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Kodak Files for Bankruptcy Protection 1/18/2012

Re Fourtue article:

"...move the cost and risk of innovating off your balance sheet and onto others"

This is not a new idea, any interview of Michael Dell from the 90's will show how he did this

I guess the writer above is trying to term it now?
 

This was also the strategy of the banking industry with regard to securitization of mortgage loans. That worked out well for everybody.
 
I've only used Kodak film. Nothing else. After reading the reorganization filing, I've concluded it's over for Kodak film. No hoarding for me however. Going to get to work recalibrating everything for Ilford films. That's the bright side for me: there is an alternative. I do hope I'm wrong, but will be prepared if I'm right.
 
No matter what happens, the US retirees are not totally screwed. Their pensions are insured by the Pension Benefit Guaranty Corporation, an arm of the US Department of Labor. But if Kodak defaults on the pensions, there's a cap on the annual payment per retiree from PBGC at around $50000. Also, they surely won't get the same very generous medical benefits. (Kodak long used generous benefits for employees and retirees to avoid unionization of their workforce.)

From reading the filing -- we may see some noticeable increases in film prices. Kodak has been mostly "eating" the trebling of silver prices since 2008, because the economy is "too bad" to raise film prices. Ilford, on the other hand, is passing silver prices through. Kodak needs to stop doing this, quit worrying about market share with Fuji.

Film is 26% of revenues. But probably most of the net income (profit). Film sales have fallen 40% since 2008, probably more due to the digitization of Hollywood than what still photographers are and aren't buying.

My bet is Apple buys the patent portfolio, to screw the Google/Android phone makers. That's a hot rivalry at the moment, the patent lawsuits are hot and heavy.
 
Moopheus said:
This was also the strategy of the banking industry with regard to securitization of mortgage loans. That worked out well for everybody.
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Let's keep the discussion to manufacturing, banking is a whole other ball game
 
I've just placed an order that should give me enough Kodak film to last two years at my, modest, rate of consumption. The reason is partly so I can relax a bit whilst waiting to see what happens, but more directly because my supplier, 7dayshop, will lose a VAT advantage in supplying to the UK when new regulations come into effect in April 2012, causing the price to rise 20%.

I know there's still Fuji, but I'd only just decided to switch from Fuji to Portra for my colour neg needs, and to standardise on T-Max for mono.
 

A four-day bender! I like that.

I'm as ignorant as most as to how all of this is going to shake out but I think it's safe to assume there will be fewer choices to be had and that some of us will loose tools we have come to love. I have no answer for that except to learn the new (for some), remaining tools, so they can keep on remaining. This morning when I heard the Kodak story on NPR I jumped out of bed, sat down at the computer and hit Freestyle for another 100 rolls. Rational? Hell no. I'm always amazed at capitalists's ability to make money at something; no matter how small or esoteric a market. But, as you already know, if it looks like you have to say good bye it might as well be a party.

s-a
 
zsas said:
Re Fourtue article:

"...move the cost and risk of innovating off your balance sheet and onto others"

This is not a new idea, any interview of Michael Dell from the 90's will show how he did this

I guess the writer above is trying to term it now?
Click to expand...

Just found the interview/case study, there is Harvard Businuess Review case study from 1998 titled The Power of Virtual Intergration: An Interview with Dell Computer's Michael Dell

I believe the Fortune article above is pitching a strategy, the writer calls "Convergences" that was termed in 98 as Virtual Integration in the Harvard case study.

I think Perez et al knew about the term back then too...

Fortune writer makes it sound all too easy...
 
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Should be sick fun to watch stocks clear and wait for stuff to show up on eBay.
 
EASmithV said:
I dearly hope that if anything is saved, the film division should be on the top of the list.
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2F/2F said:
Here's hoping they emerge a leaner and meaner company that still produces the best film in the world. Somehow I doubt it, though.
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NPR reported this morning that Kodak's plan for restructuring is to sell patents and gear up as a main focus of being a printing and ink company.
 
JMC1969 said:
NPR reported this morning that Kodak's plan for restructuring is to sell patents and gear up as a main focus of being a printing and ink company.
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Sigh. That's what they've been trying to do for a decade.
 
JMC1969 said:
NPR reported this morning that Kodak's plan for restructuring is to sell patents and gear up as a main focus of being a printing and ink company.
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I question that logic. While not exactly a sunset industry, personal printing has reached market saturation, and commercial printing...oops, an article just notified me on my iPad. Moment, please.

Sorry for the delay.

Anyway, if creditors get turned into new shareholders, film, which is declining, will not be part of the portfolio. It will be spun off, most likely to private capital, someone who can see the bottom of the demand curve and adjust to that market reality. Likely part of the deal will be use of the Kodak brand and all the emulsion and coating IP and knowledge as a package.
 
Running film independently and Kodak just picking up a branding fee could actually be a very good
thing as long as some kind of economy of scale and infrastructure can be kept intact. Things like
TMax and Portra films are sufficiently popular. But just like in any other example of restructuing, it
just all depends, and there's simply no way to tell until the dust settles, which can easily take a
year or two. So this bankrupty might turn out to be a good thing in the long run for film users or
a complete bellyflop. But it was all going to crash anyway if something didn't fundamentally change.
 
Steve Smith said:
They claim business as usual on their website. I suspect there is a lot of running around like headless chickens going on in the background though.


Steve.
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Having been through a personal bankruptcy myself a few years ago, I can provide a bit of insight.

As of today, ALL of Kodak's debt obligations are suspended, as the matter is now in the hands of a federal bnakruptcy judge, and a trustee will be assigned, if one hasn't already been.

Given that Chapter 11 of the US Bankruptcy Code allows for the debtor to reorganize debts owed so they can be repaid, usually at a rate several cents on the dollar. In the meantime, Kodak will continue operating and paying their employees.

What is generally different with a large corporate bankruptcy versus a personal one is the complexity and sheer magnitude of assets and liabilities involved.

Will various assets be divested? Generally yes, and it depends which ones. Will it be the film division? That's for the court to decide. Now, given that EVERYTHING is now in the hands of said bankruptcy court, any sale or acquisition of assets by Kodak will have to be approved by the judge. This means equipment, supplies, divisions, etc.

In the meantime, let's not all hold our breaths; we'd only turn blue.

Dieter Zakas
 
Some must already be getting their panties in a bunch. At the Freestyle web site, as of this moment, the following items are not in stock anymore:
Kodak Tri-X 400 24exp
Kodak TMax P3200 36exp
Kodak TMax 400 36exp

I don't know if that means anything, but I have a feeling folks have been buying a lot of film 'just in case'.

So I just ordered another 50 rolls of Tri-X, and 15 HP5+ too *just in case*... Help! I think my panties are in a bunch.
 
Ironic, 1/18 is the day Dwayne's shut down the K-14 line....

I could use a tad more Portra 400 but other than that, I am well stocked up. I don't know what to say, I mean, in terms of product and industry road maps, look at Fuji, the X100 is brilliant, one of my favorite cameras of all time. That is what Kodak needed to do, innovate and yet, keep the cool factor. I would love a full frame 12-16MP back for my 501C/M, but there is none, it is all super high dollar, high res cropped stuff, not interested.

I'm out here in the Mission district of San Fran shooting HP5 and Portra 400 in my Blad this week, feeling like a walking contradiction...I love shooting film...
 
PKM-25 said:
I'm out here in the Mission district of San Fran shooting HP5 and Portra 400 in my Blad this week, feeling like a walking contradiction...I love shooting film...
Click to expand...

For some reason I just loved reading that line. '...a walking contradiction...'.
 
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