Sunday, September 25, 2011

The Rise and Fall of Eastman Kodak

Bumbling the future: a tale of two companies

Disclaimer: I have no financial interest of any kind in Eastman Kodak, either long or short, and no plans to take any position in the company - ever.  I have never held any shares of EK so what follows isn't sour grapes.  I am not an insider and have no inside information. 

Latest update: September 12, 2015.  Recovered most of the images accidentally deleted two years ago, added a "Where Are They Now" section.

Way back in 1988 Douglas K. Smith wrote a great book called Fumbling the Future: How Xerox Invented, then ignored the First Personal Computer.  He went into fascinating and gory detail of the fumbling and bumbling that went on in Xerox management that led to one disastrous blunder after another.

What does this have to do with Kodak?  The parallels are striking.  Both companies are based in Rochester, NY (Xerox subsequently moved their headquarters to Connecticut for tax purposes but maintains its base of operations in Rochester).  Both companies were started by men of genius with a unique product and boundless drive.  Both companies grew like mad on the success of their products and innovation.

And both companies subsequently lost their way.  Xerox invented the world's first viable personal computer and Kodak invented the first digital camera.  Both companies failed to realize the significance of that.  And just as the PC demolished Xerox's highly profitable core business of photocopiers, the digital camera killed Kodak's main profit center of photographic film.

Both companies went through a series of strategic blunders.  I'll leave Xerox now with the suggestion that you read Smith's book and concentrate on Kodak.  As this posting has expanded since I originally wrote it in September 2011, I've added some items that provide historical context and aren't necessarily disasters in and of themselves, though there's certainly still plenty of those to go around.

A timeline of shame

World's 1st digital camera
In 1975, Kodak invented the digital camera.  Then ignored it - for 20 years. Little did anyone suspect at the time that this odd-looking ungainly 8 pound box would eventually be the company's undoing

In 1976, Kodak decided to enter the field of instant photography, essentially the sole domain of rival and powerhouse Polaroid.  Several years later, Polaroid sued Kodak in a now famous case and won a whopping $1 billion settlement, back in the days when $1B was a lot of money.
Kodak instant film camera

Kodak was obligated to stop making that product and never returned.  The irony is that Kodak instant prints were far superior to anything Polaroid had.  The further irony is that Polaroid then completely squandered their windfall and ended up going bankrupt in 2008.

Also in 1976, Kodak decided for some reason it would be a good idea to start making copiers.  This venture managed to last until 1997.  In yet another irony, by the late 80's Kodak's copiers were better than those of cross-town rival Xerox.  The opportunity was there for a while, and they blew it.
Kodak Ektaprint 150 copier

In 1982, Kodak employment hit 60,000 in Rochester alone.  It is Kodak's heyday.  It's the largest employer by far in the Rochester region.  Local stores run full page ads targeting Kodak employees to spend their bonuses with them.  They're particularly popular with car dealers.  Times are good.

Kodak 4000 disc camera and film
But already there are signs of trouble on the horizon, signs that the film business is becoming mature.  In 1982, Kodak introduced the disc film system.  If there's a more inefficient way of arranging negatives on a carrier, I can't think of it.  The only advantage of this system was that it allowed the camera to be thinner and this had an undeniable wow factor.

But the tiny negatives had an undeniable ugh factor.  Disc images were so bad that even ordinary snapshot consumers, the kind of people who were content to watch color TV with green and purple faces, complained.  The format nevertheless managed to survive until 1998.  I doubt many people were still using it by then.  The camera itself was axed in 1989.

1983: Colby Chandler takes over as CEO from  Walter Fallon.
Walter Fallon
Colby Chandler

Kodavision 8 mm. video cassette deck, 1984
In 1984, Kodak decided to enter the video recording arena with an 8 mm. video cassette unit in an increasingly crowded market already full of VHS and then Beta machines.  Three years later, they pulled the plug on this product after some serious marketing miscues.  Sony subsequently capitalized on 8 mm. video with an extensive line of decks and camcorders.

In 1986, Kodak decided to start making batteries.  Many of their products used batteries and the company had a long history of vertical integration.  There was concern that customers would blame their Kodak camera for problems caused by bad batteries.  So it seemed to make sense - at the time.
But they didn't keep going

They spun off a company, Ultra Technologies in Newark, NY to handle the job.  But by 1991, Kodak sold off its interests in Ultra which then renamed itself Ultralife and is still making batteries today.

1987: Kodak invents the OLED (organic LED) - and proceeds to ignore that too for 20 years.

1990: In a newly published, gorgeous and heavy coffee table book titled The Story of Kodak, author Douglas Collins proclaims, "film remains and will continue to remain the preferred medium for picture taking." Um, okey dokey.  New hires in the Kodak Research Labs get a free copy of this book as a welcome gift.  Today it's on sale at Amazon for $2.61, presumably by Kodak retirees desperately trying to make up for the pensions they got screwed out of.
The Story of Kodak

Also in 1990, Kay Whitmore replaces Colby Chandler as CEO.
Kay Whitmore

1991:  Kodak decided to enter the digital arena with its DCS (later renamed the DCS-100), basically a Nikon F-3 SLR camera with a 1.3 megapixel Kodak CCD image sensor instead of film.  A whole series of DCS camera eventually followed, aimed at the professional market.  With a price tag of $28,000 for the DCS-460 for example, the average snapshot taker wasn't going to be interested.  You could buy one of the houses nearby Kodak Park for $28,000 back then.
Kodak DCS-400

The DCS series continued in production until 2005.

Photo CD
1992: In another bid to "go digital", Kodak introduced the Photo CD (originally announced in 1990). This was a CD that could hold up to 25 images at resolutions of up to 6144 x 4096 in a proprietary format.  The Photo CD was accompanied by a range of products for scanning photos to CD and consumer Photo CD players designed to play back images on TV sets, with the slogan "Now View Photographs On Your TV".

While initially fairly popular with consumers, Photo CD suffered from a number of technical problems and more marketing miscues.  The quickly growing capacity of hard drives along with the increasing popularity of jpeg eventually led to the demise of Photo CD.  By 2004, processing labs were giving away the scanners for free to anyone would would haul them off.

Short answer: no
1993: Kodak hires ex-Motorola head honcho George Fisher as president and CEO.  This is probably the one move more than any other that doomed Kodak.  He lasted until 2000.  By then, the damage was done.  George, you're getting an entire chapter all to yourself in my forthcoming book, The Decline and Fall of Eastman Kodak.

1994: Kodak spins off its chemical division into a new company called Eastman Chemical (EMN).  This one move was probably the worst decision Kodak ever made.  Kodak's fate was sealed from this moment on. Eastman Chemical opened in 1994 at 21.12.  It most recently closed at 38.19.  Kodak opened 1994 at 44.19 and now trades just above one dollar.

They could've used this!
Kodak also sold its holdings in drug maker Sterling Winthrop to Sanofi Aventis.   And Kodak also sold its rights to Bayer aspirin and the Bayer name and trademarks to SmithKline Beehcman for $2.9 billion.  1994 was a big year for Kodak.  They also sold their cllinical diagnotics unit to Johnson & Johnson for yet another billion dollars.  Where did all this cash go?  Read on.

Kodak Picture Kiosk
Also in 1994, Kodak came out with the Picture Kiosk, a strange walk-up device that someone thought was a good idea.  People were going to stand there in the store and edit their photos digitally, then print them.  Our local grocery store had one of these.  I never saw anyone actually using it.  Finally one day, it looked like this.  The sign reads "Out of Order".  While I got the impression that this kind of summed up the whole project, I have been informed that this particular venture was actually a success.  You'd never know it from this particular machine though.  It is no longer there, having been unceremoniously removed years ago.

Also in 1994: Apple introduces the world's first consumer digital camera, the Quick Take 100.  Ironically, it is actually made by Kodak.  This camera wasn't a big hit for Apple, mostly because people didn't associate them with photography back then.

Also in 1994, Fisher says "Our copy products business is not for sale, and we have no plans to sell it."    Three years later, I guess the plans changed.  The whole thing went to Danka..

Kodak DC-40
In 1995, a year after the Quick Take 100 Kodak finally got into the consumer digital camera business for itself with their first offering, the DC-40, which was essntially the same camera as the Apple QT-100.  While it was well-made, full-featured and took great photos (for that era), with a hefty price tag of $995 back when that was a lot of money, this was still not exactly a mass market item.

Kodak DC-20
1996: A year after the DC-40, they came out with the DC-20, a horrible cheaply made product that took absolutely awful pictures, even by 1996 standards.  At $350 back then, the DC-20 was not a hit.  They cut the price of the DC-40 by two thirds and cut the image quality by a factor of 10.  Digital was always the poor stepchild at Kodak -  mostly because it wasn't film.  By the time they finally got serious, the market had moved on again.

Today, digital cameras are losing ground to the ubiquitous camera-equipped cell phones.  One has to wonder what they were thinking, replacing a high profit low-competition item like film with a low-profit product like digital in an industry with cut-throat competition.

Kodak Advantix APS film
Also in 1996, Kodak rolled out APS, the Advanced Photo System, with a line of Advantix cameras and film.   Introduced with great fanfare, APS was sort of a last ditch effort to extend the life of film and illustrates the deep commitment of Kodak to this product.  The juxtaposition of Advantix and the DC-20 in the same year is telling.

Technically well-executed, feature-laden, and visually appealing, APS nonetheless was unable to stem the digital tsunami.  Advantix film production ceased in 2011.

EK monthly, 1997-2002
Perhaps coincidentally, EK hit its all-time high stock price of $94.75 early in 1997.  With Kodak closing last week at $2.38 that's sort of hard to remember.  Back then Kodak was also a member of the Dow, the bluest of blue chips.

But trouble was already brewing as Fisher announced some big job cutbacks.  Interestingly, he said "We are out of denial now. We were wishing (the problems) would go away. We were deluded by our own thinking." []  And what was the new delusion?

Also in 1997, Kodak finally threw in the towel on copiers, selling its entire Office Imaging business to Danka Business Systems (DANKY).

In 1998, Kodak opened a plant in Ireland to mass produce writeable CD's, just before CD's became a commodity item.  The world was awash with CD's (remember getting one in the mail from AOL once a week?)   Then hard disk drive storage capacities exploded, first through multimegabytes, then gigabytes, and now terabytes, obviating the need for CD's entirely.  In 2001 Kodak exited the CD production business.  Also in 1998, Kodak shut down their disc film line.

In 1999, Kodak continues cutting its way to success by selling its digital printer and copier division to Heidelberger Druckmaschinen AG.

In 2000, Kodak announced that it would become "a leader in Bloomberg Businessweek put it:
digital cameras". Issues stock options to employees with strikes in the mid 70's, as an "incentive" to improve performance.  That price would never be realized.  Dan Carp replaced George Fisher as CEO.  As Business Week quoted:
Would you buy a used camera from this man?
"Dan Carp had better watch out. As chief executive of Eastman Kodak Co. since Jan 1., he has already run into deep trouble, even before finishing his first year on the job. Now, he faces the prospect of joining the list of Kodak executives who have bungled the company's transition from traditional film to the digital world"

In 2001, Kodak acquired online photo sharing business Ofoto and renamed it Kodak EasyShare Gallery.  Subsequently renamed again simply Kodak Gallery in 2005, they managed to run this into the ground too, announcing in late 2011 they were trying to unload it.

