Kodak Files for Bankruptcy Protection 1/18/2012

alanrockwood · Jan 23, 2012

It is possible to have a successful business that serves a declining market. Although the analogy with Kodak may be imperfect, I am reminded of a company called Germanium Power Devices. They have been around for decades, even though germanium-based semiconductors were a small declining market. Interestingly, that company did diversify into other (carefully selected) products rather than tie their fortunes exclusively to germanium products, and this may be part of how they stayed in business for so long.

stavrosk · Jan 23, 2012

If Kodak does not manage to stay in business I would be really disspointed if someone else does not continue making still film using their VISION technology as in the new portra 400.
It is THE best colour c41, true ISO400 film on the market.

Photo Engineer · Jan 23, 2012

Ken Nadvornick said:
Because the gulf between those that can only say, and those that can actually do, is often breathtakingly wide...

Ken

Too true Ken. Which is why when/if film vanishes there will be precious few that "can" and a lot of complainers!

As for all of the comments here and predictions, I live ~5 miles from the plant and ~10 miles from the main office. I am in a neighborhood of EK retirees and current employees. None of us KNOW but we can offer educated guesses. And, lots of rumors.

The news on TV every evening is filled with EK "news".

PE

Photo Engineer · Jan 23, 2012

Aristophanes said:
Hah!

It's not like you're going to give up charts and measures and start sticking your finger in it for each roll.

It seems like 90% of the chemistry questions on APUG are from those who:

1) Cannot read the instructions
2) Want to go off-book for some fun (all the power to them)

All I am saying is with Kodak's Ch. 11 the "survival" of its crown jewel emulsions and processes will require getting that all away from a shareholder/creditor driven dynamic and into the hands of someone with vision (and capital) to stabilize a falling market.

And that falling market is not just relevant to Kodakthis is not a discrete and isolated "Kodak problem". It's a concern for all the suppliers, especially when #1 goes bankrupt because the small guys benefit from the economy of scale the big guys provide. If anyone thinks that Ilford, Foma, and Efke can survive if raw materials prices triple as Kodak (and Fuji) driven demand withers, then you need a textbook in MiroEcon 101. There are already anecdotes as to how certain film products have been eliminated due to supply/demand imbalances.

What the Ch.11 might do is reveal some data as to how far the film market is forecast to decline and where bottom is. Kodak has certainly polled its customers on that in a way no other company has.

If the film business at Kodak ever shuts down, it will take a near miracle to restart it! If it is somehow kept going, then things will probably be ok. If someone tries to move the formulas to another plant such as Fuji or Ilford, I doubt if they will work properly from what I know of the methodologies.

Making film is not hard, nor is making paper. It is the fear of difficulty that keeps people from doing it with simple formulas.

PE

T-grain · Jan 24, 2012

that's why I respect so much Florian Kaps and others from the Impossible team, although I never used instant films! you really need to have some big b***s to start such a business in these uncertain times and yet to refine the technology (which was basically gone when Polaroid closed the plant)

does anybodyy have an "educated guess" of how much film is sold/consumed per year in those times? just want to figure it out......how much we, analog photgraphers, are "worth" in terms of money in these times

Photo Engineer said:
If the film business at Kodak ever shuts down, it will take a near miracle to restart it! If it is somehow kept going, then things will probably be ok. If someone tries to move the formulas to another plant such as Fuji or Ilford, I doubt if they will work properly from what I know of the methodologies.

Making film is not hard, nor is making paper. It is the fear of difficulty that keeps people from doing it with simple formulas.

PE

BradleyK · Jan 24, 2012

c6h6o3 said:
I'm getting beautiful prints from HP5+ negatives. Pan F+ has always been my favorite roll film, even before Kodak fell on hard times. Let Kodak's management, stockholders and the bankruptcy trustees worry about their future. Just buy film that's currently in production (Kodak or not) and go out and shoot it. You'll be doing your part to ensure that they remain in production. Chasing after and hoarding lamented, discontinued products will only hasten the demise of the ones left in production.

Well stated! +1.

clayne · Jan 24, 2012

http://therochesterian.com/2012/01/23/where-kodak-plans-to-cut/

Aristophanes · Jan 24, 2012

You can see the PDF of the Public Lender presentation here:

http://www.kodaktransforms.com/

The key phrase is "Manage for Cash/Value" (p.12) and all film products are in that group. They've further sub-divided these groups along what appear to be customer, distribution channel, and product categories, so all film products as well as motion picture processing and what looks to be chemicals and paper are in separate structures. Usually this is done to clearly identify separate revenue streams and customer base.

All of these product categories have a giant FOR SALE sign on them. They will be liquidated to pay back Citigroup, the Public Lender (DIP), first, then other creditors should there be residual funds. Paying off creditors in full will be accomplished mostly through IP sales and relieving the pension and related liabilities. Collateral for the DIP is under Security on p.24.

Kodak will then have a Core and Growth business plan of the elements in the top row on p.12. Creditor value will then be turned into preferred share in the new company with only those business lines remaining.

Obviously, some of the items on the bottom tier of p.12 may not sell or there may be interest but disagreement as to value. What happens then remains to be seen.

Just my read on the presentation.

zsas · Jan 24, 2012

I like the frankness, throwing film under the bus

"Over the last several years the Company has been executing a plan to transform from a traditional film business to a profitable and sustainable digital company but has experienced certain hurdles including:
Legacy and restructuring costs from the Companys traditional businesses
More rapid decline than expected in traditional businesses and challenges reducing corporate costs as quickly
Investment required to grow new digital businesses
Delays in IP strategy used to fund investments"

semi-ambivalent · Jan 24, 2012

c6h6o3 said:
I'm getting beautiful prints from HP5+ negatives. Pan F+ has always been my favorite roll film, even before Kodak fell on hard times. Let Kodak's management, stockholders and the bankruptcy trustees worry about their future. Just buy film that's currently in production (Kodak or not) and go out and shoot it. You'll be doing your part to ensure that they remain in production. Chasing after and hoarding lamented, discontinued products will only hasten the demise of the ones left in production.

