Business

Black Capitalism’ Promised a Better City for Everyone. What Happened?

ROCHESTER, N.Y. — The Panther Graphics printing plant sits along a row of red brick buildings and empty parking lots on the edge of a circular highway that separates this city’s downtown from a largely Black neighborhood to the north. Nearby, there is a warehouse, a Baptist Church and a billboard that warns “A Shot from A Gun Can’t Be Undone,” a reference to Rochester’s soaring murder rate.

Tony Jackson, the owner of Panther Graphics, grew up here, the oldest of six children. His mother died when he was 13 and his father served time in Attica, the nearby state prison. But Mr. Jackson said he always had “ink in his blood” — a helpful trait in a city dominated by the giant film and copying companies Kodak and Xerox — and he found his calling in commercial printing.

Mr. Jackson named his company, which produces labels for the grocery chain Wegmans and health care enrollment packets for Blue Cross Blue Shield, after the Black Panther Party. “It represents being Black and being strong,” he said.

Today, in Mr. Jackson’s office, there is a photo of his son breaking a tackle as a running back on the Duke University football team and also a large painting of four men — Martin Luther King Jr., Malcolm X, Nelson Mandela and Barack Obama — gathered around a table, smiling.

“I have always wanted people in this neighborhood to see what is possible,” he said.

But Panther Graphics is the product of a complicated legacy. The company is one of the few sizable, Black-owned employers operating in Rochester, a city of 200,000 people, 40 percent of whom are Black.

There was a time, though, when Rochester was on the cutting edge of Black “community capitalism” — an effort to create companies owned, staffed and managed largely by Black people that could lift up the broader community.

Just as giant corporations have pledged billions to help combat racism and support Black Americans in the wake of George Floyd’s murder, corporate investments in Black businesses were seen as an antidote to racial unrest in the 1960s, a way to ease the tensions that threatened the reputations of burgeoning corporate hubs like Rochester.

Some of those efforts in Rochester were quite bold and innovative at the time. Looking back now though, the long term challenges of achieving those ambitions shows the limits of social activists partnering with big business and how such efforts may not make a substantial dent in the systemic issues of poverty and racism affecting the broader Black community. It is a disheartening case study for the many companies that have made public commitments to promote equity and inclusion this year.

Nearly 60 years ago, Xerox teamed up with a Black power group to create a factory that made vacuums and other parts for copying and film processing and was partly owned by its work force.

That company, which was eventually called Eltrex Industries, provided hundreds of manufacturing jobs to Black residents, including Mr. Jackson, who credits his experience there with providing the skills and connections he needed to start his own business.

As part of an effort to promote more racial equity, Xerox also recruited Black engineers and technicians to Rochester, including Ursula Burns, who rose to become the first Black woman to lead a Fortune 500 company as chief executive officer.

Eventually, Eltrex shut its doors in 2011. Its challenges were blamed on a mixture of racism and its reliance on winning contracts from Xerox and Kodak, which were fighting for their own survival in a digital age and whose ability to support the venture became more limited.

Some community leaders say the company and its corporate sponsors veered from its mission by focusing on profit while shedding its Black activist identity.

“With as many corporate entities as Rochester has, you wouldn’t think it would have such a large poor Black population,” said Dennis Bassett, a former executive at Kodak and Bausch + Lomb, who is Black and moved to Rochester in the 1970s.

That contrast seems even more stark these days, after a particularly tumultuous time for the city, which is the nation’s third poorest, by one measure, after Detroit and Cleveland.

Lovely Warren, the first woman and second African American to be the city’s mayor, was indicted in July on weapons charges after her 10-year-old child was left alone in her home where police found a pistol and rifle. Ms. Warren pleaded not guilty.

The city was also roiled last year by the death of a Black man, Daniel Prude, who was handcuffed on a frigid street by Rochester police officers and had a mesh hood put over his head because they said he was having a psychotic episode. Video of the confrontation, which led to Mr. Prude’s death, came out months later, prompting protests in Rochester. In February, the police pepper-sprayed a nine-year-old Black girl at her home, setting off more protests that joined a larger national conversation about race and policing.

The widespread protests throughout the country led corporate America to pledge billions of dollars in investments to Black-owned businesses and to ramp up hiring of African Americans.

But following through may be a challenge, the way likeit was in Rochester.

Despite decades of investments, Eltrex failed to grow to its fullest potential and spawn a large number of other community-owned companies as many had hoped it would.

“This could have been the nation’s first billion dollar Black-owned business and the start of many others,” Mr. Jackson said of Eltrex. “But it failed to adapt.”

When the head of Xerox Joseph Wilson drove up to the headquarters of the organization in 1964, the Rev. Franklin Florence remembers there was still smoke in the air from the protests erupting around Rochester over the lack of affordable housing for Black people.