Talk of a business they never should have entered.  This is a low profit, low barrier-to-entry operation, the exact opposite to what Kodak does best.  Anyone with a PC and a big hard drive can start a photo sharing service.  Another what were they thinking moment.

Revolving Door Russo
Also in 2001, Kodak hired Patricia Russo, who had just come off a stint of running Lucent Technologies into the ground, to perform the same job at Kodak as President and COO.  She barely lasted nine months before pulling the ripcord on her golden parachute.

Acoording to a 2003 article in Businessweek, "Russo likes to recite Winston Churchill's famous quote: 'Never, never, never give up.'" Except for Kodak, I guess.  There's a funny story about Kodak and Russo contributed by a reader, but you'll have to buy the upcoming book to find out.

In 2002, Kodak announced that they were cutting their dividend to pay for a strategy concentrating on growth in digital.  Also in 2002, Kodak moved the production of disposable "single use" cameras to China and Mexico.  Another 500 Rochester workers are now jobless.  23,000 now remain.

In 2004, With its stock now in the mid-20's, Kodak was kicked out of the Dow.  Also in 2004, Kodak sold its Government Systems group to ITT (ITT).

Perez: "Oy, this company will be booming!"
In 2005 Fitch downgraded Kodak's bonds to BB from BB+ on a negative rating outlook. Also in 2005, Dan Carp retired as CEO to be replaced by noted hatchet man Antonio Perez, who had already been president since 2003.  His reign (from Spain) led Kodak down the drain.
  • "by 2007 this will be a $60 stock.'', Ulysses S. Yannas, a broker at Buckman, Buckman & Reid.  I'll bet he regrets that now.  (By 2007 it was a $25 stock).
  • ''By 2008, Kodak will be the digital company I came here to run'', Perez to investors meeting, Sept. 28, 2005.  I think he forgot to add "into the ground". 

Koduhk logo
In 2006, Kodak decided they needed a new logo.  Logo tinkering is often a sign of trouble in a company.  In an interesting Freudian turn, in addition to selling of parts of the company, they chopped the serif off the "a" in Kodak.  What's left looks like a schwa, that linguistic symbol pronounced "uh".  So the new logo reads "Koduhk".   Who put the duh in Kodak?  Read on.
    It gets worse...

    Bldg. 69 going up in smoke, 2007 - this company is booming, alright!
    In 2007, Kodak went on a rampage of blowing up unused buildings at their huge Kodak Park site in Rochester, because the property taxes on a vacant lot were lower than on an empty structure.   Here's a good one: Kodak BLDGS 65,69 Implosion 10-06-07.  This is Kodak's entire imaging science research lab going up in smoke.  Total Kodak employment in Rochester now 9,200.

    Also in 2007, Kodak resigned its membership in the Better Business Bureau, right before it was about to be kicked out.

    Also in 2007, Kodak sold off its health care imaging group to Onex, a Canadian company.  Digital radiography was arguably the one business they had with growth potential, where they had a decent presence.  So they dumped it.  What were they thinking?  Now called Carestream Health, they're doing quite well.  I guess the need for cash is already showing.

    2008: Kodak stock opens at $21.81.  It closes the year at $6.58.  This is the company Perez said he "came here to run" in 2005?  By golly he really did mean "into the ground".

    R.I.P. Kodachrome, 2009
    Also in 2008, Kodak finally remembers they invented the OLED 20 years earlier and makes a half-hearted effort to productize it with a 7.6" OLED digital picture frame - for a whopping $999.  It was not a big seller.

    On April 30, 2009, Kodak announced it was suspending its dividend.

    Also in 2009, Kodak announces it will stop making Kodachrome film, arguably the most popular and successful film in history.

    Also in 2009, Kodak sold its OLED business to LG.

    David Cok
    January, 2010, David Cok, Senior Research Associate, Kodak CTO, Imaging Science Lab director, bailed out after 28 years in the Research Labs (and not to retire either).  Is the handwriting on the wall?  Is the Pope Catholic?

    On December 17, 2010, Kodak was kicked out of the S&P 500. Stock price now around 5 bucks.

    2011: Kodak is no longer Rochester's largest employer.  It's not even its second largest.  Or third.  With less than 7,000 employees remaining, it ranks behind the University of Rochester, Xerox Corp. and a local supermarket chain.

    On February 23, 2011, President Obama, aka The Empty Suit, appoints CEO Antonio Perez to his Council on Jobs and Competitiveness, for reasons that are still unclear but do make me wonder about his judgement.  Obama obviously does not read the Night Owl.  Or perhaps Perez was appointed as an example of what not to do, since he has clearly demonstrated he knows nothing about either competitiveness or jobs.  Destroying yes, creating no..

    March 31, 2011: Kodak sold 850 patents to Omnivision Technologies (OVTI) for $65 million.  That works out to $76,471 per patent.

    April 5, 2011: Kodak sold parts of its microfilm products and equipment business, along with its data conversion services business to a company called Eastman Park Micrographics as part of its strategy (if you can call slowly bleeding yourself to death a strategy) "to fund the completion of its transformation to a digital company."
    EK monthly, 2007-2011

    In July 2011, Kodak announced that it was shopping its patent portfolio around to create a "digital profitable and sustainable company by 2012." (see the 2000 announcement above).  They are bandying about numbers like one or two billion dollars for 1,100 patents.  But recall that they only got $76K per patent for a sale of 850 patents earlier this year.  Assuming the same rate of return, the whole portfolio is worth only $84 million.  Even if this estimate is low by an order of magnitude, they're still under a billion.

    Also in July, Perez tells analysts in connection with inkjet printers,
    “You will see that that business is going to be a gorgeous business for this company,”
    Is he serious?  By now inkjet printers are a commodity item.  They come as prizes in Crackerjack boxes.  The ink is more expensive than the printers.  And now laser printers, which are far superior to inkjet in every respect, are in the same price range as high-end inkjets.   And as far as photo printing goes, fewer images are being printed at all in favor of viewing on smart phones. A gorgeous business?  I think Perez is giving Kodak the business.

    On August 1, 2011, in a further sign of just how deeply their management is in denial, Kodak put in the poison pill to prevent a takeover, arguably the one thing left that could possibly still save this train wreck of a company.
    EK daily, Sept. 1-23, 2011

    One smart guy.
    In August, 2011, Jiebo Luo, a young 15 year veteran Principal Senior Research Scientist and high-ranking member of the Inner Circle of Kodak's Imaging Science Laboratory in the legendary Kodak Research Labs in Rochester quit the company to take on a position as an Associate Professor at the University of Rochester.

    Now why would such a highly placed individual, who can basically write his own ticket, bail after 15 years?  Suddenly decided he wanted to teach?  Mmm hmm - could be... (not).

    Kodak currently lists all of 15 jobs openings in Rochester. One is for an intern, 5 are for financial auditors, and none are in the research labs.  10 years earlier, there were hundreds of jobs listed at any given time.

    On September 23, 2011, Kodak withdrew $160 million from its revolving line of credit.

    Too late for Fisher
    On this day EK has a market cap of just $640 million (9/30 update - make that $210 million).  And a short interest of a whopping 25.62%.

    September 26, 2011: Thomas Berarducci publishes an ebook called What Not to Do in Business.  Amazingly, he got George Fisher to give this testimonial: "A great collection of lessons from the trenches rather than from the ivory tower."  I guess if you want an expert on what not to do in business, George is your man.

    The wrong stuff, too little, too late

    Does all this sound like a healthy company?  No.  How did this happen?  The sad tale of EK is primarily one of too little, too late.  Not only that, but going off in the wrong direction over and over.  And never learning from their mistakes.  All of these problems go directly back to the management of the company, that incredibly remains in total denial of the obvious: Kodak is going down for the third time.
    From, the Kodak memorial poster.

    And it would be one thing if it was just denial, but denial coupled with arrogance is guaranteed fatal.  For example, Dan Carp, then CEO, stood up in Kodak Theatre (a vast private auditorium in the Kodak Park complex) at a Research Division meeting one cold winter day in the early 2000's and announced that things weren't looking so hot.  But the problem, he went on wasn't management's plan, it was the failure of the workers to execute the plan.  That one statement speaks volumes and sums up Kodak's problems in a nutshell.

    Clearly, this company is not long for this world, no matter what its delusional CEO has to say on the matter.  It's really sad to see another great American icon go out in such a pathetic manner, and infuriating because it didn't have to end this way.  Poor George Eastman must be just spinning in his grave.   Bye bye, Eastman Kodak, it was fun while it lasted.

    Updates since the original post

    EK, Sept. 2011
    September 30, 2011: The very day after I originally wrote this piece six days ago, Kodak stock dropped from $2.38 to  $1.74.  Uh oh.  Then both Moody's and Fitch cut Kodak's bond rating - again.  Double uh oh.  Then yesterday, one Gregg T. Abella, a byg wyg in EK stock holder Investment Partners Group wrote to the Kodak board,
    "Kodak's long-term performance is simply unacceptable, and as such it has not earned the right to remain an independent company. Kodak's management has been given more than enough time and still has been unsuccessful in unlocking value for stockholders or bondholders."
    Big uh oh.  (See the full story in the local Rochester paper here)  And I'd say Gregg was being highly diplomatic there.

    And finally, in a possible coup de grace this afternoon, EK crashed again, this time trading as low as 54 cents, after both Bloomberg and the WSJ reported that the company was considering filing for bankruptcy.  It then recovered, if you can call it that, to close at 80 cents.  Yikes.  Get the trumpet out, it's almost time to play Taps.  Very very sad.

    October 5, 2011: Just when it seemed like there wass really nothing else left to sell, Kodak sold its silver business, arguably the heart of the entire company, to an outfit called Rochester Silver Works.  Contrary to rumors, Antonio Perez's office desk is not for sale.  Yet.

    October 12, 2011: Collins Ink Corp., which apparently made the ink used in Kodak's inkjet printers (I thought they made their own ink), cancels their contract with Kodak, citing "Kodak's financial condition".

    October 13, 2011: Kodak makes the NYSE's "Threshold securities" list for the 6th consecutive day, reflecting its astonishing 27% short float.

    October 14, 2011: In a dose of its own medicine, Kodak gets sued by Fuijfilm over digital camera patents.  Sow the wind, reap the whirlwind.

    October 20, 2011: Kodak sues Collins Ink (see Oct. 12 above).  Apparently, Kodak's main product is now lawsuits.  Also, it comes out that Kodak apparently has yet to pay Collins for $2.5 million worth of ink.

    October 21, 2011: According to the WSJ, a group of Kodak bondholders have hired a lawyer of their own to "protect their interests".  Also Kodak hires restructuring consulting firm FTI Consulting Global.  And according to Debtwire, Kodak is meeting with Cerberus and Silverpoint Capital Management. Kodak short float is now 29.29%.

    Also, the ITC kicks the can down the road again on its long awaited Apple/RIM patent decision.  Supposedly, it's going to be November now, or maybe the "end of the year".  Not quite sure which year though.

    October 24, 2011: Kodak kicked off the S&P Midcap 400. Kindred Healthcare also had the honor of getting the boot today but while they were "promoted" to the Smallcap 600, Kodak was not.

