So what exactly should Kodak have done?

[RattyMouse]

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.

Yes, that was exactly my point. Kodak could not have stayed the same and won. Fujifilm "won" but today's Fujifilm looks nothing at all like the Fujifilm of 15 years ago.

 

[Ai Print]

Oh, well, I see the trend here, all the usual suspects blathering on and on about the usual negative Kodak punching bag stuff. I get to use Kodak and other films everyday and will continue to do so for a long long time.

I have taken steps to ensure that after all.

 

[RattyMouse]

Oh, well, I see the trend here, all the usual suspects blathering on and on about the usual negative Kodak punching bag stuff. I get to use Kodak and other films everyday and will continue to do so for a long long time.

I have taken steps to ensure that after all.

Well, as long as you have read and posted in a thread you have no interest in, all is well.

Seriously, you can't guess what would be in a thread that is titled, "So What Exactly Should Kodak Have Done?" You just couldn't resist reading it right?

 

[Photo Engineer]

Yes, that was exactly my point. Kodak could not have stayed the same and won. Fujifilm "won" but today's Fujifilm looks nothing at all like the Fujifilm of 15 years ago.

Actually, Fuji did not win. The two companies are about equal except for the base for Fuji shown in a previous post here. This type of company is illegal in the US, but Japan Incorporated allows this type of setup. So, Fuji has larger financial backing. Let's see how long those other divisions tolerate the losses in the film and film camera divisions though!

PE

 

[Photo Engineer]

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

Actually, there was no significant brain drain at that time. With over 2000 researchers the few engineers lost could hardly be called significant. It was the loss of big chunks that were more important such as the loss of entire companies (Verbatim and Drivetec for example) that hurt Kodak.

PE

 

[RattyMouse]

Actually, Fuji did not win. The two companies are about equal except for the base for Fuji shown in a previous post here. This type of company is illegal in the US, but Japan Incorporated allows this type of setup. So, Fuji has larger financial backing. Let's see how long those other divisions tolerate the losses in the film and film camera divisions though!

PE

Fuji's Imaging Solutions division reported a profit this quarter, mostly due to INSTAX camera and film sales! Fuji projects 5 million cameras sold this year alone. See my upcoming post for more.

 

[kb3lms]

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.

As someone that worked in the equipment design part of Kodak, I can 100% say that the story described above and by Sal is how things worked for a while. Where PE and Prof Pixel worked in the research labs, things may have been quite different, IDK. But where I was we actively pursued and patented digital technologies - some that took advantage of film and some that did not. There was very much a sense of urgency to develop digital technologies before Fuji, and to a somewhat lesser extent Agfa, 3M, GE and IBM, developed and patented them. Fuji had screwed us in the patent wars and we were doing anything we could to gain back ground. This was 1984 to 1988 and I worked in Medical Imaging.

In 1989 there was a sea change as one CEO and his team were ousted and another took over. A conscious, corporate edict was handed down that everything was to be about film. We were to maximize film production, profits and usage. For us, the marching orders were simple: "If it eats film, we like it. If it doesn't eat film but makes money, we might think about it. If it has nothing to do with film, we aren't interested." Project teams I had worked with for years evaporated overnight. A medical instrument division in the same building with us was hastily sold to Johnson & Johnson - never mind that that same J&J unit is still (AFAIK) manufacturing profitably in Eastman Business Park.

The was all done in the name of "Concentrating on Core Strengths and Technologies". It was done to try and make Wall Street happier. Corporations all around the USA were doing the same thing and for the same reason. It was a fad and all those groups spun off by many outfits were happily snapped up by foreign competition who developed them and laughed as the profits rolled in.

"Concentrating on Core Strengths and Technologies" is still a phrase that solidifies like an icy lead ball in my stomach every time I hear it.

Had that critical 1989 change not been made in a bid to make the analysts happy - which you cannot do, they are never happy - things COULD have been very different for EK. It was a choice they made.

I'm out.

 

[Ken Nadvornick]

For us, the marching orders were simple: "If it eats film, we like it. If it doesn't eat film but makes money, we might think about it. If it has nothing to do with film, we aren't interested." Project teams I had worked with for years evaporated overnight.

How fascinating. The most memorable quote for me down the road from Perez was (and I'm paraphrasing here, although I think the essence of the comment is pretty close),

"If film were to disappear tomorrow, I wouldn't even notice and couldn't care less..."

