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Discussion in 'Product Availability' started by bob100684, Jan 10, 2012.
Wow. So they are splitting the commercial film side of things from the consumer film and paper side of things. Interesting.
Yeah, I don't quite get the re-structuring after reading a few articles. It seems they are downsizing the consumer film by separating it from the commercial side. Maybe good news? Maybe bad?
Or the other way around!
A separate report has said that Kodak is actually eliminating its film group from the overall restructuring. This could mean that there will be a cut to manufacturing of film, but it is open to speculation, as analysts have pointed out.
The report is on ABC News.
The scenario with Kodak parallels in some respects the restructuring of Ford and GMH, both of which are seeking more and more money to continue in a market that has been crying out for change for years, but yet they persist in producing the big 6s (especially Ford) in a market that is now smaller car/SUV-driven. For Kodak, it should continue on its digital path and forget about film if it is ever to be profitable, especially with a swag of valuable patents. Not sure taking on Apple for infringement of patents is a good idea while on the cusp of Chapter 11 proceedings.
The title is misleading IMO.
Poisson du jour it's the digital part that seems to kill Kodak the only money Kodak makes is in the Film division. So I wouldn't think that killing off the film division and competing in the digital world with companies that are 10 to 20 times larger than Kodak is a very smart idea. Kodak has become a very small fish these days even Fuji is a lot bigger than Kodak. Kodak should act like a small fish innovate and find a niche market to survive competing with companies like Seiko/Epson Hewlett Packard and Sony isn't very smart. Kodak has already sold a large amount of its profitable patents so no money from
this side. Innovation and finding a niche not necessarily film could be in the digi realm but it has to be unique and a must have product imho the only thing that can save Kodak
Seems like an odd prescription: The film unit is turning a profit already, and Kodak's record of finding profitable ways to adapt to digital technology is, um, dubious. At least in the consumer space---they're done well at things like industrial process monitoring, as I understand it.
We're all speculating here, but I suppose splitting the commercial and consumer sides of the company could pave the way for letting the commercial side focus on digital, where it actually has done well, and the consumer side on film, where ditto.
I do know a bit about patent gamesmanship, and I think it's at least plausible that taking on Apple has an element of playing to prospective buyers. If you're a competitor to Apple, you might take notice of a portfolio for sale that's known to have some material relevant to Apple. Again, though, speculating.
I have a number of Japanese photographer friends, and they are quite worried about Kodak. Their color negative films seem quite popular over here.
The reorganization doesn't make much sense--other than to reassure investors that *something* is being done. There are some contradictions--film may not be the (big) future, but it's still a profitable unit. My understanding is that the bulk of film is sold to motion picture companies--so how would that fit into a consumer division? This is the classic rearranging of deck chairs on the Titanic.
I am sure that the motion picture film is part, if not all, of the "commercial" film.
If you read the Kodak press release, the consumer film is going to the consumer division and the cinematography film and pro film is going to the pro division. This seems to me more about doing something and removing prominent mentions of film from their P&L.
I agree that this press release may seem weird, but it is weird only if you expect Kodak's management to suddenly develop a rational and realistic plan after a decade of denial and clueless maneuvers.
In any large corporation?? Please, Clay, send some of the stuff your are smokin', snortin' or chuggin'!
Like many so-called re-organisations, this may appear to be "doing something", but does it add one penny to sales or profit or save a penny on costs? (And what about the costs of the re-organisation itself, and the dis-heartening effects on staff morale?) IDK, I only ask...
When Steve jobs came back to Apple he reduced the areas that Apple was involved in. He eliminated 15 of the 19 products that Apple made and broke it into 4 divisions, Desktop computers for home use (iMacs), desktop computers for professional use ( mac towers like the MacPro), laptops for home use (MacBooks), laptops for professional use(macbook pros). This was pretty much all Apple made until he introduced the iPod.
If Kodak could focus their business and push what they do really well instead of chasing a market in which they are a small and over classed player, they have a chance. Kodak was always good at innovation, they should invest money into R&D and then sell or partner those technologies with the major players in those areas.
Yet another icon imperiled--Twinkies!
Kodak has no money. 30% of their current operational costs are being covered by debt (secured bonds). They have to sell their R&D to keep the lights on.
People finally getting tired of eating crap? ....or maybe they're all dead already.
Very little consumer business left
A couple of weeks ago when I researched this, figures from 2011 suggested motion picture film made up more than 95% of what Kodak manufactures and ships, and mass-market camera film (the kind you and I use) was less than 5% and dropping fast. A few years ago it was closer to 97% consumer film, 3% movie.
Fuji continues to compete with Kodak in both areas but its film division has lost money continuously for many years.
The movie business is going digital faster than anyone expected. All of the movie camera manufacturers which supply Hollywood (and Bollywood) have discontinued their non-digital cameras, and installation of digital projectors in US theatres has now passed the 50% mark.
And that is going to be the problem with Kodak. Their operations are scaled for producing a specific (and pretty large) volume of film. When the movie industry no longer distributes movies on film, Kodak (and Fuji) are going to have too large of a fixed plant investment to justify keeping it open for such a small niche market. Thankfully Ilford rationalized their physical plant a few years back and appear to be profitable at their current production volume.
My take on this is that the "consumer" and "commercial" divisions are defined by market and sales channel - they have many products, using different techologies, that are sold in similar markets through the same sales channels. The old "film" group was defined by technology - it had products that sold in different markets, through different sales channels, but which shared the same technology base. This suggests to me that the are "end of lifeing" film - i.e. they will continue to sell existing products as long as they are profitable enough to cover the overheads and expenses and retain mindshare from the execs in charge of their respective divisions. However they aren't planning any further development. Cost savings will result from elimination of R&D expenses (if there are any left) and unprofitable product lines, reduction of marketing and sales related expenses since these will be shared with other "consumer" and "commercial" products, consolidation of administration and reduction in overheads. The danger is that if "consumer" film sales (probably all still film, as another poster suggested) without support from "commercial" (movie) film does not contribute meaningfully to the bottom line of the consumer division in the eyes of a non-film exec (since the head of film is moving to the commercial products division which leaves consumer products with a non-film head) it may be terminated. I may be reading too much into the shifting of some deck chairs, though.
The whole restructuring thing looks very confusing from the outside. It feels to me like Kodak based its restructuring more on some internal kodak management needs rather than external market needs. But who knows? It is really hard to make sense of it because it appears that some of the same production facilities will be producing stock for two different divisions. This is a recipe for trouble as the division heads try to lay off their costs on the other divisions. Seen it many times in good old corporate america.
Given the fact that many of the problems we encounter with Kodak seem to be related to distribution inefficiencies, I am guardedly hopeful that the restructuring will result in an improvement in the distribution channels.
There may be good reasons, but one thing it will do is make it no longer possible to see that the Film side is the only one making a profit.
Gee, I wonder why.