Rochester Photo News

[Ken Nadvornick]

They will re-emerge just fine.

Wonder if these stakeholders feel the same?

"Advisers told Kodak a filing would make its patent sale easier and likely allow the company to command a higher price, people familiar with the matter have said. The obligation to cover pension and health-care costs for retirees could also be purged through bankruptcy proceedings, the people said."​

Ken

 

[clayne]

I can't understand some of the people here sometimes. It's like we have some members who *want* to see Kodak or other film manufacturers fail at selling film.

 

[hpulley]

I can't understand some of the people here sometimes. It's like we have some members who *want* to see Kodak or other film manufacturers fail at selling film.

Just like auto racing, people find crashes to be the most exciting part. An orderly race from green to checkered flag is no fun to watch...

 

[zsas]

But Ilford's profits are rising...

I was poking around and can't find a Harman/Ilford quarterly rpt. Where did you find this (I am not doubting you, just want to read more about Harman/Ilford and didn't find anything on their site- are they privately owned?)

 

[tomalophicon]

I was poking around and can't find a Harman/Ilford quarterly rpt. Where did you find this (I am not doubting you, just want to read more about Harman/Ilford and didn't find anything on their site- are they privately owned?)

Andy, they are a private company.

Their director, Simon R. Galley, posted the fact on here somewhere.

 

[Photo Engineer]

We have no direct information on Ilford.

There is a photo show here in the US in a few weeks. Interestingly enough, Kodak will be there, but for the first time in years, Fuji will be absent from what I hear.

Hmmm. Wonder how things are for Fuji then.

But, Kodak is expected to go belly up soon from local reports.

PE

 

[zsas]

I can't understand some of the people here sometimes. It's like we have some members who *want* to see Kodak or other film manufacturers fail at selling film.

I thought Kodak pretty much came out and said they want to change from being 'traditional' to being 'digital', lets just re-read what Perez had to say in the second quarter report:

“We are investing in these growth businesses to create a new profitable, sustainable digital company by 2012,” Perez said. “At the same time, we continue to fund legacy liabilities associated with the traditional businesses."

* Earlier they defined the company’s core digital growth businesses as – Consumer and Commercial Inkjet.

What are "legacy liabilities associated with the traditional businesses"? The cost of silver? I believe the subtext is quite clear, its like Franz Kafka's The Metamorphosis - they(CEO/board) want to move on, they are trying to transform to a digital business but are not here now bear hugging their 'traditional business' customers in their own quarterly report - why? Maybe I am being too sensitive, but I get the feeling that they (board/CEO) want to move away from film, they have said it many times...."We are investing in these growth businesses to create a new profitable, sustainable digital company by 2012" Maybe they could have said something more, non-polarizing to a major segment of their revenue, in my opinion because I feel slighted... I dont want them to fail at all, but it would not surprise me if they divested film to really uphold their (board/CEO) own desire of becoming a "sustainable digital company".


2Q11 rpt:
http://investor.kodak.com/phoenix.zhtml?c=115911&p=irol-newsEarnings

 

[Photo Engineer]

They are paralyzed!

They cannot move forward in digital without using film profits. If they use film profits, the film end stagnates. They are using the film profits to fun digital causing problems in film! How much simpler can it be?

As for Kafka, I don't easily see a large roach in the view here!

PE

 

[Neanderman]

I think PE is right. They've been flopping around like a fish out of water for years and finally the lack of oxygen is killing their brain cells.

The Catch 22 with them selling the film business are the trademarks. I don't know that anyone is going to want to buy a film business that doesn't have rights to "Kodak" and all of the other brand names. But EK needs the Kodak name to sell its digital printers. No one is going to buy one unless it has the Kodak name on it.

It is a real quandary.

Ed

 

[jrhilton]

I was poking around and can't find a Harman/Ilford quarterly rpt. Where did you find this (I am not doubting you, just want to read more about Harman/Ilford and didn't find anything on their site- are they privately owned?)

I will quote what I wrote on another forum for ease as it may help: "It is easy to find out the data as Ilford Photo (per their website) is a trading name of Harman Technology Limited, a company registered here in England. As a result it has to annually submit accounts to UK Companies House, which are publicly available for inspection by anyone who wishes to see them, along with other legally required filings they have to make.

According to their latest publically available accounts they had revenue of £22.6m and profit after tax of £1.4m for calendar year 2010 (though made a loss in 2009). So they were profitable in 2010, but there is no data to allow the reader to split revenue between film sales and other lines."

 

[MattKing]

"The legacy liabilities" that require funding are their liabilities for retirees, plus their significant responsibilities relating to the historical environmental damage at their various manufacturing sites.

Kodak has been very responsible environmentally for a long time, but their historic sites pre-date that. Environmental re-mediation is hellishly expensive.

