CORNING, N.Y. - Suddenly, they were everywhere: people with doctorates in physics, six-figure salaries and expensive new SUVs casing this tranquil upstate New York river valley for somewhere to live.
Spacious new homes sprang up along the hillside above the new photonics plant that had helped usher Corning Inc. - known for its elegant glass and homey cookware - into the high-flying world of fiber optics and lasers.
Then, just as suddenly, the "For Sale" signs sprang up, and work stopped on partially finished homes.
The telecommunications boom had turned to bust in a stunning about-face that will have put 16,400 Corning employees out of work by year's end - up to 3,500 locally - leaving the newly recruited physicists stranded and this single-industry town reeling from the economic cyclone.
"It was like night and day. Suddenly, there were paper millionaires all over Corning, buying houses, remodeling, adding, buying new cars," said Joe Sorge, a co-owner of Sorge's restaurant downtown. "All of a sudden, bang."
Silicon Valley might be accustomed to the rapid rise and fall of fortunes, but the 35,000 people in the Chemung River Valley have long taken comfort in the solid, steady growth of family-run Corning, which originally gained fame by producing Thomas Edison's first light bulbs in 1879.
"This is something this community has never seen before," said Corning Inc. spokesman Paul Rogoski.
But beyond the telltale signs of huge layoffs - empty storefronts, quieter downtown streets - this fiber-optics train crash has left an unusual sort of wreckage.
Boom and bust
Highly educated, highly paid specialists recruited from across the country, as well as Asia and Europe, are marooned in this remote upstate valley, searching elsewhere for jobs but unable to sell their homes.
York Young, 32, a former research scientist in the photonics division, has four young children - ages 11 months to 8 years. He and his wife, Jane, moved here in February of last year, a time when so many high-tech hot shots were descending on the rural outpost that families had to park in temporary apartments until they could find or build homes.
One restaurant got so busy it took its phone off the hook. The schools were packed.
"It reminded me of The Grapes of Wrath," Jane Young said. "Everyone was migrating here from all different parts of the country hoping to find gold. Everyone left good jobs and homes and converged on this strange part of the country. People were building their dream homes."
Six weeks later, the mood had changed, the stock price was falling, and by June - 16 months after they arrived - Young's division had been dissolved.
In the past six weeks, only three people have come to look at their four-bedroom Cape Cod, which is listed at $219,000, the same price they paid.
York Young, who has a doctorate in physics and is looking at government labs and the defense industry, has promising job leads but fears his family might lose as much as 20 percent on the house.
"Being a family man, I'm not looking at a one-company town again," he said, adding that he feels no bitterness toward Corning. "We just got caught up in a big mess."
It's an unlikely turn of events for the Houghton family, whose conservative management through five generations turned a tiny glass company into a multibillion-dollar corporation.
Patriarch Amory Houghton moved here from Massachusetts in 1868 with 100 glass workers, drawn by cheap Pennsylvania coal, skilled labor, ready transportation on the Chemung River and the Erie Canal, and a $50,000 investment from the town fathers.
A decade later, Edison asked the company to make the bulbs for his lights, and Corning went on to produce cathode ray tubes for televisions, Pyrex custard cups, Steuben crystal decanters and durable cookware.
In 1972, when Hurricane Agnes put the downtown under 8 feet of water and destroyed factories and homes, the company decided to stay and rebuild. It still works hard to maintain Market Street, downtown's main drag, a charming five-block strip of well-kept brick facades accented by street lamps and flower pots.
But in 1989 and throughout the '90s, the company unloaded some of its traditional businesses, such as lighting, medical testing and housewares - even though they were profitable - and jumped into the telecommunications frenzy engulfing the global marketplace.
Companies were scrambling to lay glass threads of fiber-optic cable for the transmission of voice and data at the speed of light. Corning spent wildly on the burgeoning field of photonics - the technology of generating and harnessing light and other forms of radiant energy - buying equipment makers, building plants and expanding old ones. Its work force in the valley expanded to 8,200.
Revenues double
For a while, Corning seemed to have struck gold; revenues jumped from $3.5 billion in 1998 to $7.1 billion in 2000, with 70 percent of its business in telecommunications. Then the telecom bubble burst amid concerns about inflated valuations.
