Kodak's moment: Camera biz files for bankruptcy
Will $1bn lifeline be enough to save it?
Comment Iconic and inept US camera and film company Kodak has finally pressed the shutter button: it has filed for Chapter 11 protection.
Citigroup has stumped up $950m for a credit facility over eight months while the bankruptcy process is worked out.
Beset by the digital camera revolution and screwed by a breathtakingly stupid entry into ink-jet printers, the company led by six-million-dollar man Antonio Perez last made a profit in 2007.
Perez provided the usual three-star corporate BS quote about it being a wonderful event: "The board of directors and the entire senior management team unanimously believe that this is a necessary step and the right thing to do for the future of Kodak. Now we must complete the transformation by further addressing our cost structure and effectively monetizing non-core intellectual-property assets. We look forward to working with our stakeholders to emerge a lean, world-class, digital imaging and materials science company."
See how he is singing the IP patent licensing song still? It's like a guy with a broken leg trying to sell adverts on his crutch. Pursuing patent licensing revenues is the last refuge of the technologically blind CEO.
This is a damning indictment of Perez's six-year run as CEO. He has blown it and resignation is what is expected by his employees, his stakeholders, Kodak's shareholders and, bless its little woolly socks, the board if it had any bottle.
As reported by Reuters, a chief restructuring officer has been appointed, Dominic DiNapoli, who is the vice-chairman of FTI Consulting, an outfit that turns businesses around.
Kodak has a huge pension pot, as well as other obligations to its retired and current workforce, and yet doesn't make enough cash to turn a profit. The beleaguered camera biz preferred to pay dividends until May 2009. Kodak has been run for years by bureaucrats unaware of the digital barbarians overrunning their market until it was too late and the company's executives reacted in a misdirected panic.
The people running Kodak have got to accept that they are responsible for its demise and can't save it. Kodak needs new leadership, vision, energy and decisiveness to cut out the vast acreage of dead wood products and services, identify and support the growth businesses - and we don't mean ink-jet printers - and shrink Kodak back to a viable core while these businesses grow and save the company. ®
Clearly the problem here...
...is they didn't lobby congress hard enough.
There should have been tough laws enacted to prevent these photogra^pirates from using digital cameras to upload their own photo content to the web without using film. People using digital cameras to sidestep the use of film have stolen jobs from hardworking Americans!
Yet Another long standing
Company blinded by the idiots with boardroom bonuses, with little care for the people trying to innovate and create new products to make the money that funds it
Straight up the wrong tree.
Straight up the wrong tree - multiple times.
Almost comical (if it weren't for all the job losses amongst those who did the work) what has happened to Kodak. Starting with digital denial, then producing a bucket load of awful digital cameras, forgetting the digital print business and then making the printers where even an addled grandparent can work out the poor economics of printing using them and not an Internet bureau given how costly they were to run (it was still cheaper to go to a high street digital print kiosk - which are now priced much more competitively).
They had a good brand name and an ideal opportunity to be at the leading edge of consumer digital photography, but lost the plot entirely. All they needed was a bit of thought (tough at board level at times) and some vertical integration. Consider how well they could have done if 5 years there was an easy way to connect your Kodak digital camera to the Internet, automatically upload photos and have them nicely printed and delivered to you the next day. It's always been possible, but the trick would have to make it so seamless and easy it would have been more trouble not to do it.
Point of Order: Chapter 11 <> Bankruptcy
Chapter 11 is part of the US Bankruptcy Code, but does not mean that the filing entity is actually bankrupt. Far from it. It usually means that the entity has recognised that if things continue as they are then bankruptcy is likely to arise, but with the right steps, taken with some additional protection not normally afforded to a running business, can be avoided.
Companies can - and do emerge - from Chapter 11 in a better state than when filing. General Motors being a notable example of that, requiring just 39 days of Chapter 11 protection.
Chapter 7 is the biggy... under Chapter 7 of the Bankruptcy Code the filing entity has to cease business operations, sell off the assets and distribute proceedings to creditors with the owners only getting what (if anything) is left.
The one with the "Journalism 101 - Research and Factual Accuracy" in the pocket...
for a minute if Kodak had a Kodak Industry Ass of America to look after them.
Instead of Kodak going into Chapter 11 there would have long since been a US act stating that anyone caught using a digital camera is a pirate, supporter of terrorism and a child abuser.
Sales of photo scanners unapproved by KIAA (and not phoning home for permission for each scan) would have been prohibited.
Every scanned photo would have been wrapped in a DRM layer prohibiting further copying without obtaining a licence from Kodak and removal of these restrictions would have been a felony.
The US ISP would be blocking every JPG on every website unless it was digitally watermarked and signed by Kodak.
Kodak would have taken over MS and Apple and the latest rumours would be that the next iPad will come with a pinhole camera box and a pack of B&W negative glass plates as standard.