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Kodak’s lost moment

How Kodak missed the rise of the digital camera and is now trying to dig itself out of its financial troubles.

http://www.youtube.com/watch?v=BuImbHUy4Uc

One of the most well-known US companies of the twentieth century is reporting its latest quarterly business figures this week.

The firm is also rumoured to be looking at the possibility of calling for bankruptcy protection as a way of digging itself out of its financial troubles.

Robert Shanebrook spent more than 35 years working in product management at Kodak. He’s the author of, Making Kodak Film. His family ties with the company go back to the early 1900s.

Robert told me: “It used to be that if you went down a street in India or Africa, or London or Paris or Stuttgart, you’d look down the street and you would also see a Coca Cola sign and you would also see a Kodak sign.”

But Kodak’s business has been hurt by the rise of the digital camera.

A cruel irony says Bob, because a close colleague called Steve Sasson pioneered digital camera technology at Kodak in the 1970s.

“They looked at it and said Steve that’s very interesting, you’ve done a fine job here and we have something else for you to work on next and it was basically put away for a number of years.”

Robert says Kodak management doggedly stuck to making film, treating digital photography as a distant threat, and by the time they woke-up, it was too late.

“They missed the boat, the business went elsewhere,” he said.

As a result, the company’s been downsizing over thirty years.

Sixty thousand people used to work at Kodak HQ in Rochester, New York, in 1980 … now it’s less than ten.

The global workforce is currently 20,000 to 30,000 – down from more than 100,000.

These days, Kodak makes film used in Hollywood movies, it’s profitable, but a shrinking market.

To survive it’s turning itself into a printing company … selling more than a million home printers and developing a range of high speed ones … the trick will be to sell lots of ink back to the printer owners.

Kodak also runs a mail-order printing service … and has a range of patents to fall back on.

The firm’s CEO says profit in some of its new ventures is coming, but the turn round is taking longer than expected, meanwhile Kodak’s burning through cash.

Existing and retired workers fear healthcare benefits may be cut to save $200m to $300m a year.

Recent headlines suggesting lawyers have been appointed to look at possible bankruptcy protection have done much to add to those fears.

Bob Volpe, President of EKRA, the pensioners association, told me: “As the company continues to find difficulty in paying its bills, and having income grow, it looks at cutting, which it’s been doing for 25 years now … we’ve already had two of our benefits cut, there’s a possibility that more may be cut and that’s our healthcare.”

Kodak staff are extremely loyal to their firm … and find it hard to believe that the once giant global player is in such a precarious state.

Robert added: “If you had asked me ten years ago would this be going on I would say no I didn’t think it was possible.”

When George Eastman founded his firm he bet chemical photography would soon catch on and it did.

Now, just over 130 years later, in the digital age, Kodak’s betting on printing chemicals as a way out of it’s financial troubles.