Educators can be forgiven if they have mixed reactions to a recent speech by the head of the Xerox Corp.

On the one hand, David T. Kearns obviously believes their work is of critical importance to America. On the other, he believes they are doing an unforgivably bad job of it.

"Public education has put this country at a terrible competitive disadvantage," Kearns told the Economic Club of Detroit a month ago. "The American work force is running out of qualified people.

"If current demographic and economic trends continue, American business will have to hire a million new workers a year who can't read, write or count. Teaching them how, and absorbing the lost productivity while they're learning, will cost industry $25 billion a year for as long as it takes. And nobody knows how long that will be."

It isn't primarily the money that outrages Kearns, although outlays for public education, which have doubled or trebled every decade since World War II, now consume nearly 7 percent of the GNP. His concern is the product: a drop-out rate approaching one in four; another quarter finishing high school lacking acceptable reading, writing and computation skills and, despite the rhetoric of school reform, little evidence that things will get better soon.

"At Xerox," he said, "we expect 100 percent defect-free parts from our suppliers. We're getting 99.9 percent, and we're still going after that last one-tenth of a percent. The public schools are the suppliers of our work force. But they're suppliers with a 50 percent defect rate. . . .

"Teaching new workers basic skills is doing the schools' product recall work for them -- and frankly, I resent it."

Kearns acknowledges that business has played a role in the deterioration of public education -- even when it attempts its numerous partnerships with the education industry. The reason: the "feel-good" partnerships, in which the schools set the agenda. No more.

"Business will have to force the agenda, or we'll have to set it ourselves." And the sine qua non of the new agenda must be accountability.

Kearns proposes a six-point plan for the fundamental restructuring of education.

Choice. Under his scheme, which he does not call a voucher system but which looks a good deal like it, states would fund students, not schools. If students were free to attend the public school of their choice, bringing their education dollars with them, schools would have to compete for students, their income would depend on their ability to satisfy their customers, and poor families would have options that only the affluent now enjoy.

Restructuring. Like the best of the high-tech companies, schools need leaner, flatter organizations in which the professionals are both free to do what needs to be done and accountable for its successful accomplishment. Schools would design their own curricula, decide their own methods, textbooks and service suppliers -- and be shut down by the state if they failed to meet minimum levels of competency, measured by student performance.

Professionalism. "Teaching is the only profession I know of that if you do well, nothing good happens to you . . . and if you do poorly, nothing bad happens to you." His free-market rewards for successful teaching would include salary schedules based on performance rather than simple longevity and the accumulation of certificates.

Standards. Academic requirements for all students would be raised. "How dare we arbitrarily consign our kids to two different futures -- college prep for the affluent and dead-end vocational or general courses for the disadvantaged. . . . Every student -- without exception -- should master a core curriculum equivalent to college entrance requirements. No one should be promoted without performance. Kids who need extra help should get it."

Values. "Anyone who thinks it's possible to have a value-neutral education is dead wrong. Everything is not relative. Exclude values from the schools, and you teach that values aren't important."

Kearns would not have the schools push particular religions. "But they should recognize that children can learn integrity as well as literature, morality as well as science. . . . The Harvard Business School is not the place to start teaching values and ethics."

Federal responsibility. He acknowledges that the federal role in education is limited, but insists that a lot can be done within those limits. "The one area in which Washington ought to excel -- and doesn't -- is research. You may not believe this, but education -- a $150-billion-a-year industry -- is supported by only $100 million of research by the federal government. That's less than one-tenth of one percent. . . . At Xerox, we regularly invest about 7 percent in R&D."

Kearns, who would like his ideas discussed by the presidential candidates and has been disappointed by the "empty rhetoric" with which most of them have addressed education, is frank to acknowledge that his interest is selfish, though it has implications for the future of America.

"The fact is, the basic skills of our work force -- particularly at the entry level -- are simply not good enough for the United States to compete in a world economy."