    October 25, 2011: Kodak and Collins Ink kiss and make up, resuming their ink arrangement - for an entire week.  The whole deal apparently expires at the end of the year anyway, making one wonder just what all this odd posturing was about in the first place.

    November 3, 2011: Kodak reports some stunningly bad Q3 numbers with  a loss of 83 cents per share versus estimates of  44 cents.  In an SEC filing, they state "The Company's ability to continue its operations ... is dependent upon the ability to monetize its digital imaging patent portfolio through a sale or licensing of the relevant patents and/or the successful execution of the alternative actions, which could include the issuance of additional debt, listed above,"  This sort of announcement does not exactly give one the warm fuzzies.

    Antonio Perez concludes his presentation with "I kept saying that by the end of 2012, we're going to get to this self-standing digital company.".  Oh puhleeze.  EK stock closes at 1.12.  (Transcript excerpt from Seeking Alpha, full transcript can be found here.) 

    November 7, 2011: Kodak sells  its Image Sensors Solutions to Platinum Equity for the proverbial "undisclosed amount of cash".  This must mean they got a bad deal.  Frankly, I was surprised to learn there was anything left over there to sell besides their much talked about patent portfolio..  It's ironic that this is the group that was responsible for the development of the digital camera, the invention that led Kodak to its doom.  In addition to the mystery cash settlement, Platinum picks up the high rise research building 81 in Rochester's Kodak Park along with 200 Kodak employees, about 3% of the remaining Kodak workers in Rochester.

    Also today, Moody's publishes a note to the effect that Kodak will run out of cash "by 2012" (meaning in less than 60 days) unless they get a "major infusion" of new financing.  Much is still being made about their patent portfolio.  See the entry for July 2011 above for an analysis of just how much they might really be worth.

    November 10, 2011: Legg Mason calls it quits, announcing it dumped the last of its Kodak holdings, 7.9 million shares last month.  They started accumulating shares in 2000 when the stock was at 60.  It closed today at 1.14.  Ouch!

    November 15, 2011: A large Kodak shareholder, Investment Partners Asset Management asks Kodak to ditch the poison pill (see item from August 1, 2011 above) stating "The poison pill should be removed immediately so that the market can determine the value of the company as an independent entity or as a potential acquisition target,"  IPAM also wants it put to a vote at the next Annual Meeting.  Kodak had no comment.  Should be an interesting meeting next May.

    November 16, 2011: Kodak announces that they are selling Kodak Gallery, their online photo storage, sharing and printing business.  A buyer has yet to be found.

    November 25, 2011: Kodak ceases production of its Advantix APS film.  Since Fuji has also bailed on APS, your APS camera is now a museum piece.  Story here:

    Kodak HQ ghost town
    December 2, 2011:  In a story here Kodak announces they are shopping five empty buildings totalling 550,000 sqare feet in Kodak's Rochester headquarters complex to a local community college.  The deal promises to get embroiled in local politics with a competing offer across town in an abandoned department store (the fabled Sibley Building).  EK stock now trading at $1.02.

    December 6, 2011: Kodak dumps restructuring advisers Jones Day for the firm of  Sullivan & Cromwell.  This move at least hints at the prospect that Kodak may be pursuing an alternative to bankruptcy, most likely a takeover I'm guessing.  By way of "explanation" Kodak announced "we don't itemize the work any of our advisers do for us." 

    December 14, 2011: Perez wins the dubious honor of a spot on CNBC's "Worst CEO of 2011" awards, taking home the number 4 position.  Story here.  Kodak closed today at 82 cents.

    December 19, 2011: Well, I guess when it rains it pours  Today the WSJ reported that Kodak is having problems selling its vaunted patent portfolio.  TAnd that's affecting its ability to raise  cash.  According to the report, Kodak "could seek bankruptcy protection during the first few months of next year".

    And to add insult to injury, Kyocera is suing Kodak over an inkjet printer patent.  At this point, my guess is that Kodak isn't going to be able to sell their patents at all.  Why should anyone buy them?  It would be more cost effective to just infringe and figure that Kodak is going to be too weak to do anything about it, asssuming they're even going to be around much longer at all.  Right now EK is trading at 71 cents.  Next stop - the pink sheets.

    December 20, 2011: Delivering the can another powerful kick, today the ITC announces that, surprise - they're going to delay their ruling on Kodak's Apple/Rim patent dispute, previously expected right about now, until September 2012 (see previous timeline item for 10/21/11).

    According to a story in the local Rochester, NY newspaper here, Kodak said it was "pleased to receive the judge's order, and it is reasonable to expect him to take an appropriate amount of time to review the case. That said, as we have stated from the beginning of this case, we believe the law and the facts are on our side, and that we will ultimately prevail."  Uh, yeah - assuming they're still around by the time that happens.  If it ever happens.  Kodak now trading at 67 cents.

    December 22, 2011: Kodak names one Laura G. Quatela as its new president.  I'm sure she must be feeling a lot like Josef Goebbels did when Hitler appointed him the new head of the Third Reich a week before the end of the war in Europe.  In any case, she had no comment on her promotion.  Actually, she's only sharing the job with Kodak's other president (how many presidents can you have?) Philip Faraci.

    Perez said the move "reflects her increasing role in the company, including the strategic importance of the intellectual property business."  Interestingly, Ms Quatele is not a chemist, a physicist, or an electrical engineer.  She's a lawyer.  Since most of Kodak's activities these days revolve around lawsuits, I guess this move makes perfect sense.  Full story here.

    Also on this day, Kodak announces that they're selling their gelatin division to a Dutch company.  Gelatin is literally the heart of film manufacturing.  George Eastman was so adamant about the quality of his gelatin that he insisted Kodak make their own.  I guess he's taking a few more spins in his grave tonight.

    December 23, 2011: a news item that shows just how bizarre things are getting in Kodakland.  It seems a disgruntled former Kodak shareholder has been charged by the FBI with making death threats against Perez.  This poor guy apparently snapped on September 30th, the day Kodak suddenly sank to 54 cents (he got out at 58 cents).  He allegedly called the company and left a voicemail saying, “Don’t know when it is going to happen or where, but I am going to find (Perez) and I am going to get him,” and threatened to put a bullet in his head.  Holy moly!  See the full story here.  It pretty much speaks for itself.

    December 27, 2011: Two members of Kodak's board quit today   According to an AP story quoting the WSJ, Kodak "did not say why the two had resigned, but The Wall Street Journal, citing a person familiar with the matter, said they had had grown frustrated with the pace of Kodak's turnaround".  Hmm, that doesn't sound particularly encouraging.  EK now down to 65 cents.  What is the NYSE waiting for to delist this walking zombie of a company?

    December 30, 2011: Like rats deserting a sinking ship, the Kodak board seems to be getting out while the getting's good.  Apparently, a third board member, one Laura Tyson, has now resigned, according to this Reuters news story.  That makes three down, 13 to do.  Kodak had previously announced that they would not replace the first two directors.  No comment was available on their plans following this latest defection.  After trading as low as 63 cents, EK closed the day and the year at 65 cents.  It opened in 2011 at $5.45.

    January 3, 2012: The bad news just keeps on coming.  Today Kodak received a "continued listing standards notice" from the NYSE because their average closing price was under $1.00 per share for 30 consecutive trading days.  Notice that I asked this very question just last week (see 12/27/11 item above).  Next stop, the pink sheets.  Not that it even matters much anymore.  Kodak has already been a plaything for the penny stock boys for some time now.  After closing at 65 cents, EK dropped to 63 cents in the after hours.

    January 4, 2012: I guess when it rains, it pours.  Just one day after getting the heave-ho warning from the NYSE, the WSJ reports in an article here  that Kodak "is preparing for a Chapter 11 bankruptcy-protection filing in the coming weeks should efforts to sell a trove of digital patents fall through" according to "people familiar with the matter" (emphasis mine).

    Considering how long we've been hearing about these patents (see July 2011 item above, "Kodak announced that it was shopping its patent portfolio around to create a 'digital profitable and sustainable company by 2012.'"), this isn't seeming too likely at this late stage in the game.

    When the news came out EK plunged instantly from 65 cent to 47 cents, where it closed.  Clearly, the only question left now is whether this is going to be an Enron-style, close the doors and auction the office furniture bankruptcy, or an airline-style dtich the pension plan and keep muddling on bankruptcy.  Kodak's response: "we don't comment on rumors".  Of course back last September when the bankruptcy issue first surfaced, they were quick to deny it.

    January 5, 2012: The exodus continues as today the WSJ reported the departure of Kodak's s Chief Communications Officer, Gerard Meuchner.  Clearly no one wants to be the last one out the door.  Today EK closed at 42 cents.  One share of Kodak and 3 cents will now buy you a postage stamp.  I would not be surprised if Perez was on the horn right now to book his return flight to Madrid.

    Also on this day, Moody's downgraded Kodak's debt again, this time to "Ca".  Why not just cut to the chase and rate it where it deserves to be: "Zzzzzzz".  The end is near.

    January 6, 2012: In the continuing bizarre saga of one John Michael Paul, who allegedly issued a death threat against Perez (see December 23, 2011 above) appeared in court today, apparently to set a date for him to appear in court.  Ironically, he sold his stock at 58 cents and it closed today at 37 cents, so you could argue that he did better than a lot of other folks still left holding this particular bag.

    EK daily, 2012
    January 19, 2012: Well, it's finally over. Early today, Kodak declared Chapter 11 bankruptcy.  According to an article on, they said it "is intended to bolster liquidity in the U.S. and abroad, monetize non-strategic intellectual property, fairly resolve legacy liabilities, and enable the company to focus on its most valuable business lines.". 

    A Reuters story quotes Perez as saying "The board of directors and the entire senior management team unanimously believe that this is a necessary step and the right thing to do for the future of Kodak".  Shame on you, Antonio.  EK closed on Wednesday, presumably its last day of trading, at 55 cents.

    And so here the Timeline of Shame ends.
    Eastman Kodak

    Going my way?
    And here's a telling photo from Kodak's web site today.  Kodak, the imaging company that defined the art of photography, chose an empty highway in the middle of a barren desert, leading to nowhere, to headline their future plans.  How apropos and how sad.

    January 9, 2014: It has been suggested that I update this post given the ongoing story of Eastman Kodak.  As everyone knows, Kodak emerged from bankruptcy last year.  But this new company is Kodak in name only.  Everything that made Kodak, Kodak, is gone.  "The New Kodak Company"  is just a small vendor of high-speed printing presses trying to compete in a crowded and cut-throat niche market.

    Actually, there is one thing that's still the same.  Inexplicably, Antonio Perez, the man who single-handedly drove Kodak into bankruptcy is still at the helm, seemingly welded to his corner office in the Kodak Tower penthouse.  And he seems to have learned nothing from the experience.  Here's some vintage Perez-speak from just yesterday when he and a bunch of cronies ventured down to the Stock Exchange to ring the opening bell (the Dow lost 67 points that day):
    "This bell ringing is a symbol of Kodak's remarkable transformation," said Antonio M. Perez, Kodak's President and Chief Executive Officer. "It's a new year, with a new company, a new stock and a new start."
    Yeah yeah, blah blah blah.  New everything, same old CEO.  Good luck with that.  Where are the picketers outside 343 State Street chanting "Hey hey, ho ho, Antonio Perez must go!"   Antonio, what about all the thousands of dedicated workers and retirees who you unceremoniously threw under the bus, what about all the unsecured creditors you left swinging, and the trail of devastation and exploded buildings you left behind, have you no shame?  Have you no sense of humility?  What are you still doing here?

