Disturbing news?

Sean

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They used to have a hell of a marketing force behind their traditional products, that's all but dried up and now they wonder why things have collapsed. They could have marketed film/paper/chemistry to the enthusiast and fine art market in many unique ways boosting it's profile and maintaining some degree of success there.. well my 2c anyway..
 

resummerfield

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It's so sad. I used to be solidly behind Kodak, but their foolish decisions, just like this one, convinced me several years ago to switch my support to Ilford.
 

Mick Fagan

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I'm not a financial guru, but it appears that this is nothing more than a Leveraged Buy Out, or LBO.

Basically, financial wizards find bucketloads of money from various investing firms around the world. They purchase a profit making business, or part of a business.

The business that has just been bought, all of a sudden has a huge debt that it can just service the interest on.

After a reasonable period of time, and after any financial asset stripping has occurred, the business is usually onsold or further broken down, that is when the real money is made by the original investor(s). Alternatively, money just disappears then the original company cannot service it's debt and becomes bankrupt!

If you think that is far fetched, look closely into what really went wrong with AGFA.

Rather sobering.

By the way, one of the company that appears to be doing this deal is trying to buy Qantas airlines as well. Qantas is one of the few quite profitable airlines in the world at the moment.

The basics of the deal are that Qantas will be bought by a consortium for a fantastic sum of money. Thats the good news, the bad news is that Qantas will have it's debt increased about 8 times what it currently is. This debt is actually the purchase money bill. It's interesting that a company inherits the money that was borrowed to purchase itself.

Financial people are speculating as to whether or not Qantas will be able to service the debt it will inherit, apparently it will be a close thing.

In a nutshell, it's an interesting lesson on smart operators operating at the smart end of town.

Reading history books, will tell you what happens next, I'm not.

Mick.
 

gr82bart

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Ummm ... they're just selling their Health Imaging Business. Sure, it's one fifth of their total business, right now, but I don't see what the issue is. Seriously, how many of you guys are using x-ray film?

They're planning to use the proceeds to reduce their significant debt to a much more manageable level. I can see how this move was devised and can see how it will help position Kodak to better survive for the future.

To me, how Onex Financial Holdings finances the deal is of no concern to me. BTW this is not a LBO, but a straight sale. The fact is that Kodak is getting an injection of $2.35B in cash which will reduce it's debt load significantly. This is a good thing.

The world is going digital. I personally think Kodak is managing this change quite well. They *could* have stayed the course with film only and gone bankrupt, but they haven't and I can see Kodak's return to financial health in the near future. With this move, I bet it's next quarter, is good for the traditional film industry. I think they are doing what they need to to survive (and now begin to flourish) and still provide traditional film enthusiasts with a significant range of products.

Regards, Art.
 
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naturephoto1

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Very disappointing that Kodak feels that it must go this route and that they are still losing money in the digital end of their marketplace. I just hope that Kodak can stay in business and manage both its film and digital markets.

Rich
 

Lee Shively

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This doesn't have much affect on us but it does look like another blunder on the part of Kodak that could impact Kodak film users in the future. When you consider the number of companies crawling all over themselves in the digital imaging field, I can't imagine why Eastman Kodak's managment would think they can cut themselves a substantial piece of that pie while they toss the pie they already control in the garbage. Of course, what do I know? I'm just a photographer.
 
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copake_ham

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Art,

The point is not how many (if any) here use X-Ray film but that this is the first time Kodak has spun off a film division.

Last year it was certain chemical divisions - now the X-ray/Medical.

And, as stated in the article, Onex intends to "milk" the film segment to finance the transitioning to digital.

With this move, Kodak is further shrinking its former core business lines. Now the big question arises. Is the consumer film division next? And if so, will this be a good or bad thing for us?

BTW: My fear is that Kodak will hang on to its consumer film business until its nearly worthless.
 

BruceN

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I just hope Champion keeps making and distributing the Kodak E-6 chemistry, especially the 5 liter kits. I still have some Kodak rapid selenium toner and some photoflo, but when those run out I'll replace them with other brands. The E-6 chemistry is their absolute last chance for ANY of my business (not that i'm even on their radar, of course), and I already have the switch to Fuji/Hunt planned out should it become necessary. It's just that the 5 liter kits are so darned convenient.

