Optische Werke G. Rodenstock

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Optische Werke G. Rodenstock

Isartalstrasse 43
D-80469 Munich
Germany
Telephone: (49) (89) 7202-0
Fax: (49) (89) 7202-629
Web site: http://www.rodenstock.de

Private Company
Incorporated: 1877 as Einzelhandelsfirma Optisches Institut G. Rodenstock
Employees: 6,712
Sales: DM 979 million ($500 million) (1999)
NAIC: 333314 Optical Instrument and Lens Manufacturing; 339115 Ophthalmic Goods Manufacturing; 333315 Photographic and Photocopying Equipment Manufacturing

Optische Werke G. Rodenstock is Germany’s leading manufacturer of eyeglass lenses. The company also produces and markets eyeglass frames under the NiGuRa, Cerruti 1881, and ENJOY brands. While the eyeglass business accounts for three-quarters of Rodenstock’s sales, the company is also involved in the development and manufacturing of ophthalmic equipment, X-ray equipment, and instruments for clinical examination and screening through its subsidiary Rodenstock Präzisionsoptik. The company’s subsidiary Docter Optics develops and manufactures optical components for audiovisual slide projectors, overhead projectors, and TV and video projection. Rodenstock’s activities in the fields of ophthalmic and precision optics are organized under the umbrella of Rodenstock Technologie Holding, which also includes subsidiaries RODIS and if a that offer IT services. The company operates production facilities in Germany, the Czech Republic, Thailand and Chile and maintains a growing network of subsidiaries and sales offices on all continents.

Josef Rodenstock Founds Company in 1877

The global optical firm Rodenstock started out as a small workshop in the last quarter of the 19th century. In 1860, at age fourteen, company founder Josef Rodenstock left his parents’ home in the small town Ershausen in Thuringia, Germany. His father, Georg, a former director of a later bankrupt textile factory who—after several failed attempts to get a business off the ground—was struggling to make ends meet for his big family, had given him some loose change and an old travel bag and recommended that he try the life of a traveling salesman. Josef Rodenstock started out selling needles and porcelain buttons, and after a while extended his sales inventory with small technical instruments such as barometers, which he soon started building himself. Always curious about how things worked, Rodenstock began specializing in selling his self-made instruments, including tachometers, scales, measuring instruments, and magnifying glasses. When the young man began making eyeglass frames he had his first encounters with opticians. Rodenstock found optical equipment very fascinating and began teaching himself the underlying principles. His growing business success enabled Josef Rodenstock to financially support his parents and younger siblings. Moreover, he lived a very modest life and was thereby able to put aside a considerable sum which he used as seed capital for his own company.

In late fall of 1877, Josef Rodenstock decided to leave his hometown and moved to Wurzburg, the splendid baroque residence of a prince and a bishop on the river Main. He called himself a physicist and set up a small shop and workshop not far away from the medical department of Wurzburg University. The company which Rodenstock founded the same year was called Einzelhandelsfirma Optisches Institut G. Rodenstock with the “G” referring to his father Georg as a token of the son’s appreciation and respect. The new company started out with two employees: Josef Rodenstock’s younger brother Michael, whom he took with him to Wurzburg, and another assistant. The small firm manufactured and sold eyeglass lenses, physics instruments, and small chemical equipment, home telegraphs, and even home phone systems. Soon the workshop was extended to house a glass manufacturing and grinding facility to be able to make “diaphragm-glasses.” The company’s literally “spectacular” new product, spectacle lenses with a black rim that prevented unwanted reflexes at the edges, was invented and patented by Josef Rodenstock. Only two years after the company’s founding, the number of employees had jumped to 30. The company’s success was supported by an unprecedented economic upswing that Germany witnessed in the late 19th century when groundbreaking technical inventions were made that would fuel the following industrial revolution. Roden-stock’s new lenses became a huge commercial success. His company also developed a reputation for high precision craftsmanship and professors from Wurzburg University started asking Rodenstock to make and repair their equipment for mathematical, physical, and chemical experiments. Finally, Rodenstock was awarded the position of university mechanic.