    And here's a lovely shot of the Great Moment with the Fearless Leader ready for his close-up flanked by two dudes twitting the event no doubt, ironically enough not on Kodak cameras but on their EyePhones.  Sheesh.

    A New Kodak moment

    September 12, 2015  Where Are They Now?

    Dan Carp moved to Naples, FL and became "Non-Executive Independent Chairman of the Board" (whatever the heck that's supposed to be) of Delta Airlines in 2007 where he continues to make life miserable, this time for the millions of unhappy customers forced to fly on his crummy airline.  He also serves on the boards of Texas Instruments and Norfolk Southern Corp

    Danka Office Imaging Co. couldn't do anything with Kodak copiers either and was acquired by Konica Minolta Business Solutions U.S.A., Inc. in 2008.
    David Cok is a VP of Technology at some place called GrammaTech in Ithaca, NY.

    Walter Fallon died at his home in the Rochester suburb of Irondequoit in 2002.

     George Fisher retired earlier in 2015 after 11 years as a senior advisor at Kohlberg Kravis Roberts & Co.

    Jiebo Luo is still at the University of Rochester after bailing Kodak in 2011.  He continues doing research in image processing and is now a Byg Wyg in a bunch of technical alphabet organizations (ACM, IEEE, etc.)

    Antonio Perez managed to get at least two "Worst CEO" awards in 2011 from both CNBC and the Motley Fool, quite an impressive feat indeed.  In 2011 he was appointed to The Empty Suit's Council on Jobs and Competitiveness, presuably as an example of what not to do.  After meeting a grand total of four times, the Council went out of business  in 2013.  But he kept right on doing his thing at the New Kodak.  I'm not the only one who noticed.  On July 31, 2013, Jon C. Ogg over at 24/7 Wall St. [] wrote:
    "One thing has been more than puzzling to us, and that is how on earth this company continues to see fit that Antonio Perez should stay on as Kodak’s chief executive officer... We were as outraged that Antonio Perez received a bonus in 2012 as we are that he is somehow allowed to stay on as CEO. This just makes no sense...  Antonio Perez must have files on anyone tied to Kodak in any way as well. Otherwise his continued and future tenure as CEO of Eastman Kodak is just not logical by any means. It is insane."
     In 2013, in a puff piece in USA Today [] he had the unmitigated gall to say "Bankruptcy has been painful for many people, for myself as much as anyone else.Are you serious?

    But despite the pain he continued to hit the cash register at Kodak, going out in style in 2014 with a $3.4 million bonus on top of a $1 million salary.   Oh the pain must be simply excruciating.  Poor poor Tony.

    26 Wessex La., Pittsford, NY 14534
    But wait, that's not all.  In March 2015, he received a lump sum disbursement of some deferred base salary [].  The amount was not disclosed, to keep the pitchfork, tar and feathers crowd at bay, no doubt.

    Presumably, he needs the big bux to maintain his secret unlisted million dollar 8200 sq. ft. palazzo in a undisclosed Rochester 'burb (where a million goes a long way).  Perez is so beloved in Rochester that Kodak provided his dump with 24 hour security services until September 2014.  That's why I'm not saying where it is.  It's not clear if he's actually still living there today though.

    Pat Russo had the good sense to know a lost cause when she saw one and wasted no time before going  back to Lucent where she ran that company into the ground too.  She oversaw the merger with Alcatel and then ran it into the ground too before finally being shown the door in 2008.  She is currently on the board at General Motors (GM) which she joined shortly after it declared bankruptcy.  The New GM stock is down 15% since then.  Her capacity to do damage iin her current position is presumably more limited.  Do I detect a theme here?

    Steve Sasson, inventor of the digital camera was awarded the National Medal of Technology and Innovation by The Empty Suit at a 2009 White House ceremony.  He retired from Kodak in 2012 and now has his own consulting firm in Hilton, NY.

    Kay Whitmore helped develop Rochester Brainpower, which was some odd coalition of businesses aimed to improve the quality of education in public schools. Rochester's public schools are currently arguably the worst in the entire nation. He died in 2004. In 2010 he was posthumously awarded a spot on 24/7 Wall St.'s list of  "The 15 Worst CEOs In American History".

    And finally,
    The Night Owl is still here, still writing about the stock market every night in The Night Owl Trader and still contemplating writing a book about the sad demise of Eastman Kodak.  Oh wait - maybe I already have.

    Copyright (c) 2011, 2012, 2014, 2015
    The Night Owl Trader
    All Rights Reserved
    No part of the original content of this article may be copied or reproduced in any form without explicit prior permission.


    1. Dean Charles MarshallOctober 1, 2011 at 9:29 AM

      Great article and very well written. Back in the day my Dad worked for Bell & Howell when that company was the "sterling on silver" of the movie camera and projector business. Like Kodak they too suffered from a very "myopic" vision of how fast and furious technology was changing and were "flummoxed" when VHS hit the market? Essentially overnight their product line became "obsolete". B&H scrambled to reinvent itself with a menagerie of technical "wild goose" chases that went no where. Eventually they succumbed to the realities of the marketplace and sold off their once heralded name as a mercenary licensing brand for a bunch of cheap "As Seen on TV" gadgets and gizmos. Pathetic! I think Microsoft is another company about to have one of those "deer caught in the headlight" moments as smartphones and Ipads replace PCs and abandon Windows as an operating system.

    2. Excellent analogy. B&H was pre-eminent in its field and I should have mentioned it too. It just shows you how far over the event horizon they slipped that I didn't even think of them.

      Thanks for writing!

    3. It's fair to say that EK didn't get the picture...

    4. Nyuk nyuk nyuk. You could say they lost their focus. One can just hope that some day their prints will come. I guess we'll just have to wait and see what develops. (OK, I'll stop now :-)

    5. Poor Kodak !!!! Very poor management !!!!! Dun believe in what his employee input !!!! Sell ! Sell everything until nothing left.... Bye Bye !!!! Last one standing.....Fuji .!!!!

    6. This press is aching to report bad Kodak news, and even covers the retiree meeting on healthcare. But no news, no substance of the meeting- Why? Nothing has happened yet.
      Lets remember- if you didn't have 15 years in the company and were not "vested", you are not a retiree.
      Those who are on Medicare, stop whining and get back to the FL Race Track, or Wegmans or wherever you hang out.

    7. Where in the hell has the Board of Directors been? How could they let this happen to this company? Shame on everyone of you! So many people, worked hard to keep this company going and there is nothing left to work for. sad! It makes me sick that a company could be in ruins because of the bad management. Perez and his crew should have been gone a long time ago. They ruined the company. Thanks and goodbye Kodak! Rest in peace.

    8. Mr. OWL Trader- You neglected to mention Xerography and Kodak's chance to acquire the rights back when. That would have been a big mistake (as we now know) and would have prevented the Instamatic (drop in cartridge) from being introduced c. 1961. Instamatic was the biggest profit maker for Kodak ever!

    9. Thanks for mentioning that. The history of both of these Rochester companies is full of intertwined ironies and missed opportunities. That's part of what makes it so fascinating. You could fill a book with it and that's an idea I'm toying with.

      And BTW - it's Ms. Night Owl Trader, not Mr.

    10. Ms. Owl, are you suggesting that Kodak should have bet the farm on digital photography? Where is the profit in digital? I bet that you have hundreds of of photos sitting on your hard drive just waiting for your computer to crash.
      Nothing lasts forever. Get over it.
      Film is gone, so are buggy whips.
      If you look at employment figures now compared to 1991, Rochester has already survived the loss of Kodak and continues to have a low unemployment rate compared to other rust belt cities.
      Hoot Hoot

    11. "are you suggesting that Kodak should have bet the farm on digital photography?"

      Not at all. Quite the contraray, in fact. That's why I wrote that their problem was "going off in the wrong direction over and over".

      They might have been able to make digital profitable had they capitalized on it a lot earlier, but by the time they decided to do it, it was too late.

      "Where is the profit in digital?"

      Clearly there isn't any, at least not for a company like Kodak. In fact, a few years after Perez proclaimed that digital was going to be a big deal at Kodak, he pronounced the business to be "crap".

      "I bet that you have hundreds of of photos sitting on your hard drive just waiting for your computer to crash."

      Wrong. I have *thousands* of digital photos. However, they, like all the rest of my data, are backed up on a second drive. And there's a third copy in a physically different location in case of a real disaster.

      "Rochester has already survived the loss of Kodak and continues to have a low unemployment rate compared to other rust belt cities."

      That much is true. It is also true that in 1997, when Kodak hit its all-time high stock price, there were about 22,000 unemployed people in Rochester. As of August 2011, there were 37,518.

      Of course, none of that directly answers the question of what happeneed to the 53,000+ people who lost their Kodak jobs over the last dozen years.

      1. Thank you for your commentary and efforts. I appreciate your point of view. Sincerely Jim Eastman

      2. You're welcome. Any relation to George Eastman?

    12. think about the frustration of those who worked for Kodak in countries other than the USA. They were far away and had no influence over what affected them adversely. The decisions of Kodak
      Board were deliberated only in the Board Room and never addressed the realities of a global Company.

    13. I worked at Kodak for 35 years and worked with all of the research people mentioned in your article. From my vantage-point, you are very perceptive in your analysis. At some point in the very near future Kodak is going to become a classic study in business school texts.

      For 100 years Kodak printed money by manufacturing film. And it went out by the trainload. If you trace the genealogy, every internal CEO of the company came up through the film division. These guys knew the margin on film and thus were able to generate huge profits merely by starting up another film project. It was foolproof. And they were rewarded handsomely for every film move they made.

      So when times got tough, what did these guys have to fall back on....FILM. So they doubled down by building new plants in China and a new paper plant in Rochester (this all after everyone else could see the end). It was classic Pavlov's Dog syndrome. They were rewarded when they expanded film every single time. It doesn't take a brain surgeon to predict what way the company would veer.

      The real shame is that in the late 80's the company embarked on a diversification effort. Buying Sterling Drug and a few other companies. Plus they already owned one of the more profitable chemical companies in the world - Eastman Chemical. They were well positioned to move into new markets, but subsequent CEO's fell back into the film-is-king mentality, and the rest is history.

      In my opinion, the biggest impetus for this type of behavior was the obscene margins on film. I can't think of another product with such margins and certainly not like any digital product line.


    14. You have hit the nail right on the head, and thank you for reminding me about Eastman Chemical. I've added that blunder to the timeline of shame.

      Chemical processing is an industry with a high barrier to entry, allowing built-in margin protection. Anyone with a laptop and a soldering iron can get into digital. Why Kodak ever thought going digital made more sense than concentrating on their expertise in chemistry remains a mystery.

    15. Well researched article, thank you.

      Kodak had a one trick pony: FILM. They perfected the technology (to see how: ). Film and photographic paper made virtually all the company's profits for a over a century.

      Management failed to apply the company's core competencies and develop new competencies to products needed in the 21st century.

