RIP Kodak

[gstark]

WSJ is reporting that Kodak has now filed for bankruptcy.

[Reschsmooth]

WSJ is reporting that Kodak has now filed for bankruptcy.

Apparently not quite:

Eastman Kodak Co. is preparing to appoint a chief restructuring officer, a move that could help the company secure financing needed to stay afloat during bankruptcy proceedings, people familiar with the matter said.

It has to be remembered that Chapter 11, if that is under what Kodak seeks protection, is simply a mechanism by which Kodak can continue to seek reorganisation. It does not necessarily mean the end of EK or the demise of what appears to be the only profitable part of their business.

[gstark]

Except that here they're saying that financing for 18 months has already been secured.

Kodak has obtained a fully-committed, $950 million debtor-in-possession credit facility with an 18-month maturity from Citigroup to enhance liquidity and working capital. The credit facility is subject to Court approval and other conditions precedent. The Company believes that it has sufficient liquidity to operate its business during chapter 11, and to continue the flow of goods and services to its customers in the ordinary course.

[stubbsy]

It has to be remembered that Chapter 11, if that is under what Kodak seeks protection, is simply a mechanism by which Kodak can continue to seek reorganisation. It does not necessarily mean the end of EK or the demise of what appears to be the only profitable part of their business.

Exactly. While not good it's also not what we think of as bankruptcy here in Australia (Chapter 7 is more like bankruptcy here). It's now being widely reported that they have indeed filed for Chapter 11 protection.

Info on Chapter 11 from Wikipedia:

Chapter 11 usually results in reorganization of the debtor's business..., but can also be used as a mechanism for liquidation. Debtors may "emerge" from a chapter 11 bankruptcy within a few months or within several years, depending on the size and complexity of the bankruptcy... In enacting Chapter 11 of the Bankruptcy code, Congress concluded that it is sometimes the case that the value of a business is greater if sold or reorganized as a going concern than the value of the sum of its parts if the business's assets were to be sold off individually. It follows that it may be more economically efficient to allow a troubled company to continue running, cancel some of its debts, and give ownership of the newly reorganized company to the creditors whose debts were canceled.

[Matt. K]

Kodak CEO to board members..."I'm telling you guys, there's no way in hell the industry is going to switch over to pixels. Digital photography is just a passing fad, so relax. Now let's get back to core business!....Let me worry about the future because that's what you pay me the big bucks for!"

[Steffen]

Is that really what he said?? Because Kodak were one of the pioneers of digital imaging and sensor technology. I don't think their bankruptcy is the result of them sticking to film while the rest of the industry went digital. There must have been some other management boo-boos at play.

Cheers
Steffen.

[Matt. K]

Steffen
Then he must have said something else.

[photohiker]

I think I never really forgave them for the 126 Instamatic.

[Matt. K]

My father brought me a Kodak brownie box camera for my 10th birthday but it was too complex for me.

[stubbsy]

This analysis from the Guardian addresses the issue of digital cameras killing Kodak.

"Kodak was the first company to create the digital camera, but back then most of its profits came from selling chemicals [used for developing film], and they were afraid to invest because they thought it would eat into the traditional business," said Olivier Laurent, news editor of the British Journal of Photography. "When they realised the digital market was here to stay, it had overtaken film, and all Kodak's competitors had far superior digital cameras"

Kodak... created the first digital camera in 1975...but the company...put the technology on the backburner. By 1992, Don Strickland, a former Kodak vice-president, said the company was ready to bring in digital cameras – which would have been another first – but his bosses vetoed it over fears of the "cannibalisation of film".

[phillipb]

Having been involved with kodak for over 25 years (Not as an employee) I must say i'm not the least surprised.
Every time there was a change in management, there was always unnecessary and espensive changes.
Here in Sydney they went from having a head office and lab in one building in Annandale which although not perfect, seemed to work, to breaking the two up, Head office in North Ryde, lab in Alexandria. They had to fly up a manager from Melbourne 3 times a week to try and fix the constant problems at the lab, eventually getting rid of the Sydney lab altogether and doing all the D&P from Melbourne, You can't immagine how many rolls of film went missing every week.
Still, sad to see them go down the gurgler.

[gstark]

I read an interesting article this week. Not directly related to Kodak, but quoted them as an example, and gave an interesting analysis of why they've failed.

According to the article, as a business, you need to know precisely what your business is, and Kodak made the mistake of thinking that they were in the business of manufacturing and selling photographic emulsion products: film, paper, chemicals, etc.

However, that is not and was not their business; they were merely the products that they sold.

The actual business they were in was that of selling memories. Their products were a means to an end.

Think about that for a moment, and consider the success of their old advertising slogan, the "Kodak moment". That's a phrase that's been around for what, thirty or forty years perhaps? It's made Kodak a generic name, in the same way that Hoover is synonymous with vacuum cleaner.

The phrase may live on, such was its success, and it perfectly exemplifies the fact that their business was that of selling memories. Bit the means of creating those Kodak moments has shifted dramatically over the last 12 years, and Kodak, for now, appear to be a casualty of that shift.

[Reschsmooth]

Indeed. The concept of the "Kodak moment" is preceded by the slogan for the Brownie. Something like "you shoot and we take care of the rest".

[Mr Darcy]

the success of their old advertising slogan, the "Kodak moment". That's a phrase that's been around for what, thirty or forty years perhaps? It's made Kodak a generic name, in the same way that Hoover is synonymous with vacuum cleaner.

But I don't know anyone who uses a Hoover anymore. In fact I had to Google them to be sure they still exist.
Nor have I heard anyone talk of "hoovering the house" for many years.

[gstark]

My mum just turned 85 years young last week.

And these days has help come around to help her hoover the house.

With her Hoover.

[PiroStitch]

Well I've just done my bit by stocking up on some more film

[Mr Darcy]

My mum just turned 85 years young last week.

And these days has help come around to help her hoover the house.

With her Hoover.

My mum is mouldering. She used a Hoover Constellation, but replaced it with a Volta in the 70's
My Uncle (83) is happy with his Dyson. His mum used a hoover upright - one of the originals
Pam's mum (95) used a Sanyo in her later life. Now she lives with us. We use a Festool, or a Sanyo for little jobs.

[gstark]

His mum used a hoover upright.

That's what my mum uses too.

When she's not surfing the web.

[ATJ]

... Hoover is synonymous with vacuum cleaner.

And cross dressing.

... In fact I had to Google them to be sure they still exist....

And there's another one, although I guess most people use Google for their Internet searches at the moment, but will that change?