More on Kodak

Monophoto

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Posted on CNN this morning:

NEW YORK (Reuters) - Eastman Kodak Co. Wednesday said it would cut up to 10,000 more jobs than previously announced to speed its move into digital products, and also posted a quarterly net loss due to restructuring costs and a faster-than-expected decline in film sales.
 

Nicole

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Wow, and here they say there's been a staggering 30% increase in the return to (slide) film.

I for one am part of this group - I shoot all my family photos on slide film, except for when I have another roll of B&W in my camera.
 

bobfowler

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Nicole Boenig-McGrade said:
Wow, and here they say there's been a staggering 30% increase in the return to (slide) film.
Got a link to the article?
Click to expand...
Click to expand...
 

Ed Sukach

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Monophoto said:
Posted on CNN this morning:

NEW YORK (Reuters) - Eastman Kodak Co. Wednesday said it would cut up to 10,000 more jobs than previously announced to speed its move into digital products,...
Click to expand...
Yeah, right. Typical management doublespeak - cutting jobs to "speed things up". Reducing the labor force will NEVER speed things up - it can only slow things DOWN. If they are trying to goose their bottom line by screwing their employees they should say .... wait!! That would require integrity! Obviously that characteristic is totally absent ...
Sounds to me like a "Polaroid type" of maneuver .. to make the Officers of the company incredibly wealthy through bankruptcy.

I'll have to check my portfolio. If there is any Kodak stock in there now, there won't be by tomorrow morning.
 

Nicole

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benjiboy

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Thats right Ed, another example of incompetent managements inability to anticipate market trends, and the "poor bloody infantry"having to suffer.
 

garryl

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Monophoto said:
Posted on CNN this morning:

NEW YORK (Reuters) - Eastman Kodak Co..... and a faster-than-expected decline in film sales.
Click to expand...

Sounds like a pre-excuse to bailing out of the film business doesn't it?
 

bobfowler

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bobfowler

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garryl said:
Sounds like a pre-excuse to bailing out of the film business doesn't it?
Click to expand...

For tha amateur market, it's not a big loss if they bail out. If they bail out of the professional market, they're slitting not only our throats (well, maybe our wrists), but their own as well.
 

mikeb_z5

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From the Kodak press release:

Digital & Film Imaging segment sales totaled $2.151 billion, down 12%. Earnings from operations for the segment were $193 million on a GAAP and an operational basis, compared with $229 million a year ago. Highlights for the quarter included a 63% increase in sales of KODAK EASYSHARE Printer Docks and related media for home printing; a 25% increase in consumer digital capture sales, which includes KODAK EASYSHARE cameras; and a 24% increase in the sales of KODAK Picture Maker kiosks and related media, plus continued strong sales of motion-picture origination and print film.

So what is it? poor film sales or continued strong sales?
 

tim atherton

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Article here:

http://www.cbc.ca/story/business/national/2005/07/20/kodak-050720.html
Eastman Kodak raises target for job cuts to 25,000

couple of quotes:

Eastman Kodak Co. said Wednesday it will chop up to 25,000 jobs from its workforce, instead of the 15,000 layoffs it had originally announced.

The Rochester, N.Y., company also said it lost $146 million US (51 cents a share) in the second quarter, compared with a profit of $136 million US (46 cents a share) a year earlier....

"Sales of our consumer traditional products and services are declining faster than expected. While we are not in a position to control the rate at which traditional markets decline, there is a lot I can do about the cost structure of the traditional portfolio," he said.

Perez wants to speed up the company's transition to digital technology as its sales of consumer film decline....

Kodak plans to cut its traditional manufacturing infrastructure to approximately $1 billion US, compared with $2.9 billion US in January 2004. The cuts will be mostly complete by the middle of 2007....
 

SchwinnParamount

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You said it Ed! Those corporate pukes are executing their prime directive... to 'increase stockholder value' at the expense of the workers who control (if not own) the means of production.
 

clay

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Look, I'm no more happy about the state of affairs with regard to film than anybody else. But seriously, do we expect someone to keep making a product at a loss just for the tiny piece of the market that the fine art community represents? We have just been fortunate enough to piggyback on the wide commercial use of silver gelatin products for the last century.

It's easy to blame management for all of this, but face it, they DO have a responsibility to the owners of the company to turn a profit, and if they see the traditional silver gelatin paper market imploding, then they have a DUTY to not throw good money after bad. While I am sorry for the laid off employees, they are getting paid for the work they have done to this point. It is not like the company is ripping them off. The company owes them a job to no greater a degree than the employee owes the company the duty to show up and work. Brutal, yeah. But an employee can walk from a job at any time. Why should this not be reciprocal with regard to the company's obligation to the employee?

Other methods of allocating productive assets and capital have been tried. The great shining success of the USSR is one example.

