Christian Sandström holds a PhD from Chalmers University of Technology, Sweden. He writes and speaks about disruptive innovation and technological change.

Ever since Kodak was founded, it has had a key role in the Rochester community.

One reason is of course that Kodak became by far the largest employer in the city.

One large employer like Kodak also implies that hundreds of small firms sell their goods

and services to that company.

A third reason is that Kodak’s founder, George Eastman, was highly involved

in the Rochester community.

His former residence, the Eastman House, became a museum in 1949.

There are at least 30 organizations that were either created or partly funded by Eastman.

The University of Rochester…

… The Eastman School of Music Student Living Center…

… The Eastman Dental Center…

… It goes on and on, I think you see my point.

George Eastman and his Kodak became the father of each employee, and even to the city…

People in Rochester therefore refer to Kodak as Rochester’s great yellow father.

In Rochester, everyone had some kind of

relation to Kodak.

If I had grown up in Rochester, my granddad would have received his first paid vacation as a factory

worker at Kodak in 1938…

… Maybe dad went to the University of Rochester in the 1970s, got a degree in engineering and started to

work for Kodak…

… Making a good living and a slow but steady career at the company…

In Sweden I joined the tennis frenzy as a kid. If I had grown up in Rochester

instead, I would probably have

ended up playing baseball,

practicing in the Kodak park…

In short, if you lived in Rochester, you could always trust Kodak to provide you with a good life.

Art Aspengren (such a Swedish family name!), the President of the Rochester Industrial Management

Council, said that “if there is such a thing as a company town, this is a company town.''

But a town which relies heavily on

one single employer

becomes very vulnerable to

change…

… And change comes, sooner or later.

Back in the 1980s change came in the shape of Fujifilm.

Fuji’s products were highly competitive and became a real threat to Kodak’s global hegemony.

The number of Kodak

employees in Rochester peaked in 1982 when more than

60 000 people worked there.

Partly due to the increased competition, Kodak laid off 9000 workers in Rochester back in 1986.

This must have been quite a shift for people here. Up to this point a job at

Kodak had been a job for life.

But there was more to come…

Fuji was on the rise…

… and the price war continued throughout the 1990s…

Kodak had to cut back on its extensive charity program…

… and lay off even more people in Rochester…

The wild diversification activities in the 1980s had put the company in a lot of debt…

… The heydays of leverage come and go…

… and Kodak’s CFO

from 1994 and on, Harry

Kavetas, worked hard to clean up this mess…

In 1997, Kodak fired 19 000 people and needless to say, this affected Rochester badly.

Had the great yellow father turned into a great greedy monster with no care for its employees?

… I wouldn’t think so. The economic conditions were simply very different from the

ones back in the 1970s when Paul Simon wrote the song Kodachrome…

… And even a multinational giant has to adapt to those changes, unless it wants

to end up at the elephant graveyard.

While there have been quite a few protests throughout the years, I suppose

most people in Rochester understand that the times have changed…

… And that a smaller Kodak is better for Rochester than no Kodak at all.

… Then came the digital avalanche which destroyed Kodak’s highly profitable film revenues…

0

5

10

15

20

25

30

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Number of film and digital cameras sold in the United States.

Thus, the layoffs have continued up until now and today less than 10 000 people

work for Kodak in Rochester.

Hence, about 50 000 jobs were lost in Rochester in the last 20 years. For a city with about 230 000

inhabitants it’s quite a big blow…

One mustn’t forget all jobs that were lost at those companies which sold goods

and services to Kodak.

It would be strange if a city did not suffer from such a structural change…

… But nevertheless, Rochester has done reasonably well over these years and has not

ended up as a ghost town.

One reason is that Kodak’s decline has taken place over a longer period of time.

Another reason might be that other large

employers like Xerox have done

rather well…

The University of Rochester has grown and become the largest employer in the city.

It seems that George Eastman’s donation turned out to be a good long term

investment for the town.

Moreover, people can and do create their own jobs.

It seems that a city with a strong knowledge base and a critical mass of inhabitants can sometimes master big structural changes reasonably well.

While the great yellow days are fading away, Rochester seems to live on.

Image attributions

Sources

The Enquirer The LA Times

NY Times Rochester timeline

Find out more:

www.christiansandstrom.org