Kodak Reports

Kodak is out with its fourth-quarter and year-end earnings, and the phrase of the day is "in the black." The company posted a small profit during October, November and December - the first in many quarters. But the net earnings $16 million represent a significant turnaround of $62 million turnaround. (Kodak lost $46 million in the fourth quarter of 2005.) Have a look at the release directly. One thing to note is that much of the turnaround has to do with diminished restructuring costs compared to a year ago. What this means is, to use a cliche, the rubber is about to meet the road: The company is going to have to show the ability to grow with the businesses it has in hand. Here's one more version from the financial wires, from Reuters.

Grab Bag

Items from the notebook:

• The choice of Deputy Mayor Patricia Malgieri as this year's Athena Award winner is interesting in part for where she works. Both she and last year's winner, Jean Howard, are top advisers to Rochester Mayor Robert Duffy. The Athena Award recognizes a top female professional. It would seem to be a good measure of the type of talent that Duffy has been able to recruit; only time will tell how long he's able to hang on to them.
• WHAM-13 news anchor Ginny Ryan, the MC of the awards, told a joke at the ceremony that involves Adam and Eve. The punchline has God advising Eve that he created man with a bit of ago, and as a result, "You are going to have to let him believe I made him first."
• The proposal for new housing at High Falls marks another part of Kodak's effort to help assist the local economy. The company will donate its visitor parking lot along State Street to the new apartment building, which will include condos and town homes. It sounds as if the project may extend to the next block, which is filled with a couple of small businesses (but little else.)

Economic Development in Upstate

So Eliot Spitzer has chosen someone from outside the region, and outside New York, to lead his charge to rebuild upstate's economy. Daniel Gunderson is coming up from Pennsylvania to serve as co-chairman of the Empire State Development Corp., the state's economic development arm.
He was serving as the No. 2 in charge at Pennsylvania's Department of Community and Economic Development. He's been busy there. The state just played a key role in triggering phase one of a massive investment in downtown Pittsburgh, that could bring new life to that city's cultural district. One positive aspect of Gunderson's hiring is his department was apparently pursuing industries similar to those of importance to upstate New York.

While Gunderson's geographic resume was probably a surprise to some, the reality is that the job's biggest challenge is a political one: Figuring out how to share power and scarce resources with the downstate co-chairman.

Grab bag

Some items crossing my desk of late:

• Maggie Brooks on Tuesday challenged local elected representatives on an issue that is a recurring theme this community. The county executive, who will stand for election this year, called on the Council of Governments "to propose specific ideas for further cooperation and consolidation." She cited collaborative projects in areas such as public health, public safety and transportation as examples. She also urged the council to update this 2001 study on intermunicipal governmental cooperation. Her call is remarkably consistent with her position on consolidation. During her successful 2003 campaign, Brooks argued that consolidation of services -- not consolidation of government units -- was the way to achieve real cost savings in the public sector. With all due respect to the county executive, maybe there's another way: Controlling local government employment. The number of local government jobs in the Rochester metro area grew 7.1 percent between 2000 and 2006; statewide, the increase was 4.4 percent. Perhaps more interesting is that local government employment is now making up a larger part of our economy than it did six years ago - 12.7 percent compared to 11.5.
• It's perhaps not surprising but a new study showed that sentiment among manufacturing companies in New York dropped dramatically between last month to this. The Federal Reserve Bank index went from 22 percent to 9 percent. Here's a link. Greater Rochester's economy remains heavily weighted in the manufacturing sector. For other Federal Reserve reports, go here.

A Company You're Not Supposed to See

The employees at KEK Associates Inc. have a work life that is never dull. The Henrietta company is a self-styled "product architect" -- they are hired by other companies to design and develop new products. The company has a fascinating mix of clients, stretching from Kodak and Xerox to Nike to the Massachusetts Bay Transit Authority. Just last week the company had a role in new products introduced by both Kodak and Icuiti Corp. at the Consumer Electronics Show in Las Vegas. This portion of KEK's web site shows a little about how the company does the work. Click on the circles to see some of the initial designs, and how the final products look.

Sandy Parker at the Rochester Rotary

If you've never been to a luncheon sponsored by the Rochester Rotary Club, well, let's just say it's an experience. They are a group with some lively traditions -- including issuing "fines" when members "step out of line," such as a member who had to cough up $28 for apparently forgetting to mention the rotary in a recent newspaper interview.

Today's luncheon speaker was Sandy Parker, the CEO of the Rochester Business Alliance, who is becoming the poster child for efforts to improve the upstate economy. It was a year ago, during her annual rotary speech, when Parker kicked off Unshackle Upstate, a coalition of upstate business interests.

Anyway, Parker today was a bit more upbeat -- predicting a legislative success for the Unshackle coalition, but also flattish job growth, a delay in the Renaissance Square project in downtown Rochester and a Stanley Cup for the Buffalo Sabres, owned by Rochester's own Tom Golisano.

Perhaps the best one-liner, though, came from newscaster Don Alhart of Channel 13, a long-time Rotarian who warms up the crowd with a news report. One of his items today was about a zoo in Australia that is conducting an experiment by placing humans on display.

"They are already exhibiting strange behavior," Alhart said. "I understand they have formed a Rotary Club -- that, of course, because they were rejected by the Lions."

(Rim shot.)

Spitzer and the Upstate Economy

The folks at the Rochester Business Alliance may be pinching themselves following Gov. Eliot Spitzer's first week in office. The very first press release of Spitzer's term was an agenda for change aimed at improving the upstate economy.

The RBA and its partners in Buffalo and other parts of the state have been talking for a year about policy prescriptions designed to boost the region's economy. Their agenda, called Unshackle Upstate, parallels Spitzer's. It calls for reforming worker's compensation, health care and other areas to reduce the cost of business.

It also calls for decentralizing economic development funds to give local areas more control over their own destinies. Spitzer has indicated his intention to appoint an upstate chairman of the Empire State Development Corp., the state's economic development arm. Upstate officials have long complained at the the ESDC has a distinct downstate focus.

It's unclear at this writing who the upstate chairman will be. In a conversation this week, State Sen. Jim Alesi, R-Perinton, said he had discussed the job with Spitzer's administration, in a contact initiated by the new governor's team. But he said that unless something changes, he prefers to remain in the Republican-controlled Senate. Alesi told me he thinks that Spitzer is looking for someone with both legislative and business experience.

It's important to note that both Spitzer and the business community will face a challenge from organized labor, which has a different perspective on the policy prescriptions. For instance, unions and other activists believe the state should look closely at fraud by insurers in the worker's compensation system.

So it will make for an interesting couple of months.