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This decision to give a tax payer funded loan to a company that’s basically been unable to adapt to changing market conditions for 30 years really puzzles me.

This decision to give a tax payer funded loan to a company that’s basically been unable to adapt to changing market conditions for 30 years really puzzles me. Why does Kodak think they can pivot into an entirely new industry? Wouldn’t the money be better spent on a true startup in this area? Investing in several startups would provide some risk mitigation that at least one of the companies could make it in the market. A new company wouldn’t be saddled with all of Kodak’s over bloated management and legacy. It’s also likely that such a company or companies would create more than 300 jobs.

ChrisLomont 6y ago
>Wouldn’t the money be better spent on a true startup in this area? Not likely. Kodak likely has large production capacity already as well as the contacts throughout industry to execute. >A new company wouldn’t be saddled with all of Kodak’s over bloated management and legacy. A new company also would not have the large engineering staff and capacity to produce like Kodak could. Kodak still has massive and significant chemical engineering talent. Kodak still has a billion+ in annual revenue, ~5000 employees, and manufacturing and design talent. Very, very few startups reach that capability.
- mmmBacon 6y ago
  If they have that much of an advantage it’s not at all obvious why they need a $765M taxpayer investment. They should have been able to raise funds from capital markets. I’m not a crazy free market ideologist but I tend to think if private investment failed, there’s a reason. I also having spent the last 20 years in HW I disagree that anything having to do with the production of material goods requires a large number of engineers. Finally it’s not at all clear that their chemicals experience translates into pharmaceutical experience. Again if there was a strong business and technical case, private investors would want in.
  - mehrdadn 6y ago
    Not saying you're wrong (I don't know), but it's not a straightforward implication is it? I'd assume private investors would want high profit, whereas the government just wants drugs in response to the pandemic to get made ASAP. If they might be able to do it with minimal profit then maybe it wouldn't interest private investors much.
  - ChrisLomont 6y ago
    > If they have that much of an advantage it’s not at all obvious why they need a $765M taxpayer investment. Are the goods being produced for the taxpayer? Why yes, they are. Thus it makes sense for the taxpayer to pay for the goods. This is pretty much the end of discussion on who should pay for the goods. As to your estimation on how many engineers should work on something, there’s ample other engineers that would disagree. Go ahead and amaze us with the next iPhone or Tesla with only a handful. Also, all your arguments apply to funding startups from private markets, yet above you seemed ok with taxpayers funding startups. (Despite high failure rates....) I think you really just want taxpayer money for startups.
    - mmmBacon 6y ago
      By your logic you could say all goods are being produced for taxpayers, therefore shouldn’t it follow that every company should get a taxpayer funded loan? I’m not generally a fan of of taxpayer funding for the private sector. This includes most startups. Generally I think these deals are usually really bad for taxpayers. Kodak is losing money, to the tune of $60M so it’s unclear what their long-term viability is as a company. The only argument for a startup here is to jettison the structure of a failing company. Again, I think you are overestimating the number of engineers needed to produce some of the things you’re talking about. My assertion is that if Kodak was really strong here and had a good business case, they would not need taxpayer funded investment.
cosmie 6y ago
> Why does Kodak think they can pivot into an entirely new industry? It's not an entirely new industry for them. Kodak's roots in the photography industry built up a good bit of institutional knowledge and capital infrastructure around chemical synthesis, and they've already been leveraging that expertise/infrastructure for hire (including for pharmaceuticals) through their Advanced Materials division[1]. So it's not entirely new to them, nor a complete unknown on their ability to execute. This contract just elevates it into a substantially larger and more important chunk of business for them. Between the existing expertise and facilities, Kodak makes a much safer and faster-to-market bet than seeding a bunch of startups from scratch. https://www.kodak.com/en/advanced-materials/page/specialty-chemicals https://www.kodak.com/en/advanced-materials/page/specialty-c...
- joezydeco 6y ago
  Kodak also had a biomedical diagnostics business unit. They sold it to Johnson and Johnson about 25 years ago.
- Jasper_ 6y ago
  They sold off most of their chemical company to Eastman Chemical about 25 years ago. https://en.wikipedia.org/wiki/Eastman_Chemical_Company https://en.wikipedia.org/wiki/Eastman_Chemical_Company

