kodak bankruptcy

[plasticman]

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Sorry Plasticman but the problem is thapt film no longer makes a "massive profit" for Kodak

 

Let's put it like this then, for simplicity: the film division still makes a profit in spite of the massive mismanagement of the company as a whole, the enormous liabilities and deadweight of the extended company.

 

My question is why a slimmed-down, pro-consumer film company wouldn't be able to make an even bigger profit than the existing setup with all its disadvantages?

 

Almost no point discussing the pros and cons, as so many people are already relishing the destruction of the company. The only thing to do is see what comes out of the mess at the end.

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[AlanG]

I don't know if a slimmed down company could keep providing a good range of film and chemicals for the various industries that currently use these materials.

[adan]

You're definitely correct that, big or small, the FP&E group is making the ONLY profit at Kodak at the moment. Kodak's problem is not film profits per se, but that they couldn't get the "new" Kodak up and profitable fast enough and cheaply enough. So the film profits just vanish into a black hole.

 

I think Kodak is between a rock and a hard place when it comes to the film division. If they keep it, it reduces their losses by $80-90 million a year - which isn't enough. If they sell it, they get a lump sum of probably $600 million-$800 million. Which still isn't enough.

 

I'm also not sure exactly what would be sold. It is one thing for, say, a U.S. investment group to buy the whole operation: land, buildings, machines, etc.

 

But I'm not so sure that Lucky or Efke, or whoever, want to own factories in the U.S. Are they going to buy the machines and labs and move them lock, stock and barrel to Europe or China? Or just buy the brand-name(s)?

 

Which is probably OK - there is not much to "Tri-X" except a brand-name, since Kodak has tweaked the formula over the years, and today's 400TX is not the same as the TX400 of a decade ago, which wasn't the same as the "Tri-X Pan" of 1983, which wasn't the same as what Gene Smith and H-CB rolled through their cameras in 1965.

 

Personally - yes, I think a spun-off "Eastman Film Company" could be structured to be sustainable. But that depends on how low a price Kodak will accept, and what strings come attached (responsibility for pension obligations, etc.)

 

Which is where bankruptcy comes in - it allows the court to force Kodak and everyone else to accept things that would be "bad" decisions (and thus liable to shareholder lawsuits) if taken outside the bankruptcy process. So long as Kodak can say "the court made us sell it for $400 million," they are free of responsibilities, and the spin-off may be in a position to pay its own way.

[pico]

Agreed, but Tri-X is _the_ iconic b&w film, and while they could have emulated the look they wouldn't have had the prestige of the name.

 

WHICH Tri-X. They have changed it at least three times. I would bet that 50% of you don't know the old Tri-X.

 

.

[pico]

If Kodak robs the pension funds of all their employees I would consider it a crime, and I'd not be unhappy to see the employees with destroyed pensions rebel to the point that some would terminate the life of the bastards who are responsible.

 

.

[bill]

Now, we wouldn't want anyone to over-react, would we? You must think sangfroid was Sigmund's brother...

 

Regards,

 

Bill

[andybarton]

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WHICH Tri-X. They have changed it at least three times. I would bet that 50% of you don't know the old Tri-X.

 

.

 

Sorry for being born too late... must have a word with my patents, some time.

 

You'd probably be wrong, by the way.

[adan]

If Kodak robs the pension funds of all their employees I would consider it a crime.....

 

Kodak isn't going to take money OUT of the pension funds.

 

Worst case is, they stop putting any more IN. Middle case is, they contribute less (maybe a lot less) than they have been. In either case, only with bankruptcy-court approval, and vested employees no doubt will have their own lawyers presenting their interest to the judge, who will play Solomon.

 

But your concern is noted.

[stunsworth]

WHICH Tri-X. They have changed it at least three times. I would bet that 50% of you don't know the old Tri-X.

 

I was using a lot of Tri-X when they changed the formulation about 10-12 years ago. These eyes didn't notice a difference in practice, though some tests at the time indicated it was finer grained that Tmax 400.

[Messsucherkamera]

I just checked the B&H website. All sizes of Tri-X are in stock, except for 5x7 and 8x10 sheets. At least there's not a run on Tri-X.

 

Yet.

 

Maybe that's a good sign.

[StS]

I still see Agfapan in the shelves. I think they folded down in 2006, if I remember correctly.

 

The machines are now used to make Adox film.

 

Stefan

[adan]

UPDATE: Effective Jan. 1, Kodak reorganized, and eliminated its separate Film, Photofinishing and Entertainment Group. Kodak now has two divisions, Commercial Products and Consumer Products, and film is split between the two new divisions.

