So what exactly should Kodak have done?

[Xmas]

...they very well could have sank a couple hundred million into down-sizing their film coating line from scratch into a state of the art, highly scalable and diversified operation that would be the envy of the film & paper coating world. Wiith the ability to maintain a high degree of quality and profit margin regardless of demand for analog products, that to me would have been the perfect outcome.

But we are here now, with film having fallen some 95% over it's glory days in the 90's, prices continuing to rise, corporate shifts by the likes of stalwart Ilford Harman showing me that nothing is on as solid a footing as any of us would like.
...

After you make the capital investment you still have to pay the staff wages unless you want to be a plant worker doing free shifts five days a week?

 

[Paul Howell]

Why didm't Fuji go bankrupt?

Fujifilm Holding not be confused with Fuji Heavy Industries is a well diversified company that has been able to absorb loses while restructuring the imaging division.

Fujifilm Holdings Fujifilm Fujifilm Imaging Systems
Fujifilm Medical
Fujifilm Pharma
Fujifilm RI Pharma
Fujifilm Photo Manufacturing
Fujifilm Fine Chemicals
Fujifilm Electronics Materials
Fujifilm Engineering
Fujifilm Optics
Fujifilm Opto Materials
Fujifilm Global Graphic Systems
Fujifilm Computer Systems
Fujifilm Software
Fujifilm Techno Services
Fujifilm Techno Products
Fujifilm Business Supply
Fujifilm Digital Press
Fujifilm Media Crest
Fujifilm Shizuoka
Fujifilm Kyushu
Fujifilm Logistics

Fuji Xerox Fuji Xerox Printing Systems Sales
Fuji Xerox Information Systems
Fuji Xerox System Service
Fuji Xerox Interfield
Fuji Xerox Advanced Technologies
Fuji Xerox Manufacturing
Fuji Xerox Service Creative
Fuji Xerox Service Link
Fuji Xerox Learning Institute

Toyama Chemical Taisho Toyama Pharmaceutical

Fujifilm Business Expert

 

[Ai Print]

After you make the capital investment you still have to pay the staff wages unless you want to be a plant worker doing free shifts five days a week?

Well of course...and had Kodak done things *perfectly* this would have easily been a non-issue.

 

[Xmas]

Well of course...and had Kodak done things *perfectly* this would have easily been a non-issue.

Well when Eastman Kodak closed, down their production film coater at UK Harrow (about 2004) the local papers indicated 450 people were made redundant.

Do you work for nothing and have you 449 friends of a similar vein?

Note they were skilled workers, it would be difficult to start up again.

 

[Bob Carnie]

Downsized to more smaller units, concentrated on Photography, and like others have said above maximized their knowledge in digital.


Canon is still a powerhouse, they saw a way to transition to digital. Kodak did not transition well.

 

[RattyMouse]

Fujifilm would have failed just like Kodak had they tried to keep film or even digital cameras their primary focus. They succeeded by moving away from film and imaging.

 

[NJH]

Kodak wasn't first to capture images with a CCD, Steven Sasson may well have been first to put a still camera system together but he did it with existing technology. I don't think as big and mighty as Kodak was they could have kept that genie bottled up, for sure any half decent IPR lawyer and they must have had plenty of them would have done everything to stop anyone developing anything similar till the patent expired. If its true that they really didn't bother to defend their IPR then that is beyond unforgivable for a technology company of such resources.
http://www.google.com/patents/US4085456

 

[Photo Engineer]

Dan Carp once said that Kodak is an Imaging Company not a Film Company. Well, I guess he didn't listen to himself.

PE

 

[Ken Nadvornick]

Kodak ceased being imaging market proactive and chose instead, by decisions made and unmade, to become reactive. They stopped leading and started chasing, thus losing the ability to set the direction. Then they discovered they couldn't keep up trying to run the race on someone else's path.

Where the buck stopped, a devastating lack of thoughtful foresight doomed them.

Ken

 

[Photo Engineer]

They elected a marketing type as CEO instead of a savvy technical type!

PE

 

[Ken Nadvornick]

When all is said and done, Kodak will have simultaneously been one of the finest companies ever created under the American capitalist system, as well as one of its ugliest failures. The delta between those two data points can only be described as staggering.

How that Perez fellow sleeps at night I'll never understand. I suppose millions of dollars in bonus money for a job well done helps a little...



Ken

 

[Ian Grant]

They elected a marketing type as CEO instead of a savvy technical type!

PE

Strange you say that because it makes total sense and echoes why my father was made Managing Director of a very large international carpet company in the late 1960's. They wanted someone technical with a long term view at the top,

I remember my father told me back then around the time he retired (roughly 40 years ago) that the marketing and finance people were only thinking short term, he was talking about other companies in many fields and was of course right.

There is another aspect as well, companies led by their technical people have quite a different dynamic, it's a respect across the work force and a knowledge that those at the top have full commitment.

Only those that worked at (Eastman) Kodak can know what it was really like, we as consumers see or perceive a rather rudderless cash rich business being exploited by a very highly paid CEO and his crew in a way that gave them huge bonuses despite losses, cutting R&D to keep their salaries increasing and making nonsensical decisions as to how to go forward.

