George Eastman
http://en.wikipedia.org/wiki/George_Eastman
The Kodak Brownie Camera
Same basic "Brownie" was in production from 1900 until 1952
http://en.wikipedia.org/wiki/Brownie_(camera)
***
Alan: Rochester, New York, is my home town.
My Dad, William Wellington Archibald, worked at Kodak (Hawkeye Works, Apparatus and Optical Division) for over thirty years.
In this era of rapid technological turnover, it is remarkable that Kodak's original "Brownie" camera remained in continuous production - essentially unchanged - from 1900 until 1952.
A pictorial history of the Brownie is located at http://www.browniecamera.nl/
***
(Note: The New York Times article is followed by another dissection of Kodak's rise and fall culled from The Night Owl Trader - http://nightowltrader.blogspot.com/2011/09/rise-and-fall-of-eastman-kodak.html)
Excerpt: "Rochester’s troubles go beyond Kodak. Xerox and Bausch & Lomb have shed thousands of jobs as well. Twenty-five years ago, the three companies employed 60 percent of Rochester’s work force. Today, it is 6 percent... Rochester has been a job-growth leader in the state in recent years. In 1980, total employment in the Rochester metropolitan area was 414,400. In 2010, it was 503,200. New businesses have been seeded by Kodak’s skilled work force, a reminder that a corporation’s fall can leave behind not just scars but also things to build upon."
Despite Long Slide by Kodak, Company Town Avoids Decay
Brett Carlsen for The New York Times
Kodak headquarters in Rochester. The city has been a job-growth leader in New York State.
By PETER APPLEBOME
Published: January 16, 2012
COMMENTS (89)
ROCHESTER — In what was once the ultimate company town, virtually everyone has a trove of bright Kodak moments.
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Times Topic:
Eastman Kodak Company
Brett Carlsen for The New York Times
A sculpture in Eastman Quadrangle at the University of Rochester commemorates gifts made by George Eastman.
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They were plucked from the personal memories immortalized on the film made here, the bountiful jobs that allowed children to follow their parents into Kodak’s secure embrace, the seemingly endless largess that once allowed the company’s founder, George Eastman, to provide dental care at little or no cost to every child in town.
Now, with Eastman Kodak’s stock price below $1 and talk of bankruptcy inescapable, people here are pondering a thought as unimaginable as New Orleans without the French Quarter or New York without the Yankees — Rochester after the calamitous fall of the company Eastman founded in 1880.
It feels like the wrenching culmination of a slide over decades, during which Kodak’s employment in Rochester plummeted from 62,000 in the 1980s to less than 7,000 now. Still, for this city in western New York, the picture that emerges, like a predigital photograph coming to life in a darkroom, is not a simple tale of Rust Belt decay.
Rochester has been a job-growth leader in the state in recent years. In 1980, total employment in the Rochester metropolitan area was 414,400. In 2010, it was 503,200. New businesses have been seeded by Kodak’s skilled work force, a reminder that a corporation’s fall can leave behind not just scars but also things to build upon.
“The decline of Kodak is extremely painful,” said Joel Seligman, president of the University of Rochester, which, with its two hospitals, is the city’s largest employer with 20,000 jobs. “But if you step back and look at the last two or three decades, you see the emergence of a much more diversified, much more knowledge-based economy.”
Kodak announced last week its most recent reorganization, an effort to cut costs and enhance digital operations, which now account for 80 percent of revenue. But after the company said in November that it could run out of cash in a year if it could not sell more than 1,000 digital-imaging patents, fears of bankruptcy have emerged among investors, retirees and employees.
A Kodak spokesman, Christopher Veronda, said the company did not comment on market rumors. In an e-mail, he added, “Rochester has been our home for more than 130 years, and it remains our home.”
Still, nowhere have Kodak’s troubles resonated more than in Rochester, where George Eastman’s philanthropy and legacy live on in myriad institutions, including the University of Rochester and its Eastman School of Music. The George Eastman House museum of photography and motion pictures still has the oak box he used to keep up with his donations, whether it was the $625,000 he gave in 1901 to the Mechanics Institute, now the Rochester Institute of Technology, or his smaller gifts to groups like the Vacant Lot Gardening Association or the Rochester Association of Workers for the Blind. The company’s charitable contributions continued long after his death in 1932, and local officials say its generous buyout and severance packages have cushioned the blow of its decline.
Kodak’s fall carries an emotional punch, too, like seeing an enduring part of the American experience wither away.
James Ulrich, who volunteers as a docent at the Eastman House, thinks back with pride on the greatest summer job ever, traveling the country in a Kodak company car taking pictures of tourists taking pictures.
Robert Shanebrook, who until his retirement in 2003 spent most of his 35 years at Kodak working with world-class photographers like Ansel Adams and Yousuf Karsh, said: “We all had this personal investment and personal pride in being part of this organization; we felt we were working with the most capable people in the world. And then it all sort of crumbled, like finding out something bad about someone you were close to.
“You think, ‘How could that be?’ ”
The images of prosperity are being replaced by ones in shadows and shades of gray — the largely empty parking lots at the Kodak headquarters and its sprawling manufacturing complex, or seeing the “Kodak” sign blazing across the night sky downtown and wondering if before long the lights will go dark.
Rochester’s troubles go beyond Kodak. Xerox and Bausch & Lomb have shed thousands of jobs as well. Twenty-five years ago, the three companies employed 60 percent of Rochester’s work force. Today, it is 6 percent.
“Part of my job is convincing people we aren’t the place we once were,” Mayor Thomas S. Richards said.
The most painful toll is in the city itself, where the population has dropped to 210,000 from a peak of 332,000 in 1950, and where vast stretches north of downtown are dreary acres of decay. And while job growth has been strong, wages have declined from well above the national average at Kodak’s peak to below it now, reflecting the dwindling of well-paying factory jobs.
Brett Carlsen for The New York Times
Loretta Mueller, a laboratory manager, works at Vaccinex, a company that was founded and is based in Rochester.
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Times Topic: Eastman Kodak Company
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But beyond the urban core, in sparkling new office parks and research labs, at the University of Rochester and the Rochester Institute of Technology and the local medical complexes, Rochester remains quite robust, in no small part because of the legacy Kodak and other faded industrial giants left behind.
The fact that Kodak declined over decades, rather than suffering a sudden collapse, allowed people at the company and elsewhere to explore new options — to take skills in medical technology, photonics, imaging or optics to small startups or to start their own.
Steve Kristy spent 18 years at Kodak until finally quitting in 2000, saying he was exasperated by the company’s inability to embrace the digital world. Mr. Kristy is now chief executive of a company he co-founded, LiquidPixels, which provides enhanced visuals for Web sites, making use of skills he learned at Kodak.
