. last year and should get a little more this year.
It was pushed into the world of buying and selling when a board member bequeathed his company to Augustana.
Not that philosophy professors are working side-by-side with marketing reps. The college board _ rich with lawyers and executives _ makes most of the decisions and day-to-day operations are in the hands of company employees.
The bequest by Erick Schonstedt reflects a certain practicality, said Tredway, a history professor more likely to sprinkle his conversation with Latin tags and Civil War references than the slick phrases of high finance.
Had he left the company to relatives, it would have been saddled with millions of dollars in estate taxes. So he donated it to charity _ the school.
What the college got in 1993 was a company famed for high-quality metal detectors and bogged down in making unprofitable instruments for the space program.
Augustana officials had to decide whether to forge ahead with Schonstedt’s approach or cut their losses, and staff, and focus on the metal detectors. It wasn’t a tough call.
``There were some changes that had to be made to make the company really solid,″ said Charles Lindberg, a trustee, corporate lawyer, and the company’s chairman.
And now what? Augustana will probably sell the company in a few years.
``There’s lots of fortunes to be made and lost in any business, and that’s not a proper long-term investment for a college,″ Lindberg said.
Tredway agreed that the college should sell, when it finds the right buyer. In the meantime, he’s enjoying proving a point: ``The people who run an academic enterprise can bring something to the business world.″