Bausch & Lomb

Bausch & Lomb Inc. is the United States' leading ophthalmic goods firm and stands as one of the premiere contact lens manufacturers in the world. The company also produces Ray-Ban sunglasses, the best-selling line of sunglasses in the world, as well as several other brands of high-end sunglasses. As of the late 1990s, the company was restructuring to focus on products related to the eye. It sold such unrelated units as its skin care products and its oral care business and directed acquisitions toward high-margin eye care products, such as those for ophthalmic surgery. The company's pharmaceutical unit was also narrowing its focus to prescription and over-the-counter ophthalmics. Bausch & Lomb Optical Co., an eyeglass store and manufacturer of eyeglass frames, was founded in 1853 by two German immigrants, John Jacob Bausch and Henry Lomb, in Rochester, New York. Bausch's son Edward learned to make microscopes, and the company prospered after it began to manufacture them. In 1890 Edward Bausch contacted Carl Zeiss, a German optics firm, and soon arranged for Bausch & Lomb to license Zeiss's patents, with the exclusive rights to the U.S. market. The most important patents were to Zeiss's new photographic lens and its first prism binoculars. Bausch & Lomb expanded, opening offices in Chicago, Boston, New York City, and Frankfurt, Germany. Bausch & Lomb gradually became a leading name in optics in the United States, supplying microscopes to schools and laboratories and manufacturing the U.S. Navy's first telescopic gun sights. In the early 1900s, Zeiss perfected the military range finder. Impressed by U.S. manufacturing expertise, Zeiss eventually decided that, rather than build its own factory, it would allow Bausch & Lomb to manufacture range finders in the United States. In 1907 Zeiss bought 20 percent of Bausch & Lomb, granting the company free use of Zeiss patents in the United States. Zeiss, on the other hand, sold to the rest of the world and was paid in dividends rather than royalty payments. Bausch & Lomb also sent technicians to Germany for training at Zeiss laboratories. Military products accounted for only a small amount of Bausch & Lomb's production, but as the only U.S. manufacturer of many optical products, production was nevertheless vital to the U.S. military. As a result, the U.S. Navy stationed technical experts in the company's plant in 1912. Bausch & Lomb's arrangement with Zeiss unraveled after the outbreak of World War I. The company had sold the Allies equipment without Zeiss's approval in Europe, which was not one of Bausch & Lomb's markets. In 1915 Zeiss sold its 20 percent share back to Bausch & Lomb, and until 1921, the two companies had no dealings with one another (although Bausch & Lomb continued to use Zeiss patents). Because of the war, Bausch & Lomb became the major U.S. supplier of scientific precision glass, from which the lenses used by the military were ground. After the war, the other U.S. companies that had learned to make the glass stopped production, making Bausch & Lomb the only producer of scientific precision glass in the Western Hemisphere. In 1921 Zeiss made all of its military patents exclusively available to Bausch & Lomb for use in the United States. In 1926 John Jacob Bausch died, and Edward Bausch became chairman of the board. In the 1937 Bausch & Lomb went public, selling $3.6 million worth of stock to raise working capital. At the time the company made 17,000 products, from eyeglasses to spectroscopes. Bausch & Lomb made 28 percent of U.S. eyeglass lenses and a large percentage of the country's microscopes and binoculars. Even after the offering, the company was still closely held, with family members owning significant percentages of Bausch & Lomb stock and holding most top management positions. Despite these accomplishments, Bausch & Lomb's image was tarnished somewhat by a 1940 federal suit regarding its relationship with Zeiss. The U.S. Justice department charged both c