“Kodak was frustrating and rewarding to work for,” he said. “It’s had such a wonderful brand that it’s sad it couldn’t stretch that into the digital era, but it produced an amazing wealth of people who want to stay in Rochester and are available to work in all areas of technology.”
Similarly, Kodak left behind an industrial infrastructure that may never be duplicated, 1,200 acres that once employed more than 30,000 people and that are being repurposed as Eastman Business Park, where half the 6,200 employees still work for Kodak and half work for 35 other companies located on the site.
Many of those companies were spun off from Kodak, like Ortho Clinical Diagnostics, which is now part of Johnson & Johnson and produces blood analyzers for medical offices and hospitals; Carestream Health, which manufactures conventional and digital X-ray equipment; and ITT, which manufactures optics for military and government applications.
Michael Alt, director of the park, said the facility had enormous potential despite Kodak’s struggles.
“Maybe when the quicksand gets up to your neck you ought to be reaching for the rope, but it’s not there yet,” he said.
Local officials expect that if Kodak goes into bankruptcy, it will continue to operate, which would very likely mean a smaller company and financial repercussions for many retirees. But no one expects Kodak to play as large a role as it once did or for any single company to take up the slack.
“Sure there’s nostalgia, and when you have this kind of news it tends to amplify it, but we cannot plan our future on the basis of nostalgia,” Mayor Richards said. “We will fail here if what we try to do is replicate what we had 30 years ago.”
- Gordon Lewis
- Tacoma
IBM once made typewriters and then PC's. The camera manufactures also saw the need to make digital products or go out of business. Why wasn't Kodak's management able to create new products to go along with these ?- TCB
- Brooklyn
You really can't blame Kodak,for not going all out into the digital camera business. It's money making business was in film, photo papers,development supplies and equipment.All dead businesses today.And even if it had become the leader in digital photography,all the manufacturing would have gone overseas.- TCB
- Brooklyn
Rochester is the same story as most of the old northeast and midwest cities. The jobs either dissapeared,or moved out to the suburbs.The people left too. Thriving old cities became shells of what they once were.- Marilyn
- Philadelphia
I grew up in Rochester too - my family seemed to be the only one that didn't work for Kodak so no we never experienced the great benefits. There were graceful notes with Highland Park, cultural places, and the Lake in the summer, though with that awful climate. I haven't been there in a long time but I keep in touch with some good people there, so I'm glad it's hanging on.- pete
- rochester
Kodak developed alot of bad habits as a virtual monopoly and became (unlike its founder, George Eastman) a domesticated animal; when it came time to run with the wolves, it didn't know how.
Whatever happens to Kodak though, the quality of life in Rochester is and will remain very high:
-More golf courses, racquet courts, ice rinks, lakes, playing fields, etc per capita than any other place I've ever seen;
-Secondary schools well-placed in the various national rankings;
-Vibrant cultural scene, particularly music( fantastic annual jazz fest every year);
-Dozens of colleges and universities in the area;
-Glorious weather in the summer and a real winter which the municipalities are well-prepared to handle;
-Short commuting times and very inexpensive cost of living.
-etc- Jan. 17, 2012 at 3:12 p.m.
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- Sylvia
- Ridge,NY
As I read this story, I kept hearing Paul Simon singing ",,,,,mama, don't take my Kodachrome away."- Jan. 17, 2012 at 2:45 p.m.
- RECOMMENDED2
- Michael Rothman
- Minneapolis Minnesota
I was there in June for the Jazz Festival. That was great, but the downtown area, where I worked as a teenager, looked like Dresden after the war. Very sad story.- Jan. 17, 2012 at 2:44 p.m.
- RECOMMENDED2
- Basil Marasco, Jr.
- Rochester, NY
You are absolutely right about that. There was no foresight (or no concern) regarding what was happening to the downtown area. When I was a child, going downtown was better than the carnival.
Recently, we had a major local telecom business, established here in Rochester, commit to occupy the old Midtown Mall area. After all the pertinent government financing was secured for the demolition, etc., the telecom business backed out of the deal and, in fact, had been in negotiations with an out-of-state giant for some time, which then bought the local company out.
The city and downtown in particular keeps getting whacked left and right.
- randrews4
- Rochester
I don't know where you got your figures for the population of metropolitan Rochester. The Rochester Metropolitan Statistical Area has a population of 1,054,323 according to the 2010 census.- syndicat
- Westchester County, NY
In 1950 Rochester was ranked number 32 in US population. The #31 and #33 cities were Atlanta and San Diego.
In 1950 Rochester was not only the home to a thriving Kodak, but also Xerox, Bausch and Lomb (at that time a premier scientific equipment maker), Stromberg Carlson (a TV pioneer), Itek, General Signal (the world's largest railroad signal maker), Gannett Publishing, Hickey Freeman and Bond suits, Champion Knitwear, Fannie Farmer (candy), French's Mustard, Hickock (belts and wallets), Taylor Instruments, Delco (batteries) etc.
Western Union Corp was founded in Rochester along with Vacuum Oil (Mobil)
This city was an economic powerhouse.
Now, the largest employers are in services. HMOs, Wegman's, Hospitals, etc.
This is an example of what has taken place in the US economy. These Rochester companies employed people with good jobs and they made things that Americans consumed.
Some companies, like Kodak, faded away. Some, like General Signal, Xerox, Fannie Farmer, Champion, French's, and Taylor moved away to places with lower taxes and cheaper labor.
Gannett moved to a more important location for its USA Today newspaper.
What a great city Rochester was.- Jan. 17, 2012 at 2:44 p.m.
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- Coger
- michigan
I grew up in Rochester. My father and many relatives worked there. I worked at Kodak during summers while attending college. Rochester New York was a wonderful place to grow up. My parents home was next to one of many parks in Rochester. During summers, college students taught us tennis. We had free concerts in the parks. There still is the Eastman School of Music. Our parents let us take a bus to Charlotte Park on Lake Ontario where we swam and played. We had wonderful Abbott's Custard. Near by are the Finger Lakes. Jobs were easy to find and the pay was good. I had another job as an apprentice meat cutter. It was happy valley.
No recessions, layoffs, etc. I left in 1977 when Kodak still employed 55,000. Xerox employed many thousands also. I have been back many times and still believe "Up State New York is one of the most beautiful parts of the USA.- Jan. 17, 2012 at 2:44 p.m.
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- CEG
- Stonington, CT
And the big city park, on the river and canal, was designed by Fredrick Law Olmsted. Beautiful place.- Jan. 17, 2012 at 8:01 p.m.
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- George AdScam Parker
- Boise, Idaho
Lived there for one year in the early sixties after arriving from England. Taught for one academic year at RIT. Loved the place (not the snow!) But, I wanted to be a "Mad Man" and fled to NYC. Have lived all over the world. A couple of our bests friends still live in Rochester. In the same house! The parallels between Kodak and Xerox are scary. "Fumbling the Future" is a must read on that subject. The amazing thing is that Xerox has funded PARC for years, whilst ignoring everything invented there... And EVERYTHING was invented there. As Steve jobs found out to his benefit when the incredibly dumb "management" of Xerox gave him a tour. You can't make this stuff up! Rochester will survive. The people will make sure. Good luck to them.- r5169
- Midwestern U.S.A.