The company stopped paying dividends for the first time since it went public in 1945. The chief executive, John Loose, retired in April after only 16 months on the job. Former Chief Executive Officer James R. Houghton, the great-great-grandson of the founder, returned from retirement at the request of the board of directors.
Late last month, credit ratings were cut to junk by Moody's Investor Service and Standard & Poors after the company said it would sell $500 million in preferred stock to raise cash.
The stock price, which had soared to a peak of $113 in September 2000, closed at $1.54 Friday, and the company is expected to lose hundreds of millions of dollars this year. Analyst Max Schuetz, with Credit Suisse First Boston in San Francisco, predicts the company will go through $1.1 billion in cash by the end of this year.
"The thing that's a challenge for Corning is the businesses they're doing badly in are burning through cash, and the businesses they're doing well in require a significant amount of cash or capital investment to sustain their growth," he said.
Houghton, whose comeback plan is to strike a more even balance between its telecommunications and non-telecommunications businesses, says he expects the company to turn a profit next year. In a token of optimism, the company recently donated $60 million to the school district for a new high school.
Still, there's probably no better symbol of the swift change in the company's fortunes than the 1880s brick building on First Street.
Just a year and a half ago, as Corning battled for talent with Lucent Technologies and other companies riding the telecommunications wave, the company converted the former schoolhouse into a state-of-the-art recruiting center, complete with a gym and showers for recruiters. Corning was hiring so many people - 300 a month - that the expanding staff had been working out of trailers.
Today, the building has reversed its mission and serves as an outplacement center, where recruiters help find jobs elsewhere for professionals who were laid off.
That means senior executive recruiter Drew Farren spends his time finding jobs for some of the same engineers he recruited to the company less than two years ago.
"As a recruiter you feel really bad," he said. "But you're happy you're able to help them out. One good thing is they already know us. We know how to market them."
The local union, too, is trying to help workers, but it doesn't know where to tell people to look, said Stephen A. Mandell Sr., president of the local of the American Flint Glass Workers Union. "The whole country's down. Anywhere they say they're hiring 50 people they'll get 5,000 applications."
Some have to remain
The situation is even worse for people who need to stay, such as Anne Auchu, 49, who moved here 10 years ago with her daughter, now 17, and her elderly mother.
When her job as a technical writer was eliminated in October, Auchu decided not to move her daughter, Jennifer, out of her high school and got part-time jobs at a department store and as a substitute teacher. She plans to enroll in a teaching certification course this fall and eventually work full time as a teacher.
Jennifer, a scholar and athlete, has taken a job as a lifeguard at a pool and a YMCA to help pay the bills. Auchu's mother died of a heart attack in April, just an hour after she picked up her daughter's last severance check from the mailbox.
"It was more traumatic for her than anyone," Auchu said. "She saw me working 60 to 80 hours a week. She was the old school - if you worked hard you'd get ahead. This wasn't the case."
Company pitches in
Through its foundation, Corning works to keep the storefronts spruced up on Market Street, even though many of them are now empty. The cuts have touched everybody.
Katherine DeMunn, owner of Katherine's Garden flower shop, has seen at least a 30 percent drop in corporate business alone since the fall, when the Corning departments began canceling their Christmas parties and weekly orders for reception areas.
"I don't think I realized how dependent I was on the Corning orders," she said.
Nowhere is the business collapse more graphic than in the Aurene housing development on a hillside behind Corning's research lab, where the company sold a Utah developer 426 acres in 1998 for what was supposed to be a community of 400 homes priced at $200,000 to $500,000 with spectacular views of the river valley.
Construction stops
The five dozen finished homes, many with "For Sale" signs, now share a neighborhood with eerie-looking, partially built structures and construction equipment stopped in its tracks.
Jenny Ruland, an unemployed teacher with three children, who had trouble finding an affordable house during the boom, said she grew uneasy watching the houses go up, wondering what would happen in hard times.
"Natives like us would say, 'Oh, my God, when these people are gone, who's going to pay the taxes?' It's been really hard for the natives who really knew and cared for Corning and the corporation."