6 ms·

Kodak Teeters on the Brink

62 points by smilliken 15y ago

teyc 15y ago
What's going to happen to all those retirees? There aren't any 401ks to fall back on are there?
- eduardordm 15y ago
  Pretty sad, but they are not in a good situation. To be sure, you need to check current regulation on that. But, if I remember, it's something like: First they will pay all debt they made WHILE on chapter 11 and govt, then workers & retirees, etc. Kodak has some patents, and some other assets, but I doubt it is enough to pay everyone.
  - rdtsc 15y ago
    It is interesting that for obsoleted technology patents don't do much. Who cares about say "new innovative color film developing technology"? A large tech company filing for chapter 11 could potentially have a hefty patent portfolio ready to be sold.
    - timjahn 15y ago
      Of course, the question is, how long does it take for that theoretical portfolio to be outdated? Developing film was around until quite recently, until it quickly became obsolete.
      - rdtsc 15y ago
        Yeah, it was a fast transition. It took only 10-15 years or so but it turned a whole market segment upside down. If someone said in 1995 that by 2010 Kodak will be obsolete, I would not have believed them.
        timjahn 15y ago
        No kidding. Makes me wonder what technologies heavily used today won't be around for my 16 month old son's 10th, 11th, 12th birthdays.
    - ars 15y ago
      No, they have a lot of digital photo patents - they were first to make a digital camera, they just couldn't make them cheaply enough and lost market share rapidly.
- ars 15y ago
  That what this is for: http://en.wikipedia.org/wiki/Pension_Benefit_Guaranty_Corporation http://en.wikipedia.org/wiki/Pension_Benefit_Guaranty_Corpor... It doesn't cover everything, but it helps a lot.
  - ams6110 15y ago
    The PBGC has a total of $102.5 billion in obligations and $79.5 billion in assets (quoting the linked page).
  - nradov 15y ago
    The PBGC provides a nice backstop for workers with certain defined benefit pension plans but as a matter of public policy it's a terrible idea and ought to be phased out. The insurance rates it charges are insufficient and so taxpayers are going to get stuck with a huge liability. Its mere existence creates a moral hazard by encouraging employers to make promises they can't keep. The government should encourage a shift to defined contribution plans.
- ams6110 15y ago
  If there's one thing I hope that people entering adulthood today learn from recent history, it is that you cannot depend on your employer, the government, your union, or any other large impersonal bureaucratic entity to take care of you, individually. You better plan on doing that yourself.
fvryan 15y ago
I wonder how things could have gone differently for Kodak. Kodak invented the digital camera, so it's easy in retrospect to say they should have focused more on digital technology. But film was printing cash and they would have had to anticipate so many changes. Photography behavior, photo sharing behavior, personal computing, and now mobile.
- eduardordm 15y ago
  Things are moving so fast that I wonder how long it will take for smartphones to kill those low/medium-end cameras. I have a cool small sony camera and I only take photos using my phone.
  - fvryan 15y ago
    It's already started.. Cisco shutting down Flip Mino for example after buying it $580M.
- moylan 15y ago
  2 of my first 3 digital cameras were kodak. a dc2300? a low end 2mp camera. and a palmpix attachment that connected to my then palm iiix and iiic. both were very good cameras and the lenses were better than any of the camera phones i had for a few years. the palmpix especailly for a vga res camera took surprisingly good pics. i never heard of them trying to put their tech into camera phones. their name and reputation would have helped shift a few phones. a quick check only turns up one model a motorola zn5. they're also sitting on impressive printing technology. there is still a market for mobile printing for embedded applications. i would love a a5-a6 printer that fitted in my bag to kick out a page every once in a bluemoon. it would be tragic to see kodak disappear from shops and be nothing but a brand in some larger company.
  - ams6110 15y ago
    I would be surprised if their imaging business didn't survive in some fashion. Maybe spun off or sold off. Their stuff is quite good. Heh. Just did a quick search to check something and looks like this has already happend: http://www.kodak.com/ek/US/en/Image_Sensor_Solutions/Kodak_Image_Sensor_Solutions.htm http://www.kodak.com/ek/US/en/Image_Sensor_Solutions/Kodak_I... Edit: So this is fascinating. The one piece of their business where they had legitimately market-leading tech, they sell off. They must have felt that they couldn't escape the weight of the failure of all the old business lines.
