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  1. #31

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    Quote Originally Posted by Athiril View Post
    http://online.wsj.com/article/SB1000...167627950.html
    "As we sit here today, the company has no intention of filing for bankruptcy."


    Also from your link

    "Perez, who took the helm in 2005, has sharpened Kodak’s focus on the printing business to help revive revenue."

    Good decision there..
    Don't believe the statement about having no intention of filing for bankruptcy.

    Here is why:

    The Board of Directors has to vote to authorize a voluntary petition for Ch. 11 bankruptcy in US federal bankruptcy court. Up until which time such a motion is passed by the Board - Kodak's statement is truthful regardless of what might be going on behind the scenes.

    Even if, at the time of that statement's issuing, Antonoio Perez as Chairman of the Board of Eastman Kodak corporation had already asked the Clerk of the Corporation to convene the board with the sole purpose of voting on a motion to authorize such a petition and has even recommended to the other board members that they vote to pass that motion - even then the company's statement could not be credibly challenged in a court of law.
    Digital Photography is just "why-tech" not "high tech"..

  2. #32

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    Feeding a failing digital strategy from the revenue of a strong film group is bad management. If they had scaled film down it would be nice and healthy. Ilford, Efke, Adox, those companies are doing just fine.

    You don't need to sell film at 1980's levels to have a nice happy company with quality products. I'll bet film sales today are just as good as the 1940's or 1950's.

    Corporate and executive greed think you can have endless a growth model. Even the Earth's human population can not grow forever.

    I am praying a little company can keep Kodak film alive.
    - Bill Lynch

  3. #33
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    There are now 3 threads on this subject. I think the moderators should combine them.

    This topic occupied about 1/2 hour on the local news stations with live interviews and a personal message sent to our channel 10 news during the newscast to further explain the Kodak POV. Yes, Perez and the board are mishandling things from our perspective. They are making film pay for the digital conversion. But, the error started back with Carp and Fischer, maybe even earlier. I was there when this big change started and they were investing heavily in projects they should not have been investing in at all at that time. I saw the handwriting on the wall and left before the landslide. Now, many of the good people are just leaving.

    However, the film division on its own is quite profitable if much smaller than it used to be! This is due to the market. Its profit is not easily seen due to the fact that all revenue goes into digital and digital advertizing. Also, Motion Picture product sales still remain in a slump.

    If the Kodak film division split out (something called for by a major investor this week BTW), they would be in an excellent position and perhaps one even stronger than Ilford's! At this point though, the film division could not be bought easily by another firm due to legal issues with the Kodak Park site which has been used for chemical production and storage for over 100 years. They would have to assume the legal burden of the expected cleanup as part of the sale price.

    But, the bottom line is that this is a huge deal in Rochester. They even had an interview with the Mayor to get his comments on this "fiasco".

    And yes, the retired community is reacting to this and I have had a number of messages from friends on this topic.

    PE

  4. #34

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    Quote Originally Posted by wblynch View Post
    Feeding a failing digital strategy from the revenue of a strong film group is bad management. If they had scaled film down it would be nice and healthy. Ilford, Efke, Adox, those companies are doing just fine.

    You don't need to sell film at 1980's levels to have a nice happy company with quality products. I'll bet film sales today are just as good as the 1940's or 1950's.

    Corporate and executive greed think you can have endless a growth model. Even the Earth's human population can not grow forever.

    I am praying a little company can keep Kodak film alive.
    You are wrong in so many ways.

    Kodak cut its film production capacity by 95+% by 2004-2005. And even then it wasn't enough to avoid the decline in demand. Even now worldwide film demand is still slipping at about 15-20% per year with no real end in sight.

    Kodak's film division was never what you would call healthy after 2001. Of course, it produced "profits from continuing operations" but those profits required billions of dollars of restructuring charges to achieve. These showed up as "exceptional charges" or "one time charges" on their income statement.

    Ilford and Efke (which have both already been in bankruptcy in the last decade, mind you) were able to survive only because they were very, very small to start with. And let's also be clear - nobody knows what Efke's financial condition is or isn't because they have no public financial reporting obligations.

    Film sales in the 1940s and 1950s far, far exceeded those of today in terms of the volume of film sold. Gosh, it isn't even close. And raw materials were a heck of a lot cheaper. For example, in 1950 the market price of silver was $0.75/oz!

    It's an inconvenient truth for most of us - but truly large-scale film production just isn't commercially-viable any more and, if you aren't sufficently "small scale" already, nobody is going to give you the financing you need to right-size yourself for the market.
    Digital Photography is just "why-tech" not "high tech"..

  5. #35
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    Quote Originally Posted by lxdude View Post
    If so, that's incompetence, not embezzlement. If anything, those who hired Perez and agreed on his compensation (the Board of Directors) would be the ones to be held ultimately responsible for any lack of results.
    From what I've read there's some that think it's embezzlement. They've profited from their decisions. Just look at how much they earn.

    Ian

  6. #36

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    Quote Originally Posted by Photo Engineer View Post
    There are now 3 threads on this subject. I think the moderators should combine them.

    This topic occupied about 1/2 hour on the local news stations with live interviews and a personal message sent to our channel 10 news during the newscast to further explain the Kodak POV. Yes, Perez and the board are mishandling things from our perspective. They are making film pay for the digital conversion. But, the error started back with Carp and Fischer, maybe even earlier. I was there when this big change started and they were investing heavily in projects they should not have been investing in at all at that time. I saw the handwriting on the wall and left before the landslide. Now, many of the good people are just leaving.

