Eastman Kodak, the 131-year-old film pioneer that has been struggling for years to adapt to an increasingly digital world, filed for bankruptcy protection early on Thursday.
The American legend had tried a number of turnaround strategies and cost-cutting efforts in recent years, but the company — which since 2004 has reported only one full year of profit — ran short of cash.
First came foreign competitors, notably Fujifilm of Japan, which undercut Kodak’s prices. Then the onset of digital photography eroded demand for traditional film, squeezing Kodak’s business so much that in 2003 the company said that it would halt investing in its longtime product.
“Kodak is taking a significant step toward enabling our enterprise to complete its transformation,” Antonio M. Perez, the company’s chief executive, said in a news release. “At the same time as we have created our digital business, we have also already effectively exited certain traditional operations, closing 13 manufacturing plants and 130 processing labs, and reducing our workforce by 47,000 since 2003. Now we must complete the transformation by further addressing our cost structure and effectively monetizing non-core I.P. assets.”
Under Mr. Perez, who joined Kodak from Hewlett-Packard in 2003, the company has bet on inkjet printers. That strategy has yet to bear fruit, however. (NYTimes)
I grew up in Rochester in a Kodak family. We bled yellow. I worked two summers at Kodak, in the factory where they made the ill-considered instant print film that went away when they lost the patent suit with Polaroid.
Kodak has been ill-managed for years, lacking leadership with a real passion for making great products and a stomach for taking the risks necessary to stay out in front. R&D was Kodak's life blood and has been gutted by the current crew, who have reduced this giant of innovation to hawking its old ideas for a few spare nickels with which to slow its demise. The great minds at the firm have been wasted, have left in disgust, or both.
Why, oh why, has Kodak continued to ride this fool of a CEO, Perez? He took a sick company, changed its focus completely to a non-core business, lobotomized it, and then moved on to selling off the extremities and internal organs. Did the Board really think this was a winning strategy?!?
I am appalled by what they have done to this brilliant company. Kodak needs a leader with the passion and determination of Steve Jobs to bring it back from the brink. The current Gil Amelio-esque bunch is utterly and completely incapable of completing the task ahead. They all need to go. Every darn last one of them.
mancuroc Rochester, NY
Kodak's recipe for decline parallels that of all too many companies too many MBAs and too many corporate lawyers running things, and not enough visionaries and technical people - this, no less, from the company that pioneered digital imaging.
It's hard to see a silver lining in bankruptcy, but if there is one, it is that the company luckily failed find a buyer for the intellectual property it foolishly tried to sell to raise money. Once you sell it, it's gone for ever; if the company survives, it will be there to license as a source of income.
If you live and breathe only by the bottom line, you die by the bottom line. There's a lesson here for American voters: beware of electing as President a bean counter whoy lacks imagination.
C. Attucks New York
Kodak could not bring to market fast enough the electronic image capture and display products they needed to produce in order to successfully compete with smaller electronic companies. Although they had the capital to dominate the digital evolution, management was reluctant to fully commit to the technology.
Many consumers are not aware that Kodak was a very successful world-wide chemical company that made chemicals for other industries besides photography. They should have kept the Eastman Chemical Division in Kingsport, Tennessee (EMN stock price as of today is $46.48) as part of a balanced portfolio. But the executive boardroom kept making decisions that addressed short term stock price concerns (e.g., Johnson & Johnson poison pill acquisition) instead of focusing on core business growth. They created a world-class health, safety and environmental program after several highly publicized chemical contamination spills and could have remained a viable chemical company since the infrastructure is still in place.
Steve Englewood Beach, FL
Kodak invented the Digital Camera, then, sat on it for 20 years. Pathetic leadership, zero vision, I feel for the Employees, past & present.
Josh Hill Connecticut
Sad. I can't think of a better example of a company that squandered its lead in new technology because of dinosaur management that was wedded to the old, dying business. Well, maybe one -- Western Union famously turned away Alexander Graham Bell.
I know a former Eastman employee who speaks with despair of management's failure to recognize what they had in the first megapixel CCD. And I don't have the impression that current management is any better -- ink jet printers, indeed.
Kodak was not only a pioneer Film company, Kodak was also the pioneer in all forms of Digital Imaging, including the first commercial digital cameras. The birth of Digital Photography was a quandary for Kodak, as the company's cash cow were the consumables (film and paper and chemistry). I was fortunate to be on the launch team of the very first digital camera when Kodak was still one the greatest American if not International companies/corporations. They were even among the Major sponsors of all Olympic events.
The reason I left Kodak in the mid 1990's is the same reason Kodak is filing for Bankruptcy today. Even though it had been an innovative technology company, its outlook was provincial, and its reach slowed down by a stodgy corporate culture with its roots in the 19th Century.
Despite the excitement of many of us back then at the arrival of Digital, we were also apprehensive of its effect on revenues from silver halide products and would even joke about which one of us would turn the lights off. The days of mass manufacturing of film are numbered. It simply does not make business sense to keep huge factories running to sell only small batches. Film is the darling of young photography enthusiasts because it is different. We would even joke back then that if Digital was first, people would be Wow'ed by the invention of film. And even if film manufacturing was still feasible, the Lab infrastructure is no longer there to support it.
The End Indeed.
Clearly, OLEDs are the next big imaging technology, and Kodak should be pushing their position there. But unfortunately, they sold the technology to LG a few years ago.