That said, I also firmly believe that I have no obligation to support Kodak. I think they are moving in a direction that is not in our best interest. Throwing our support behind Ilford is the best way to vote with our feet.
 

gnashings

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clay,

No one is suggesting that capital venture be ran by philantropic reasoning. Its business, we all know that - from what I can tell there is a very wide range of people on this forum, highly educated, intelligent people, many of them in business for themselves, many quite successfully. I find your comment a tad patronizing, and perhaps indicative that you haven't really bothered to look into what is being said. Kodaks moves are taken emotionally by some (myself, for example) - that is true, but for the most part this is a discussion of the fact that Kodak is shootingitself in the foot and mishandling this situation and THEN that the little people will suffer. And they will, and more and more will because Kodak is a nobody in digital, always will be and no one will ever care - and its really premature to write obituaries for film as a photographic medium, outside of the "artistic" or "hobby" community. The only reason that digital photography has been embraced by anyone other than family P&S buyers is because of STRICTLY financial reasons - time is money, and digital makes them money - BUT - only until the costs become unreasonable. We are on the first wave of digital imaging, even though it has been around for a while, and in the long run, the greed of theindustry will make a lot of people think: "Hmmm... I bought a Hassy 25 years ago, some lenses and studi equipment and have ran a successful business... now... I spend a million dollars on digital to get me 85% of the quality I am used so that I can trim costs...But instead of 25 years, 25 months makes my equipment obsolete.... I need to spend more cash justto maintain status quo..." I don't think professionals will put up kindly with the product cycles, as they, unlike the mass market, will not look kindly to being force fed a new gizmo they never asked for.
The digital arena - not just photography, anything computerized or electronic - has gone from the traditional "there is a need - lets make a product to fill it" model to the much more lucrative "lets make a product and then show people why they need it (or want it - ewhatever eaches into their wallets more effectively)".

OK, rant over...

Peter.
 

bobfowler

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The release didn't say that they were making these products at a loss, they said that the company had a net loss - a big, big difference. Since they didn't say where the loss was incurred, I think it's jumping the gun to assume it was from manufacturing. Knowing that Kodak is pouring it's resources into the digital market in a massive game of catch up, it's much more likely that the losses were related to expenses in ramping up their digital operations, not in manufacture of a mature technology that isn't getting a lot of R&D these days (if any).


Management is exactly where the blame should go, especially the brass at the top of the heap. Sure, they have a responsibility to their shareholders, I won't deny that, but they also have a responsibility to their employees and customer base. The market may not be as strong for B&W paper products as it was 20 years ago, but the market isn't imploding either. I don't see the continuance of making B&W paper as throwing good money after bad at all. Kodak hasn't been introducing any new B&W paper products in the recent past, so it's pretty safe to say that not a great amount of R&D is going on in that area. Spending inordinate amounts on R&D trying to hit the "digital" moving target is, IMO, a much greater waste of resources for a company that isn't exactly a leader in consumer electronics. Kodak could easily continue to manufacture legacy B&W paper products and still make a profit, just maybe not as large as a profit as the bean counters would like.

As for the whole company/employee job thing - you're right, no one is "owed" a job.


Actually, I like your analogy of large corporations to the USSR. When companies get too big and diversified, they quite often forget the very people who helped them get that way. In the case of the USSR, it was the "people" who brought the communists to power, yet "the people" were the ones to suffer when the State was ravaged by mismanagement and corruption.

In the case of Kodak, "the people" can be represented by the employees and the long time customer base. These are the ones who will suffer when the over-bloated Great Yellow Father finally rolls over and dies, a victim of it's own (read that as boards) stupidity. The bright side is that with every corporate death, the bloated corpse will fertilize the field and fresh new players will arise from the dung-heap of the boardroom.

If Kodak wants to leave the B&W field, fine. I'll miss HC-110 and Microdol-X, but Ilford has plenty of products in their line that will fill any void that Kodak leaves. Between Efke, Forte, Foma, Fuji, and Ilford (plus a few others), there is a great selection of B&W films from which to choose. If Kodak kills off color and bows out of film completely (not likely, at least for a while), Fuji products are pretty damned good and are readily available.

OK, rant over, go on home...
 

Earl Dunbar

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Mike: The "strong sales" refer to motion picture film... both original and final print. It is the consumer and commercial STILL film sales that were down.

I agree with Bob Fowler that if EK bows out of professional anaglog products, they are hurting themselves. How will they maintain branding? If they think the consumer digital market can make it without flagship professional presence, they are deluding themselves. They are out of the professional DSLR market, having already waved the white flag there. Their only professional products in still photography will be as an OEM of sensors and related equipment. That's not an insignificant market, but there are fierce competitors around, and Kodak has proven in the past that they can seriously underestimate the competition ... just look at how they let Fuji eat their lunch. I switched to Ilford products in the mid-70s because Kodak had the arrogance to tell me that Polycontrast Rapid was just as good as fiber, and better than anyone else's products. Or that their reversal print process was better than Cibachrome.

I'm afraid Kodak is banking on two things: the consumer digital market (with its low margins and constant need for product churn) and the medical and other non-photography imaging market. They may be somewhat successful in the latter. But they divested themselves of the remote sensing divsion (to ITT) recently. That's the group that was developing the next Hubbel. I would think there might be some value in spinoffs from that R&D that could be sort of profitable. But I guess that wasn't important.