The company founder, however, was obsessed by the idea of somehow figuring out exactly the degree of vision impairedness in different customers. Since he believed that poor vision was not an illness but a minor flaw that could be corrected by custom-shaped lenses, Rodenstock’s idea was to deliver customized spectacles to every customer—a revolutionary idea for his time. He developed a “spectacle-measuring-apparatus” that opticians could use to determine which lenses would be best for a certain customer—a sensational invention for the trade. Five years after setting up shop, Rodenstock decided to move his business from Wurzburg to Munich, which was emerging as a center for science and technology. In the center of the city, Rodenstock established his Optical-Oculist Institute G. Roden-stock, a shop that offered a novelty to Munich residents: an extra room where eye refraction was determined for each customer. Within only a few years Rodenstock had started what he had once envisioned: he manufactured and sold customized ophthalmic lenses to his clientele.

Soon Rodenstock’s production facilities, which at first remained in Wurzburg and the new location in Munich’s Colos-seumstrasse set up in May 1884, were not able the meet the high demand. In 1886, Rodenstock acquired real estate on the edge of the city. The property on Isartalstrasse, an old gypsum mill close to the river Isar, included several buildings that allowed the industrial production of optical goods, and the nearby water was used to generate electricity. Josef Rodenstock’s brother Michael moved the production from Wurzburg to Munich’s Isartalstrasse while the company founder marketed his products—including optometers, model eyeglasses, refraction measuring apparatus, barometer scales, and optical lenses for photo cameras—by means of promotional essays and by traveling Europe to establish relationships with potential distributors. Rodenstock’s “Bistigmat” photo objectives became another huge success. They were not only more powerful than the competition’s but also much cheaper, and Rodenstock sold 25,000 of them in only three years. Soon photo optics became a second foothold for Rodenstock and the company started making different kinds of binoculars, telescopes, and theater glasses.

Alexander Rodenstock Joins the Company in 1905

The demand for Rodenstock products was climbing to new heights at the end of the 19th century, stretching the company’s production capacity to its limits. However, industrial property in Munich was impossible to find or impossibly expensive. The company founder decided to set up a brand-new factory in Regen, a small town in the Bavarian forest, a traditional center of the glass making industry. Regen was located on the railroad from Munich to Prague—a major transit line at the time. The factory started operations in 1899. However, Rodenstock was waiting in vain for the highly qualified glassmakers to show up at the factory, which consequently started out with 90 farm and forestry workers who had no idea about glass or eyeglass making. In addition, the manager of the new site failed to get the business off the ground. The new factory, which was already a huge financial investment, could only be kept operating with ongoing financial support which soon would have reached the limits of Rodenstock’s reserves. Only when Michael Rodenstock—who had been against this venture altogether—took over the management did the business catch on. Five years later the new factory reached its capacity again and another one was set up in the same town. By 1905, Rodenstock employed about 250 employees in Regen. A number of smaller production sites was set up in the following nine years to keep up with demand which was pushed up by a number of Rodenstock innovations, mainly new kinds of ophthalmic lenses with better qualities and functions.

Company Perspectives:

A company is not an island living in complete isolation from society. A company sends out signals, takes in impulses and is also subject to quite considerable demands which need to be met in order for the company to survive. Rodenstock wants to actively promote dialogue with its environment, a process which begins with our making ourselves identifiable, by creating transparency and by taking up a position. Only when our work is focused on society and the environment will we find acceptance for our numerous products and services. This is both our aspiration and our spur. We serve the world of vision by providing products and services for optical applications from spectacles up to ophthalmic computer software. Our wide catalogue of services is rounded off by products and system solutions in the precision optical field. We want to secure and expand our position as a brand company while maintaining our independence.

The stressful start-up time had left its mark on Josef Roden-stock’s brother Michael. Struggling with health problems, the founder’s loyal companion signaled his intention to retire. The founder’s oldest son Alexander, who studied physics and economics at Munich’s Technical College, was called in to help in the family business. The 22-year-old, who would have preferred to graduate first, followed his father’s wish and entered the business in 1905. New ideas and energy were needed in the company since the 59-year-old founder was showing signs of becoming more conservative. After he had gotten an overview of the family operations, Alexander’s first endeavor was to strengthen the company’s scientific research capabilities—the basis for the constant stream of innovations needed to stay competitive. Since its beginnings, the business had grown from a craftsman’s workshop to an industrial enterprise; new organizational structures in production and distribution were needed, as well as new investments in industrial production technology. However, up until 1912 the company founder, with his authoritative, patriarchal style, dominated the operation and made the most crucial decisions. In 1912 the company shares were redistributed and Alexander Rodenstock—as well as his two brothers-in-law—became official shareholders. Seven years later the company founder finally retired and Alexander got to have the final say.

