A company town's bid to reinvent itself

Sorrow has long since replaced anger for residents here who have witnessed the decimation of their manufacturing industry over the past two decades.

So when Marsha Tyler's $18-an-hour job assembling photocopiers at Xerox Corp. was shipped off to Mexico two years ago, the mother of two did what others are now doing: She shook her fist at her employer, rationalized the company's decision, and then headed back to school.

"We hung in there, but finally our number came up," says Ms. Tyler. "All that grunt work is going out of the country."

For much of the past century, residents considered Rochester an oasis from economic hardship, if not from the wintry winds of Lake Ontario. Two big employers - Eastman Kodak and Xerox - provided a steady stream of manufacturing, research, and management jobs.

But in recent years, foreign competition and technological change have forced Rochester to fight harder. Now, in a struggle that could hold lessons for the broader challenge of America's "jobless recovery," that resilience is being tested further.

"What's happening here is happening nationwide," says Kent Gardner, an economic analyst at the Center for Governmental Research, a nonprofit public-policy think tank in Rochester. He's referring not just to the problem of lost manufacturing jobs - 2.7 million nationally in the past three years - but also to the transition to a more diversified and service-oriented economy.

A snapshot of Rochester's challenge: Digital cameras will soon be outselling the film cameras on which Kodak built its name. The company recently announced at least 2,000 jobs in the city will be cut.

Yet Rochester is trying hard to surmount such hurdles. The city has developed strong ties between industry, government, and higher education that make it easier to retrain and redeploy blue-collar workers. And it is nurturing home-grown companies to broaden the local economy.

With such efforts, Rochester is becoming an exemplar of adaptation.

For a good part of the 1900s, Rochester was self-sufficient to the point of having its own telephone and electric companies. The city bled Kodak yellow, and photography's success made many view the city as recession-proof into the 1970s. "There was an isolationist, standoffish kind of attitude that we can take care of our own," reflects Rochester's mayor, William Johnson Jr.

Today, despite a population of more than 1 million, Rochester retains a small-town feel. While the feeling of immunity from recessions is gone, residents insist that the quality of life remains high. The area boasts affordable housing, 18 colleges and universities, a philharmonic orchestra, and a AAA baseball team.

But a recent letter to the editor in the Rochester Democrat and Chronicle reflects the frustration of blue-collar workers: "The news [of Kodak's layoffs] would have been easier to take if we were being downsized due to a decrease in consumer demand, but to hear that more jobs are being taken away from us and sent to foreign countries for cheaper labor is hard to deal with."

The pragmatic view of Dwight Simpson is more common among downsized workers here. He was laid off from his job as a technician at Corning Inc. three years ago, after leaving ahead of layoffs at Xerox the year before: "I felt somewhat betrayed, but you know that [companies] have to make money, and they'll do whatever it takes."

After looking for a job for more than a year, Mr. Simpson - a native of Jamaica with two small children - is now studying for a degree in electrical engineering at Rochester Institute of Technology (RIT), with the help of a scholarship for displaced workers.

RIT's Professional Re-employment Education Program (PREP) offers 60 percent tuition breaks to more than 160 area workers - including Marsha Tyler and Dwight Simpson - who have recently been laid off.

Monroe Community College, another leader in retraining workers, creates and tailors programs to meet the labor needs of area businesses, says President Thomas Flynn. The college - which has nearly 20,000 students enrolled in its career and training programs this fall - recently responded to local industry's requests for more call-center employees, toolmakers, and nurses.

The future of Rochester's economy - like those of many other cities - seems to lie largely in business services, higher education, and precision manufacturing, analysts say. Two prime examples: The University of Rochester and Paychex Inc.

The University of Rochester has outpaced Xerox to become the area's second-largest employer, after Kodak. Employment at its medical center continues to grow, as it becomes a medical hub for western New York.

Paychex is a home-grown company that provides 1,900 residents with well-paying back- office jobs. Last year, the company brought in more than $1 billion processing payroll, workers' compensation, and taxes for small business.

Area politicians and business leaders are pinning hopes on organic growth of companies like Paychex. Mayor Johnson, for one, is wary of luring out-of-town companies, when there's little to prevent a company from packing up if a better offer comes along.

Nor is Johnson writing off Kodak as a source for well-paying jobs. He points out that Kodak Park remains the largest manufacturing facility in the state. "You can't ignore 20,000 jobs," he says.

Tyler, the former Xerox employee now studying at RIT, is doing her part to revive Rochester's economy. This summer, she collaborated with another former blue-collar worker on a 15-minute PowerPoint presentation for her persuasion class. The title: "Come to Rochester for Your Education. Stay for Your Life."

"Rochester is a thriving place," she says. "You just have to have the right degree."