Ian

 

[Prof_Pixel]

Strange you say that because it makes total sense and echoes why my father was made Managing Director of a very large international carpet company in the late 1960's. They wanted someone technical with a long term view at the top,

I remember my father told me back then around the time he retired (roughly 40 years ago) that the marketing and finance people were only thinking short term, he was talking about other companies in many fields and was of course right.

Yup, I've often said that two things that have destroyed US corporations (and I suppose elsewhere as well) are the MBA (Masters of Business Administration) and the spreadsheet. The MBA taught students to focus on short term goals (their pay was based on short term performance) and the spreadsheet made it possible to play with the financial figures to obtain whatever result was desired.

 

[Alan Klein]

Kodak (factories, people, executives and business) was film. They had huge margins and didn't want digital. Sure they played around with digital. But they weren't serious. In any case, other than cameras, what do you do with digital images? Nothing beats film from that standpoint. Note only film bbut print paper and supplies. Sure there's printers, and prints from digital at the pharmacies. And digital cameras. But let me ask. How many of you used Kodak film or digital cameras? Let's face it. So many other companies were better camera and printer manufacturers. Not so with film. So they proceeded with film over the cliff.

 

[Photo Engineer]

Alan, many of us wanted digital as a good line of products but management would not listen. My point in my previous post and that of Ian make it clear.

PE

 

[Sirius Glass]

Kodak crashed and burned because they made a knowing decision early on NOT to defend their world-class, world-leading technologies. That included both film and digital. It's as simple as that, really.

When it came to film technology, like it or not, Kodak was in total control. They were the 800-pound gorilla that dominated the field. They had the most money, the best researchers, the best products, the biggest market, and the adoration of generations of loyal customers. Everyone else was just simply trying to keep up.

To those who claim Kodak could not keep up with digital imaging technology, they miss the fact that Kodak invented it. And because they invented it there was a point in time at the beginning where by definition they controlled it completely and were ahead of everyone else, bar none.

But somewhere along the line the decision makers at Kodak were served up and swallowed the infamous "easy digital billions" Kool-Aid. They came to believe that only by instantly and completely abandoning their century-plus of world-class emulsion and coating expertise and products could they lay their hands on those elusive digital billions. And in trying to do so they threw it all away.

In the person of their new CEO they ended up working harder to stop film than they did to start anything else. In building their bridge across the river to the promised land, for every new digital plank they laid down in front, they pulled up two analog planks from behind. Inevitably those dual trend lines crossed leaving them stuck mid-river without a viable path in either direction.

What could they have done differently?

Defended their top-of-the-line film imaging technology (see Sal's post above), marketing it as the higher quality option for discriminating photographers, while they concurrently worked to improve and control their newer digital imaging technology (again, see Sal above) and carefully blended it into their analog product lines as more appropriate for the birthday candles crowd.

Successful companies make their own markets. Kodak was more than big enough, rich enough, and bad-ass enough to have controlled the direction that the new technology would take. They were already doing that with film. There was nothing stopping them from doing it with digital. Except thoughtful foresight.

My dream for Kodak (listen up, all you who think I'm anti-Kodak...) was to be the biggest and baddest imaging company on the planet—which would only have been an extension of what they already were with film. To have a beautifully maintained and comprehensive portfolio of correctly marketed, highly supported, continually improved, and perfectly price-point positioned film and digital imaging product lines for both professionals and consumers.

But instead they drank the Kool-Aid and ended up all trying to crowd onto that last remaining plank in the middle of a raging river, seemingly clueless about how they got there, and constantly pointing fingers at everyone and everything else for their predicament, while the managers with the biggest bonuses spent their time throwing all of the lesser stakeholders into the icy waters below.

I am still so mad at those guys I could spit...

Ken

+1

Kodak did not listen to me when I worked there, so I left and as always I was right and my bosses were wrong. What can I say?

 

[Photo Engineer]

Same thing for me. Hahahaha.

JK

PE

 

[accozzaglia]

This, plus Kodak haemorrhaged its highly trained research and development talent when it needed that talent the very most.

I've mentioned it elsewhere on APUG previously, but the one instance which sticks with me is that of Kodak's digital optical storage team: its director was recruited by Seagate in Minnesota during the mid-1990s. Once relocated, he promptly hired his entire Kodak team of a dozen engineers and moved them to Minnesota — all dozen of them boasting Ph.Ds in various optical engineering sub-disciplines. As talent and knowledge capital go, especially given the transitional time period, that's an incredible, difficult-to-replace loss of an exceptional brain trust. #braindrain

I watched Kodak spend a lot of money on projects that failed, such as the Verbatim / Drivetek high capacity floppy drive and the purchase of a failing and floundering Wang computers. I also watched MAC fail from use of the wrong hardware, and the wide fast coaters? Don't get me started on this.

It was the era of the managers "who could do no wrong" I guess. Nothing could stop some of these projects until they had bled the company of a lot of money.

And yet, they could have become a great mover and shaker in the digital world, as they held most of the best digital sensor patents.