NYT Pick
I'm happy to see that Rochester is, at this time, still maintaining at least a bit of its former dignity and self. But yet its story seems eerily similar to a place I'm familiar with, Anderson, IN. General Motors was the kingpin in that town, although there was no George Eastman around to direct a benevolent corporation; it was all management and union. Once a town of 70,000 with over 20,000 GM workers, Anderson had plenty of the smartest engineers holding plenty of patents. When the jobs dried up, Anderson never did cash in on the expertise of many of its engineers left over from the manufacturing days; rather the area kept looking for, and still does, that one big corporate "catch" that like GM would turn the town around. Most of the engineers from the glory days of the 1960-1990 era are now gone, and the town is left to ponder a future with low-wage manufacturing jobs and service-sector employment. Even a high-tech automotive engineering firm with a seemingly "bright" future turned its back on Anderson after being basically given the key to the city. My reason for writing is to say to Rochester: don't get complacent, and don't assume because this NY Times article makes things seem okay that they automatically will be. You have taken a big hit with Kodak, probably a bigger hit than you realize and one that will take years to be fully realized. Elect for mayor the smartest people (something that Anderson never did) and educate your children. Learn from other cities.- Jan. 17, 2012 at 2:41 p.m.
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- Kay
- Dearborn, MI
I grew up in Rochester, NY. Rochester was an amazing community, with excellent cultral opportunities. The Eastman School of Music was a tremendous asset to the city, and the Rochester Philharmonic was outstanding. All children would attend the philharmonic at least once a year through public school outings.
The entire city would look forward to the Kodak bonuses, as much of the money would be spent in Rochester.
George Eastman's philanthropy impacted the entire area: Outstanding parks; the annual Lilac Festival; and dental opportunities for low income children.
Growing up in the '60's, and '70's life was great. Recently I happened to meet a someone on my job in Mi. who was also from Rochester. We spent a good 40 minutes talking about what a great place to grow up in.
I hope the city can remain vibrant despite what is happening to Kodak. Good luck to the people of Rochester.- Jan. 17, 2012 at 2:06 p.m.
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- Malcolm F. Baldwin
- Lovettsville, Virginia
I grew up in Rochester as did my family on both sides and look back fondly on a vital city and marvelously special community. We visit about once a year with pleasure, last May for a concert by the Philharmonic and a visit with my ailing sister. While it has lost the vital commercial center I found so enthralling in the 1950s – Sibley's most especially – and its RG&E is no longer the small community-conscious utility my father Schuyler served so well, Rochester remains unique in its cultural, community, educational and environmental attributes. I have every hope and expectation that it will retain its unique qualities and overcome its loss of Kodak with enlightened capitalist and community energy.- Jan. 17, 2012 at 1:20 p.m.
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- joseph
- bklyn
As a former Rochestarian (okay fine, town of Brighton, Penfield schools, but not more than a stone's throw from the city borders, right next to Mercy High School), I remain relatively hopeful for the city.
They have a concentration of institutions of higher education in the larger region (U of R, RIT, Fisher, Naz, Hobart, Colgate, Wesleyan, and I've probably omitted several) and solid reputations for most of the suburban school districts.
The problem to my eye is that the County and the towns all think "ha ha, teh city sux & is broke, anyone who makes real money lives out here," which is a very short-sighted perspective. Similarly this perspective is in evidence on the individual level, as middle class people flee for the burbs as soon as possible, leaving the center of the city full of college kids and people of low socioeconomic status. This is not an auspicious demographic trend.
Urban living, people: get with it.- Jan. 17, 2012 at 12:45 p.m.
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- hen3ry
- New York
“Part of my job is convincing people we aren’t the place we once were,” Mayor Thomas S. Richards said.
How true. But the population of Rochester seems to be exercising considerable wisdom in its attempts to live without Kodak. We could take the mayor's statement and apply it to this country. We are not the country we once were but we can improve and take advantage of what we have. So far we haven't done that.
Good luck to Rochester and I hope they make it.- Jan. 17, 2012 at 12:05 p.m.
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- Trixie
- New York
I grew up in Rochester, "the urban core," and would like to just point out that no matter how "dreary" and "decayed" parts of it may be, the city is still the lifeblood of the county. The University of Rochester and Strong Hospital (both major employers) are in the CITY, Wegman's got its start in the city, all of the county's major museums are in the city, the country's largest farmer's market is in the city, etc. We can talk all day about economic successes in the metropolitan area, which are great and very welcome, but without the City of Rochester the county and surrounding exurbs would be adrift. It's beyond time to correct the urban flight that has plagued Rochester and reinvest in incentivizing city living.- Jan. 17, 2012 at 12:04 p.m.
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- Phil
- Rochester, NY
Rochester will indeed succeed because of the legacy of Kodak and the many very bright people brought to this area. There are so many cultural, educational, and outdoor as well as indoor activities that one would have to be bankrupt of initiative to fail to take advantage. Any of the optical and other imaging small companies in town may become the next Kodak.
Thank you for noticing and keeping people informed.- Jan. 17, 2012 at 11:45 a.m.
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- kmiker
- San Francisco
For decades my late father-in-law worked as an engineer at Kodak responsible for the design of its photographic paper manufacturing process line -- dominated by gigantic machines and a production line that spanned a city block. His life in many ways was one prototypical of the post-WWII 50's generation of young "company men." In the course of that time he rose to the most senior engineering levels but always resisted the invitation to jump to the management track -- a self-imposed limitation on his personal financial growth. By the mid-80's he was gnashing his teeth and struggling with near-daily bouts of 5am anxiety over what he perceived to be a hopelessly misguided executive management culture, propped up by ivy-league MBA cool-aid with no heart for the engineering & manufacturing culture that he thought the taproot of Kodak's greatness. The rot had already set in, and he dreaded to see what 20 years would bring. Fortunately for him he died before those 20 years were up, though there must be many of his cohort still in Rochester all too alive to the man-dimensioned pain wrapped up in $1 Kodak shares. The 10 shares of Kodak stock my baby son was given by his great grandfather decades ago are a bitter commentary on lost opportunity and executive failure. Truly the fault was not in their stars.- Jan. 17, 2012 at 11:36 a.m.
