It is ironic that Citibank now ultimately will be calling the shots at Kodak because of the $950M "Debtor in Possession" line of credit:
<a href="http://en.wikipedia.org/wiki/Debtor-in-possession_financing" rel="nofollow">http://en.wikipedia.org/wiki/Debtor-in-possession_financing</a><p>When Citibank was bankrupt the Secretary of the US Treasury gave Citibank $45B for preferred stock - basically no strings attached. Shareholders of Citibank kept their equity. The Citibank management that had run it into the ground and stayed in place will now be the ultimate decision makers at Kodak.<p>Why isn't anyone talking about breaking up these "too big to fail" banks? When they get in trouble again now they will be able to point to saving Kodak as another reason they should be bailed out. If you saw this situation in a third world country: National government loans to bank, bank loans to industry; you would see this a croneyism and not be likely to invest or build a business in that country.
Great article from The Economist on what mistakes Kodak made and what led them to bankruptcy compared to Fujifilm:
<a href="http://www.economist.com/node/21542796" rel="nofollow">http://www.economist.com/node/21542796</a>
Sad thing is that Kodak invented the digital camera. At the time the sales of the film for their Kodak camera's were doing so well they decided to shelve the project instead of jeopardize those sales. (That is how I understand it anyway)<p>20 years or so later everyone has a digital camera and all Kodak has are some patents.
For all of you speculating about what business decisions took Kodak to the current situation let me give you my perspective as someone who still buys their film products. I'm also sort of experienced in shooting digital.<p>I personally believe Kodak <i>screwed</i> film.<p>I mean, their new emulsions are superb, and they can run around Ilford and Fuji in circles in everything except maybe slides, where Kodak is still better but ridiculously expensive. They screwed film because they where the only ones in a position to take film into the next technological level, but kept managing that division as if it was 1980 and everybody was still printing at the lab or at their own darkroom. They should have focused more on people who still develop at the lab but scan film themselves.<p>The only feature they introduced that helped self-scanning was stronger carriers. They also claim dyes that ease color management in some of their color negative films but I call that bullshit. Color management in color negative film is a PITA unless you own a Kodak minilab. They had the opportunity to give everyone better color management technology by making targets that are affordable, making easy to use software or even making their own film scanner. They didn't, even thou there were strong rumors about it happening, and even while they still sell their stupid 4x6 print scanners.<p>Basically now scanning color negative films for most photographers is sort of a painfully inaccurate manual process. Slides are easier but also cost more and have less dynamic range than digital and similar color rendition and accuracy. Black and white can be managed by even amateur photographers but Kodak could still make it a whole lot easier.<p>I really would like for at least their film division to manage to go out of bankruptcy, since I have only recently began shooting Ektar and love Portra... But if they really go out of business I think I'll sell my MF film gear and start saving for a full frame 35mm DSLR or maybe a Pentax 645d.
Kodak joins a lot of older companies that just cant keep up with the changing world. Take RIM for example who said to the original iPhone “There is no way that phone can do what they showed off on stage.” It is sad but bound to become more commonplace. Blockbuster and Circuit City also come to mind as companies that used to dominate, but are now long gone.
I know of a high level marketing consultant who, in the mid-late 90's was presenting to Kodak management. The presenter before him gave a 'rah rah' speech listing all of Kodak's core competencies. Prior to starting his presentation, the consultant offered some frank words for his audience. He said that all of those core competencies were fine, but that if Kodak wasn't fully focused on digital within the next few years, they would be in deep trouble. Management didn't like hearing that and invited him to leave the conference despite it being a multi-day engagement. That's the nature of large organizations - they tend to insulate themselves from painful truths and challenges by discounting or ignoring them.
This is not unexpected, but a very sad "Kodak moment." I can't help but think about Innovator's Dilemma when I think about Kodak. Didn't they decide not to pursue digital camera so that they don't cannibalize their film business?
Kodak must be remembered for being one of the first popularizers of technology. Kodak did not invent photography, but it made it <i>accessible</i> to the public, putting it in the hands of the middle class and amateurs instead of just professionals. They were the Apple of the 1890s. If you want to look for a photograph of their legacy, don't look for any famous photos, but for the snapshots members of your family were taking of you while you were growing up.
This is a very sad, but also dignified way for a company to face the fact that their business model is based on technology that has passed. Now, the recording industry...
Technological change made Kodak obsolete - there's not much management could do about that. But what really annoys me is how badly Kodak management handled it.<p>Rather than simply winding down the business and paying cash to shareholders, they ploughed money into developing digital printers and digital cameras; a market with thin margins and where they had very little competitive advantage. It's almost like management couldn't bear the thought of going out of business so they ended up doing something worse - losing more money and THEN going out of business.<p>I think Microsoft has made a similar mistake. Rather than sitting on it's little nest-egg of Windows and Office and miking the cash until it runs dry, it feels compelled to waste money in areas with no competitive advantage. Bing, Windows Mobile and XBox have all provided a worse return on investment than US treasury bills.
Amazing it took this long. I can't remember the last time I used regular film or a modal camera. I suspect when Grandma and Grandpa got digital and started sharing on Facebook, they were done.<p>It's a shame because like their neighbor Xerox they were technologically advanced. They were big in digital pre-2000 and slammed on the brakes when they hit short term losses.<p>Chalk it up as another case of large firms struggling to innovate. Makes Apple seem all the more impressive.
A lot of companies even larger than Kodak have emerged from bankruptcy though.<p>It's just a sign that old management methods have failed and time to change.<p>The problem is once something becomes a commodity, it's hard to make profit from there. I am going to be very curious to see what happens to the iphone brand in a decade. Once it would have been impossible to imagine the "walkman" brand to fade away.
Kodak has starting to function more like a patent troll in recent years, as it seemed to lose its ability to create profits the old-fashioned way. It's gone from a truly all-around amazing company, to an increasingly parasitic force in the world.<p>Very sad to watch.
Point of order, Kodak didn't exactly file for what people traditionally associate with 'bankruptcy'. Chapter 11 is an entirely different beast. In the future, it's best to mention that.
This is kinda sad, I sorta hope they pull through. Companies like Kodak have really struggled to remain relevant, and it's not <i>really</i> their fault.. yeah, they made a decision 20 years ago, but for it to bite them on the arse 20 years later is just not nice. It's like fooling around with someone on a Saturday night, forgetting about it and then finding out you've got a kid 20 years later.