      As a result the company may fail.

    16. All of this and you didn't even touch on the fact that Kodak sits on one of the largest brownfields in the country. This alone is a good reason to file bankrupccy. At one time , and perhaps still is the most polluted zip code in the US.

    17. You fail to give CEO George Fisher credit for sending Kodak down the wrong path. In my opinion, he was the key person to start Kodak on its path to oblivion.

    18. Dont't forget the selling of their Clinical Products division to Johnson and Johnson in the mid 1990's.

    19. Yup - good point. Yet another profitable chemical business down the drain. Thanks! While looking that one up, I also found two more divisions they unloaded to raise cash. I'm surprised there's anything left at all there now.

    20. So Smart guy who wrote this, what would you have done? It is easy to be a Monday morning quarter back!!!!!!!!!!!!!!!! Going Digital back in 1975 would have brought Kodak to an end a lot sooner and a lot of us who were able to continue to work until retirement are thankfull Managenment did what they did. I feel sorry for those who are negativly impacted today but for what George Fisher did, selling off other interprises, I think the other Ceo's up to and including Dan Carp and excluding Perez did only what they were able to do with the hand they were dealt and I thank them for that!

    21. Oh I don't deny it's very easy to be a Monday morning quarterback. I'd like to think that what I would have done is take a trip to Silicon Valley and look at the factories there, all neat white glass-fronted boxes, then come back to look at Kodak Park, a smelly ugly grimy assortment of brick buildings connected by giant pipes with belching smokestacks.

      Then I would have said, hey, this isn't a computer company, it's chemical company. There's no way we're going to spin off Eastman Chemical. We'll continue doing what we do best and leave the digtial stuff to electronics companies.

      Dumping Eastman Chemical was the kiss of death for Kodak. But then again, it's easy to be a Monday morning quarterback.

    22. Fantastic analysis. Very well researched, and it pinpoints the problems are indeed caused by poor decisions in management. Perez and his cronies need to go and leave the company with at least a fighting chance to survive.

    23. Growing up in Rochester during the Kodak heyday it wasn't "where does your dad work?", it was "what plant does your day work at?". Groups of kids would congregate in school based upon this, whether it was the Park, Elmgrove, Hawkeye, or Downtown. It's heartbreaking in a way to see what the company has become, after generations of my family worked there. I wonder what will become of the downtown tower when the company is gone...

    24. Not sure there is info about the New Kodak comercial priniting - Creo CTPs- Versamark -Nexpress - Not sure that is mentioned about the new personal printers ...?

    25. I worked for Kodak, in Rochester, for 37 years. I personally witnessed a worldclass company reduced to what it is today. The fault for the situation lies with the leadership the company "has enjoyed." It makes me want to cry.

      I worked for Kodak, in Rochester, for 37 years. I saw a worldclass company turned into what it is today. Shame on the management for letting that occur.

    26. You forgot the OLED (organic light emitting diode) debacle. They immediately began selling licenses on it's patents for an interum cash flow several years back. They never wanted to manufacture; just reap the benefits. Today, we all know the future of consumer and industrial lighting will be the LED. They could have become a giant in the industry with some agressive hard work but the buzzards would rather pick at the "dead carcass" and line their pockets.

    27. Ah, the OLED! Thanks for reminding me. I added a line in 1987 for that particular fumbled ball.

    28. I worked at EK for 16 years, and saw that it was impossible get marketing dollars for the plethora of new and innovative electronics being developed. All marketing dollars were focused on the dying cash cow. I have nothing bad to say about working there at all though!


    30. I worked at Eastman Kodak for 27 years as machinist and can not believe what management did to the company,in my opinion it's like whats happening to the whole country,it really makes me sick.Hello America wake up where in deep Do Do.

    31. Good article, but very, very hard to believe you gave George Fisher a pass on this one...he's really the guy whose self-interests tanked the company at a crucial point in time. Perez is worthless, Carp was in over his head, but Fisher was cunningly destructive.

    32. You are absolutely right. Fisher gets away simply because the original emphasis here was on the most recent events, and it's already pretty long for a blog post.

      Rest assured that when the book version of the Rise & Fall comes out, he'll have a whole chapter devoted to his shall we say unique management style.

    33. As a former EK'r who left the company 2 years ago I read this chronology with sadness/anger & respect for the thoroughness of the article. As to what they should have done years back, do what Intel did when they changed from memory to microprocessors; understand your core business and strengths, and put your resources where you can compete successfully. OLED was a major blunder; we sat through 20 years of being told it was the next best thing when we figured out what to do with it. Kodak can put precise thin layers of materials on flexible substrates,much like the former Polaroid plant that is now making flexible solar panels. There were many opportunities for innovation, but no leadership willing to run with it. Why Perez wasn't sent packing years ago is a crime. Pinning the future on a cheap knock-off of an HP printer that has never worked properly is incompetence.

    34. I too am saddened by the demise of such a great company, totally due to mismanagement. The answer to falling behind was hiring the "gurus" like Al Rickmer to teach us how to run the company and cut costs and to downsize the production workers while not touching any levels of managers. What were they thinking?

    35. The ironic part about Polaroid was Kodak could have settled the suit for a very small amount of money, seem to recall it was less than 1/3 of the verdict. Polaroid agreed to the number, but at the time Walter Fallon wouldn't agree to settle as he was certain Kodak would win the lawsuit. That was their first mistake.

    36. Well clearly they were thinking about how to save their own jobs, not the company.

    37. The presiding judge had been a lawyer for Polaroid, which may have have been a factor in the judgement that was awarded. The one billion awarded was much less than the profit made on Instant Film. I know I was a yield and efficienct foreman in the department. A billion was a bargain.

    38. This is a new Anonymous. I take a contrarian viewpoint. Kodak management has more or less executed a soft landing; they kept the company going, trimmed it gradually and regularly, preserved the cash cow of film as long as humanly possible, for as many people as humanly possible (but not all of them). With a major technology change, firms tend not to survive. No ocean passenger line entered the Translatlantic airline market; no railroad entered successfully the automobile market. HP has been modestly successful transforming from workstations to PCs, thanks to Compaq acquisition. None of the traditional department stores have been successful becoming a big box retailer. I would venture that no Chinese restaurant owners can run a family casual dining facility. Going out of business is in Kodak's future, but they did not crash and burn, they have gone down the glide path. Kodak management could not tell everyone this was the fate for morale purpose; may as well have them focused on some kind of digital printing future where a smaller company might eke out an existence. But all in all, I found the Night Owl posting illuminating and comprehensive coming from an external perspective without significant internal contacts to provide input.

    39. Boo Hoo... To Employees who drank the kool-aid....
      I am glad Kodak or Xerox never hired me. I was interviewed after discharge from the Marine Corps in the 1960's, no offer; again after five years at NCR in the mid 1970's, no offer; yet again after my three year stint at Verbatim (Sunnyvale, CA) as Engineering Services Manager when they bought, dissected and sold the technology, offering Guadalajara, Mexico.
      Saved again....I joined Tandem Computers (Engineering)for eight years in 1986. Earned Tandem Tops in 1989. As Energy Conservation Manager achieved numerous energy and conservation awards in the late 1980's and early 1990's, including Energy Manager, National 1990 Association of Energy Engineers.

      Knew Jim Taberski, Kodak Energy Guru and Debra (don't recall last name) Xerox Energy Guru both Rochester, Webster who didn't have a clue about energy strategies or the synergy boost of teams to see other possibilities.

      I grew up in the Rochester area but have lived in California for the past 32 years.
      We visit family and friends each year in Autumn. We still call it home.

      In retrospect both Kodak and Xerox ( Palo Alto, CA also) fostered an in house management philosophy of "we know better than anyone else". Yes, there were many genius people at both companies but tight management philosophy limited the "what if strategy" of accepting outsider idea or application of other product concepts.

      Now I'm glad that I never worked for either. Their management style did not get stamped on my mind or influence our family of three sons.

    40. Boo Hoo... To Employees who drank the kool-aid of being one of the Kodak, Xerox special people. Almost got me...guess my loss.

      I am glad Kodak or Xerox never hired me. I was interviewed after discharge from the Marine Corps in the 1960's, no offer; again after five years at NCR in the mid 1970's, no offer; yet again after my three year stint at Verbatim (Sunnyvale, CA) as Engineering Services Manager when they bought, dissected and sold the technology, offering Guadalajara, Mexico.

      Saved again....I joined Tandem Computers (Engineering) for eight years in 1986. Earned Tandem Tops in 1989. As Energy Conservation Manager achieved numerous energy and conservation awards in the late 1980's and early 1990's, including Energy Manager, National 1990 Energy Manager of the Year by Association of Energy Engineers.

      Knew Jim Taberski, Kodak Energy Guru and Debra (don't recall last name) Xerox Energy Guru both Rochester, Webster who didn't have a clue about energy strategies or the synergy boost of teams to see other possibilities. Interviewed both on Energy Strategies.

      I grew up in the Rochester area but have lived in California for the past 32 years. We visit family and friends each year in the Autumn. We still call it home.

      In retrospect both Kodak and Xerox (Research Park in Palo Alto, CA also) fostered an in house management philosophy of "we know better than anyone else". Yes, there were and possibly now many intelligent and genius employees at both companies but tight management philosophy limited the "what if strategy" of accepting outsider idea or application of other product concepts.

      I'm glad I never worked for either, and had their management style stamped on my mind or influence our family.


    41. Kodak management has indeed made many mistakes, but there are so many factually incorrect statements in this article that it is hard to regard it as a serious analysis of where the company went wrong.

      The key is that Kodak had world-class expertise in two areas: materials science (including precision coating) and image science. It failed to exploit these to transition from film into new markets, largely because it brought in outside management that had little understandng of these core competencies and instead tried push the company into areas where it had to competitively develop expertise other companies already had.

      But Wall Street also deserves a bit of the blame by pessimistically driving away capital during periods when Kodak could have succeeded in new ventures based on its core competencies and demanding the profit margins the stock had enjoyed from the high margin film business.

    42. "there are so many factually incorrect statements in this article that it is hard to regard it as a serious analysis "

      Really? Errors of fact? Can you cite one or two examples? I stand by everything I wrote as being accurate but would be happy to make any corrections as needed.

    43. Actually, the biggest money maker for EK Co. was 35 mm films. They accounted for 30 - 35 % of all profits. The 126 Instamatic Cartridge was big, but not that big and of course, it had a much shorter life than 35 mm.

    44. I will look forward to the book when it arrives. Hopefully it will have a Kindle version available. ;)

    45. Does anyone remember the Kodak disk camera? Can't remember when it appeared, not long before it disappeared?

    46. Ah yes, the infamous disc camera, Kodak's Edsel. Introduced in 1982, camera production ceased in 1989, though the film itself continued to be made until 1998, presumably for the benefit of the myopic and the masochistic.

      Here's a few typical user comments (from about this particular corporate embarrassment:

      "I remember these, and I remember the crap quality of the pictures it took"

      "What a piece of junk!"

      "I remember the pictures from these cameras were always so crappy and grainy."

      'Nuff said.

    47. I left the company this year. The sad part about staying alive as a company is that senior management is now more concerned with their own jobs than making decisions that are best for the company.