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- bb
- nyc
It sounds like you're blaming Kodaks decline on senior mgmt which isn't really the entire story. Perhaps Kodak's love for Rochester was also it's undoing. Would it be a totally different company today if it had left Rochester and reloceted to Silicon Valley back in the 80's?- Joel
- New York, NY
The management failure wasn't abandoning the "engineering and manufacturing culture" -- it was the failure to anticipate and adapt to the market's move from film-based imaging to digital. The technology was there, but not used. As a profound misunderstanding of market potential it ranks right up there with Xerox's decision to give the graphical user interface that it had invented to Apple.- Jan. 17, 2012 at 8:01 p.m.
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- RWNorman
- Silver Spring, MD
One of my favorite corporations and for good reason. It was a transitional corporation in a time when most large companies were owned outright by an individual with great power and influence, who used that power and influence to garner even more power unto themselves regardless of whether that resulted in the harm of their employees.
Not so with Kodak. Whilst the times seemed to dictate "more me" for the owners across the country, Kodak gave to its employees and created a real community, not a company town of indentured servants.
Kodak was a true picture of what a modern corporation should look like in the 20th Century, and they were way ahead of anyone else's concerns about environmental impact and the health and well being of their employees.
Even though the technology is old, the patents could probably continue the existence of the corporation for another generation or two, assuming that Kodak cut down to just being a holder of patents.
Had we had more corporations who were such good citizens, then perhaps people wouldn't gripe about corporate citizenship today.
Roger W. Norman
SirMusic Studio
http://rwnorman.typepad.com/rwnormans_beer_food_and_p/
http://www.reverbnation.com/rogerwnorman - Jan. 17, 2012 at 11:29 a.m.
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- Jim B.
- Ashland, MA
Dave
the problem was the house would need another $50k to make it livable. Which I guess would raise its assessment and who knows how high the property taxes would be. Let's say another $3k. So that's $9000 a year on property taxes or $750 a month. Reduce that $9000 a year to $3000 a year and months payment is $250 a month. That leaves $500 a month that could go toward a house payment, i.e., a bigger, better house that I own rather than the county, the town, the teacher's union, the public employee unions with health care and pensions not pegged to private sector realities but propped up by state law collective bargaining agreements.
Then compare NYstate income tax and sales tax, plus heating bills in winter, and its easy to see why younger folks (not to mention businesses) left Rochester. The biggest employer in the City is the U. of Rochester and it's medical facilities. Both supported by generous gov. programs (from student loans to medicare payments).
And I went to college in Syracuse in the sixties, LeMoyne so I'm partial to the area but can't make it work.- Jan. 17, 2012 at 11:21 a.m.
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- C Wolfe
- Bloomington, IN
I feel a strange nostalgia for Kodak too, mainly because I associate that logo and its distinct golden-yellow with the masses of family photos I have squirreled away. Despite the ease and superiority of digital photography, I think of going through my mother's boxes and boxes of photos when I was clearing out her household after her death, and so many memories randomly and vividly evoked. Some of the photos had been my grandmother's, already handed down once before.
When these images are stored away on a flash drive or some other device, I wonder whether my grandchildren will have that same visceral feeling of opening a battered box and discovering a treasure, or whether they'll even be able to access my digital memories as technology changes.- Jan. 17, 2012 at 11:20 a.m.
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- bb
- nyc
They would if you printed out all your photos on 4x6 photo paper. I recently discovered how easily I could print with my normal printer small photos. So get printing on quality Kodak Photo Paper (if they make it) so you won't loose those memories.
- bob tichell
- rochester,ny
The proliferation of small businesses, along with the growth of the Uof R, Paychex, and Wegmans pushed Rochesterto get out from under the downfall of EK. And like its AAA baseball team and AHL hockey team the city has always been proud to be one of the best of the minors. Unlike Buffalo which seems to get the major share of western NY government largesse and pretends to be a big city Rochester tends to think "small" and with a couple of recent mistakes like the giant ferry to Toronto and the Renaissance Center that never rose, Rochester remains committed to focus on what will work. Cooperation between the Democratic city and Republican county has helped with government doing what it can , but individual leadership with massive support from the middle class has maintained regional theatre, a small but excellent Rochester Philharmonic Orchestra, and a Memorial Art Gallery under the auspices of the U of R. Taxes are high but there is still growth and job formation. Winters are tough(although not yet this year) but excellant snow removal makes for few snow days. Summers are glorious with nearby Lake Ontario and Finger Lakes providing water with no sharks (or surf). The suburban public schools are top notch and the city schools keep trying. The performing arts have given the world Garth Fagan's dancers, Rene Fleming, Philip Seymour Hoffman. And the George Eastman House Museum of Photography has been among the world's leaders in preserving old photos and movies.- Jan. 17, 2012 at 11:10 a.m.
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- bob tichell
- rochester,ny
I also shamefully forgot to mention the great actress and comedienne Kristin Wiig, and editor-in-chief of Politico, John Harris
SUNDAY, SEPTEMBER 25, 2011
The Rise and Fall of Eastman Kodak
Bumbling the future: a tale of two companies
Disclaimer: I have no financial interest of any kind in Eastman Kodak, either long or short, and no plans to take any position in the company - ever. I have never held any shares of EK so what follows isn't sour grapes. I am not an insider and have no inside information.
Latest update: January 5, 2012: WSJ reports Chief Communications Officer calls it quits
Back in 1988 Douglas K. Smith wrote a great book called Fumbling the Future: How Xerox Invented, then ignored the First Personal Computer. He went into fascinating and gory detail of the fumbling and bumbling that went on in Xerox management that led to one disastrous blunder after another.
What does this have to do with Kodak? The parallels are striking. Both companies are based in Rochester, NY (Xerox subsequently moved their headquarters to Connecticut but maintains its base of operations in Rochester). Both companies were started by men of genius with a unique product and boundless drive. Both companies grew like mad on the success of their products and innovation.
And both companies subsequently lost their way. Xerox invented the world's first viable personal computer and Kodak invented the first digital camera. Both companies failed to realize the significance of that. And just as the PC demolished Xerox's highly profitable core business of photocopiers, the digital camera killed Kodak's main profit center of photographic film.
Both companies went through a series of strategic blunders. I'll leave Xerox now with the suggestion that you read Smith's book and concentrate on Kodak. As this posting has expanded since I originally wrote it in September 2011, I've added some items that provide historical context and aren't necessarily disasters in and of themselves, though there's certainly still plenty of those to go around.
A timeline of shame
In 1975, Kodak invented the digital camera. Then ignored it - for 20 years. Little did anyone suspect at the time that this odd-looking ungainly 8 pound box would eventually be the company's undoing.
In 1976, Kodak decided to enter the field of instant photography, essentially the sole domain of rival and powerhouse Polaroid. Several years later, Polaroid sued Kodak in a now famous case and won a whopping $1 billion settlement, back in the days when $1B was a lot of money.
Kodak was obligated to stop making that product and never returned. The irony is that Kodak instant prints were far superior to anything Polaroid had. The further irony is that Polaroid then completely squandered their windfall and ended up going bankrupt in 2008.