The biggest problem with using bankruptcy as a survival tool is that is does nothing to effectively remove those liabilities for the historical environmental damage at their various manufacturing sites. Any entity that tried to take on the responsibility for those sites would most likely automatically assume those liabilities as well.

So if they were to sell those businesses, the purchasers would have to start up manufacturing at different sites, most likely with different equipment.

In many jurisdictions, all or part of those liabilities can be personally enforced against corporate directors. I don't know whether this would apply to Kodak.

 

[michaelbsc]

In many jurisdictions, all or part of those liabilities can be personally enforced against corporate directors. I don't know whether this would apply to Kodak.

I expect a legal defense could be mounted successfully, but that would eat the profits of a marginally thin business.

So the business model of buying the film becomes 1) buy Kodak film, 2) fight with environmentalist movement, 3) watch movie theaters go digital, 4) hope to break even unless a union gets involved so you can go broke.

 

[railwayman3]

I was poking around and can't find a Harman/Ilford quarterly rpt. Where did you find this (I am not doubting you, just want to read more about Harman/Ilford and didn't find anything on their site- are they privately owned?)

It's a private company, but (in common with all UK Limited Companies) the annual accounts are on public record (and available online for a small fee) from www.companieshouse.gov.uk (If you need anything like this, go to this official Government site, don't get caught by paying extra to so-called "company search agent" sites. )

 

[jrhilton]

It's a private company, but (in common with all UK Limited Companies) the annual accounts are on public record (and available online for a small fee) from www.companieshouse.gov.uk (If you need anything like this, go to this official Government site, don't get caught by paying extra to so-called "company search agent" sites. )

I would add that the information on the public register at Companies House (such as the accounts, statutory directors names etc) is deemed to be in the public domain, so there is no reason it can not be quoted here, as long as it is correctly quoted and referenced of course .

 

[PHOTOTONE]

There should be no issue with licensing the Kodak name for film only to an entity that might purchase the film division. Licensing your name for specific products only is done all the time. Kodak would retain the use of the name for their inkjet products and whatever else remains. Already Kodak chemistry is made under license by the owner of the former Kodak chemical plant.

A point to ponder is: When the sales of a product decline to the point that a master roll of film cannot be cut and sold out completely while still "in-date", then it becomes impractical to continue manufacture. Kodak can only make a certain size of master rolls, which are quite large, mile long I think, and wider than a yard (3-4 ft). What I don't understand is why they discontinued the 8x10 size of film that is still available in 4x5, as if there is stock for 4x5 there is stock for 8x10, as it is just a different cutting of the same master roll.

 

[Aristophanes]

There should be no issue with licensing the Kodak name for film only to an entity that might purchase the film division. Licensing your name for specific products only is done all the time. Kodak would retain the use of the name for their inkjet products and whatever else remains. Already Kodak chemistry is made under license by the owner of the former Kodak chemical plant.

A point to ponder is: When the sales of a product decline to the point that a master roll of film cannot be cut and sold out completely while still "in-date", then it becomes impractical to continue manufacture. Kodak can only make a certain size of master rolls, which are quite large, mile long I think, and wider than a yard (3-4 ft). What I don't understand is why they discontinued the 8x10 size of film that is still available in 4x5, as if there is stock for 4x5 there is stock for 8x10, as it is just a different cutting of the same master roll.

I suspect that the value in any film spin-off would lie as much in the name Kodak as anything else. One does not associate that name with printers. Heritage sells. Owners of the digital and print product side may be better off with a new brand entirely. Weighting down an industrial film manufacturer with even more overhead for licensing is counter-intuitive.

The point about master rolls is spot on. This applies to the entire industry, including Fuji and Ilford and their combined capacity. My concern is that there is no new capital to purchase the production assets of Kodak because there are no new customers for the product and the current sales are still in decline. With no one making new film cameras, both photo and motion picture (not in capacities large enough to amortize those master rolls), by definition the market is in an entropy death spiral. This type of capitalization cannot be sustained by eBay sales of cameras found in closets, Lomography, a few super-expensive rangefinders, and the LF hobbyists.

If demand falls too far retaining adequate technical knowledge also becomes a serious issue alongside production facility maintenance and refurbishment.

 

[Neanderman]

There should be no issue with licensing the Kodak name for film only to an entity that might purchase the film division. Licensing your name for specific products only is done all the time. Kodak would retain the use of the name for their inkjet products and whatever else remains. Already Kodak chemistry is made under license by the owner of the former Kodak chemical plant.

True enough, but remember -- Kodak is still marketing and distributing the chemicals. In that case, essentially all they did was sell the manufacturing while agreeing to buy everything produced. While they could do that with the films, that wouldn't make them "a digital company" since they'd still be selling film.

