FYI Kodak : Directors rally to save film factory

[PKM-25]

Ratty, honestly man, you are way out of touch and way out of line on this, I'm not the only one who has or will call you out on it either.

I kind of feel bad man, but I'm not replying to you anymore, it's a complete waste of time and all it does is enable this web addiction of yours.

Take care sir....

 

[kb3lms]

Also, please explain how multimillion dollar projects are hidden from shareholders. That would be most interesting.

Easy. ENRON.

OK that wasn't "projects" but all kinds of multi-million dollar shenanigans are hidden from shareholders. Or, more likely, the shareholders don't pay that much attention. Honestly, I've never met a management type, especially at EK, who ran around worrying what the shareholders would think. For the most part they don't give a $hit.

Seriously, I work in a small division of a major electrical products manufacturer. Our parent company can hardly keep track of the projects we are working on let alone shareholders. Yeah, sometimes you wonder how it all works.

Take it light, Ratty. There just isn't as much drama, let alone planning, in American business as you think there is. All that stuff is only on television. Most management decisions are made when the top guy falls out of bed in the morning and whacks their head on the floor. Then they go to the office and get some minions to justify whatever it was that they decided on that day. Tomorrow is a crap shoot.

EKA will either continue to make film or they won't. Shoot it while you got it. And if EKA quits, more market for someone else to capitalize upon.

 

[ambaker]

While I do not work for Kodak, I do work for a decent sized multinational company.

If Kodak is anything like us, if you do not have a need to know, you don't know.

Proprietary information is guarded just as tightly internally, as it is against the outside.

I would expect it is the same at Kodak, and everywhere else. A few words to the wrong person could render the advantage gained by years of R&D, lost.

That we hear nothing about the future plans for building 38, does not surprise me. I would be astonished if Kodak did telegraph their next move.

 

[RattyMouse]

Easy. ENRON.

Enron's tactics were 100% illegal. I hope you are not suggesting that Kodak is engaged in such activity!

OK that wasn't "projects" but all kinds of multi-million dollar shenanigans are hidden from shareholders. Or, more likely, the shareholders don't pay that much attention. Honestly, I've never met a management type, especially at EK, who ran around worrying what the shareholders would think. For the most part they don't give a $hit.

Seriously, I work in a small division of a major electrical products manufacturer. Our parent company can hardly keep track of the projects we are working on let alone shareholders. Yeah, sometimes you wonder how it all works.

Take it light, Ratty. There just isn't as much drama, let alone planning, in American business as you think there is. All that stuff is only on television. Most management decisions are made when the top guy falls out of bed in the morning and whacks their head on the floor. Then they go to the office and get some minions to justify whatever it was that they decided on that day. Tomorrow is a crap shoot.

EKA will either continue to make film or they won't. Shoot it while you got it. And if EKA quits, more market for someone else to capitalize upon.

I am taking it light. Very lightly. I expect nothing from Kodak's future so if I'm wrong, it's all bonus for me. I had a spectacular weekend, out shooting a lot of film. Even 1 roll of Kodak! While I swore off their film I did break down and buy 3 rolls of color film from Kodak, one of which is now in the can.

 

[kb3lms]

if you do not have a need to know, you don't know.

And I would have to 100% agree with that as well.

 

[RattyMouse]

While I do not work for Kodak, I do work for a decent sized multinational company.

If Kodak is anything like us, if you do not have a need to know, you don't know.

Proprietary information is guarded just as tightly internally, as it is against the outside.

I would expect it is the same at Kodak, and everywhere else. A few words to the wrong person could render the advantage gained by years of R&D, lost.

That we hear nothing about the future plans for building 38, does not surprise me. I would be astonished if Kodak did telegraph their next move.

Any basic perusal of annual reports from PUBLIC companies shows where the R & D money is going, what plans are being made and what decisions are being approved or rejected. A project the size of building 38 would be huge, absolutely huge. Money that size does not move without being approved by a board of directors. At least at a functioning company it doesnt. I guess I could be wrong here if Kodak's management team is utterly incompetent and incapable of monitoring their money.

I spent many years working for one the the largest companies in the world, with over 120,000 employees and 200 billion dollars in annual revenue, so I've seen some big projects come and go.