samstave 15y ago
Then they MUST MAKE THIS RIGHT NOW: http://re35.net/ http://re35.net/
- dhughes 15y ago
  Great idea! I wish there was a rollfilm version too.
- luke_s 15y ago
  I got really excited for a moment, as I have been looking for something like this for a long time. Unfortunately it turns out to be an old April fools joke.
  - stan_rogers 15y ago
    It (or, rather, something very like it) was an actual product at one time, but it needed to be a per-camera product to make it work properly. The 135 format standard says how big the frames should be and how many sprocket holes per frame, but not how the frames align with the sprocket holes or exactly how much distance there should be between the film canister and the lightbox. Getting the sensor aligned with the lightbox (and the viewfinder) basically meant a different model for each of the various SLR cameras out there. The sensor itself was pretty low-rez and had little in the way of dynamic range. Oh, and since things were so inefficient at the time, you needed to butcher the camera (drilling a hole in the baseplate) to feed power to the canister-cum-senor (and, if I recall correctly, to get the data out). It didn't make it past the "floating a trial balloon" stage in the marketplace.
gerggerg 15y ago
As much as I actually respect Kodak, absolutely love a lot of their products and will miss the film, this made me happy: "The company's problems came to a head in 2011, as Mr. Perez's strategy of using patent lawsuits and licensing deals to raise cash ran dry."
- kokey 15y ago
  The bankruptcy rumours surprised me, since I remember reading years ago that Kodak shut down most of their film business etc. because of the market changing. I thought they just logically trimmed the business to what was feasible and they would be small and operate off some royalties and some of their newer products and perhaps brand licensing, perhaps in a way that Atari functioned for a while. Seems like they mismanaged this approach.
minikomi 15y ago
I hope TriX holds out for at least a few more years!
- ams6110 15y ago
  Try Ilford HP5.
- dhbanes 15y ago
  Just buy a bunch of it, B&W film lasts a very long time even under average conditions. It should outlast you if you keep it in the freezer with a few desiccant packets. Might want to go for the 100' rolls. Defrost before use :)
  - minikomi 15y ago
    Yep, on my list to get a bulk loader next time some money rolls in.
    - dhbanes 15y ago
      btw, Tri-X was my first thought too after seeing this headline. Glad to see a few people still have their priorities straight ;)
- hzy 15y ago
  As long as Ektar and Portra keep rolling onto store shelves I'll be happy.
  - revdinosaur 15y ago
    Ektar is an incredible new stock. That and their new formula 16mm Ektachrome have really impressed me as of late.
walru 15y ago
If only there was some legislation put into place long ago, that would have banned the usage of digital photography, so Kodak wouldn't be in this situation today.
- deleted 15y ago
  [deleted]
villagefool 15y ago
Still waiting for the rise of Kodacell...
deleted 15y ago
[deleted]
jroseattle 15y ago
A cautionary tale for the current stable of technology giants: * Unwillingness to shift the company around a high-margin sacred cow (film). * Unwillingness to compete with other partners in the chain (digital cameras). * Expanding into unprofitable areas (printers)
ahi 15y ago
"...deciding to focus on consumer and commercial printers in the past half-decade under Chief Executive Antonio Perez." ... "...the viability of the company's printer strategy has yet to be demonstrated, raising questions about the fate of the company's 19,000 employees." ... "Kodak has lost money each year but one since Mr. Perez, who previously headed the printer business at Hewlett-Packard Co., took over in 2005. The company's problems came to a head in 2011, as Mr. Perez's strategy of using patent lawsuits and licensing deals to raise cash ran dry." ... "Mr. Perez decided to base the company's future on consumer and commercial inkjet printing. But the saturated market has proved tough to penetrate, and Kodak is paying heavily to subsidize sales as it builds a base of users for its ink." Much like the incompetent Borders CEO, I predict a bankruptcy filing will mean a couple million dollar retention bonus in this guy's future. Sure, Kodak was in trouble in 2005, but it still had plenty of options better than printers and patent trolling. I love when management of cash strapped companies hire consultants to do their jobs for them: "Soon after, Kodak hired restructuring lawyers and advisers to help shore up its finances." So in the losers column we have shareholders, employees, retirees, taxpayers (PBGC/Medicare), and the communities of upstate New York. In the winners column we have the fuckwits responsible.