Except for continued manufacturing of Kodachrome, I'm sort of bitter right now. And the increased layoffs will hit hard here , in Rochester.

Earl
 

Earl Dunbar

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Bob: The losses came from one-time charges resulting from shutting down non-essential operations, facilities, layoffs, etc. Absent that, the profit from operations was 50 cents/share, which would have still been under street estimates. As they continue to write down assets, we will likely see this continue.

Earl
 

John Bartley

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clay said:
... keep making a product at a loss just for the tiny piece of the market that the fine art community represents?....
Click to expand...

Except for this statement, which would be a hard one for anyone to prove without access to the company books, I have to say that this post is one of the most valid "non-emotional" points of view that I have read in this forum on this subject. Management at Kodak has a responsibility to the shareholders for corporate success and has a responsibility to the soon to be "ex" employees to treat them fairly on the way out and to the remaining employees to make sure that they get paid on schedule for the work that they do. What else is "required" as opposed to "desired"?

I guess if anyone doesn't like what Kodak is doing, then they should, as Clay says "vote with their feet". Until I bought the surplus PlusX-Aero, the only Kodak stuff I used was stop bath. That won't be hard to replace.

cheers eh?
 

jjstafford

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Vote with your feet or something about 32" higher. Piss on Kodak. It's a company gone bad. Bless Mister Eastman. It's been downhill ever since.
 

jd callow

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Good company or bad -- How many 'Good' companies of that size are there --I need their product right now and for the seeable future.

I'll cut my nose off when I grow gills and we're all living under water.
 

MattKing

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jjstafford said:
Vote with your feet or something about 32" higher. Piss on Kodak. It's a company gone bad. Bless Mister Eastman. It's been downhill ever since.
Click to expand...
Okay, I've bit my tongue as long as I can hold out, but I have to reply now.

First, for those of you who don't know, I might be referred to as a Kodak "brat". My father worked for Kodak Canada for 36 years, retiring in 1984 when I was 28. Indirectly, I was fed, clothed, housed and educated with Kodak $ and Kodak knowledge for all of my formative years. My father and mother rely on a Kodak pension, which for the most part is generous, and flexible (i.e. the medical and dental benefits have for the most part continued to evolve as times have changed during my father's 20+ years of retirement). My Dad started out with Kodak at an entry level job, and left as a middle level manager.

From my perspective, Kodak was always fair to its employees, in fact reasonably generous. It continues to provide services to its retirees, even though its financial circumstances are clearly not what they used to be.

Kodak has always been a very big organization, and suffered some of the problems that go with that, but as far as I am aware there isn't even a hint that there have been any actions from Kodak like any of the recent scandals that have plagued some of the large corporate entities (Enron, etc.) recently.

Kodak is struggling with difficulties, and has discontinued business in at least one area that matters to us here - B&W paper. It clearly has made mistakes, and will probably make more, and some of those mistakes may result in products being discontinued that we would prefer remain available, but surely that is reason to criticize Kodak, not treat it with utter contempt.

To the best of my knowledge, Kodak hasn't ceased production without warning, sought bankruptcy protection or even stated that it intends to leave the film based photographic business. It has just sought to expand radically into the digital business, and react to a shrinking film business, probably in some ways we won't like.

This is a long, round-about way of saying to those who who have nothing good to say about Kodak, that you might wish to moderate your opinion somewhat.

It is also in particular a request to jjstafford - please change your avatar - it is really irritating to be presented time and time again with the image of someone urinating over a symbol of something that has value for thousands of people, and has particular value to those of us who rightly feel a strong feeling of loyalty to an organization which has personnally benefitted us greatly. I know that if my father saw it, it would make him sick, and considering the thousands of photographers of all types that he helped in his years of work, that seems incredibly unfair.
 

djklmnop

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You know what's funny? Fuji is somewhat similar to Kodak, in terms of production. They make films, digital cameras, but not paper nor chemicals. Either way, I never hear them complaining. Like Kodak, Fuji's digital offerings isn't in high demand as Canon or Nikon's SLRS. I don't hear Fuji complaining about profit losses.

Perhaps I'm wrong, but Kodak needs to learn how to sell their products again. Otherwise, in the near future, the news headline will be, "Kodak ran out of things to blame for their profit losses."
 

bobfowler

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My father worked for a division of Kodak for about 10 years after he retired with 30+ years from GTE. I have a Kodak flag tacked up on a wall in my garage (no shit, I really do!) and have a couple of hundred sheets and several hundred feet of Kodak 35mm film in my 'fridge. I've both loved and hated various Kodak products for over 30 years.

Regardless of any of that, I still feel that Kodak's board is screwing the pooch. Like I said, Kodak isn't the only big company that messes up. Back in the early 1970's, my father led a design team at GTE that developed a huge, flat panel television plasma display. GTE Brass wasn't interested (though they did get the patents) saying "no one wants to hang a big TV on the wall". Shortly after, the Brass sold off Sylvania to Phillips and got out of the TV market. Had they run with the ball instead of dropping it, well... you get the picture.
 
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