Well, Acco, the ramble had some errors in it.
Kodak did not close plants that were fully functional. Rather, declining sales of film caused functioning plants to stand idle. Those that tried to remain operational began to see a fall in quality due to the severe control problems they ran into. At the same time, Kodak did plan on making Kodachrome a boutique product supported by the minilab that they designed for the table top. It failed. Read the manuals to see how many rolls per day are needed to keep it functioning properly.
So, even by trying to do what you suggest, Kodak found it failed just as overall film sales are failing today in every product line. Kodak is not closing independant plants that do E6 or C41, but they are going out of business nevertheless. It is the same story. No business, no plant!
PE
That's all well and good, PE, but the crux of the point I made had less to do with the hard product which your angle boils down to. Nor am I an expert in manufacturing, so on that merit, I defer to your decades of applied experience.
Where we differ is in paradigms. The paradigm you're articulating relates to the hard connection between how a simple R&D/manufacturing (and processing infrastructure) begets sales; when it doesn't succeed, then slash manufacturing and processing infrastructure. Under this model, of course the reason behind the wind-down you explain makes sense.
What this fails to do, unfortunately, is examine the fundamental problems with the basic business model executed by Eastman Kodak for the best of its 20th century lifetime. What worked in the 20th century does not necessarily translate to 21st century modes of consumption, distribution, and operation.
I referenced IBM previously, and this was not an accident. IBM, despite holding fistfuls of technology patents and was diversified in hundreds of product sectors, changed its business model in the previous decade as a way to survive in a different business environment. They became knowledge agents -- consultants -- helping others by using their decades of collective knowledge to advise for a fee to customers who were willing to pay for that knowledge and ongoing support (in effect, a subscription model). IBM's hardware, like Kodak's film, was no longer solitary and central to their raison d'être. Of course IBM still makes certain lines of hardware (and, of course, software solutions), and that which they make still commands a market demand.
But IBM have evolved into a service-based enterprise, and this was the contrasting point I made with Kodak and with the example I described of a lab wanting to start Kodachrome processing on their own. Of course the example was probably limited with its engineering accuracy. That wasn't the central point. What was germane here is the way Kodak in times past played a centralized role in its products, spoking outward with an all-in-one proprietary kit of questionable quality control (whether by user inexperience or quality of the product) to scores of processing labs. They even got dinged -- rightly or wrongly -- for monopoly, for keeping the product and process completely closed. This was their prerogative, and it appeared to work in the 20th century. That closed model, once the market moved on in the last 20 years, not only began to stop working, but now, it's also obsolete.
So take what Kodak has left: patents, current and expired; engineers and R&D people with lifetimes of aggregated knowledge (nigh impossible to merely dump into documentation for some brave, new soul or photo lab to learn on their own); and they have a withering command of the remaining (but enduring) film market against Fuji (with colour) and Ilford (with b/w). Within the last, Kodak have some boutique products whose present potential are being woefully underexploited -- even in, yes, this so-called digital world. Moreover, other companies can and do develop better digital products than Kodak. Kodak is no longer the undisputed industry imaging leader it once was, but on some level, it behaves as if it believes it still is. [n.b., It's also what made Rochester a one-company town (Xerox, incidentally, crept in there while Kodak didn't initially consider them a threat), and not exactly an incubator for spin-off start-up enterprises. This, alas, is another discussion involving Jane Jacobs, urban planning, creative cities, and my own personal experiences of living there a few years ago.]
On the main point: what Kodak does have, however, are the research findings and a collective wisdom upon which it can employ to capitalize in consultancy capacity. By consulting for a fee what they know best, a new business model emerges. An expired patent is, in many senses, as open as open-source software is for IBM.
This isn't a hard product, PE. This is soft services. This is where many companies are taking their operations to not only survive, but also to adapt. Like IBM (and even General Electric), the hard products can continue to be made on a smaller scale, but diversification into soft services is why they're relevant now. IBM realized along the way that having a typewriter or computer in every business office was simply not possible, and certainly not possible to command a monopoly on mainframe architecture. IBM either spun off or phased out what didn't meet their bottom line and concentrated on what remained while introducing something entirely new. And it appears to work.