Also in 1976, Kodak decided for some reason it would be a good idea to start making copiers. This venture managed to last until 1997. In yet another irony, by the late 80's Kodak's copiers were better than those of cross-town rival Xerox. The opportunity was there for a while, and they blew it.
In 1982, Kodak employment hit 60,000 in Rochester alone. It is Kodak's heyday. It's the largest employer by far in the Rochester region. Local stores run full page ads targeting Kodak employees to spend their bonuses with them. They're particularly popular with car dealers. Times are good.
But already there are signs of trouble on the horizon, signs that the film business is becoming mature. In 1982, Kodak introduced the disc film system. If there's a more inefficient way of arranging negatives on a carrier, I can't think of it. The only advantage of this system was that it allowed the camera to be thinner and this had an undeniable wow factor.
But the tiny negatives had an undeniable ugh factor. Disc images were so bad that even ordinary snapshot consumers, the kind of people who were content to watch color TV with green and purple faces, complained. The format nevertheless managed to survive until 1998. I doubt many people were still using it by then. The camera itself was axed in 1989.
1983: Colby Chandler takes over as CEO from Walter Fallon.
In 1984, Kodak decided to enter the video recording arena with an 8 mm. video cassette unit in an increasingly crowded market already full of VHS and then Beta machines. Three years later, they pulled the plug on this product after some serious marketing miscues.
In 1986, Kodak decided to start making batteries. Many of their products used batteries and the company had a long history of vertical integration. There was concern that customers would blame their Kodak camera for problems caused by bad batteries. So it seemed to make sense - at the time.
They spun off a company, Ultra Technologies in Newark, NY to handle the job. But by 1991, Kodak sold off its interests in Ultra which then renamed itself Ultralife and is still making batteries today.
1987: Kodak invents the OLED (organic LED) - and proceeds to ignore that too for 20 years.
1990: In a gorgeous coffee table book titled The Story of Kodak, author Douglas Collins proclaims, "film remains and will continue to remain the preferred medium for picture taking." New hires in the Kodak Research Labs get a free copy of this book as a welcome gift.
Also in 1990, Kay Whitmore replaces Colby Chandler as CEO.
1991: Kodak decided to enter the digital arena with its DCS (later renamed the DCS-100), basically a Nikon F-3 camera with a 1.3 megapixel Kodak CCD image sensor instead of film. A whole series of DCS camera eventually followed, aimed at the professional market. With a price tag of $28,000 for the DCS-460 for example, the average snapshot taker wasn't going to be interested. You could buy one of the houses nearby Kodak Park for $28,000 back then.
The DCS series continued in production until 2005.
1992: In another bid to "go digital", Kodak introduced the Photo CD (originally announced in 1990). This was a CD that could hold up to 25 images at resolutions of up to 6144 x 4096 in a proprietary format. The Photo CD was accompanied by a range of products for scanning photos to CD and consumer Photo CD players designed to play back images on TV sets, with the slogan "Now View Photographs On Your TV".
While initially fairly popular with consumers, Photo CD suffered from a number of technical problems and more marketing miscues. The quickly growing size of hard drives along with the increasing popularity of jpeg eventually led to the demise of Photo CD. By 2004, processing labs were giving away the scanners for free to anyone would would haul them off.
x1993: Kodak hires ex-Motorola head honcho George Fisher as president and CEO. This is probably the one move more than any other that doomed Kodak. He lasted until 2000. By then, the damage was done. George, you're getting an entire chapter all to yourself in my forthcoming book, The Decline and Fall of Eastman Kodak.
1994: Kodak spins off its chemical division into a new company called Eastman Chemical. This one move was probably the worst decision Kodak ever made. Kodak's fate was sealed from this moment on. Eastman Chemical opened in 1994 at 21.12. It most recently closed at 38.19. Kodak opened 1994 at 44.19 and now trades just above one dollar.
Kodak also sold its holdings in drug maker Sterling Winthrop to Sanofi Aventis. And Kodak also sold its rights to Bayer aspirin and the Bayer name and trademarks to SmithKline Beehcman for $2.9 billion. 1994 was a big year for Kodak. They also sold their cllinical diagnotics unit to Johnson & Johnson for yet another billion dollars. Where did all this cash go? Read on.
xAlso in 1994, Kodak came out with the Picture Kiosk, a strange walk-up device that someone thought was a good idea. People were going to stand there in the store and edit their photos digitally, then print them. Our local grocery store had one of these. I never saw anyone actually using it. Finally one day, it looked like this. The sign reads "Out of Order". While I got the impression that this kind of sumed up the whole project, I have been informed that this particular venture was actually a success.. You'd never know it from this particular machine though. It is no longer there, having been unceremoniously removed years ago.
Also in 1994: Apple introduces the world's first consumer digital camera, the Quick Take 100. Ironically, it is actually made by Kodak. This camera wasn't a big hit for Apple, mostly because people didn't associate them with photography back then.
Also in 1994, Fisher says "Our copy products business is not for sale, and we have no plans to sell it." Three years later, I guess the plans changed. The whole thing went to Danka..
In 1995, a year after the Quick Take 100 Kodak finally got into the consumer digital camera business for itself with their first offering, the DC-40, which was essntially the same camera as the Apple QT-100. While it was well-made, full-featured and took great photos (for that era), with a hefty price tag of $995 back when that was a lot of money, this was still not exactly a mass market item.
Today, digital cameras are losing ground to the ubiquitous camera-equipped cell phones. One has to wonder what they were thinking, replacing a high profit low-competition item like film with a low-profit product like digital in an industry with cut-throat competition.
Also in 1996, Kodak rolled out APS, the Advanced Photo System, with a line of Advantix cameras and film. Introduced with great fanfare, APS was sort of a last ditch effort to extend the life of film and illustrates the deep commitment of Kodak to this product. The juxtaposition of Advantix and the DC-20 in the same year is telling.
Technically well-executed, feature-laden, and visually appealing, APS nonetheless was unable to stem the digital tsunami. Advantix film production ceased in 2011.
Perhaps coincidentally, EK hit its all-time high stock price of $94.75 early in 1997. With Kodak closing last week at $2.38 that's sort of hard to remember. Back then Kodak was also a member of the Dow, the bluest of blue chips.
Also in 1997, Kodak finally threw in the towel on copiers, selling its entire Office Imaging business to Danka Business Systems.
In 1998, Kodak opened a plant in Ireland to mass produce writeable CD's, just before CD's became a commodity item. The world was awash with CD's (remember getting one in the mail from AOL once a week?) Then hard disk drive storage capacities exploded, first through multimegabytes, then gigabytes, and now terabytes, obviating the need for CD's entirely. In 2001 Kodak exited the CD production business. Also in 1998, Kodak shut down their disc film line.