 

Struggling Kodak restructures business | The Advertiser | theadvertiser.com

 

Not sure what this is all about. Seems like a way to spread the film profits around and improve the operating results for the other divisions. OTOH, it makes it harder to spin off "film" as a separate company.

[stunsworth]

Seems like a way to spread the film profits around and improve the operating results for the other divisions. OTOH, it makes it harder to spin off "film" as a separate company.

 

That assumes Kodak sees a future for their film division.

[plasticman]

That assumes Kodak sees a future for their film division.

 

Each of the two (loss-making) divisions split the (profit-making) film division. But you think they don't see a future in film.

You may be right, as it doesn't seem like Kodak know their @ss from their elbow. But still.

[stunsworth]

Each of the two (loss-making) divisions split the (profit-making) film division. But you think they don't see a future in film

 

Kodak need money quickly. Reorganising the company doesn't help that - it's all just smoke and mirrors IMHO. They have however stated that their future is in digital, and their future markets will not be the same as the old ones.

 

Film's profits offset against the company's overall losses are peanuts. They have no chance of making the two divisions profitable.

 

They may also have crunched the numbers and decided that while film is making money now it may not do in 5 years time. Easier to sell it while it's making money than when it isn't.

 

All speculation, as discussed on another thread.

[plasticman]

Easier to sell it while it's making money than when it isn't

 

I just wish they would. I'd say a relatively low-volume pro film outfit that wasn't attached to the loss-making behemoth that's Kodak these days would probably do pretty well.

[stunsworth]

I just wish they would. I'd say a relatively low-volume pro film outfit that wasn't attached to the loss-making behemoth that's Kodak these days would probably do pretty well.

 

I agree, it would be very bad news if the film division was dragged down by the rest of Kodak.

[adan]

Film's profits offset against the company's overall losses are peanuts. They have no chance of making the two divisions profitable.

 

True - but at least this reorg hides the embarrassment of their "old tech" products outperforming the new digital ones every quarter. The bottom line doesn't change, but the results for the two new divisions improve slightly as they bolster their losses with film income.

 

Easier to sell it while it's making money than when it isn't.

 

Except that it is harder to sell now that it is no longer a free-standing unit, but diffused throughout the whole corporate structure.

 

The cynic in me thinks Kodak doesn't want the film business visible in public like an embarrassing relative. They also don't want to sell a profit center (for so long as that's the case). They'll just hide it in the closet (no more reporting of separate FPE Group results/profits after Jan. 26 - the 2011 annual results), suck it dry until the profits run out, and then shut it down and take the write-off against taxes.

 

Corporate finance is a juggling act. The media/newspaper holding company for which I worked from 1986 to 2009 (E. W. Scripps) went through an inverted version of what Kodak is doing.

 

By 2007 they had a phenomenally successful cable TV programming division (Food Network, HGTV, etc.) but the news media properties (newspapers, TV stations) had flat or declining income, which held back the company stock overall. They split into two companies with separate stock listings, and the new "Scripps Networks" stock went through the roof, while the "old media" company sagged and then stabilized (except for my job - but such is life.)

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[plasticman]

...Except that it is harder to sell now that it is no longer a free-standing unit, but diffused throughout the whole corporate structure.

 

The cynic in me thinks Kodak doesn't want the film business visible in public like an embarrassing relative. They also don't want to sell a profit center (for so long as that's the case). They'll just hide it in the closet (no more reporting of separate FPE Group results/profits after Jan. 26 - the 2011 annual results), suck it dry until the profits run out, and then shut it down and take the write-off against taxes

 

Now that Kodak have actually filed for Chapter 11, I'm sorry to say that I think you're probably right.

 

Very sad that right up to the wire, Kodak management seem to be intent on making bad decisions, relying on weak markets (consumer printing?), and not serving their customer's best interests.

 

I'd hoped for some sort of solution that would have spun-off the film business to a leaner, more committed self-sufficient unit. A business that would have promoted and advertised film use, and spread the word about how great it is, rather than this attempt to strangle a profitable sector simply because the execs in charge are ashamed of its 'old Kodak' image in the business press.

[stunsworth]

I know that companies can come back from Chapter 11 and survive, but I do wonder if that's going to happen to Kodak. The trajectory of the company has been downhill for so long that I doubt that it's possible - the obvious analogy is that of a huge ship heading towards the rocks - no matter how hard you try to stop, momentum isn't in your favour.

 

For all you film guys, even though I shoot digitally these days I genuinely hope that something gets sorted out. Whether that's floating off the division as a separate company, or selling it, probably doesn't really matter as long as it has a future of some kind.