    48. Interesting to see the mention of Bell&Howell, I worked for B&H for 28 years, all in the Document Management division. (microfilm, digital imaging for business) it was up and down but did better than most other divisions. Then the best part, our major competitor, Kodak, buys our division out completely in 1999 for the "value and experience well could bring" Those of us that survived the transition soon learned the Kodak truth about new ideas, “NIH” (Not Invented Here)was the watchword for any new ideas. if Kodak wasn't already doing it, it couldn't be done or even considered. So the success we were having at B&H flattened out and both combined division started it downward spiral. I was "retired" in 2003 and now just pray that Kodak can hang on long enough for my wife to reach 65 before we lose our health care...

    49. I worked for Kodak for 33 years. Started out as specilist and left as manager, seeing a lot going wrong all the way. Disc camera was very wrong. What hit me the most was the "matrix management". Every decision had to go through at least 4 levels at diferent departments. It turned into a "grid-lock" company. I felt the company really comming down when Fisher came aboard. He clearly didn't understand what was going on.

    50. Amen to the Fisher comment. Assasin #1 Kodak had a successful $5 billion market in healthcare and Fisher took out the knife...also carried off several million in his pocket going out the door..

    51. You mention a few but there were many world class scientists who simply left because they could not stomach the direction of the company. Not a good sign when management could care less if the top talent jumps ship!

    52. Well it wasn't meant to be all-inclusive, but I'll gladly mention one more: Hsien Che Lee, a soft-spoken man and a true genius, author of many of the patents Kodak is now shopping around to save their butts, and one of the best imaging scientists they ever had. In the early 2000's, he saw the handwriting on the wall and left, apparently to move to Taiwan.

    53. I joined Kodak in 1967 when I left the Navy. I started as an Industrial Engineer in Rochester then transferred to Dallas as a Technical Sales Rep (TSR). The Kodak name was like gold (yellow) and there was no customer that wasn't glad to see me and there were almost no complaints. I was a proud employee for six years and left for a company in Silicon Valley. I'm saddened to watch their decline and would probably put much of the cause on Fisher. I'm hopefull that my many old friends came away intact.
      Pete Smith

    54. I left Kodak in the 1991 early retirement package after 25 years. I worked in finance and was very depressed that the company was so mismanaged. I have not owned stock since 1981. One of my projects was Capital Expenditures.
      In 1990 Kodak spend $2,500,000 on capital. This was a time honored tradition of letting everybody buy what the wanted. I remember going to Toronto and having a tour of the dome stadium and it cost $800,000
      So every year Kodak spent enough on capital to build 3 dome stadiums. Unfortunately nobody could stop these expenditures and there were no dome stadiums as a result.

      I talked to top management but the old boys club was too important. Thank God they gave me early retirement.

      It was kind of a ritual that as I walked into Kodak Office in the morning, I would look up at the tower that housed management and say JUMP


    55. CMOS sensor group was shut down in 2009.
      CMOS patents were sold in 2010 for 65 million.

    56. Just a quick addition: First commercial digital camera (DCS/DCS 100) in 1990; DCS200, 1992; AP2000/DCS420/DCS460/DCS465/EOS5, 1994; EOS1, EOS3, DCS560 1996. Exited the professional digital marketplace in 2000. While they were marketed, these cameras were the benchmark for high-quality digital cameras. I was the service engineer from 1989- 1998.

      Too bad; soooo sad...

    57. I would like to add a little correction on your statement about Kodak's Picture Maker event. They never get out of that business and that kiosk did not disappear but was replaced with a better and faster printer. It turned out to be a very profitable business in early 2000's. It grew steadily and made good contribution to Kodak's cash flow. But the top management did not give good support to the business and eventually lost the Walmart account. Yet the business is still here and is one of the very few new digital business that makes profit and survived since it's birth in 1987.

    58. Thanks for the additional information. Actually, I meant that the particular machine in that store was removed. It didn't look particularly successful to me since I never saw anyone using it, but I'll change that entry in the timeline.

    59. Nothing was mentioned about Kodak's Photofinishing history. The other side of the cash film cash cow. In te 80's and 90's Kodak bought up every Photofinishing company such as Colorcraft, Fox Photo, APG etc. They combined them with thier own Kodak Processing Labs and formed Qualex. Qualex had most of the wholesale overnight business until Fuji came in and started low balling the major accounts to gain accounts. Walmart was one of the first to go along with others. Kodak was too arrogant to compete so they let the business go. When they went after the business they lost it was too late. Towards the end Costco came back as the highest volume account and the lowest revenue. The last bone headed move by Qualex was to spend millions on a hybrid system of digital print technology to produce digital prints from film in the photo labs named CLAS. To the average customer they could not tell the difference from an analog print or could care less. With in a few years of rolling out the system, the equipment was scraped as all the Qualex labs were closed. Overnight film processing would have died anyway with the transition to home printing and all electronic viewing. On site mini labs are on the way out as well.

    60. Excellent. Indeed, I was searching more for Kodak's physical consumer products and spin-offs rather than services, but clearly the whole Qualex affair was bungled just as badly as everything else. Photofinishing will be chapter 5 in the upcoming book.

    61. Excellent and perceptive article.In retrospect,Kay Whitmore may have been the true visionary-he recognized that the digital tide was coming and it would never generate filmlike profits.He looked for another chemical based business that had high barriers to entry and could generate profits similar to film.Since Kodak's chemical strengths were a good fit with the pharmaceutical business he acquired Sterling Drug and L&F.Unfortunately George Fisher promptly reversed Whitmore's decision and sold Sterling plus other profitable businesses.Kodak could have been a very different company today if that had not happened.

    62. My father worked for Kodak, and in the 1980's I remember grumblings of things like "digital cameras" and "recordable CDs" rolling through our house. But where were these products? Even as a kid/teen/young adult, something felt "off" about these things sitting on the back burner for years & years! By the time Kodak produced their ground breaking inventions, it was too late! Sad to see such an inventive company squander it's gifts - like watching a genius child go back packing in Europe instead of enrolling at Harvard...

    63. An excellent article. Another little known factoid -- I started at Kodak 40 years ago. After I had been there for awhile I found that we were actually making film for Polaroid (I actually did the jobs, I know)!! Then they sue Kodak.

    64. Thanks for the compliment and the interesting information. Yet another irony in this strange story. It's great to hear from people who worked or still work at Kodak.

    65. OUTSTANDING BUT VERY SAD ARTICLE! In the 1970's I worked in Project Management on a number of new product programs; Super 8 sound, disk camera, instant photography, copiers and clinical chemistry. The profits from film were so enormous, that cost control/management on these new programs was almost non-existant. On one of these programs, senior management finally realized that this program had been losing in excess of $1M a week for at least the last year and a half. With strict attention to cost management this program became profitable within a year. Profits continued to increase over the next several years. So, George Fisher sold it!! I took early retirement at age 55 in 1996 after 32 years with the company. With 75% of my retirement in EK stock, I decided to cash out at $91 per share. The best decision of my life!!!

    66. "early retirement at age 55 in 1996"

      Outstanding! That must have taken real guts for in 1996 EK had doubled in just four years and was doing nothing but climbing upwards. Congratulations.

      It is indeed a very sad story in many ways. It's sad for all the good people who lost good jobs, for the ripple effect on Kodak's home town of Rochester, NY, for an iconic American brand known worldwide, and for all the vacant lots where busy manufacturing and research buildings just to stand. The only thing being produced there now is weeds.

    67. In the 1970's, with the hugh profits from film, spending seemed to sprial out of control.
      I attended a briefing at Kodak Park for Mr. Fallon on the instant photography program. The annual capital spending for this program at KP was in the tens of million $$$'s. He was informed that the program was slipping, which he considered totally unacceptable. Mr. Fallon asked the KP enginnering mgr how many more $$'s he needed to get the program back on schedule. The manger replied that the resources didn't exist in Rochester or western NY to spend any more $$$!!! On this program, $$$ were never a real concern. The primasry goal of Mr.Fallon and other senior managers seemed to only be to stick it to Polaroid.

    68. Back in the 1970's/80's an article appeared in Business Week stating that EK had so many $$$ on hand that it was a primary takeover target. It seemed overnight that Kodak went on a buying spree getting into the battery, floppy disk, video tape business, plus a few others that are long forgotten. EK's entry into these three business's was at the time these products became commodities with significant price erosion. Any chance for real profits went down the drain!!! But senior mgt was saved from a takeover and the loss of their jobs.

    69. Profitability information was always a giant secret at Kodak. At one time in my career, I inadvertanly was shown the profitabily for Kodacolor 20 & 36 exposure 35mm film. Un- believeable! At the same time I was very concerned about my future. I felt like one of those who had learned the formula for Coca Cola and now had to be taken out and shot.

      At the time of my retirement, having spent the last 20 years in Marketing & Sales positions, I was managing over 60 sales people. Still I was not "worthy enough" to know the profitability of the products I was responsible. Unbeknown to us,we could be promoting a "loser."

    70. One name seems to be missing from the list of those with some responsibility for the downfall of Kodak. I suggest adding Mr. Goizueta, former chairman of Coca Cola and a member of the Kodak Board of Directors in the early 90's. I believe Mr. Goizueta was behind the ouster of Kay Whitmore and the hiring of George Fisher.

      The year that Kodak held its annual meeting in Atlanta, I was honored to attend a very nice dinner at the Coca Cola headquarters in Atlanta hosted by Mr. Goizuetta in honor of the EK Board. Senior EK managers from Rochester and those residing in Atlanta were included.

      The tension between Mr Goizuetta and Mr. Whitmore was very evident and commented on by several of the attendees. Shortly thereafter George Fisher arrived on the 19th floor of the Tower and the downslide of EK accelerated.

    71. Wow - that's most interesting. Clearly Kodak's Board has been asleep at the switch for many years now and shares culpability for mismanaging the company into the ground, but this is the first I've heard of l'affaire Whitemore/Goizueta. I may have to add another chapter to the upcoming book.

    72. Another name forgotten in the downfall of EK beginning in the 1980's---Herb Reese(sp). His group was responsible for finding "opportunities" for EK to spend its cash to avoid a takeover. His group uncovered the battery, floppy disk, video tape, Sterling Drug, et al ventures. They accomplished their goal. EK quickly went from cash to debt.

      Another issue that was talked about internally and frustrated many in the 80's and into the 90's, was the "inadequate" accounting system. Many said it was George Eastman's orignal. Current info was always 4-5 weeks after the fact.

    73. A fascinating story and lively, informative comments. But what about Kodak's 35mm motion-picture business? For decades it dominated the Hollywood studios. Even today a spokesman boasts of its success:

      In Europe and the US, I believe that only Fuji is a real competitor. Of course 35mm motion-picture film is in decline, but I'd be interested to know: Was that an area that EK actually got right for quite a while? And most films we see at the multiplex are still shot on Kodak stock.
      Thanks for an excellent study, and Michele, please hurry and get that book done!

    74. Thank you for the kind words. I made no mention of Kodak's motion picture business because this was originally intended to be a Timeline of Shame, focusing on things Kodak did wrong.

      Entertainment Imaging, as you correctly surmised, was very successful for Kodak and remains essentially the last bastion of film to this day, although even this is now going away (perhaps in less than four years) as more and more theaters install digital projectors.