In 1999, Kodak continues cutting its way to success by selling its digital printer and copier division to Heidelberger Druckmaschinen AG.
In 2000, Kodak announced that it would become "a leader in digital cameras". Issues stock options to employees with strikes in the mid 70's, as an "incentive" to improve performance. That price would never be realized. Dan Carp replaced George Fisher as CEO. As Bloomberg Businessweek put it:
"Dan Carp had better watch out. As chief executive of Eastman Kodak Co. since Jan 1., he has already run into deep trouble, even before finishing his first year on the job. Now, he faces the prospect of joining the list of Kodak executives who have bungled the company's transition from traditional film to the digital world"
In 2001, Kodak acquired online photo sharing business Ofoto and renamed it Kodak EasyShare Gallery. Subsequently renamed again simply Kodak Gallery in 2005, they managed to run this into the ground too, announcing in late 2011 they were trying to unload it.
Talk of a business they never should have entered. This is a low profit, low barrier-to-entry operation, the exact opposite to what Kodak does best. Anyone with a PC and a big hard drive can start a photo sharing service. Another what were they thinkingmoment.
Also in 2001, Kodak hired Patricia Russo, who had just come off a stint of running Lucent Technologies into the ground, to perform the same job at Kodak as President and COO. She barely lasted nine months before pulling the ripcord on her golden parachute.
Acoording to a 2003 article in Businessweek,"Russo likes to recite Winston Churchill's famous quote: 'Never, never, never give up.'" Except for Kodak, I guess. There's a funny story about Kodak and Russo contributed by a reader, but you'll have to buy the upcoming book to find out.
In 2002, Kodak announced that they were cutting their dividend to pay for a strategy concentrating on growth in digital. Also in 2002, Kodak moved the production of disposable "single use" cameras to China and Mexico. Another 500 Rochester workers are now jobless. 23,000 now remain.
In 2004, With its stock now in the mid-20's, Kodak was kicked out of the Dow. Also in 2004, Kodak sold its Government Systems group to ITT.
In 2005 Fitch downgraded Kodak's bonds to BB from BB+ on a negative rating outlook. Also in2005, Dan Carp retired as CEO to be replaced by noted hatchet man Antonio Perez, who had already been president since 2003. His reign (from Spain) led Kodak down the drain.
- "by 2007 this will be a $60 stock.'', Ulysses S. Yannas, a broker at Buckman, Buckman & Reid. I'll bet he regrets that now. (By 2007 it was a $25 stock).
- ''By 2008, Kodak will be the digital company I came here to run'', Perez to investors meeting, Sept. 28, 2005. I think he forgot to add "into the ground".
In 2006, Kodak decided they needed a new logo. Logo tinkering is often a sign of trouble in a company. In an interesting Freudian turn, in addition to selling of parts of the company, they chopped the serif off the "a" in Kodak. What's left looks like a schwa, that linguistic symbol pronounced "uh". So the new logo reads "Koduhk". Who put the duh in Kodak? Read on.
It gets worse...
In 2007, Kodak went on a rampage of blowing up unused buildings at their huge Kodak Park site in Rochester, because the property taxes on a vacant lot were lower than on an empty structure. Here's a good one: Kodak BLDGS 65,69 Implosion 10-06-07. This is Kodak's entire imaging science research lab going up in smoke. Total Kodak employment in Rochester now 9,200.
Also in 2007, Kodak resigned its membership in the Better Business Bureau, before it was about to be kicked out.
Also in 2007, Kodak sold off its health care imaging group to Onex, a Canadian company. Digital radiography was arguably the one business they had with growth potential, where they had a decent presence. So they dumped it. What were they thinking? Now called Carestream Health, they're doing quite well. I guess the need for cash is already showing.
2008: Kodak stock opens at $21.81. It closes the year at $6.58. This is the company Perez said he "came here to run" in 2005? By golly he really did mean "into the ground".
Also in 2008, Kodak finally remembers they invented the OLED 20 years earlier and makes a half-hearted effort to productize it with a 7.6" OLED digital picture frame - for a whopping $999. It was not a big seller.
On April 30, 2009, Kodak announced it was suspending its dividend.
Also in 2009, Kodak announces it will stop making Kodachrome film, arguably the most popular and successful film in history.
Also in 2009, Kodak sold its OLED business to LG.
January, 2010, David Cok, Senior Research Associate, Kodak CTO, Imaging Science Lab director, bailed out after 28 years in the Research Labs (not to retire either).
On December 17, 2010, Kodak was kicked out of the S&P 500. Stock price now around 5 bucks.
2011: Kodak is no longer Rochester's largest employer. It's not even its second largest. Or third. With less than 7,000 employees remaining, it ranks behind the University of Rochester, Xerox Corp. and a local supermarket chain.
On February 23, 2011, President Obama appoints CEO Antonio Perez to his Council on Jobs and Competitiveness, for reasons that are still unclear but do make me wonder about his judgement. Obama obviously does not read the Night Owl. Or perhaps Perez was appointed as an example of what not to do, since he has clearly demonstrated he knows nothing about either competitiveness or jobs. Destroying yes, creating no..
March 31, 2011: Kodak sold 850 patents to Omnivision Technologies for $65 million. That works out to $76,471 per patent.
April 5, 2011: Kodak sold parts of its microfilm products and equipment business, along with its data conversion services business to a company called Eastman Park Micrographics as part of its strategy (if you can call slowly bleeding yourself to death a strategy) "to fund the completion of its transformation to a digital company."
In July 2011, Kodak announced that it was shopping its patent portfolio around to create a "digital profitable and sustainable company by 2012." (see the 2000 announcement above). They are bandying about numbers like one or two billion dollars for 1,100 patents. But recall that they only got $76K per patent for a sale of 850 patents earlier this year. Assuming the same rate of return, the whole portfolio is worth only $84 million. Even if this estimate is low by an order of magnitude, they're still under a billion.
Also in July, Perez tells analysts in connection with inkjet printers,
“You will see that that business is going to be a gorgeous business for this company,”
Is he serious? By now inkjet printers are a commodity item. They come as prizes in Crackerjack boxes. The ink is more expensive than the printers. And now laser printers, which are far superior to inkjet in every respect, are in the same price range as high-end inkjets. And as far as photo printing goes, fewer images are being printed at all in favor of viewing on smart phones. A gorgeous business? I think Perez is giving Kodak the business.
On August 1, 2011, in a further sign of just how deeply their management is in denial, Kodak put in the poison pill to prevent a takeover, arguably the one thing left that could possibly still save this train wreck of a company.
In August, 2011, Jiebo Luo, a young 15 year veteran Principal Senior Research Scientist and high-ranking member of the Inner Circle of Kodak's Imaging Science Laboratory in the legendary Kodak Research Labs in Rochester quit the company to take on a position as an Associate Professor at the University of Rochester.