It's the same appeal to Wall street, delivered with the same hubris, just with the pendulum having been wildly jerked in the other direction. And publicly offered when film sales were still reportedly one of the main sources of income keeping the company afloat. Did he think film users were all quietly sitting there with their eyes tightly closed and hands over their ears?

Again, who in their right mind runs a company like this? Especially a treasure like Kodak?

Ken

 

[Xmas]

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.

If Hollywood stops buying Kodak stop making. Alaris are probably a small fraction of Eastmans current coating area.

The camera sales are not critical the profit is in the film sales and there are a lot of instax (and impossible) users about in our streets, and that is amazing to me.

Instant film has recovered volume sales although from a very low base.

It is not up there with selfie sticks though.

 

[Prof_Pixel]

Fujifilm Shifts Focus to Stem Cells and Ebola Drugs

http://www.bloomberg.com/news/artic...os-to-stem-cells-fujifilm-finds-a-second-life

 

[kb3lms]

.....but has had dire consequences for other stakeholders, which include employees and customers. This is all part of a series of related, fundamental shifts. Much of it can be traced back to the 1980s, with a cascading effect thereafter. Off topic I guess.

No, Michael, exactly on topic. This is why things are the way they are. And not just with EK, but many, many other companies in various industries.

What Kodak should have done different was to proceed using common sense and ignore the analysts.

Unfortunately, as a CEO, that gets you shown the door and on the wrong side of the glass. Just as the previous EK CEO learned in 1989.

And even more unfortunately - "All this has happened before, and all this will happen again."



Now I'm really out! I came here looking for a Film Ferrania update!

 

[Ken Nadvornick]

Go Ferrania!



Ken

 

[NJH]

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.

Sorry different shuttle, the one which broke up on re-entry. You can read the report here:
http://spaceflight.nasa.gov/shuttle/archives/sts-107/investigation/CAIB_medres_full.pdf

Its well worth a thorough read for anyone who works in large technology/engineering companies or organisations.

Engineering by Powerpoint is specifically discussed in the report including this statement which I quote here "The Board views the endemic use of Powerpoint briefing slides instead of technical papers as an illustration of the problematic methods of technical communication at NASA". The analysis summarised on page 191 is almost a must read IMHO for anyone working in engineering in the modern world.

 

[Photo Engineer]

Again, you all agree with me, albeit in different ways.

I posted earlier that Kodak had two people "in training" to be a new CEO. One was the CFO and the other the CTO (Financial and Technical tracks). Starting in about 1988 Kodak began choosing more from the Financial tracks to promote and finally chose the CEO from either outside (didn't know film) or from the CFO track.

The CFO chose profits over long term technical goals and although Carp said "We are an Imaging company not a Film company" he did not follow this lead. He dismissed digital as pointed out above.

Now, I said Fuji was equal to Kodak, and they are in many ways. Instax and its companion film have yet to reach the profitability of Kodak's motion picture films, and the film division is not doing too badly. The rest of the company is dragging it down. Just click on "kodak.com" and what do you see? Printing? Really? Well, good luck competing with Xerox! However, it seems that a local print shop, run by a former Xerox executive uses Kodak printers. They are better machines. But he and I agree that the color needs tweaking.

Well, to continue, Fuji would have failed if it were to be faced by US laws. Its parent company keeps it alive which operates under Japanese law. Kodak would have been great in Japan. Making 4x5 cameras, ignoring Polaroid, prepaid film processing....

I hope you see my point. We are not all far apart!

PE

 

[alanrockwood]

This is a very interesting thread.

 

[Sirius Glass]

Kodak should have been clairvoyant.

 

[NJH]

Well, to continue, Fuji would have failed if it were to be faced by US laws. Its parent company keeps it alive which operates under Japanese law. Kodak would have been great in Japan. Making 4x5 cameras, ignoring Polaroid, prepaid film processing....

PE

That is quite an interesting point if thought about in a wider context. Japan is not unique with regards to the closeness of big industrial companies to the state, the Koreans do it on an even bigger scale, here in Europe one could claim this closeness was key to the German success story. As you and a few others experienced the downfall of Kodak first hand how much of that do you feel was due to endemic factors in the US corporate world at the time and how much was just down to bad management decisions. It sounds like its maybe 50/50?

 

[Xmas]

Kodak would have been great in Japan. Making 4x5 cameras, ignoring Polaroid, prepaid film processing...

PE

The Ja have pooled their photo patents so neither company need have paid lawyers, etc.
EK are still making lots of money on cine film, they could have made more siting the coater in Tiwan, HK, or Korea.
A CEO needs vision they could have recruited Land in '50 and Jobs in '90.