However, the founder’s son took over at a politically and economically turbulent time. When World War I started in 1914, the company’s export business broke down completely. The German government administered the country’s war economy and boosted Rodenstock’s production of different kinds of binoculars with precision optics, which were in high demand in the German army. The economic depression after the war was followed by a temporary upswing which was interrupted by the worldwide economic crisis, a consequence of the Great Depression caused by New York’s stock market crash in 1929. High unemployment and the devastating effects of hyperinflation pushed a big part of the German population into poverty—the breeding ground for a radical political turn to the far right. On top of the sluggish domestic market, which shifted to cheaper quality and growing export losses, Rodenstock was threatened by French ophthalmic products, which were less expensive because of lower pay levels in France. Alexander Rodenstock successfully steered the family business through financial hardship caused by the chaotic market and prevented the company from being taken over by German optics giant Carl Zeiss. When the company seemed to run out of financial breath in 1932, Alexander Rodenstock rescued the enterprise once more by securing a big order from the Reichswehr, the German army, financed by the Economics Ministry. In the following years the Nazi government started administering the domestic economy again, preparing it for a war. Binoculars and eyeglasses became nationally important products and Rodenstock, under government administration, was pushed to introduce mass production, especially after the company was turned into a vendor of precision optical lenses to be used in the products of other companies. In 1944, the company’s factory in Munich was partly destroyed in bombings. However, due to the CEO’s intensive efforts, Rodenstock was granted permission to start operations again by the U.S. authorities only three weeks after Germany’s capitulation. After another three weeks had passed, Rodenstock’s Regen factory, untouched by the war, started production again and supplied objectives for photo cameras and binoculars as well as eyeglass lenses to the Allied forces in occupied Germany.

While leading the company through these turbulent times, Alexander Rodenstock also suffered personally several times due to his continued interest and active participation in politics. As a co-founder of the conservative party Bavarian Volkspartei, he was arrested, taken as a hostage, and condemned to death by political left wing forces who seized power in Munich for a short time during the 1918 German November Revolution. He also had the good fortune to escape a planned assassination attempt. From 1919 on he was active in Munich community politics where he promoted a democratic city charter. During the Nazi years his marriage to a Jewish woman brought him under rising political pressure. However, in the last war years he was awarded the common title “Wehrwirtschaftsführer,” (”leader of the defense economy”), as the result of which he temporarily lost his post as Rodenstock CEO during postwar de-nazification. Until he was found innocent in 1947 in a special hearing, the company was led by a trustee.

The Rolf Rodenstock Era Begins After 1945

After the postwar reconstruction years, Germany entered two decades of dynamic economic growth in which Rodenstock successfully participated. This was partly due to the company’s continuing efforts to be at the cutting edge of research for new kinds of eyeglass lenses with better capabilities. In the 1950s the company pushed the development of so-called bifocal lenses that unified in one lens sections for long and short distance viewing. They enjoyed growing popularity in the late 1950s and became a huge commercial success in the 1970s. In 1968 Rodenstock started mass-manufacturing lenses for eyeglasses that automatically adopted their color according to changing light conditions. The success of the bifocal lenses led to the development of trifocal lenses, followed by a new generation of progressive lenses that allowed uninterrupted changes of vision from short to far distances. These so-called Gleitsichtgläser were introduced to the market in 1980 under the brand name Progressiv. Following the industry trend of plastic lenses replacing the ones made from glass, Rodenstock started making plastic bifocal lenses in 1989. Besides lenses, the company started making frames for eyeglasses in 1960 and ventured further into precision optics which took an upswing with technological progress in laser and satellite technology and space observation programs.