ChrisLomont 6y ago

>Wouldn’t the money be better spent on a true startup in this area? Not likely. Kodak likely has large production capacity already as well as the contacts throughout industry to execute. >A new company wouldn’t be saddled with all of Kodak’s over bloated management and legacy. A new company also would not have the large engineering staff and capacity to produce like Kodak could. Kodak still has massive and significant chemical engineering talent. Kodak still has a billion+ in annual revenue, ~5000 employees, and manufacturing and design talent. Very, very few startups reach that capability.

mmmBacon 6y ago
If they have that much of an advantage it’s not at all obvious why they need a $765M taxpayer investment. They should have been able to raise funds from capital markets. I’m not a crazy free market ideologist but I tend to think if private investment failed, there’s a reason. I also having spent the last 20 years in HW I disagree that anything having to do with the production of material goods requires a large number of engineers. Finally it’s not at all clear that their chemicals experience translates into pharmaceutical experience. Again if there was a strong business and technical case, private investors would want in.
- mehrdadn 6y ago
  Not saying you're wrong (I don't know), but it's not a straightforward implication is it? I'd assume private investors would want high profit, whereas the government just wants drugs in response to the pandemic to get made ASAP. If they might be able to do it with minimal profit then maybe it wouldn't interest private investors much.
- ChrisLomont 6y ago
  > If they have that much of an advantage it’s not at all obvious why they need a $765M taxpayer investment. Are the goods being produced for the taxpayer? Why yes, they are. Thus it makes sense for the taxpayer to pay for the goods. This is pretty much the end of discussion on who should pay for the goods. As to your estimation on how many engineers should work on something, there’s ample other engineers that would disagree. Go ahead and amaze us with the next iPhone or Tesla with only a handful. Also, all your arguments apply to funding startups from private markets, yet above you seemed ok with taxpayers funding startups. (Despite high failure rates....) I think you really just want taxpayer money for startups.
  - mmmBacon 6y ago
    By your logic you could say all goods are being produced for taxpayers, therefore shouldn’t it follow that every company should get a taxpayer funded loan? I’m not generally a fan of of taxpayer funding for the private sector. This includes most startups. Generally I think these deals are usually really bad for taxpayers. Kodak is losing money, to the tune of $60M so it’s unclear what their long-term viability is as a company. The only argument for a startup here is to jettison the structure of a failing company. Again, I think you are overestimating the number of engineers needed to produce some of the things you’re talking about. My assertion is that if Kodak was really strong here and had a good business case, they would not need taxpayer funded investment.

cosmie 6y ago

> Why does Kodak think they can pivot into an entirely new industry? It's not an entirely new industry for them. Kodak's roots in the photography industry built up a good bit of institutional knowledge and capital infrastructure around chemical synthesis, and they've already been leveraging that expertise/infrastructure for hire (including for pharmaceuticals) through their Advanced Materials division[1]. So it's not entirely new to them, nor a complete unknown on their ability to execute. This contract just elevates it into a substantially larger and more important chunk of business for them. Between the existing expertise and facilities, Kodak makes a much safer and faster-to-market bet than seeding a bunch of startups from scratch. https://www.kodak.com/en/advanced-materials/page/specialty-chemicals https://www.kodak.com/en/advanced-materials/page/specialty-c...

joezydeco 6y ago
Kodak also had a biomedical diagnostics business unit. They sold it to Johnson and Johnson about 25 years ago.
Jasper_ 6y ago
They sold off most of their chemical company to Eastman Chemical about 25 years ago. https://en.wikipedia.org/wiki/Eastman_Chemical_Company https://en.wikipedia.org/wiki/Eastman_Chemical_Company