Kodak - The Great Yellow Father Of Rochester
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Kodak - The Great Yellow Father Of Rochester

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How Kodak's relation to its hometown has changed over time.

How Kodak's relation to its hometown has changed over time.

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Kodak - The Great Yellow Father Of Rochester Presentation Transcript

  • 1. Christian Sandström holds a PhD from ChalmersUniversity of Technology, Sweden. He writes and speaks about disruptive innovation and technological change.
  • 2. Ever since Kodak was founded, it has had a key role in the Rochester community.
  • 3. One reason is of course that Kodak became by far the largest employer in the city.
  • 4. One large employer like Kodak also impliesthat hundreds of small firms sell their goods and services to that company.
  • 5. A third reason is that Kodak’s founder, George Eastman, was highly involved in the Rochester community.
  • 6. His former residence, the Eastman House, became a museum in 1949.
  • 7. There are at least 30 organizations that were either created or partly funded by Eastman.
  • 8. The University of Rochester…
  • 9. … The Eastman School of Music Student Living Center…
  • 10. … The Eastman Dental Center…
  • 11. … It goes on and on, I think you see my point.
  • 12. George Eastman and his Kodak became the father of each employee, and even to the city…
  • 13. People in Rochester therefore refer to Kodak as Rochester’s great yellow father.
  • 14. In Rochester, everyone had some kind ofrelation to Kodak.
  • 15. If I had grown up in Rochester, my granddad would have received his first paid vacation as a factory worker at Kodak in 1938…
  • 16. … Maybe dad went to the University of Rochester inthe 1970s, got a degree in engineering and started to work for Kodak…
  • 17. … Making a good living and a slow but steady career at the company…
  • 18. In Sweden Ijoined the tennisfrenzy as a kid. If I had grown up in Rochester instead, I would probably haveended up playing baseball,practicing in the Kodak park…
  • 19. In short, if you lived in Rochester, you could always trust Kodak to provide you with a good life.
  • 20. Art Aspengren (such a Swedish family name!), thePresident of the Rochester Industrial Management Council, said that “if there is such a thing as a company town, this is a company town.
  • 21. But a town whichrelies heavily on one single employer becomes very vulnerable to change…
  • 22. … And change comes, sooner or later.
  • 23. Back in the 1980s change came in the shape of Fujifilm.
  • 24. Fuji’s products were highly competitive and became a real threat to Kodak’s global hegemony.
  • 25. The number of Kodakemployees in Rochester peaked in 1982 when more than60 000 peopleworked there.
  • 26. Partly due to the increased competition, Kodak laid off 9000 workers in Rochester back in 1986.
  • 27. This must have been quite a shift forpeople here. Up to this point a job at Kodak had been a job for life.
  • 28. But there was more to come…
  • 29. Fuji was on the rise…
  • 30. … and the price war continued throughout the 1990s…
  • 31. Kodak had to cut back on itsextensive charity program…
  • 32. … and lay off even more people in Rochester…
  • 33. The wild diversification activities in the 1980s had put the company in a lot of debt…
  • 34. … The heydays of leverage come and go…
  • 35. … andKodak’s CFO from 1994and on, Harry Kavetas,worked hard to clean up this mess…
  • 36. In 1997, Kodak fired 19 000 people and needless to say, this affected Rochester badly.
  • 37. Had the great yellow father turned into a greatgreedy monster with no care for its employees?
  • 38. … I wouldn’t think so. The economicconditions were simply very different from the ones back in the 1970s when Paul Simon wrote the song Kodachrome…
  • 39. … And even a multinational giant has toadapt to those changes, unless it wants to end up at the elephant graveyard.
  • 40. While there have been quite a fewprotests throughout the years, I suppose most people in Rochester understand that the times have changed…
  • 41. … And that a smaller Kodak is better for Rochester than no Kodak at all.
  • 42. … Then came the digital avalanche which destroyed Kodak’s highly profitable film revenues…3025201510 5 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Number of film and digital cameras sold in the United States.
  • 43. Thus, the layoffs have continued up until now and today less than 10 000 people work for Kodak in Rochester.
  • 44. 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…
  • 45. One mustn’t forget all jobs that were lost at those companies which sold goods and services to Kodak.
  • 46. It would be strange if a city did not suffer from such a structural change…
  • 47. … But nevertheless, Rochester has donereasonably well over these years and has not ended up as a ghost town.
  • 48. One reason is that Kodak’s decline has taken place over a longer period of time.
  • 49. Another reason might be that other large employers likeXerox have done rather well…
  • 50. The University of Rochester has grown and become the largest employer in the city.
  • 51. It seems that George Eastman’s donation turned out to be a good long term investment for the town.
  • 52. Moreover, people can and do create their own jobs.
  • 53. It seems that a city with a strong knowledge base and a critical mass of inhabitants can sometimes master big structural changes reasonably well.
  • 54. While the great yellow days are fading away, Rochester seems to live on.
  • 55. Image attributions
  • 56. Sources The Enquirer The LA Times NY TimesRochester timeline
  • 57. Find out more:www.christiansandstrom.org