dj, I have 2 Miniature Schnauzers (I've had 6, including them.) and they don't usually like kids. I'm not sure what it is about this breed (terriers), but all 6 of mine have been that way. They're very high-strung, and they bark a lot. Since my son grew up with all of them except one, they've never growled or snapped at him.
A few years back, my son and his girlfriend came to stay at my house for the holidays. I had to do some last minute shopping, so I told him I'd leave the back door unlocked in case I wasn't back in time. They got here a few minutes before I did. The female remembered him and his girlfriend, but my male has never really warmed up to my son. He growls anytime my son comes in the room with me. This dog is more attached to me than any of the others, and they've all been "my dogs" even though they were technically his dogs, too.
My son has a deep voice. He's got dark hair and brown eyes. At first, I thought that was why the male didn't trust him to get near me, but then I remembered that he came in the house while I was gone. He might also sense my son's animosity. He's very impatient with me at times, and sometimes he rides his girlfriend's case. I feel uncomfortable when they visit, and sometimes I feel sorry for her. That sounds mean, I know, but my ex was a jerk, and when my son snaps at me or his gf, it reminds me of the way his dad treated me.
Schnauzers are notorious for being "one person" dogs. They like other adults, but they choose one person as their favorite.
Does your grandson have a low voice? My son's was pretty low even when he was really young. I don't know how to explain it, but other kids' voices sounded younger in comparison, which is completely normal.
I hope your dog will eventually warm up to your grandson.
Edit: I forgot to mention my nieces were always afraid of my dogs because two of them got bitten. The oldest one was told not to bother the dog while she had puppies, but she was 2 years old and either didn't understand when my mother and I warned her, or she just disobeyed us. The dog snapped at her cheek. Of course, my mother told my sister-in-law what happened. I felt bad about it, but it happened so fast, there was nothing I could do. That poor little girl was terrified even when she was a teenager.
One of the other girls was bitten by the same dog for getting up in her face while I was sitting nearby. I'm so glad my dogs weren't very big. It could've been more than red marks on their cheeks.