Speaking as one small-scale hoarder, no film is discontinued if it's still in my freezer.

s-a

c6h6o3 · Jan 24, 2012

semi-ambivalent said:
Speaking as one small-scale hoarder, no film is discontinued if it's still in my freezer.

s-a

Until it becomes so fogged that you can't use it. Ask anyone who has any Super-XX Pan about that.

I have a couple thousand sheets of Azo, but it will last a lot longer than I will. Film is a very different matter.

keithwms · Jan 24, 2012

semi-ambivalent said:
Speaking as one small-scale hoarder, no film is discontinued if it's still in my freezer.

s-a

Heheh, yeah well one of these days we're going to get a really big coronal mass ejection and all the horded films will be zapped quite well, whether they're in your fridge or not! Plus our eyes generally don't get better with time (even though our minds might well). So use what ya got!!

KarnyDoc · Jan 24, 2012

I found this thread quite interesting. There were a couple of posts that made me wish APUG had a "Like" button a la Facebook!

As for comments made by certain individuals, while I do not know their backgrounds, I'm willing to put my money on what PE says, because, although now retired, he's in a better position than any of us to make comments, observations, or speculations about where Kodak is headed both within their bankruptcy proceedings and once they emerge from it.

Dieter Zakas

Sal Santamaura · Jan 24, 2012

c6h6o3 said:
...I have a couple thousand sheets of Azo, but it will last a lot longer than I will...

Jim, did you ever figure out a way to get that (Canadian, I recall) Azo warm enough for your taste?

AlbertZeroK · Jan 24, 2012

KarnyDoc said:
I found this thread quite interesting. There were a couple of posts that made me wish APUG had a "Like" button a la Facebook!

As for comments made by certain individuals, while I do not know their backgrounds, I'm willing to put my money on what PE says, because, although now retired, he's in a better position than any of us to make comments, observations, or speculations about where Kodak is headed both within their bankruptcy proceedings and once they emerge from it.

Dieter Zakas

*LIKE*

Photo Engineer · Jan 24, 2012

Kodak has made this statement today:

""Kodak lists divisions it will manage for cash/value. Those include cameras, entertainment, patents and film. Many analysts have suspected Kodak will sell off consumer units. This will have an impact on the workers in those units."

Following that quote from Kodak is an analysts comments.

PE

semi-ambivalent · Jan 24, 2012

keithwms said:
Heheh, yeah well one of these days we're going to get a really big coronal mass ejection and all the horded films will be zapped quite well, whether they're in your fridge or not! Plus our eyes generally don't get better with time (even though our minds might well). So use what ya got!!

I think we're getting a pretty big CME Real Soon Now, aren't we? That's why I'm small-scale hoarding.

s-a

keithwms · Jan 24, 2012

Yep I guess we'll have auroras this weekend. Good time to get out the film... !

DREW WILEY · Jan 24, 2012

If they've got any common sense they will protect those core options where they have a defined
niche, even if it is shrinking, and not wander into more food fights where they're just another me-too
player. The film and RA paper market is still pretty strong if they look at it on a net profit rather than
impress the stockholders with market share basis, and are willing to be a sustainable relatively small
specialty company, at least compared to the octopus they once were.

Aristophanes · Jan 24, 2012

DREW WILEY said:
If they've got any common sense they will protect those core options where they have a defined
niche, even if it is shrinking, and not wander into more food fights where they're just another me-too
player. The film and RA paper market is still pretty strong if they look at it on a net profit rather than
impress the stockholders with market share basis, and are willing to be a sustainable relatively small
specialty company, at least compared to the octopus they once were.

The Ch. 11 wiped out the stockholders.

pbromaghin · Jan 24, 2012

Poisson Du Jour said:
Kodak is effectively bankrupt, not filing for protection from it, but gone. Oh, and consider the employees who will no doubt lose their Pension entitlements. It's liabilities outstrip its assets and this is why analysts are pulling the plug on it.
Mashable's summary in The Age tells it bluntly, the way it is. If you can get Kodak film get as much of it as you can, right now.

This article is the best thing I've seen yet on how Kodak got itself into this mess. Will the "digital company" that comes out of this survive? Well, just what the hell is a "digital company", anyway? The nebulosity of describing themselves this way is just one more symptom of their lack of commitment and focus to any path that will lead to success.

I don't subscribe to your conclusion, though. There will be an orderly liquidation of some assets and a redefinition and re-organization of the remaining company. Somebody will be producing Kodak film when this is all done. It will be a small entity, maybe not called Kodak, but it will be there.

Ken Nadvornick · Jan 24, 2012

Aristophanes said:
The Ch. 11 wiped out the stockholders.

I don't think that was the main point of the post.

Ken

Steve Smith · Jan 24, 2012

pbromaghin said:
just what the hell is a "digital company", anyway?

Might be something like the 'digital headphones' which went on sale when CDs were new.

Steve.

Photo Engineer · Jan 24, 2012

Kodak announced today that it is unable to pay its utility bill as it has no reserve cash. The outcome or fallout from this is to be determined.

PE

Poisson Du Jour · Jan 24, 2012

What "utility bill"?
Electricity, gas, water, phone? Then what? It must be in dire straits. Even pensioners can afford to pay their utility bills and still have money to play with.

Kodak Files for Bankruptcy Protection 1/18/2012

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