62 points by smilliken 15y ago

teyc 15y ago

What's going to happen to all those retirees? There aren't any 401ks to fall back on are there?

eduardordm 15y ago
Pretty sad, but they are not in a good situation. To be sure, you need to check current regulation on that. But, if I remember, it's something like: First they will pay all debt they made WHILE on chapter 11 and govt, then workers & retirees, etc. Kodak has some patents, and some other assets, but I doubt it is enough to pay everyone.
- rdtsc 15y ago
  It is interesting that for obsoleted technology patents don't do much. Who cares about say "new innovative color film developing technology"? A large tech company filing for chapter 11 could potentially have a hefty patent portfolio ready to be sold.
  - timjahn 15y ago
    Of course, the question is, how long does it take for that theoretical portfolio to be outdated? Developing film was around until quite recently, until it quickly became obsolete.
    - rdtsc 15y ago
      Yeah, it was a fast transition. It took only 10-15 years or so but it turned a whole market segment upside down. If someone said in 1995 that by 2010 Kodak will be obsolete, I would not have believed them.
      - timjahn 15y ago
        No kidding. Makes me wonder what technologies heavily used today won't be around for my 16 month old son's 10th, 11th, 12th birthdays.
  - ars 15y ago
    No, they have a lot of digital photo patents - they were first to make a digital camera, they just couldn't make them cheaply enough and lost market share rapidly.
ars 15y ago
That what this is for: http://en.wikipedia.org/wiki/Pension_Benefit_Guaranty_Corporation http://en.wikipedia.org/wiki/Pension_Benefit_Guaranty_Corpor... It doesn't cover everything, but it helps a lot.
- ams6110 15y ago
  The PBGC has a total of $102.5 billion in obligations and $79.5 billion in assets (quoting the linked page).
- nradov 15y ago
  The PBGC provides a nice backstop for workers with certain defined benefit pension plans but as a matter of public policy it's a terrible idea and ought to be phased out. The insurance rates it charges are insufficient and so taxpayers are going to get stuck with a huge liability. Its mere existence creates a moral hazard by encouraging employers to make promises they can't keep. The government should encourage a shift to defined contribution plans.
ams6110 15y ago
If there's one thing I hope that people entering adulthood today learn from recent history, it is that you cannot depend on your employer, the government, your union, or any other large impersonal bureaucratic entity to take care of you, individually. You better plan on doing that yourself.

fvryan 15y ago

I wonder how things could have gone differently for Kodak. Kodak invented the digital camera, so it's easy in retrospect to say they should have focused more on digital technology. But film was printing cash and they would have had to anticipate so many changes. Photography behavior, photo sharing behavior, personal computing, and now mobile.

eduardordm 15y ago
Things are moving so fast that I wonder how long it will take for smartphones to kill those low/medium-end cameras. I have a cool small sony camera and I only take photos using my phone.
- fvryan 15y ago
  It's already started.. Cisco shutting down Flip Mino for example after buying it $580M.
moylan 15y ago
2 of my first 3 digital cameras were kodak. a dc2300? a low end 2mp camera. and a palmpix attachment that connected to my then palm iiix and iiic. both were very good cameras and the lenses were better than any of the camera phones i had for a few years. the palmpix especailly for a vga res camera took surprisingly good pics. i never heard of them trying to put their tech into camera phones. their name and reputation would have helped shift a few phones. a quick check only turns up one model a motorola zn5. they're also sitting on impressive printing technology. there is still a market for mobile printing for embedded applications. i would love a a5-a6 printer that fitted in my bag to kick out a page every once in a bluemoon. it would be tragic to see kodak disappear from shops and be nothing but a brand in some larger company.
- ams6110 15y ago
  I would be surprised if their imaging business didn't survive in some fashion. Maybe spun off or sold off. Their stuff is quite good. Heh. Just did a quick search to check something and looks like this has already happend: http://www.kodak.com/ek/US/en/Image_Sensor_Solutions/Kodak_Image_Sensor_Solutions.htm http://www.kodak.com/ek/US/en/Image_Sensor_Solutions/Kodak_I... Edit: So this is fascinating. The one piece of their business where they had legitimately market-leading tech, they sell off. They must have felt that they couldn't escape the weight of the failure of all the old business lines.