      We note that in the past year, ARRI, Panavision, and Aaton have all stopped making film cameras. See a very interesting article about this subject here:

      Some of the most visualy gorgeous movies of all time were shot on Kodak film, like "Days of Heaven", which although it is credited as Metrocolor (MGM's trade name for their color processing), was actually shot on Eastmancolor film.

      EI typifies what Kodak does best - dominate in a high profit, high barrier-to-entry market. And it too is going away now, just one more nail in the coffin.

    75. I too, look forward to your book. The first entry in your excellant article is 1975.

      I think the decline of EK started even earlier when members of senior management, for what ever reason,(probably their complete focus on film based photography) lost touch with what all was really going on within the company.

      As an example, in the early 1970's, I attended a briefing on the clinical chemistry program in B-26 at KP for Norm Beach, then mgr. of KP and I believe also mgr. of the US, Canadian Photographic Div. At the conclusion of the briefing, Mr. Beach stated very strongly that "this program wasn't US, Canadian, or photographic and therfore didn't belong at KP."

      He further stated that he didn't want more than 4 or 5 Kodak Park personnel working on this program. He apparently didn't realize that there were several dozen personnel working full time on the program in a building not more than 100 yards from his office. There were also dozens others at KP, KAD and the Research Labs actively working full time on the program. The program continued unchanged.

    76. That is most interesting. It is fascinating to hear from those who were there. This story illustrates very well a big part of Kodak's problems - it got so big the right hand didn't know what the left hand was doing. This problem was exacerbated by a Byzantine management structure that encouraged the construction of personal fiefdoms to be jealously guarded against attack from outsiders. Nevermind that they were all working, in theory anyway, for the same company.

      I invite anyone interested in contributing to the story of the Decline and Fall of Easteman Kodak to contact me directly at nightowltrader (at) All comments will be kept confidential. Obviously, anything posted here is public.

    77. I read the previous comment with interest. On the Instant Photography program it was just the opposite. It was micro-managed by senior mgt that had come from film mfg at KP, eg. Walter Fallon. Several years before the Instant film was available to the public, test packs would be prepared for Mr. Fallon to take home on the weekend and shoot. The packs had been carefully evaluated for color balance, etc. by numerous photographic scientists and engineers. On Monday AM, the program manager
      would receive a call from Mr. Fallon detailing the changes in the color balance he wanted made. Those changes would be incorporated in the test packs for next weekend.

    78. You forgot about EK completely screwing up a very profitable Copy Products line of business! They made wonderful high volume copier/duplicators and their management decided that they should compete with the Canons of the world in the low/mid volume range (which even we at the lower staff levels knew was a disaster in the making).

      And it was a complete disaster, which, along with their decision to purchase IBM's copier organization and a botched color duplicator project that lost $1B, led to them bailing on the whole market. By the time they had dumped off the duplicator business to Danka, there was little left to salvage....

      Complete mismanagement at every step of the way once they left the path of sticking to the high speed stuff...

      From when I was there, the real beginning of the end was in the 80's when they decided to start dancing to Wall St. - first thing that got sacrificed was the research budget and then the downward spiral started. They have, amazingly, lasted this long. However, once that pipeline of new products and discoveries started drying up, so did the company. Unfortunately, despite all of the talented staff they have had and still have, they've become a classic study case for how not to manage a company....I find it truly incredible that Perez still has his job & even more amazing that the board of directors has been virtually invisible throughout the last decade. So much for looking out for the stockholders....

    79. Thanks very much for that comment. You're quite right. Indeed, you could write an entire book just about the intrigue and blunders surrounding the whole game of musical copiers played by Kodak, Xerox, and IBM in the 80's.

      I'll add a few entries to the Timeline of Shame about this and may just devote a whole chapter to it in the upcoming book, for which I am now seeking an agent. Stay tuned :-)

    80. Michele, I'm looking forward to the book. The stuff we witnessed was truly mind-boggling yet there never seemed to be repercussions for bad decisions. And I don't mean punishment for honest efforts that failed but for just plain bad mgmt decision after bad mgmt decision. While in Copy Products, I was part of a decent-sized project to make toners for other brands of copiers, primarily Xerox & IBM. Tons of development work & testing and as soon as they had some viable products that were ready to sell, marketing squashed them saying 'they didn't want to get into competition' with other vendors! Unreal - they didn't have that figured out BEFORE we committed the time and funding to that effort?
      These kinds of stories don't end either, unfortunately..... At this point, I really feel for my old friends that are still there (not that there are many any longer)... It cannot be an enjoyable situation to be in.

    81. Excellent. This is just the sort of thing I need to write about. I would invite you, along with anyone other current or former Kodak employees with an interesting story to tell, to contact me directly at nightowltrader (at)

      All communication will be held in the strictest confidence.

      I want my book to tell the human side of the decline of Kodak, not just a bunch of facts and figures.

    82. What action has been, or is going to be, taken against the members of the board of directors who had and have a fiduciary responsibility to shareholders?
      This was a great historic article of a major screw up by corporate leaders who lined their pockets with company money. Sounds like the banking industry where the leaders used taxpayer money to give themselves rewards for being indispensable as they crashed the market place.

    83. A very timely comment. The Kodak board, like most corporate boards, is firmly in the pocket of the CEO. Interestingly, if you look up "Board of Directos" on Kodak's web site, all you get is a bio of Perez.

      Less than a month ago, there was a very interesting article here: I quote:

      "When the demise of Kodak is analyzed in some detail, one of the most important questions will be the role the board played as the company spiraled downward. This board had members who should have, and could have, known much more about Kodak’s problems."

      So who are these Sgt. Schultz "I know nothing" characters? You won't find them on Kodak's web site but you will find them here:

      This Gang of 16 includes:

      * Joel Selignman, President of the University of Rochester

      * Douglas Lebda of (which I never heard of but is apparently some sort of useless web click advertising farm),

      * one Delano Lewis of Colgate Palmolive who receives $292,334 for his servies,

      * and a Laura D'Andrea Tyson PhD (yes she lists her degree in her name) who is listed only as a "Special Advisor" to the Berkeley Research Group LLC, whatever that is. Ms. Tyson is apparently a professional board sitter, being pals with no fewer than 197 other board members elsewhere.

      Shoot - you could write a whole book just about these folks.

    84. Started with Kodak in the early 80s ... And remembered the thrill of my first day ... I learned a lot at Kodak ... Customer Service was the most important thing that I learned and that I took with me for the remainder of my business experience. I was proud to have Kodak on my resume ... It is a shame to see where Kodak is today ... Good bye Kodak

    85. Back in the early 1970's, EK had an extensive and expensive program to make "peel apart" type Instant film for existing Polaroid cameras. It never made it to market, another huge consumer of resources.

    86. In addition to the poor picture quality from the disk camera, the disk format required that photofinishers purchase new (and expensive) processing and printing equipment from EK. This really strained the relations with the independent photofinishers.

    87. Its a wonderful article and very well scripted, thanks - it does get my eyes moist.
      Have been with Kodak for many long years and have enjoyed a large part of the early ones, but unfortunately have seen the last decade just spiral downwards.
      It would be wonderful if you could also get the snapshots of events in other parts of the Kodak world, and not just what happened in US - the gross mismanagement, the lack of vision,the lack of spine, "its not my problem" attitude.
      You will also find many humane stories of Kodak personnel and its customers, it may add a different flavour to your book.
      Last suggestion: Also look at the Management structure during the last decade - too many managers and few leaders. Till this year, the face of Kodak to a key account was a Salesman / Area Sales Manager / Strategic Account Manager / SPG Manager / Marketing Manager, and all trying to save their jobs and show their contribution !! I have attended meetings when there were 5 to 6 EK reps and 1 or 2 customer reps !!

    88. Everyone forgets Kodak's "arch-rival" (as the media used to portray them)- Fujifilm. They were the only company to give Kodak good competition in the film & color paper business(not only in price but also quality, which is why Kodak took to the courts & tried to destroy them). Where did that get them? Fuji built factories in the U.S. for color paper, graphics arts, film, etc. Kodak has been sending manufacturing overseas for years. How ironic. More ironic is that it has been speculated in the industry that while Kodak was charging Fuji with dumping products in the U.S., Kodak was dumping pharmaceuticals in Europe, which is why they got rid of Sterling Drug like a hot potato. Also ironic is that Fuji not only kept but also invested a lot of R&D into it's non-film companies, such as medical, digital printing & cameras, even pharma. Which company is on top now?

    89. "You will also find many humane stories of Kodak personnel and its customers, it may add a different flavour to your book."

      An excellent suggestion. My problem right now is I'm suffering from an embarrassment of riches. It's going to be tough to fit this train wreck into a single book.

      "Kodak's "arch-rival" ... Fujifilm."

      In the late 90's there was a popular poster that was plastered all over in Kodak. Someone had Photoshopped the Fuji blimp to look like it was going down in flames, a la Hindenberg.

      Talk about ironies - today Fujifilm (FUJIY) is trading at 24.28; EK is at 1.03.

    90. I remember very well when the digital cameras came up and film sales started to decline more and more - this was 2001/2002 - Kodak blamed the missing film revenue to 9/11. 'Consumers will soon be travelling and foto-shooting again.' They just couldn´t accept the digital reality. I wonder if they really believed what they were saying...

    91. Well that's the thing - there was always one excuse or another. Before 9/11, the excuse was an unfavorable dollar exchange rate. And before that it was that the employees were not executing the plan.

      Management was always pointing the finger everywhere except where it belonged - in the mirror.

    92. My favorite was the annual 'one-time charge' write-off against earnings....they must have used that for 10 years in a row to explain why the earnings were lower than they forecast... It was silver prices, then layoffs, then re-structuring, then selling off businesses, 9/11, the strong dollar, the weak dollar, etc...It would be interesting to go back and see how many times they used that ploy and list them out chronologically.
      Just once it would have been good to see 'poor management' as one of those reasons!

    93. A couple of more comments on the disk camera turnoffs. The original design goal was for a camera that was small and light enough to fit in a shirt pocket so it would be carried everywhere and thus used more. Missed big time!!

      Also when the disk camera was introduced, local independent photofinishers were gabbing increased market share from EK. Big reason, lower print price. At introduction, few independent photofinshers had the necessary equipment installed to process the disk format. The consumer was forced to use EK processing at a higher price----a turn off!!

    94. The biggest joke is the number 2 or 3 in the company. His name is Gustavo something and the guy can barely speak any English. He insists on traveling around the world to meet customers and employees and after many of these meetings  we get calls from customers making fun of him and telling us they understood nothing of what he says. He even asks for an after lunch siestas in an office cubicle wherever he is ! When he walks around a Kodak office or a conference you find employees looking at each other and holding their laughs. Even when you try to filter out his bad English from what he is saying you end up with a George Costanza talking business in a Seinfeld episode. 
      The biggest question among Kodak employees that met this senior VP is how the hell he is where he is.

