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TheStreet Open House

Rochester's Rise Amid Kodak's Demise

***

Videk is another company that's leading high tech manufacturing in Rochester and traces its founding directly to the research and development labs of Kodak.

The company is a 20-minute drive from downtown. Tom Slechta, Videk's CEO, sits on a chair surrounded by tech trinkets, cameras and rolls of fake checks inside his manufacturing room.

The company produces machine vision automated inspection. In other words, his team of engineers, developers and "solution architects" create software and custom-rig digital cameras and other technology to scan the integrity of labels, checks, bank statements, packages and more.

Slechta said his business partners include the Treasury Department, the U.S. Postal Service, Kodak, Canon, Hewlett-Packard (HPQ), Xerox (XRX), financial institutions (he won't say which ones, but hints that they're large national banks) and others.

An example to illustrate the process, Slechta said, is with its automated inspection of Treasury checks. Videk's cameras can verify the integrity of up to 40,000 Treasury Department checks per hour with 100% accuracy.

Another way to explain the process is if a financial institution wants to be sure the bank statement of John Doe actually gets mailed to John Doe and not Jane Doe, they go to Videk.

The company was spun out of Kodak more than thirty years ago, and some of the engineers who still work there today had helped build the division when it was part of Kodak. Slechta, who has a bio-medical background, said Bausch & Lomb recruited and hired him at a young age. Soon, though, he left the eye care company and headed for Videk after it spun out of Kodak.

When asked about Videk's use of cameras and its ties to Kodak, Slechta said Kodak came to them in the late 80s to help design and develop an industrial camera using its megaplus pixels sensor elements.

"So, that kind of was a start of digital cameras, if you will, for Kodak," Slechta said.

The trial didn't work at the time as the cameras were worth thousands of dollars, but Slechta said it was a good idea for Kodak to prototype the function and see what they could do with it.

Beyond Videk's digital cameras, former Kodak employees and status as a former Kodak division, you can find the former photographic filmmaker's footprint in the smallest places at this smaller firm. There's an entire wall in the manufacturing room that has drawers devoted to various trinkets -- bolts and screws, as well as electronic parts -- used for the verification systems. The drawers, though, are labeled with "K-" and then a number. Slechta said that's how Kodak categorized parts. Videk still uses the same system.

***

A reawakening of Kodak's sprawling Eastman Business Park could be an added tailwind for the city and its entrepreneurs. In June, Kodak and the State of New York established a $49 million environmental trust to address company's environmental obligations into the future.

The deal, agreed in Kodak's bankruptcy process and supported by New York Governor Andrew Cuomo, could restart some of the park's industrial capability and attract new businesses.

Kodak, which is poised to exit bankruptcy in the third quarter, meanwhile, believes it can attract new talent to the company as it pursues higher growth markets that could support rising earnings. The company may restart college recruiting and general hiring programs after it exits bankruptcy.

Though job cuts at Kodak lasted decades, talented workers remained in the area.

In the earliest days of Kodak's decline, the company lavished laid-off workers with generous severance and benefit packages that were the seed for new businesses.

Many former Kodak employees in Rochester have been absorbed into small and mid-sized local companies. Some have started their own firms. It has helped to make Rochester a rare center in the U.S. for 21st century jobs and one that is somewhat insulated from the economic change that devastated the metropolis' rust-belt neighbors.

Even if Kodak's bankruptcy had yielded a liquidation, the company's influence would be irrevocably felt in the city.

While entrepreneurs such as Pollock, Slechta and Senall are helping with the rising number of jobs, it is Rochester's hospitals and universities that are the city's biggest employers. And those world class institutions trace back to the generosity of Kodak's founder George Eastman.

"It's a university town," said Larry Matteson, a professor at the University of Rochester's business school. "It's gone from an industrial town to a university town."

Despite decades of struggles of former blue-chip, Fortune 500 companies that called the western New York city home, like Kodak, Bausch + Lomb and Xerox, a bustling private sector has remained.

Inside the George Eastman House, about 8 minutes from downtown, curator Kathleen Connor dumps a large rectangular cardboard box full of old newspaper clippings on a table in her office.

She said she's collected as many articles about the company's history since she arrived at the Eastman house in the 1980s.

"I chose to stay here in Rochester, N.Y. ,and live and raise a family because it's a great community. You can find a job. You can own a car. You can go on a vacation. You can send your kids to good schools, and we have access to some wonderful healthcare," Connor said. "I think that the community still benefits from many of the things Mr. Eastman gave to our community."

Read Part 2 of Kodak's Fading Moment: "Kodak's Bankruptcy: Manufacturing a 21st Century Rebirth"

Read Part 1 of Kodak's Fading Moment: "Kodak: The End of an American Moment"

-- Written by Joe Deaux and Antoine Gara in Rochester, N.Y.

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