Bruce
 

uraniumnitrate

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The fact is that Kodak did it right! Sell out untill they can get money for it! In this country there is isn't any institution still uses X-ray units based on the traditional film method as all is digital! Well maybe some 65 years old dentists still may use those but, they not gonna be around for long do they?
 

Russ Young

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I attended the Ansel Admas Workshop in the summer of 1984, right after Ansel died. Gordon Brown, THE major tech rep for The Great Yellow Father was there and announced to the stunned acolytes that Kodak would entirely phase out of black & white products in the next four years. That night at dinner, talk had already switched from Super XX to FP4. Kodak has over decades of experience in insulting our intelligence.
Russ
 

gr82bart

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copake_ham said:
BTW: My fear is that Kodak will hang on to its consumer film business until its nearly worthless.
Click to expand...
Honestly George, so what? I mean seriously, we can speculate all we want, but what is that going to achieve? Further all this does is continue a 'doom and gloom' scenario for Kodak amongst us, that is really just getting tiring.

Look, people aren't even being rational here any more. We're talking x-ray films and people are questioning how long E-6 chemistry will last. It boggles my mind how 2 + 2 = 5 on APUG. Truly.

Regards, Art.
 

DeBone 75

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Personly I use X-ray film. I like it. Granted I may be only one of a few that does for traditional photography. I don't buy alot but still. But on the other hand I do work in a Hospital. We are not all dgital and most of our film is Agfa, for what it's worth. On one of the other threads is the story on Forte. When will the bleeding stop?
 
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copake_ham

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Art,

If you consider this news within the context of the other thread indicating that Forte is going out of the film business then you see a continuation of a disturbing trend.

Also, I would commend you to re-read the first paragraph of the news article where the writer has blandly stated that consumer film sales have "collapsed". Whether this is true or not - and to what extent it is- is less of a problem than that it is increasingly common folklore that film is (or has) "disappeared".

It's not "doom and gloom" to be aware and concerned about disturbing trends.
 

waynecrider

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If the sale was based on a projection that the consumable market in xrays would rapidly shrink, as camera film did, then it was probably smart to get as much for it as possible. Repeated sales of consumables (chips, paper, ink) is the cash flow; Or you have to sell updated equipment as often as possible. The problem is, R&D is expensive just from the standpoint of the new equipment that has to be manufactured to manufacture the stuff your selling. It seems that the choice was not to stay in the overall health market outside their investment in microprocessors, and perhaps software systems another money maker with repeated sales. It was definetly a positioning move to reduce the debt which can be the death knoll for a company. Nobody likes people who can't pay their bills and that effects anyones continuence in any market. Trying to get loans to finance new products when you can't pay your existing bills will kill you fast.
 

BruceN

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gr82bart said:
Look, people aren't even being rational here any more. We're talking x-ray films and people are questioning how long E-6 chemistry will last. It boggles my mind how 2 + 2 = 5 on APUG. Truly.
Click to expand...


I never equated E-6 with x-ray materials, I merely expressed my hope that it will continue to be available. Given EK's recent (and not so recent) history I think it's a pertinent question. Whether it will or not will only be told in time. I'm afraid your boggled mind, rationality questions and fuzzy math problems are something you will have to solve on your own.
 

HerrBremerhaven

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There is probably a bigger insentive to Kodak of transferring over 8000 employees. Consider the potential of future retirement or serverance checks, and eliminating 8000 employees can really help them in the future. Kodak spent tons of cash to become a major player in the commercial printing and graphics supply world, and this sale will help pay off the debt of buying several companies. Commercial printing is the growth industry for them, which is easy to tell when you read the SEC reports from Kodak. However, the public perception is still that of a consumer film company, despite that less than half their revenues have come from consumer films in well over ten years.

So how does this affect my photography? Not at all. I can still purchase E100VS, E200, TriX, TMX, and several other films that I use. I have no desire to dump my usage of Kodak products simply on the basis of what they do with other divisions.

Ciao!

Gordon Moat
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Photo Engineer

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How does this affect us. Not at all.

But, see my post in the doom and gloom forum about the layoffs and sale of buildings that was announced the day before this sale.

PE
 

avandesande

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Hopefully when the end comes they sell off their film units instead of just shutting them down like they did with B&W paper.
 
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