PE

 

[accozzaglia]

Whether or not you say so in jest, a good company must keep open a channel so it can listen to and consider its own people as a wellspring for new and better ideas.

+1

Kodak did not listen to me when I worked there, so I left and as always I was right and my bosses were wrong. What can I say?

 

[NJH]

Yup, I've often said that two things that have destroyed US corporations (and I suppose elsewhere as well) are the MBA (Masters of Business Administration) and the spreadsheet. The MBA taught students to focus on short term goals (their pay was based on short term performance) and the spreadsheet made it possible to play with the financial figures to obtain whatever result was desired.

Sadly the spreadsheet along with powerpoint is fast destroying science and engineering as well. Neither are engineering tools but it is just to easy to fall into using such stuff, all it then takes is for some fast talking and convincing sounding guys to get up the ladder using design by powerpoint and everyone else is forced to do likewise to keep up. It takes a disaster like the space shuttle blowing up to stop it.

 

[pdeeh]

They should have stopped time ...

 

[Xmas]

Sadly the spreadsheet along with powerpoint is fast destroying science and engineering as well. Neither are engineering tools but it is just to easy to fall into using such stuff, all it then takes is for some fast talking and convincing sounding guys to get up the ladder using design by powerpoint and everyone else is forced to do likewise to keep up. It takes a disaster like the space shuttle blowing up to stop it.

No there was no connection between power point, Excel and the space shuttle.

They launched outside the allowable temperature window, you would not ignore warnings for the 4thJuly and light the blue paper?
Chernobyl staff performed an illegal test
Think three mile island was similar
Fukeshima reactor was designed to be unsafe and the sea walls were not as high as earlier Tsunami.

 

[jpentecost]

Given that so many ex Kodak employees are here, I'm preparing myself to be "Slapped down" as my daughter would say .. So I'm going to stick to my own experience ..

In the early 2000's I did this test ..

http://www.cinematography.net/Viper/Viper Tests.htm

Thomson had developed the camera in conjunction with Kodak. Kodak had developed a system called "LOT" or Linear optical tape, that could record (Uncompressed!) two HD streams. Basically a linear optical CD or DVD .

The background at the time was that there were any number of digital SLR's with Chips that if you could output the data from them at 25fps and record it, could be used for motion picture work. (The Viper was not one of these but a 3-CCD camera). LOT had many advantages over the disk and solid state systems we now have .. It was a "one time" format the data was burnt onto the tape and could not be rewritten. For Kodak that gave them a revenue stream and for production it gave them confidence that data could not be lost.

Kodak had supplied two recorders to a film to use this system. They had been testing for two weeks and were due to start shooting in another week. (And had moved hell and high water to get the completion bond company to agree to a motion picture being shot digitally) Suddenly two people from Kodak arrived at the camera rental house and removed the equipment. Apparently senior management had now heard about it (they spent $80million developing it so you would think they MIGHT have known before) and did not want to jeopardize the £100,000 worth of film sales they would make if this film was shot on film. The upshot of this was that they properly upset the production, who then shot on Fuji just to spite them. They had knocked a chink in the door with the completion bond companies that would allow a production to shoot a feature film not on film, and they also guaranteed that when digital cinematography became the norm that they would supply none of the materials for it.

 

[RattyMouse]

I think in reality Kodak was doomed once digital was invented. Face it, digital wins out over film because it offers the mass public what it wants: instant gratification at a very low cost. How can film compete with that on a mass scale? It can't. Because of this, film sales *had* to decline from the billions of rolls of film that were sold each year. The question is, what level would it fall to? Now we know that it would fall 95% or so. What kind of Kodak is left after that fall in sales?

As we can see from nearly everyone who is trying, there isnt serious money making digital products that just produce images. Canon, Nikon, and perhaps Sony are the only real companies making money from selling pure cameras and they are witnessing declining sales year after year.

The smart phone has turned the camera into a commodity so there's no real money in being a pure camera company. Kodak had to change and the bankruptcy forced this to happen. Now they are a printing company. Not very exciting for us, but we'll have to wait and see if they can make a success of this new direction.

The problem is, they never right sized their film operations, nor do they show any interest in remaining a film manufacturer. There's no connection to printing boxes and film, so we are left with massive uncertainty regarding if they will even continue to make film in the near future. What happens when Hollywood stops buying film?

Fujifilm took the path that seems to keep them on a semi film manufacturing basis. Their most recent financial report published this week shows that they upped their INSTAX camera sales prediction for the year to 5 MILLION units. Five million film cameras sold!! In 2015 no less. That's amazing.

 

[BetterSense]

The question is, what level would it fall to? Now we know that it would fall 95% or so. What kind of Kodak is left after that fall in sales?

As we can see from nearly everyone who is trying, there isnt serious money making digital products that just produce images. Canon, Nikon, and perhaps Sony are the only real companies making money from selling pure cameras and they are witnessing declining sales year after year.

People must remember this. Billions of dollars in revenues evaporated. The best case scenario for Kodak would be to own the whole pile that's left...but it's a small pile no matter what, and many competitors for it. There is no big win for Kodak, even if they had dominated digital.