The F.I.G.H.T. organization was an umbrella group made up of Black churches, tenant associations and even book clubs that used their collective strength to organize protests around any issue affecting the membership.

Many of Rochester’s corporate leaders were shaken by the protests, but it was Mr. Wilson who took the step in 1964 of reaching out to Mr. Florence, the head of F.I.G.H.T. — short for Freedom, Independence, God, Honor, Today — to ask how Xerox could help.

“Joseph Wilson asked what we wanted,” Mr. Florence recalled in an interview. “We told him we wanted a factory.”

Mr. Florence had gained national attention during the civil rights movement with his campaign against Eastman Kodak, the city’s largest and most influential company, which had employed relatively few Black residents.

He was a polarizing figure in Rochester who led protests at Kodak’s annual shareholder meeting, an embarrassment to the founding Eastman family and a warning to other companies about the power of social activism to disrupt their businesses.

Mr. Wilson of Xerox assigned one of his executives in Europe to set up the plant. The company that would run it would be called Fighton.

Some of Fighton’s first products were vacuums and parts for electrical transformers. A portion of the company was owned by the employees and the rest by the F.I.G.H.T. organization which ran a neighborhood housing project called F.I.G.H.T. Village, near the factory. Xerox lent managers to help train the workers.

Among the efforts to support Black business amid the unrest of the 1960s, Fighton represented something new.

“They wanted to try capitalism, but they wanted it to happen in a socialist way,’’ said Laura Warren Hill, a history professor at Bloomfield College in New Jersey, and the author of “Strike the Hammer: The Black Freedom Struggle in Rochester, NY 1940-1970.” “They wanted it to have a human face and to help the underserved.”

The role of the city’s big corporations in this initiative also stood out.

“You have Xerox working with a Black power group,” Ms. Hill said, “to shape what Black capitalism is going to look like.”

Outside of Rochester, though, Fighton was not always so well received. The name seemed to be a big part of its problem.

“The people we were trying to do business with would ask ‘What does this Fight mean? Fight who?’” recalled Matthew Augustine, the company’s longest serving chief executive.

In 1976, Mr. Augustine was recruited to become C.E.O. by a friend from Harvard Business School who was on the board of Fighton.

The F.I.G.H.T. organization had gone through an internal power struggle, with Mr. Florence eventually losing his leadership role. At the time, the factory was not profitable and in danger of shutting down, Mr. Augustine said.

The Fighton board wanted Mr. Augustine, a native of Louisiana, to shift the business model to be “more personal profit orientated” and less focused on the community benefit, he said.

The board agreed to give Mr. Augustine ownership of most of the company and he eventually amassed an 80 percent stake.

One of his first moves was changing the company’s name from Fighton, which was seen as too militant in the business community, to Eltrex Industries — a mashup of Electrical, Transformer and Xerox.

In addition to manufacturing, the rebranded company started selling office supplies and offering snow removal and mail processing services. Under Mr. Augustine’s watch, Eltrex was meant to be a one-stop shop for companies seeking to fulfill their minority-owned business goals.

Mr. Augustine said his approach to hiring was to give many employees first and often “second chances.” Some workers were still incarcerated and came to and from the factory from jail each day.

Rochester had other Black-owned businesses but many tended to be restaurants, barbershops and other service-focused enterprises. At its height, Eltrex employed 350 people, mostly Black and Hispanic workers, in “prideful jobs” Mr. Augustine said. It generated $20 million in sales and was profitable.

Kodak, which had been initially reluctant to get involved because of its contentious relationship with the F.I.G.H.T. organization, also agreed to do business with Eltrex, Mr. Augustine said.

Despite it financial success, Mr. Florence’s son Clifford Florence said Eltrex was straying from its original mission.

“They lost sight of the advocacy that they should be doing for the poor and began to look at the money,” he said.

Mr. Jackson went to work at Eltrex in the late 1980s. He got the opportunity to supervise employees and to work in sales, where he made valuable connections. He looked enviously at Mr. Augustine’s office, his Mercedes and house in the suburbs. “That’s what inspired me to start my own business,” Mr. Jackson said.

In 1993, Mr. Jackson left Eltrex to start Panther Graphics. One of his biggest accounts came from Xerox. In a few years, Mr. Jackson also had a house in the suburbs and a cabin on Lake Ontario with a pontoon boat.

Several years ago, Mr. Jackson drove his Porsche to visit a friend in north Rochester and handed him cash to buy them beer. A few minutes later, the police surrounded Mr. Jackson and his sports car. An officer threatened to search him, suggesting that the cash was for a drug deal. The police eventually left, he said, but did not apologize for their mistake.

“I am not going to cry about it because what good does that do?” Mr. Jackson said.

In her memoir published in June, Ms. Burns describes how the very top executives at Xerox and the longtime board member Vernon Jordan mentored her throughout her career. She praised Mr. Wilson, who is credited with founding Xerox, for taking an “enlightened” approach to diversity.