 

[MattKing]

I expect a legal defense could be mounted successfully, but that would eat the profits of a marginally thin business.

So the business model of buying the film becomes 1) buy Kodak film, 2) fight with environmentalist movement, 3) watch movie theaters go digital, 4) hope to break even unless a union gets involved so you can go broke.

The directors' liability is such that it can hang around even after someone leaves the Board.

And it isn't so much fighting the environmental movement as fighting the government, because what generally happens is that without legislation being in place, the entities that buy these premises leave no material assets in the corporations, then cut and run if they are required to re-mediate, leaving the government with the responsibility of either leaving a public health hazard or spending large amount of public dollars.

Alternatively, governments (municipal, state and federal) could pass specific exempting legislation - that is when the environmental movement would definitely jump in, to try their best to make the legislation politically costly.

Note that the rules about all this vary tremendously from jurisdiction to jurisdiction, and to get a definitive opinion on this you would need to involve someone with extensive experience in these issues in New York.

 

[zsas]

WSJ "As Kodak Fades, Workers Remember Their Moment"
http://online.wsj.com/article/SB10001424052970203513604577142701222383634.html?ru=yahoo&mod=yahoo_hs

 

[Photo Engineer]

Yes, my friend Paul Gilman is one of the interviewees and is one of our GEH lunch regulars.

PE

 

[PHOTOTONE]

Will PE, and all other retirees lose their pensions?

 

[tomalophicon]

Don't you guys in the US have state-funded retirement pensions?

 

[cmacd123]

The point about master rolls is spot on. This applies to the entire industry, including Fuji and Ilford and their combined capacity. My concern is that there is no new capital to purchase the production assets of Kodak because there are no new customers for the product and the current sales are still in decline. ....
If demand falls too far retaining adequate technical knowledge also becomes a serious issue alongside production facility maintenance and refurbishment.

This is probably the biggest fly in the ointment. Kodak and Fuji make MILES, or Vison Print film and Eterna Print Film respectfully. This is a Low speed colour product on a Polyester base for Process ECP2. The use for this stock is to make relatively short lived Prints to show in Theatres. Movie Projectors run this stuff at 90 ft a minute, so just look at the run time of your favourite recent movie to see how much of this film your local theatre needs. And two weeks later a new Movie comes out and the prints get shipped back to a Kodak Subsidiary to be destroyed.

The Studios hate this so much that they have now made a deal which will subsidise the theatres to switch to digital projection. No prints, just a few DVD's or even just satellite download to a hard disk. I think the system is called "Virtual Print Fee" It is likely that all Theatres in North america will be switched to this system by the end of 2012. The Print film is sold rather cheeply, and it does not contain much silver so it is not only profitable but also justifies the maintenance and staffing of the Film making plants.

It is almost like Tri-x is run at the plant as a hobby on the lunch break.

This change will make it harder to keep that massive plant running I suspect.

One of my other hobbies is Old Electronics, and when I go to the stores I see "Emerson", Tung-Sol., Sylvania, Westinghouse, RCA and many other proud brand names that are now applied to products that have NOTHING to do with the firms that made these brands famous. Vacuum Tubes had a similar Decline in the Mid 1970's -- 1975 RCA made their last Tube TV set. (I think GE stuck it out to about 1982 on their Low end models) with no demand for tubes to build new sets, production levels fell and the major makers turned to imports to fill the replacement demand. {at least with Tubes they don't go bad in storage}

ILford and Foma don't have the MP Print film factor so they may be in better shape. Fuji has made themselves a niche in providing cated film products for Flat Screen displays from what I hear so they have a buffer. Kodak - the inventor of the OLED was too timid to jump on that advantage. With their Film making expertise they probaly could be cranking out TV displays with one hand behind their back..

 

[cmacd123]

They are paralyzed!

They cannot move forward in digital without using film profits. If they use film profits, the film end stagnates. They are using the film profits to fun digital causing problems in film! How much simpler can it be?

YES! and the only investments in film have been improvements for the the MP business - probably mostly to avoid loseing the Print film business to Fuji. Film Makers can justify asking there work be printed on slightly more expensive Kodak Film more easaly if it was shot on Kodak Negative... Still the Vision 3 family dropped 100T, saying the 200T was almost as good., so I think they are left with 50D 200T 250D and 500T.

 

[MDR]

I love Kodak for introducing a cheaper alternative to Vision 3 500T for indie and ultra Low Budget Filmmakers (Vision 500T 5230) and I think it was a step in the right direction maybe they should have done so earlier like the Eastman/Kodak thing in the past. I believe its still a little more expensive than Fuji Stock though. I still miss Vision 800 I kind liked the look it gave most people didn't though.