 

[RattyMouse]

That we hear nothing about the future plans for building 38, does not surprise me. I would be astonished if Kodak did telegraph their next move.

Company reports all the time give general indications on the status of major assets and ways to improve or dismantle them. Kodak has given no indication whatsoever that there is any planned future for building 38.

The recent WSJ article clearly states that Kodak was trying to get Hollywood studios to buy out building 38. They refused to bite.

By any stretch of the imagination, that displays clearly that it's the end of the road, at least with Kodak's ownership. Were there plans in place and actions underway to save building 38 would they REALLY try to off load it? I dont see how it can be logically stated YES as the answer to this question.

 

[RattyMouse]

Ratty, honestly man, you are way out of touch and way out of line on this, I'm not the only one who has or will call you out on it either.

I kind of feel bad man, but I'm not replying to you anymore, it's a complete waste of time and all it does is enable this web addiction of yours.

Take care sir....

If people call me out with facts, I'm all ears.

You too take care. Good luck with your web addiction.

 

[Ken Nadvornick]

PE, Prof Pixel or Bob Shanebrook, would one of you pleeeeease come on here and tell poor Ratty how tight lipped Kodak has always been about proprietary business information such as what he is speculating about?

In the 70s and 80s customer expectations for consumer product guidance were virtually nonexistent. How do I know this? Because I was there. As were many readers here. One never knew what the future of any company held until it became the present.

But today one can't manufacture and sell anything without maintaining ongoing channels of communication into one's target customer market. Locking up future customer mindshare, and thus future market share, is crucial. And this requires educating your customers via product guidance.

Product guidance has become a primary marketing tool, to be ignored at risk of product failure. Things today happen at the speed of light. One can no longer leisurely wait around for product markets to slowly develop—or stop disintegrating—all on their own. One has to proactively make things happen.

This is not some brand new radical pie-in-the-sky approach. Everybody now does it. Because they have to. With the advent of Internet channels of communication, it's the new normal. The new standard customer expectation. And it's only one of the many ways that the sea changed beneath Kodak's feet.

Ken

 

[lxdude]

Perez did *exactly* what Kodak's board wanted from him. He was richly rewarded and praised at every level. He, in no way, left Kodak under poor terms.

And how do you know that? A lot of investors were seriously losing patience with him well before the bankruptcy. They were tired of hearing the same old promises. Not everything said about him was praise.

He left Kodak as the man who failed to reverse Kodak's fortunes, who failed keep Kodak from going bankrupt. I don't blame him for everything; he faced plenty of difficulties resulting from decisions made before his time, and the economy crashed. But he did not accomplish what he promised. He certainly did not leave to wide acclaim.

As for richly rewarded, all large corporate CEO's are richly rewarded compared to the rest of us- even ones who are abject failures. An obvious example is Leo Apotheker at Hewlett Packard. In the 10 months he was at H-P, the stock dropped 40% and the company lost more than $30 billion off its market capitalization. Some of his blunders were later reversed, like his decision to get rid of webOS and the personal computing division. The Touchpad fiasco was an example of his 'leadership'. His acquisition of Autonomy Corp. at a premium, which H-P has subsequently devalued and taken a more than $8 billion charge on, has been a disaster.
So, how much money did he make for 10 months of bad decisions and serious damage? $26.1 million.

$13 million in basic compensation.
$7.2 million in severance.
$3.5 million in H-P shares.
$2.4 million "performance bonus" (The world of executive compensation is a weird and magical place).

 

[RattyMouse]

And how do you know that?

Because he could have been fired at ANY time by the board of directors of Kodak. You know the board? the people appointed by the owners to protect their interest in the company.

Perez was never fired and so served at the pleasure of the board.

 

[RattyMouse]

While I do not work for Kodak, I do work for a decent sized multinational company.

If Kodak is anything like us, if you do not have a need to know, you don't know.

Proprietary information is guarded just as tightly internally, as it is against the outside.

I would expect it is the same at Kodak, and everywhere else. A few words to the wrong person could render the advantage gained by years of R&D, lost.

That we hear nothing about the future plans for building 38, does not surprise me. I would be astonished if Kodak did telegraph their next move.

Why do you think that information given out always has to be proprietary?? That's a false assumption and probably explains why you and Dan believe that something actually might be going on behind the scenes.

