Fifteen years that reshaped Rochester business

Mike Dickinson//October 11, 2002//

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The Rochester business community is dramatically different today from 15 years ago.
In 1987, the Big Three-Bausch & Lomb Inc., Eastman Kodak Co. and Xerox Corp.-employed more than 60,000 workers in the Rochester area and dominated the local economy. Kodak employed 44,000 workers here, Xerox, 12,853, and Bausch & Lomb, 3,500.
Today, the three firms employ 37,440 locally. Kodak has 24,640 workers, down 44 percent; Xerox employs 11,500, off some 11 percent; and Bausch & Lomb has 1,300, down 65 percent.
For its 15th anniversary issue, the Rochester Business Journal surveyed top executives of local businesses last week. They rated the decline of the traditional Big Three, and the accompanying loss of jobs, as both the biggest news story and the biggest challenge the community has faced since 1987. The impact of that decline is expected to affect the region well into the future.
In a community shaped over the last century by Kodak and its leaders, only 5.7 percent of area business executives responding to the survey viewed a Kodak executive as the most influential businessperson of the last 15 years. And those Kodak-related responses chiefly surrounded the negative, or at least disappointing, results driven by former Kodak CEO George Fisher.
Since 1987, Kodak has had four CEOs-three internal promotions and one outsider-and each has faced the difficult task of cutting jobs and moving positions away from Rochester.
The overwhelming choice for most influential businessperson was Paychex Inc. founder and CEO-and current gubernatorial candidate-Thomas Golisano. Sixty-six percent of respondents selected him. The next closest were the Wegmans-Daniel and Robert together-and Jay Stein M.D., University of Rochester Medical Center. Stein’s prominence reflects the area’s growing hope that biotechnology in this century will become what manufacturing was for the local economy through much of the last century.
The survey respondents think no single company stands out as the next great firm to join the ranks of Kodak, Paychex and Xerox in Rochester business history. Asked to identify a firm minted in the last 15 years that they expected to join that list, respondents’ most common response was none or they had no idea.
Constellation Brands Inc.-whose roots date to 1945, but took its present shape more recently-narrowly edged URMC as leading contender. But the biotech industry overall is viewed by area businesspeople as most likely to generate the next big firm, led by Genencor International Inc. and URMC.
Among the firms considered key to the area’s future, Genencor this year said it plans to build a $50 million biotech facility here, adding up to 100 jobs, and URMC received $30 million in state funds to support its biotech research.
PaeTec Communications Inc., the Sutherland Group Ltd. and Choice One Communications Inc. also received multiple mentions. PaeTec and Choice One emerged after the acquisition of ACC Corp., one of the fast-growing firms of the 1990s.
Looking ahead, the business community sees no shortage of challenges. Of particular concern are the flight of young adults from the community in search of better jobs and a more vibrant community, and the lack of business executives ready to step forward as community leaders.
The decline of the Big Three-which encompassed answers such as the difficulties facing Kodak and Xerox, and the exodus of manufacturing jobs-dominated the survey responses.
The cracks in Kodak, Xerox and Bausch & Lomb began appearing in the late 1980s and early 1990s. Paychex in 2000 became Rochester’s most valuable company as its market value soared past those of Rochester’s longtime business titans.
The news chronology that follows, beginning on page 23, shows the path of troubles the Big Three encountered over the last 15 years, while also documenting the emergence of others that hold promise for the future.
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