    However, the film division on its own is quite profitable if much smaller than it used to be! This is due to the market. Its profit is not easily seen due to the fact that all revenue goes into digital and digital advertizing. Also, Motion Picture product sales still remain in a slump.

    If the Kodak film division split out (something called for by a major investor this week BTW), they would be in an excellent position and perhaps one even stronger than Ilford's! At this point though, the film division could not be bought easily by another firm due to legal issues with the Kodak Park site which has been used for chemical production and storage for over 100 years. They would have to assume the legal burden of the expected cleanup as part of the sale price.

    But, the bottom line is that this is a huge deal in Rochester. They even had an interview with the Mayor to get his comments on this "fiasco".

    And yes, the retired community is reacting to this and I have had a number of messages from friends on this topic.

    PE
    Thanks for the information. Of course, this has a substantial impact on Rochester, too.

    I'd like to say that the film division is strong but it posted a loss in Q1 and only a very small profit ($2 million) in Q2. So I am afraid that if the profit is "not easily seen" it is because it is so small.

    A spin-off of the film division with a dedicated management team in place would be the best possible outcome for all of us. And I sure hope it happens. I suspect there is still enough of a market to make it work if the right people are running it.

    As always, however, this will likely come down to a matter of somebody willing to provide the finance to make it happen. And I think that the outlook for that sort of thing has been steadily souring over the past 6 months.
    Digital Photography is just "why-tech" not "high tech"..

  7. #37
    CGW
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    Quote Originally Posted by aldevo View Post
    You are wrong in so many ways.

    Kodak cut its film production capacity by 95+% by 2004-2005. And even then it wasn't enough to avoid the decline in demand. Even now worldwide film demand is still slipping at about 15-20% per year with no real end in sight.

    Kodak's film division was never what you would call healthy after 2001. Of course, it produced "profits from continuing operations" but those profits required billions of dollars of restructuring charges to achieve. These showed up as "exceptional charges" or "one time charges" on their income statement.

    Ilford and Efke (which have both already been in bankruptcy in the last decade, mind you) were able to survive only because they were very, very small to start with. And let's also be clear - nobody knows what Efke's financial condition is or isn't because they have no public financial reporting obligations.

    Film sales in the 1940s and 1950s far, far exceeded those of today in terms of the volume of film sold. Gosh, it isn't even close. And raw materials were a heck of a lot cheaper. For example, in 1950 the market price of silver was $0.75/oz!

    It's an inconvenient truth for most of us - but truly large-scale film production just isn't commercially-viable any more and, if you aren't sufficently "small scale" already, nobody is going to give you the financing you need to right-size yourself for the market.
    Amen. The extent of "magical thinking" elsewhere in these threads is disturbing. Where have these posters been for the past decade?

  8. #38
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    Thanks for that PE, which lends a voice more knowledgeable than mine to what I've thought for some time now.

    In the event of bankruptcy, what happens to retirement funding?


    I'm wondering what would happen to environmental liabilities in the event of a liquidation?
    I do use a digital device in my photographic pursuits when necessary.
    When someone rags on me for using film, I use a middle digit, upraised.

  9. #39
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    Quote Originally Posted by Ian Grant View Post
    From what I've read there's some that think it's embezzlement. They've profited from their decisions. Just look at how much they earn.

    Ian

    Salary, incentives and perquisites are compensation, not profit. We frequently see someone do a poor job at a company and walk away with huge severance packages regardless. Michael Ovitz at Disney is one famous example.

    A very recent example is Leo Apothecker, who was in charge of HP for 11 months. He is receiving:
    $7.2 million severance pay, paid over 18 months.
    $3.56 million worth of restricted stock.
    424,000 performance-based restricted stock units, the value of which will depend on H-P's performance.
    A $2.4 million bonus, of all things, under H-P's "Pay-For-Performance" program.
    Relocation expenses.
    Reimbursement of any loss on the sale of his house, up to $300,000.
    Payment of his legal fees related to negotiating his severance package.
    Health and dental coverage for 18 months.
    Coverage under H-P's standard expatriate tax-equalization program if he moves to France or Belgium.
    And if he does move back to France or Belgium, airfare.


    All that, for getting fired after 11 months, during which time H-P's stock value declined 45%. And it's legal.
    Is he an embezzler, or is the Board just stupid?
    I do use a digital device in my photographic pursuits when necessary.
    When someone rags on me for using film, I use a middle digit, upraised.

  10. #40
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    Kodak's film division profit is down for 3 major reasons, poor overall economy, lower Motion Picture consumption and the transferring of some of the profit to the writeoff of the digital division!

    Contrary to some comments here, Kodak's film division remained very strong until the economic downturn and only decreased production due to lower overall film consumption. During that time, they brought out new B&W film products and new color products including EKTAR! So, this showed the health of the operation and those that say otherwise are wrong!

    Kodak pensions are secure. The news reports and my own e-mail exchanges give that a complete bill of health. That only holds true for current retirees. For employees, their status depends on what plan they selected for their retirement. There are (and were) several options that we could pick from.

    Scaling down is not a very good option. The best option is to run on demand at full speed. This cuts costs and improves quality. One thing is sure, keeping excess production facilities closed down costs in taxes. But, Kodak has one spare facility in mothballs just in case.

    Anyone who says they know what is going on right now inside Kodak is dead wrong, including me! I KNEW what went on, but I don't currently KNOW what is going on. I think that my educated guesses and opinions are better than most, but I won't give out many of my thoughts as I prefer to keep them out of the fray. Just be assured that Monday morning at 8:00AM, Kodak Park will get to work making film for that week according to a schedule made months ago!!!!!! YAY!

    PE

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