Key Dates:

1877:: Josef Rodenstock sets up his Optical Institute in Wurzburg.
1884:: The company is moved to Munich.
1898:: A new production facility is set up in Regen.
1919:: Josef Rodenstock’s son Alexander takes over the business.
1953:: The founder’s grandson Rolf Rodenstock becomes CEO.
1960:: A new frame production facility is set up near Munich.
1975:: Rodenstock sets up its first subsidiary in the United States.
1978:: The company acquires Dusseldorf-based Wernicke & Co. GmbH.
1981:: Rodenstock takes over German frame manufacturer NiGuRa.
1989:: A lens factory is set up in Thailand.
1990:: The founder’s great-grandson Randolf Rodenstock becomes CEO.

The 1970s saw intensified efforts to expand Rodenstock’s global reach. When company founder Josef Rodenstock retired in 1919, he had already built a company with worldwide connections and a strong international reputation, including sales offices in Milan, Brussels, Vienna, London, New York, Chicago, and Moscow. However, the two world wars isolated Germany in the international arena, cutting Rodenstock off from the markets abroad. The first foreign sales offices after World War II were set up in Vienna and Paris in 1965. In 1972, Rodenstock set up a subsidiary in Italy, followed by one in the United States three years later. In 1951, the company started setting up production facilities in other countries with the establishment of Santiago die Industria Optica in Chile. Another factory in Argentina, established in 1958, was closed down when the country got caught up in political and economic turmoil. A frame factory for the United States market was built in Puerto Rico in 1973. In 1989, a Rodenstock lens factory was set up in Thailand. In 1978, the company took over Dusseldorf-based optical manufacturer Wernicke & Co., followed by the acquisition of NiGuRa, a frame maker also located in Dusseldorf, including their production sites on Malta.

The rise of Rodenstock to a globally acting major player in the optical market was mainly driven by Alexander Rodenstock’s son Rolf. Rolf Rodenstock entered the family business in 1944. The war had interrupted his studies at Munich University. However, in 1942, after being seriously wounded, Rolf Rodenstock was released from war duties and got his Ph.D. in business administration in 1944. While helping his father rebuild and modernize the company, he felt drawn to the academic life, started teaching, and became a professor at Munich University in 1956. However, after his father passed away in 1953, Rolf Rodenstock decided to turn back to “real life” and took over leadership of the family business. Besides his duties as company CEO, he helped set up and chair several industrial trade organizations over the years and impressed the public with his relaxed appearance despite his enormous workload. By the end of the 1980s, Rodenstock had made the transition from a mid-sized business to a global optical firm with 7,000 employees worldwide, generating DM 700 million in sales.

Randolf Rodenstock Takes Over in 1990

The fourth Rodenstock leader took over the family empire in difficult times. Health care reform in Germany, increasing competitive pressures, and globalization were the hallmarks of the 1990s. The founder’s great-grandson Randolf Rodenstock studied physics and business administration in Munich and Fontainebleau, France, and—like his father and grandfather—was drawn to academic life, especially in the spirit of the late 1960s when the “Establishment” was harshly criticized by the young generation and being an capitalist entrepreneur was greatly out of fashion. However, Randolf Rodenstock decided to put theory into practice and joined the family business in 1976 at age 28. He became a personally liable shareholder in 1983, and took over as CEO in 1990 when he was 42 years old.

In 1987, the German government abolished federal subsidies for prescription eyeglass frames, causing a serious downturn of the German optical industry. Eyeglass consumers put upgrading their lenses on the back burner while doctors became more frugal in prescribing eyeglasses. In the aftermath, sales of the German optical industry dropped by up to one-fifth and Rodenstock slipped into the red in 1989. Randolf Rodenstock took up the challenge of rescuing Rodenstock from a life-threatening downturn. He focused on a tight company restructuring program, product innovation, developing a contemporary design for spectacle frames, and improving the company’s public image.