“Why is it that we have none of these people working here?” Mr. Wilson said, according to Ms. Burns’s book. Mr. Wilson remarked that he could not run a “great company” where Black people and women he saw outside his window were “literally not here.”

While Mr. Wilson and other executives set a supportive tone at the top, these efforts by Xerox and the city’s other large companies did not always change attitudes across the broader Rochester community, some local leaders say. Ms. Burns, who is retired from Xerox, declined to comment.

Eltrex was regularly recognized with awards for the quality of its products. Yet, Mr. Augustine would hear rumblings from people in the local business community about the need to improve quality control at Eltrex.

Eltrex was also paying a higher interest rate than other companies — something Mr. Augustine learned after he was appointed to the board of a local bank.

“People ask, ‘Why weren’t you a billion dollar company?,” said Mr. Augustine. “But they don’t understand the environment we were operating in.”

“When you hear about the folks burning down Black Wall Street. This stuff is real. There are people who are absolutely threatened by any kinds of success for Black people and they work to keep you from being successful.”

Dennis Bassett spent 18 years at Kodak and 17 at Bausch + Lomb. He remembers flying with a top Kodak’s executive on the corporate jet, talking about the need for more diversity. Kodak “did a good job putting people of color in executive positions,” Mr. Bassett said.

But those hiring initiatives did not always reach down into the company’s middle management, where many key decisions were made, he said.

And even as Xerox and Kodak “were printing money,” the city’s poorest Black residents continued to slide further into poverty, he said. Mr. Bassett faults himself for not pushing the companies to do more to help the city.

“Back then, I was chasing the brass ring,” said Mr. Bassett, 73. “I was doing the things I needed to be successful for my career and my family.

“I look back and say I bit my tongue more than I wish I had bit my tongue,” he added.

In a statement, a Xerox spokesperson said the company has spent millions over many decades supporting science programs for Rochester students and organizing mentorships and other volunteer activities to “help close the poverty gap.”

“Giving back to communities throughout the world, particularly underserved communities, is ingrained in our company’s values,” the spokesperson said.

Kodak did not respond to requests for comment.

Mr. Bassett faced some barriers in Rochester that seemed intractable.

Mr. Bassett remembers that when he put his five-bedroom house in an upscale Rochester suburb on the market in the 1980s, the realtor recommended that he take down all the family pictures or any artwork that could indicate that a Black family lived there.

“The realtor was matter-of-fact,” Mr. Bassett said. “And guess what? We complied. I just wanted to sell my house.”

Rochester will have a new mayor in January, most likely a City Council member named Malik Evans.

Mr. Evans, who defeated Ms. Warren in the Democratic primary this summer, said the city needs to let go of its identity as a company town dominated by Kodak and Xerox, and become a “town of companies.”

“We have older African American residents who had graduated from high school and were getting jobs at Bausch + Lomb and Kodak, and then buying property,” said Mr. Evan. “But then that fizzled.”

Mr. Evans said the city should focus on creating more small- and medium-size businesses and that corporate commitments cannot fade as the protests against racism recede.

“It can’t become just another flavor of the month,’’ he said. “We always look back a few years later and say, ‘Whatever happened to that.’”

Today, there are no grand monuments to Franklin Florence or the company he helped create. Eltrex’s original factory building was damaged in 2010 after a vehicle smashed into the first floor and burst into flames. The vehicle’s occupants were killed in the crash and the building was demolished.

“If you walk down the street in Rochester, not many people know who Franklin Florence is, and I think that is a crime,” said Ms. Hill, the historian. “Whether you love or hate him, he is an important figure.”

Even today, there is debate about Eltrex’s legacy. Mr. Augustine, the former C.E.O., said he regretted that he was not able to grow the company’s customer base before Xerox and Kodak began to struggle. But he often found that other companies were not sincerely interested in engaging Black-owned businesses, but only looking like they were.

Kodak filed for bankruptcy in 2012., while Xerox restructured its business which resulted in a series of large lay offs at its Rochester facilities. Mr. Augustine said some of Eltrex’s assets were sold and its employees transferred to Cannon Industries, a metal fabricator and one of the other large minority-owned businesses in Rochester.

“Could we have done more? Yes,” said Mr. Augustine. “But I am proud of what we accomplished.”

Mr. Jackson said Eltrex failed to adapt to life beyond Kodak and Xerox and its problems should not be blamed on racism. “I have to reinvent myself every five years or I die,” he said.

For his part, Franklin Florence said he had hoped the original concept of Fighton could have been expanded. He urged the protesters who are pushing to end systemic racism today to keep up the pressure.

“There were people back then who said we had to get out of the street and into the boardroom,’’ Mr. Florence said. “Our folk went into the boardrooms and we suffered. And that is where we are today.”


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