Quitting time. The regulars trickle into the Elmgrove Inn.
Over glasses of "Genny," as locally brewed Genesee beer is known, they make the kind of conversation that's heard in working-class taverns all over the country: Is Reggie Jackson worth all that money? Will any of the Rochester Red Wings make it to the major leagues? Has it started to rain yet?
Before long, the talk turns to the layoffs at the big plant down the street.
Yvonne the bartender, laid off a few months ago, says she didn't really like working on the assembly line anyway. A woman at one end of the bar tells about a friend laid off last month who found a temporary, part-time job after "just three days. That's pretty good." It's the kind of talk of opportunities lost and found that became pretty much the norm at bars like this as the recession deepened.
What makes this conversation unusual is that the company laying off employes is Eastman Kodak Co.
Kodak is Rochester's backbone, a company so successful that it had been hiring straight through the recession; a company so paternalistic that it has traditionally offered summer jobs to thousands of college-age children of its employes; a company at which layoffs have been all but unheard of.
Now, like many companies that have made sharp cuts in their workforce, Kodak is going to be slow to rehire, even though the economy as a whole is improving.
Since January, Kodak has laid off 2,700 workers. Roughly 4,000 more employes reportedly have opted for an early retirement program the company put into effect earlier this year. And a decision to limit hiring and let normal attrition take its toll could eliminate another 2,000 jobs this year.
Most of the cutbacks have been in the Rochester area, where 80 percent of Kodak's U.S. employes work and where the company is by far the largest employer. By the end of this year, the company's total Rochester employment, which peaked at 60,406 at the end of last year, could be below 53,000, its lowest level in three years.
This summer, the temporary jobs usually given to employes' offspring will go instead to laid-off workers.
The fall-out from the recession has come to Rochester.
"During most of the economic downturn, we stayed strong here in Rochester," says John D. Hostutler, president of the Rochester Industrial Management Council, which comprises 140 local manufacturing firms. "We're always the last to go into a recession, so we're one of the last to come out."
Until recently, this city of 242,000 had been spared the worst of the recession, though it hasn't been untouched. Its numerous tool-and-die makers have been hard hit by the slowdown at the big capital-goods companies they supply, and the big General Motors parts plants on the outskirts of town have laid off hundreds of workers.
But Kodak's steady hiring over the past couple of years and Rochester's strong base of high-technology companies--other major employers include Xerox and Bausch & Lomb--had helped the city maintain a relatively low rate of unemployment.
Building up production capacity for last year's introduction of the Disc camera and for an expansion of its line of copiers, the company hired 10,000 workers in three years, absorbing most--if not all--of the workers laid off by other, less-fortunate companies in town.
Rochester's 1981 unemployment rate was 5.9 percent; the figure for last year was 7.2 percent. But unemployment started rising in October, topped the 9 percent mark in November and--following Kodak's first round of layoffs--reached a record 10.3 percent in February. Last month, the New York Department of Labor said April unemployment in the Rochester area was 9.6 percent.
Repeating a scene that elsewhere has become almost a cliche' in this recession, 2,000 applicants showed up recently when a new downtown hotel advertised to fill 300 positions. (Although Kodak is the city's largest employer, it has not been the sole cause of the increase in unemployment. Xerox has also cut its workforce, chiefly through an early retirement program, eliminating 3,100 positions in the Rochester area since mid-1981. And many of the city's other high-tech companies also have reduced their staffs.)
Even as Kodak was expanding, its manufacturing productivity was declining, a classic sign of an overstaffed company. "With the large work force, there's kind of a squeeze on earnings, a squeeze on profit margins," says Kodak spokesman Hank Kaska.
In addition, Kodak, which had found a steady market for its cameras and film despite the economic slump, began late last year to feel the effects of not only the sagging U.S. economy, but also deteriorating overseas sales, and increasing competition from abroad.
First-quarter sales of Kodak's photographic products rose a subnormal 4 percent domestically while declining 14 percent overseas. "Anytime the economy turns sour overseas, it has a serious impact, a profound impact, on manufacturing operations in this country," says Kaska, who estimates that about 20 percent of Kodak's operations in Rochester are devoted to the foreign market.
Kodak's reaction was the same as most companies experiencing a slump. "The objective was clearly to reduce the size of the work force, to operate leaner," Kaska says. "It's the company's intention to become the lowest-cost producer for every product line we're involved in."
Similarly, the cuts made by Xerox in the past two years, which reduced the company's Rochester employment to about 12,500 from about 15,500, are an effort, company officials concede, to make the copier company less flabby.
Those most affected by the cuts at Kodak were those who could least afford it. While those opting for voluntary retirement were long-time employes who have been well rewarded in the past with Kodak stock and were given huge retirement incentives, the laid-off workers were young, unskilled or semi-skilled, in many cases black or Hispanic.
Some economists believe that many companies that have pared operations to an efficient, profitable level will be slow to add new workers, producing a drag on the economy both in Rochester and nationally.
Rochester officials say that it could take years to reduce the city's new-found levels of unemployment. "So many companies have layoff lists to work off of before they take new employes," Hostutler says. "It's going to take a while, no question about it."
But Thomas T. Mooney, president of the Rochester Area Chamber of Commerce, is philosophical about the problems Rochester is facing, saying that the actions of companies like Kodak and Xerox will forestall more serious problems in years to come.
"The efforts they're making to position themselves, in the medium and long run, are not only good for the companies, but for the city, as well," he says. "In the life of this community, I think these couple of years will be looked on as difficult, but really beneficial to the community's growth."