To significantly cut cost, Rodenstock began moving its lens and eyeglass production to Asia, a step that his father Rolf Rodenstock would not have approved. However, it might have been the move that kept the company from extinction. The factory in Bangkok, Thailand, where personnel cost were only 2.5 percent of the cost in Germany, took up the production of plastic lenses. Another production facility was set up in the Czech Republic in 1994. The main factory in Regen was downsized and became the group’s research and development and logistics center, which also developed and built the complex machines needed in lens and frame production. In the mid-1990s the company organized all its industrial business activities, which contributed about 30 percent of sales, under the umbrella of Rodenstock Technologie Holding to be able more easily to enter partnerships and obtain capital from outside the company. The holding included Rodenstock’s instruments and precision optics divisions, Wernicke & Co., and the two new acquisitions: if a Computer system, a software development and training institute for German opticians; and Docter Optics, a vendor of headlight lenses for the German auto industry.

During the same time period, a whole range of new products was introduced to the market, including new generations of progressive and photocromic lenses branded Rodenstock Multigressiv and Cosmolit Office, as well as better quality coatings for plastic lenses and professional photo objectives. The company also became a vendor of “intelligent” precision optical elements for manufacturers of systems used in medical, communications, satellite, and military equipment. Within ten years, the number of Rodenstock employees decreased by almost one-quarter. After five years of losses Rodenstock started making a small profit again in 1994.

In the late 1990s, after 15 years of little investment in advertising, the company launched a major image campaign designed to modernize the rather conservative image the public had of Rodenstock. Because of the company’s exclusive distribution through opticians and selected retailers, the Rodenstock brand name was almost unknown by consumers. The campaign proved successful and Rodenstock was able to gain a bigger market share in a generally declining market, partly due to its focus on high-quality products with higher profit margins. By the end of the 1990s, Rodenstock focused on its core market—lenses and frames for eyeglasses—where the company saw itself as the German market leader, number two in Europe and number three worldwide. The company had become a truly global firm with half of its sales generated abroad and more than half of its workforce employed outside Germany. With the acquisition of a majority of the American 2C Optics Inc. Rodenstock got access to Individual-Lens-Technology, a patented technology for the production of prescription lenses in just one fabrication step which promised enormous productivity gains, and set up a new production facility in Frankfurt, Germany, for its proximity to a major international airport. However, more than 80 percent of Rodenstock lenses were made in Thailand by 2000, while all frames were manufactured on Malta. To further modernize the company’s image, Rodenstock invited Italian fashion designer Cerruti to create a series of fashion frames, developed the ENJOY brand of fashion frames for younger consumers, and entered license production agreements with auto maker Porsche and sports shoes and apparel manufacturer Reebok. On the other hand, Rodenstock sold off the majority of its industrial optics subsidiaries to further consolidate the business and focus on its core market.

Randolf Rodenstock’s declared goal at the beginning of the new millennium was to transform the classical industrial enterprise he inherited into an organization that oriented itself strictly to the demands of the market with a less hierarchical structure and more team-oriented work environments. He also emphasized the necessity to broaden the company’s capital base, but didn’t think his company would go public before 2002. Asked by Martin Schäfer if he saw his son taking over the company one day, Randolf Rodenstock answered: “What would you say if my daughter did that?”

Principal Subsidiaries

NiGuRa Optik GmbH; ERGO Optik GmbH; Rodenstock Beteiligungen GmbH (Germany); Docter Optics GmbH; Rodenstock Italia S.p.A. (Italy); Rodenstock Latina S.P.A. (Italy); Rodenstock France S.A.R.L. (France); London Optical Company Ltd. (United Kingdom); Rodenstock (UK) Ltd.; SUVI B.V. (Netherlands); Rodenstock Nederland B.V. (Netherlands); Rodenstock Instruments Corporation; Rodenstock USA Inc.; Rodenstock Precision Optics, Inc.; Rodenstock Canada Inc.; Rodenstock Norge A/S (Norway); Rodenstock Sverige AB (Sweden); Rodenstock (Schweiz) AG; Ocni optica Klatovy s.r.o. (Czech Republic); Optica Rodenstock Chile S.A.; Rodenstock (Thailand) Co. Ltd.; Rodenstock Australia Pty Ltd.; Optische Werke G. Rodenstock Produktion in Österreich, GesmbH (Austria); Rodenstock Technologie Holding GmbH; RODIS Informationssystems GmbH; ifa Computersysteme.