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Kodak's moment: Camera biz files for bankruptcy

Will $1bn lifeline be enough to save it?

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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. ®

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