Now why would such a highly placed individual, who can basically write his own ticket, bail after 15 years? Suddenly decided he wanted to teach? Mmm hmm - could be... (not).
Kodak currently lists all of 15 jobs openings in Rochester. One is for an intern, 5 are for financial auditors, and none are in the research labs. 10 years earlier, there were hundreds of jobs listed at any given time.
On September 23, 2011, Kodak withdrew $160 million from its revolving line of credit.
On this day EK has a market cap of just $640 million (9/30 update - make that $210 million). And a short interest of a whopping 25.62%.
September 26, 2011: Thomas Berarducci publishes an ebook calledWhat Not to Do in Business. Amazingly, he got George Fisher to give this testimonial: "A great collection of lessons from the trenches rather than from the ivory tower." I guess if you want an expert on what not to do in business, George is your man.
The wrong stuff, too little, too late
Does all this sound like a healthy company? No. How did this happen? The sad tale of EK is primarily one of too little, too late. Not only that, but going off in the wrong direction over and over. And never learning from their mistakes. All of these problems go directly back to the management of the company, that incredibly remains in total denial of the obvious: Kodak is going down for the third time.
And it would be one thing if it was just denial, but denial coupled with arrogance is guaranteed fatal. For example, Dan Carp, then CEO, stood up in Kodak Theatre (a vast private auditorium in the Kodak Park complex) at a Research Division meeting one cold winter day in the early 2000's and announced that things weren't looking so hot. But the problem, he went on wasn't management's plan, it was the failure of the workers to execute the plan. That one statement speaks volumes and sums up Kodak's problems in a nutshell.
Clearly, this company is not long for this world, no matter what its delusional CEO has to say on the matter. It's really sad to see another great American icon go out in such a pathetic manner, and infuriating because it didn't have to end this way. Poor George Eastman must be just spinning in his grave. Bye bye, Eastman Kodak, it was fun while it lasted.
Updates since the original post
September 30, 2011: The very day after I originally wrote this piece six days ago, Kodak stock dropped from $2.38 to $1.74. Uh oh. Then both Moody's and Fitch cut Kodak's bond rating - again. Double uh oh. Then yesterday, one Gregg T. Abella, a byg wyg in EK stock holder Investment Partners Group wrote to the Kodak board,
"Kodak's long-term performance is simply unacceptable, and as such it has not earned the right to remain an independent company. Kodak's management has been given more than enough time and still has been unsuccessful in unlocking value for stockholders or bondholders."
Big uh oh. (See the full story in the local Rochester paper here) And I'd say Gregg was being highly diplomatic there.
And finally, in a possible coup de grace this afternoon, EK crashedagain, this time trading as low as 54 cents, after both Bloomberg and the WSJ reported that the company was considering filing for bankruptcy. It then recovered, if you can call it that, to close at 80 cents. Yikes. Get the trumpet out, it's almost time to play Taps. Very very sad.
October 5, 2011: Just when it seemed like there wass really nothing else left to sell, Kodak sold its silver business, arguably the heart of the entire company, to an outfit called Rochester Silver Works. Contrary to rumors, Antonio Perez's office desk is not for sale. Yet.
October 12, 2011: Collins Ink Corp., which apparently made the ink used in Kodak's inkjet printers (I thought they made their own ink), cancels their contract with Kodak, citing "Kodak's financial condition".
October 13, 2011: Kodak makes the NYSE's "Threshold securities" list for the 6th consecutive day, reflecting its astonishing 27% short float.
October 14, 2011: In a dose of its own medicine, Kodak gets sued by Fuijfilm over digital camera patents. Sow the wind, reap the whirlwind.
October 20, 2011: Kodak sues Collins Ink (see Oct. 12 above). Apparently, Kodak's main product is now lawsuits. Also, it comes out that Kodak apparently has yet to pay Collins for $2.5 million worth of ink.
October 21, 2011: According to the WSJ, a group of Kodak bondholders have hired a lawyer of their own to "protect their interests". Also Kodak hires restructuring consulting firm FTI Consulting Global. And according to Debtwire, Kodak is meeting with Cerberus and Silverpoint Capital Management. Kodak short float is now 29.29%.
Also, the ITC kicks the can down the road again on its long awaited Apple/RIM patent decision. Supposedly, it's going to be November now, or maybe the "end of the year". Not quite sure which year though.
October 24, 2011: Kodak kicked off the S&P Midcap 400. Kindred Healthcare also had the honor of getting the boot today but while they were "promoted" to the Smallcap 600, Kodak was not.
October 25, 2011: Kodak and Collins Ink kiss and make up, resuming their ink arrangement - for an entire week. The whole deal apparently expires at the end of the year anyway, making one wonder just what all this odd posturing was about in the first place.
November 3, 2011: Kodak reports some stunningly bad Q3 numbers with a loss of 83 cents per share versus estimates of 44 cents. In an SEC filing, they state "The Company's ability to continue its operations ... is dependent upon the ability to monetize its digital imaging patent portfolio through a sale or licensing of the relevant patents and/or the successful execution of the alternative actions, which could include the issuance of additional debt, listed above," This sort of announcement does not exactly give one the warm fuzzies.
Antonio Perez concludes his presentation with "I kept saying that by the end of 2012, we're going to get to this self-standing digital company.". Oh puhleeze. EK stock closes at 1.12. (Transcript excerpt from Seeking Alpha, full transcript can be found here.)
November 7, 2011: Kodak sells its Image Sensors Solutions to Platinum Equity for the proverbial "undisclosed amount of cash". This must mean they got a bad deal. Frankly, I was surprised to learn there was anything left over there to sell besides their much talked about patent portfolio.. It's ironic that this is the group that was responsible for the development of the digital camera, the invention that led Kodak to its doom. In addition to the mystery cash settlement, Platinum picks up the high rise research building 81 in Rochester's Kodak Park along with 200 Kodak employees, about 3% of the remaining Kodak workers in Rochester.
Also today, Moody's publishes a note to the effect that Kodak will run out of cash "by 2012" (meaning in less than 60 days) unless they get a "major infusion" of new financing. Much is still being made about their patent portfolio. See the entry for July 2011 above for an analysis of just how much they might really be worth.
November 10, 2011: Legg Mason calls it quits, announcing it dumped the last of its Kodak holdings, 7.9 million shares last month. They started accumulating shares in 2000 when the stock was at 60. It closed today at 1.14. Ouch!
November 15, 2011: A large Kodak shareholder, Investment Partners Asset Management asks Kodak to ditch the poison pill (see item from August 1, 2011 above) stating "The poison pill should be removed immediately so that the market can determine the value of the company as an independent entity or as a potential acquisition target," IPAM also wants it put to a vote at the next Annual Meeting. Kodak had no comment. Should be an interesting meeting next May.
November 16, 2011: Kodak announces that they are selling Kodak Gallery, their online photo storage, sharing and printing business. A buyer has yet to be found.