The iPhone would have been a EKPhone...

Apple have a problem today.

 

[Wayne]

The iPhone would have been a EKPhone...
.

Thanks for giving me nightmares for the next month.

 

[Chan Tran]

That's not true. Fuji makes great films and very innovative digital cameras. I think the difference with Fuji though is that continued making professional-level film cameras until recently, so they already had the technology in place to make cameras when digital came about. Kodak quit making high-end cameras decades ago and didn't have the ability to make pro-level cameras when digital came about. That's why they used Canon and Nikon film bodies as a basis for their digital cameras, which made cumbersome, large, expensive cameras compared to the digital cameras that Canon, Nikon, and Fuji began making themselves.

I must agree with you that Kodak cameras aren't good. The old Retina's were fine but compared to others they are not that good. So although they make great film and at least in the beginning great image sensor they simply couldn't make good cameras. The market for digital photography is for making the entire camera and not just the sensor.

 

[RattyMouse]

Thanks for giving me nightmares for the next month.

Or maybe it would be called the Kodaphone.

 

[AgX]

That is quite an interesting point if thought about in a wider context. Japan is not unique with regards to the closeness of big industrial companies to the state, the Koreans do it on an even bigger scale, here in Europe one could claim this closeness was key to the German success story.

I do not know of any closeness of that kind in in the German Empire or thereafter. (Of course with exception of the nationalisation in ther GDR.)

 

[alanrockwood]

That is quite an interesting point if thought about in a wider context. Japan is not unique with regards to the closeness of big industrial companies to the state, the Koreans do it on an even bigger scale, here in Europe one could claim this closeness was key to the German success story. As you and a few others experienced the downfall of Kodak first hand how much of that do you feel was due to endemic factors in the US corporate world at the time and how much was just down to bad management decisions. It sounds like its maybe 50/50?

I am not in a position to know, but that need not stop me from expressing an opinion. My guess is more like 80/20 or maybe 90/10, with bad management decisions predominating, after one factors out those factors not under management control.

 

[Photo Engineer]

That is quite an interesting point if thought about in a wider context. Japan is not unique with regards to the closeness of big industrial companies to the state, the Koreans do it on an even bigger scale, here in Europe one could claim this closeness was key to the German success story. As you and a few others experienced the downfall of Kodak first hand how much of that do you feel was due to endemic factors in the US corporate world at the time and how much was just down to bad management decisions. It sounds like its maybe 50/50?

I could not place a figure on that. If you looked at Kodak under Japanese law, perhaps nothing bad would have happened. Under US law, they failed, but due to spectacularly bad decisions! Almost as if they thought they were working with Japanese law. But then I often heard the term used "Japan INC" when we tried to do something and were prevented by law. We were told that the Japanese could do it, but we could not.

Regarding some previous posts here, Kodak once made Graphic cameras (LF) and the early 35mm cameras were made for Kodak and were quite high quality. However, the government made Kodak divest itself of the professional camera business. They could no longer sell film with the process included. And, when the president of Motorola moved over to Kodak to take over, he knew about imaging cell phones but was probably prohibited from sharing this with EK. Even so, he never did. Under other laws, both companies could have cooperated more closely and an imaging cell phone might have emerged years earlier than it did. It certainly would have been better.

Then again, I have seen managers disapprove a project when the time was right, but the presenters were the wrong people, and then they approved the same project when the time was wrong, but the presenters were those who were considered the right people. In those cases, the projects either failed or were very inappropriate for the time of introduction.

The bag of answers to the above and other comments and questions is still quite full.

PE

 

[kb3lms]

As you and a few others experienced the downfall of Kodak first hand how much of that do you feel was due to endemic factors in the US corporate world at the time and how much was just down to bad management decisions. It sounds like its maybe 50/50?

I feel it was more decisions made because of and in line with factors in the US corporate world at that time. And those same factors are even more pervasive today. Corporate decisions are all made with short term goals in mind to keep "The Street" and thereby the investors happy. So were the decisions good or not? The answer is "it depends". Did the parties that were supposed to benefit by those decisions benefit? As a party to any CEO level decision, consumers or end users are pretty far down on that list.

Besides, any CEO knows that their 15 minutes on the world stage is just that. Sooner or later that time will surely come to a close and they will be remembered in light of the decisions they made and how "The Street" was affected by those decisions. If that sounds difficult to believe, just ask Carly Fiorina.