samstave 15y ago

Then they MUST MAKE THIS RIGHT NOW: http://re35.net/ http://re35.net/

dhughes 15y ago
Great idea! I wish there was a rollfilm version too.
luke_s 15y ago
I got really excited for a moment, as I have been looking for something like this for a long time. Unfortunately it turns out to be an old April fools joke.
- stan_rogers 15y ago
  It (or, rather, something very like it) was an actual product at one time, but it needed to be a per-camera product to make it work properly. The 135 format standard says how big the frames should be and how many sprocket holes per frame, but not how the frames align with the sprocket holes or exactly how much distance there should be between the film canister and the lightbox. Getting the sensor aligned with the lightbox (and the viewfinder) basically meant a different model for each of the various SLR cameras out there. The sensor itself was pretty low-rez and had little in the way of dynamic range. Oh, and since things were so inefficient at the time, you needed to butcher the camera (drilling a hole in the baseplate) to feed power to the canister-cum-senor (and, if I recall correctly, to get the data out). It didn't make it past the "floating a trial balloon" stage in the marketplace.

gerggerg 15y ago

As much as I actually respect Kodak, absolutely love a lot of their products and will miss the film, this made me happy: "The company's problems came to a head in 2011, as Mr. Perez's strategy of using patent lawsuits and licensing deals to raise cash ran dry."

kokey 15y ago
The bankruptcy rumours surprised me, since I remember reading years ago that Kodak shut down most of their film business etc. because of the market changing. I thought they just logically trimmed the business to what was feasible and they would be small and operate off some royalties and some of their newer products and perhaps brand licensing, perhaps in a way that Atari functioned for a while. Seems like they mismanaged this approach.

minikomi 15y ago

I hope TriX holds out for at least a few more years!

ams6110 15y ago
Try Ilford HP5.
dhbanes 15y ago
Just buy a bunch of it, B&W film lasts a very long time even under average conditions. It should outlast you if you keep it in the freezer with a few desiccant packets. Might want to go for the 100' rolls. Defrost before use :)
- minikomi 15y ago
  Yep, on my list to get a bulk loader next time some money rolls in.
  - dhbanes 15y ago
    btw, Tri-X was my first thought too after seeing this headline. Glad to see a few people still have their priorities straight ;)
hzy 15y ago
As long as Ektar and Portra keep rolling onto store shelves I'll be happy.
- revdinosaur 15y ago
  Ektar is an incredible new stock. That and their new formula 16mm Ektachrome have really impressed me as of late.

walru 15y ago

If only there was some legislation put into place long ago, that would have banned the usage of digital photography, so Kodak wouldn't be in this situation today.

deleted 15y ago
[deleted]

villagefool 15y ago

Still waiting for the rise of Kodacell...

deleted 15y ago

[deleted]

jroseattle 15y ago

A cautionary tale for the current stable of technology giants: * Unwillingness to shift the company around a high-margin sacred cow (film). * Unwillingness to compete with other partners in the chain (digital cameras). * Expanding into unprofitable areas (printers)

ahi 15y ago

"...deciding to focus on consumer and commercial printers in the past half-decade under Chief Executive Antonio Perez." ... "...the viability of the company's printer strategy has yet to be demonstrated, raising questions about the fate of the company's 19,000 employees." ... "Kodak has lost money each year but one since Mr. Perez, who previously headed the printer business at Hewlett-Packard Co., took over in 2005. The company's problems came to a head in 2011, as Mr. Perez's strategy of using patent lawsuits and licensing deals to raise cash ran dry." ... "Mr. Perez decided to base the company's future on consumer and commercial inkjet printing. But the saturated market has proved tough to penetrate, and Kodak is paying heavily to subsidize sales as it builds a base of users for its ink." Much like the incompetent Borders CEO, I predict a bankruptcy filing will mean a couple million dollar retention bonus in this guy's future. Sure, Kodak was in trouble in 2005, but it still had plenty of options better than printers and patent trolling. I love when management of cash strapped companies hire consultants to do their jobs for them: "Soon after, Kodak hired restructuring lawyers and advisers to help shore up its finances." So in the losers column we have shareholders, employees, retirees, taxpayers (PBGC/Medicare), and the communities of upstate New York. In the winners column we have the fuckwits responsible.