November 25, 2011: Kodak ceases production of its Advantix APS film. Since Fuji has also bailed on APS, your APS camera is now a museum piece. Story here:http://www.msnbc.msn.com/id/45439596/ns/local_news-rochester_ny/t/what-happened-kodaks-advantix-photo-system/
December 2, 2011: In a storyhere Kodak announces they are shopping five empty buildings totalling 550,000 sqare feet in Kodak's Rochester headquarters complex to a local community college. The deal promises to get embroiled in local politics with a competing offer across town in an abandoned department store. EK stock now trading at $1.02.
December 6, 2011: Kodak dumps restructuring advisers Jones Day for the firm of Sullivan & Cromwell. This move at least hints at the prospect that Kodak may be pursuing an alternative to bankruptcy, most likely a takeover I'm guessing. By way of "explanation" Kodak announced "we don't itemize the work any of our advisers do for us."
December 14, 2011: Perez wins the dubious honor of a spot on CNBC's "Worst CEO of 2011" awards, taking home the number 4 position. Story here. Kodak closed today at 82 cents.
December 19, 2011: Well, I guess when it rains it pours Today the WSJ reported that Kodak is having problems selling its vaunted patent portfolio. TAnd that's affecting its ability to raise cash. According to the report, Kodak "could seek bankruptcy protection during the first few months of next year".
And to add insult to injury, Kyocera is suing Kodak over an inkjet printer patent. At this point, my guess is that Kodak isn't going to be able to sell their patents at all. Why should anyone buy them? It would be more cost effective to just infringe and figure that Kodak is going to be too weak to do anything about it, asssuming they're even going to be around much longer at all. Right now EK is trading at 71 cents. Next stop - the pink sheets.
December 20, 2011: Delivering the can another powerful kick, today the ITC announces that, surprise - they're going to delay their ruling on Kodak's Apple/Rim patent dispute, previously expected right about now, until September 2012 (see previous timeline item for 10/21/11).
According to a story in the local Rochester, NY newspaper here,Kodak said it was "pleased to receive the judge's order, and it is reasonable to expect him to take an appropriate amount of time to review the case. That said, as we have stated from the beginning of this case, we believe the law and the facts are on our side, and that we will ultimately prevail." Uh, yeah - assuming they're still around by the time that happens. If it ever happens. Kodak now trading at 67 cents.
December 22, 2011: Kodak names one Laura G. Quatela as its new president. I'm sure she must be feeling a lot like Josef Goebbels did when Hitler appointed him the new head of the Third Reich a week before the end of the war in Europe. In any case, she had no comment on her promotion. Actually, she's only sharing the job with Kodak's other president (how many presidents can you have?) Philip Faraci.
Perez said the move "reflects her increasing role in the company, including the strategic importance of the intellectual property business." Interestingly, Ms Quatele is not a chemist, a physicist, or an electrical engineer. She's a lawyer. Since most of Kodak's activities these days revolve around lawsuits, I guess this move makes perfect sense. Full story here.
Also on this day, Kodak announces that they're selling their gelatin division to a Dutch company. Gelatin is literally the heart of film manufacturing. George Eastman was so adamant about the quality of his gelatin that he insisted Kodak make their own. I guess he's taking a few more spins in his grave tonight.
December 23, 2011: a news item that shows just how bizarre things are getting in Kodakland. It seems a disgruntled former Kodak shareholder has been charged by the FBI with making death threats against Perez. This poor guy apparently snapped on September 30th, the day Kodak suddenly sank to 54 cents (he got out at 58 cents). He allegedly called the company and left a voicemail saying, “Don’t know when it is going to happen or where, but I am going to find (Perez) and I am going to get him,”and threatened to put a bullet in his head. Holy moly! See the full story here. It pretty much speaks for itself.
December 27, 2011: Two members of Kodak's board quit today According to an AP story quoting the WSJ, Kodak "did not say why the two had resigned, but The Wall Street Journal, citing a person familiar with the matter, said they had had grown frustrated with the pace of Kodak's turnaround". Hmm, that doesn't sound particularly encouraging. EK now down to 65 cents. What is the NYSE waiting for to delist this walking zombie of a company?
December 30, 2011: Like rats deserting a sinking ship, the Kodak board seems to be getting out while the getting's good. Apparently, a third board member, one Laura Tyson, has now resigned, according to this Reuters news story. That makes three down, 13 to do. Kodak had previously announced that they would not replace the first two directors. No comment was available on their plans following this latest defection. After trading as low as 63 cents, EK closed the day and the year at 65 cents. It opened in 2011 at $5.45.
January 3, 2012: The bad news just keeps on coming. Today Kodak received a "continued listing standards notice" from the NYSE because their average closing price was under $1.00 per share for 30 consecutive trading days. Notice that I asked this very question just last week (see 12/27/11 item above). Next stop, the pink sheets. Not that it even matters much anymore. Kodak has already been a plaything for the penny stock boys for some time now. After closing at 65 cents, EK dropped to 63 cents in the after hours.
January 4, 2012: I guess when it rains, it pours. Just one day after getting the heave-ho warning from the NYSE, the WSJ reports in an article here that Kodak "is preparing for a Chapter 11 bankruptcy-protection filing in the coming weeks should efforts to sell a trove of digital patents fall through"according to "people familiar with the matter" (emphasis mine).
Considering how long we've been hearing about these patents (see July 2011 item above, "Kodak announced that it was shopping its patent portfolio around to create a 'digital profitable and sustainable company by 2012.'"), this isn't seeming too likely at this late stage in the game.
When the news came out EK plunged instantly from 65 cent to 47 cents, where it closed. Clearly, the only question left now is whether this is going to be an Enron-style, close the doors and auction the office furniture bankruptcy, or an airline-style dtich the pension plan and keep muddling on bankruptcy. Kodak's response: "we don't comment on rumors". Of course back last September when the bankruptcy issue first surfaced, they were quick to deny it.
January 5, 2012: The exodus continues as today the WSJ reported the departure of Kodak's s Chief Communications Officer, Gerard Meuchner. Clearly no one wants to be the last one out the door. Today EK closed at 42 cents. One share of Kodak and 3 cents will now buy you a postage stamp. I would not be surprised if Perez was on the horn right now to book his return flight to Madrid.
Also on this day, Moody's downgraded Kodak's debt again, this time to "Ca". Why not just cut to the chase and rate it where it deserves to be: "Zzzzzzz". The end is near.
January 6, 2012: In the continuing bizarre saga of one John Michael Paul, who allegedly issued a death threat against Perez (see December 23, 2011 above) appeared in court today, apparently to set a date for him to appear in court. Ironically, he sold his stock at 58 cents and it closed today at 37 cents, so you could argue that he did better than a lot of other folks still left holding this particular bag.
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