A clear example:

http://www.fujifilmholdings.com/en/investors/annual_reports/2014/pack/pdf/Competitive-advantage-R&D-Tech-assets.pdf


This link shows a document posted by Fujifilm last week. It shows very CLEARLY how film is a core technology for Fujifilm. It shows very clearly how making photosensitive emulsions are a core technology. It further shows applications for these emulsions like Functional Polymers, Functional Materials, Nano Dispersion technology, and grain formation technology.

Fujfilm is communicating to their owners and investors what their core technologies are, how they are developing them, and how these technologies are producing future economic growth. Notice that Fujifilm does not say that they are selling off their core assets in this area.

Kodak says *none* of this about film. Nothing. Zip. Nada. What we learn from Kodak is that they are trying to sell off their #1 asset, building 38. Would they be selling off building 38 if they had plans to develop new technology based on film? No. This is categorically true.

These are the facts as I can see them. Kodak is free to disclose facts that could change a story like this. But they do not and a very reasonable explanation why they dont is given above.

If the communication poor Japanese (and that's putting it VERY mildly) can give guidance on their future, there is no excuse whatsoever for an American company.

Now I understand why the CEO of Kodak Alaris ,when asked (Can still film survive without movie film), he completely dodged the question and failed to give an answer.

 

[lxdude]

Because he could have been fired at ANY time by the board of directors of Kodak. You know the board? the people appointed by the owners to protect their interest in the company.

Perez was never fired and so served at the pleasure of the board.

That does not mean "Perez did *exactly* what Kodak's board wanted from him", as you stated. They wanted success; he did not deliver.

The "owners" are shareholders, and some of them were getting increasingly unhappy with Perez. But boards have a strong degree of autonomy; shareholders trust them, and removing a board requires a concerted effort by a significant number of them. Most shareholders are not involved or interested to that degree. That is why boards are usually re-elected with near-unanimity.

In general:
Boards sometimes hang with questionable decisions, thinking they will work out. There are good reasons why they do.
They want to believe they made the right decision. They assume competence. They want to give the chance to succeed, and they know that will take some time. Short time total busts like Apotheker are uncommon. It usually takes quite a while to become unsatisfactory to the point of being fired.
Firing a CEO can have a deleterious effect on a company in itself, giving the appearance of a company in disarray and shaking the confidence of shareholders. That can make make a board slow to fire.
There is also the issue that they have to find a replacement, substantially better than the one they fired, who is willing to take the job. At Kodak, that was becoming more difficult as time went on.
For a board to fire means admitting they made a mistake. It calls into question the judgment, therefore the competence of the board. And many boards are dominated by the CEO to a surprising degree. Along with being CEO, Perez was Chairman of the Board.

It is seldom as simple as you present it.

 

[RattyMouse]

That does not mean "Perez did *exactly* what Kodak's board wanted from him", as you stated. They wanted success; he did not deliver.


It is seldom as simple as you present it.

That's true, and I dont present facts. I present my opinion based on my understanding of the turn of events. I believe Kodak was heading into bankruptcy no matter what and Perez was able to discharge almost all of Kodak's major liabilities using that process. For this he was richly rewarded.

 

[lxdude]

That's true, and I dont present facts. I present my opinion based on my understanding of the turn of events.

I'm cool with that.

 

[AgX]

So Kodak bought back all the cameras at retail

Not quite true :
buyers did not get their money back, but could choose between a 50$ voucher (seemingly for Kodak products), a Kodak Disc camera or 1 Kodak share.

That is for the USA. In other countries the situation might have been complety different.

 

[AgX]

So Kodak paid the design team c41.

What do you mean by that?

 

[Xmas]

Not quite true :
buyers did not get their money back, but could choose between a 50$ voucher (seemingly for Kodak products), a Kodak Disc camera or 1 Kodak share.

That is for the USA. In other countries the situation might have been complety different.

In the UK it depended on which camera you had what recompense Kodak offered, it did not include Kodak shares and it refected current camera prices rather than Kodaks manufacturing cost, one option was for Kodak film.

But to be fair neither Kodak nor Polariod had much margin on the cameras they planned on money from film.

 

[Xmas]

What do you mean by that?

Kodak spent a lot of R&D for the C41film development and mini lab processes.

At the same time as they developed instant cameras and film. They would have known they needed to buy Lands company before they started marketing.

They were competing designs (instant and c41) one was going to get market dominance.

Fuji stayed in the camera market with eg nice SLRs Kodak did not.

Kodaks budget allowed the R&D $ they could have developed SLR as well, or bought a Ja company, or had Cosina manufacture.

Instead they picked a woeful combination.

The judge reduced Polariods 10000 $ claim to 900 (millions) cause both companies instant process had been damaged by C41s 30 min turnaround.

Whatever the Kodak supporters think this seemed fair the concept of a plastic P&S v a Ja eg K1000 for same number of prints 1 min v 30 mins was 'no competation'.

Well you can say this is 20:20 hindsight but Kodak insiders told me it was happening in 1980: even if I had been unaware at the time.

I also had a Polariod and Kodak instant neither of which I used after the first film.

 

[AgX]

To be fair to Kodak:

-) when they started their own instant products they could not have known that there would be such a legal case, let alone of such outcome

-) there never was the idea at the industry to have to choose between the concept of print film and instant film as one of them would take over the market

Fuji stayed in the camera market with eg nice SLRs, Kodak did not.

Agfa too had a huge camera plant. It was making losses for many, many years. Finally it was closed completely (the largest plant closure of those days in Germany).

The concept of both Kodak and Agfa was to make cameras for the mass of consumers. High end cameras only made a fraction of their camera ranges.

 

[Xmas]

To be fair to Kodak:

-) when they started their own instant products they could not have known that there would be such a legal case, let alone of such outcome

Not true in industry you have to either have patent lawyers in house or employed as consultants or both.

Two of the patents had expired by 86 which meant they were on the Kodak R&D teams desks before they started their instant...

Even if that had not been the case a new patent landing on your desk would compromise your work unless you had 'prior art'.

An R&D team either keeps something a company secret with strict need to know or publishes a patent to cripple competitors.

Kodak had obtained lots of patents to protect its film volume, some well 'speculative'.

The judgment of the US court was wilful violation. Kodak were very lucky in my opine.

Now there is another concept of a patent pool that the Ja photo industry uses... This saves a lotta Yen on lawyers fees... A Ja company still needs to patent to stop non Ja industry...

 

[Xmas]

...

-) there never was the idea at the industry to have to choose between the concept of print film and instant film as one of them would take over ...

Cept in Kodaks and Polariod plans

Kodak even bet money on both horses

 

[PKM-25]

I think it is high time Sean implements a daily posting limit, we have the same "industry Experts" constantly windbagging the same crap day in day out, pretty obvious they live for this forum polluting tripe.

When you have that kind of loud mouth parroting, it buries the spirit and sense of community of a site like this deep in the mud, drives people away. I'm going back to mostly using the site as a read-only and posting a few times a week.

It's just pathetic to keep dragging great news like this into the poop pit.

 

[Ken Nadvornick]

On the other hand, I find the discussion quite interesting. In a couple of cases I've gone off and done a bit of research to learn more about what has been stated. Sometimes it's correct. Sometimes it's incorrect. Sometimes it's honest. Sometimes it's disingenuous.

But as a conversation it is always interesting to listen to what others have to say. Even if I sometimes disagree with it. Or they disagree with me.

And I am perfectly capable of performing my own due diligence and ultimately deciding for myself...



Ken

 

[MattKing]

On the other hand, I find the discussion quite interesting. In a couple of cases I've gone off and done a bit of research to learn more about what has been stated. Sometimes it's correct. Sometimes it's incorrect. Sometimes it's honest. Sometimes it's disingenuous.

But as a conversation it is always interesting to listen to what others have to say. Even if I sometimes disagree with it. Or they disagree with me.

And I am perfectly capable of performing my own due diligence and ultimately deciding for myself...



Ken

Ken:

It would be interesting to "note-up" the Polaroid vs. Kodak patent decision. My understanding is that it established an almost entirely new principle in US patent law. The "note-up" process might help reveal whether that new principle was subsequently strengthened and entrenched in the law, or whether, as I expect, it was subsequently treated as an anomaly that should be rarely if ever looked to for guidance.
There are a lot of those orphan decisions in the common law - curiousities that are incredibly important to the litigants, but easily "distinguished"( I.e. ignored) by those who followed.