    95. Thank you for helping us ex-employees vent our frustration. We all experienced these things going on at Kodak, but most people on the outside would have a hard time believing us if explained it to them.
      I would like to add the battery division to your timeline. In the '70s and '80s Kodak made many products that required batteries, so they decided to start a battery manufacturing division. They spent hundreds of millions of dollars building up a manufacturing facility in Newark NY, about an hour from Rochester. I am not sure if they sold it, or spun it off, but today it is called Ultralife Corp.
      I would also like to add some thoughts about the loss of jobs in Rochester NY. At the peak in the 1980s Kodak employed over 60K people in the Rochester area, down to around 6K today. However not all of those people lost their jobs. Had Kodak not sold off, or spun off all of the divisions they did it would have been worse. These businesses would have disappeared under incompetent Kodak management. However under outside management many people(not all)are employed today, and are part of thriving businesses.
      Eastman Chemical, Sanofi, SmithKline Beecham , J&J Ortho Clinical, ITT Space Systems (now Exelis), Carestream Health and Ultralife Corp are all successful businesses, and many employ people in the Rochester area today. The unemployment rate in Western NY is around 7%, much lower than the national average.
      I thank Kodak management for selling these businesses and not running them into the ground.

    96. Interesting point of view - that Kodak did all these companies a favor by selling them :-)

      "I would like to add the battery division to your timeline. "

      Done - check out the year 1986 in the Timeline. Thanks for suggesting it.

    97. Excellent article, I printed a copy. I do take issue with KODACHOME being "the most popular and successful film in history".

      I measure popularity by sales of film. It was popular prior to the mid-1980's. It certainly is not even in the top twenty most successful films in history. Sales have been low since the 1980's and in decline each year. For many years I saw the sales numbers each month.

      Sad situation but an but excellent article.

    98. Thanks for the compliments. Film sales numbers are difficult to come by. By the late 1980's, all film was already in decline. Perhaps I should have said that Kodachrome was the most iconic and widely recognized film in history. If Kodachrome wasn't it, can you tell me what *was* the most successful film by sales?

      I'm pretty sure that if you ask 10 random people on the street what "Velvia" is, they'll say "process cheese". But everyone knows Kodachrome.

    99. "in the late 90's there was a popular poster that was plastered all over in Kodak. Someone had Photoshopped the Fuji blimp to look like it was going down in flames, a la Hindenberg."

      This is an interesting story, considering that the Fuji blimp represents one of Kodak's biggest blunders; Kodak decided to pass on being a sponsor of the '84 Olympics in L.A (I guess they thought they didn't need the advertising) and Fuji was a sponsor instead, which is when Fuji made their first big splash in the U.S., with the Fuji blimp at the Olympics.

      Regarding Kodachrome being the most popular film, it had the best name recognition because it had been around since the 1930's, but if you look at the professional film market in the 80's & 90's, Velvia was definitely the favorite film of the pros. If you looked at any professional photo or nature magazine, most of the images were shot on Velvia (and Velvia is still manufactured by Fuji).

    100. Prior to George Fisher's arrival, all the recent senior managers (Pres/CEO) with one exception had begun their careers at Kodak Park in the Film organization--Whitmore, Chandler, Fallon, Vaughn, Chapman---. The one exception was Gerry Zornow (Marketing background) who was President, but never CEO. Maybe this explains why they couldn't accept the coming of digital photography.

    101. You failed to mention anything about Kodak Colorado Division which started up in 1971 with a state-of-the art process which manufactured paper and film which is all but gone. Kodak is in the process of demolishing the empty buildings and has sold the paper and film manufacturing to Care Stream. It employed 3000 at one time and, I believe, now has less than 300 employees.

    102. Yes indeed - thanks. I'll add KCD to the list. Someone else emailed me about the Kodak jet fleet. I'll have to look into that too.

      And Kodak closed at 84 cents a share today. I wonder how Antonio Perez is feeling about those 446,000 shares he bought just north of $3 back in May?

    103. Kodak is banking on the commercial printing industry, but from what I understand they have greatly dropped the ball with their products in that arena as well.

    104. You have an error:
      The Kodak website stated that Perez started with Kodak in 2003, you state it was 2005..

    105. You need to check your dates relative to "Kodak decided to enter" vrs "Kodak entered"

    106. Anonymous 1 writes: "The Kodak website stated that Perez started with Kodak in 2003, you state it was 2005."

      What I said was "Perez replaced Dan Carp in 2005". On April 2, 2003 Perez was named president of Kodak. He was then in fact made CEO on May 19, 2005 after Carp retired from the position.

      However, I've changed that bit to include those details. Thanks for pointing it out.

      Anonymous 2 writes:

      "You need to check your dates relative to "Kodak decided to enter" vrs "Kodak entered"

      Good point. That's just sloppy tradecraft. Thanks for being my editor. I'll go back and fix those places.

    107. Good point Michele and yes, you were right but thanks for clarifying just the same :)

    108. "If Kodachrome wasn't it, can you tell me what *was* the most successful film by sales?"

      Probably Kodak Gold or Fuji Superia - the consumer-grade colour-negative stuff that Joe Public bought in supermarkets, drugstores and airports.

      If you asked someone who does photography for a living or a serious hobby, they would probably say Kodak Tri-X (for B&W) or Fuji Velvia (for colour slides)

    109. During the 1980's I had a small cartoon from the New Yorker hanging in my office at KO. It showed two "mad scientists" with a bubbling beaker on the lab bench. The caption read "Eureka, hurry get someone from Marketing down here." I think this says a lot about EK, a lot of great ideas coming out of KRL, but the company didn't have a clue or willingness to capitalize on them.

    110. A few commentators have mentioned that one day EK will be a case study of a business that was unable to manage the transition in technology in its field. Let me assure you that it already is (a case study). I am a fourth year mechanical engineering student in Australia, and I have an essay due on Monday about EK's demise.
      Thanks for the article, and thanks also to all the contributors - you have provided a great perspective and summary of what has/is happening at EK.

    111. Great article. I joined Kodak during the life sciences phase and worked in industrial biotech, eastman chemicals, and sterling drug. I agree with earlier postings that core skill of the company was chemicals and marketing.

      They made half hearted attempts to develop the rich R&D portfolio but the effort was half hearted and Rochester centric. Like many large companies, decisions always erred on the side of conservatism rather than bold moves.

      I quickly saw that the company was run by the film guys and left with the sale of Sterling. Not to defend Fisher's sales of life sciences and chemical but wall street at the time was clamoring for this change and the new CEO saw it as the reason that he was hired. They saw the Sterling purchase as wrong and not core to the perceived skill in photography. Evolution is hard to manage in a world where "focus" on "core competencies" can doom one in an evolving environment. In the end, the sale of Sterling in six parts for more than the purchase price proved that it was a net plus.

      The investment community and business press is just as complicit in this debacle as the board and management.

    112. My employment at Kodak began when they bought the Canadian company, Creo Inc. in 2006. Kodak acquired three companies that year in a move to execute the graphic communications portion of the business. They gained a great deal product-wise when they bought those companies but the one thing that they needed and didn't take advantage of was a new company culture. There isn't an ex-Creo employee or graphics customer today that doesn't mourn the demise of Creo. Kodak? Not so much. I have never worked at a more anti-customer company and I believe that debilitating culture is 131 years old.

    113. The first half of my EK career was in Rochester. I heard and believed how customer focused the company was. For the remainder of my career, I was in field sales and saw the other side, the customer's view of EK. It then appeared to me that the various Rochester functions primary objective was to protect and preserve their little empire within the EK organization. So much for customer focus!!

    114. I've worked for Kodak in R&D for 25 years. In the comment dated November 5, 2011 it was implied that Whitmore saw the benefits of chemicals with the acquisition of Sterling Drugs. The mentioned L&F came a long for the ride with the Sterling purchase because it had the Bayer Aspirin connection (Kodak sold Bayer Aspirin back to Bayer, btw). However, it was under Whitmore that the plan to split the company into EKC and the stand alone Eastman Chemical was started and largely completed. Fisher could have stopped the split but stated something to the effect that since it was already announced and in motion that it would go through to completion. Part of the reason to "go through to completion" was that Kodak had what was considered too much debt as part of the Sterling Drug acquisition and at that time Eastman Chemical got saddled with more than it's fair share of the overall debt burden when the split occurred. So I wouldn't say from the evidence that Whitmore was that big on chemicals. However, the BOD may have been the driver for the company split and not Whitmore.

      As sort of a slap in the face to Kodak see how well Eastman Chemical has done after the split. Many(most?) of Kodak's spin-offs and the parts sold off due to not fitting into Kodak's strategy have done OK. Which should also tell you something about Kodak's managers and their decisions.

      In my opinion one of Kodak's biggest mistakes was the eventual elimination of what could have been a big play in healthcare (drugs, x-rays (both film and digital), Ektachem (large potential for diagnostics on a chip here), and who knows what the future could have been in that). And health care is certianly not likely to be a business area that goes into secular decline like most of Kodak's current portfolio.

    115. April 5, 2011: Kodak sold parts of
      its microfilm products and equipment business, along with its data conversion
      services business to a company called Eastman Park Micrographics

      Interesting that Eastman Park Micrographics jacked up all the service contract prices and the owners of the legacy analog Kodak products paid it. Eastman Park Micrographics is making a profit. Current Kodak service techs still perform all the service calls and Eastman Park pays Kodak for that. First thing we all said was why the devil doesn't Kodak keeep the customers and jack the prices?!! The managers at the meeting basically agreed with us but had an answer. That equipment is not part of the core business Kodak is chasing.

      Interesting further, Kodak is displaying an operational Nexpress at CES this year. So the question is, can the Nexpress save this company?

    116. "can the Nexpress save this company?"

      If it is, it better hurry. If you extend the current trend line of EK forward from today's 65 cent close, it intersects zero around the end of next month.

    117. Sorry if I missed it somewhere in all that, but way back Kodak invented and marketed a very unique and spectacular group of products for the analysis of blood. It was a very good product I felt as I serviced the product up until someone decided they could sell it off also. There was a very good markup on the "slides" used for analysis.

    118. The common theme for Kodak is terrible management across the board for decades and a company that lived in poor management denial for the past 25+ years. They laid workers off, sold/acquired several businesses, but never changed the management hierarchy and until that happens Kodak is doomed.

    119. I spent 30 years at Polaroid in a number of engineering, manufacturing, and management roles.

      Almost exactly the same story at Polaroid -- an unwavering faith in silver halide film and an incompetent end-game CEO who slithered out after the 2001 bankruptcy with his pockets full.

      EK and Polaroid were two gems of American innovation squandered by blindness at the top and self-interest in the Board room.

    120. I spent 32 years with Kodak in CESD, In all those years, the higher ups never gave full support to the people that kept the machines running that processed all that film and printed all those pictures. All of CESD was given a bad rap by the top level management! When I left the company I actually expected the benefits I had earned as I worked, now I am down to hoping there will still be someone there to help manage what little is left for me. Thanks God I saved for my retirement!

    121. I also spent 32 yrs with Kodak. 4 yrs with the tool bag and the rest in management. Started with Recordak (1963) and saw all the changed, both good and bad over the yrs. Field management had a hard time trying to understand some of the stuff that came down the tube but we had to make it work. Glad I took lump sum and invested well.

    122. As a kid I went to a Kodak Park school, walked with my Dad to the entrance gate of his job at Kodak, we went to the movies, bowling and Christmas shows at Eastman Kodak. My Aunts ,Uncles, cousins and brother worked at Eastman Kodak.... we were a Kodak family. We bought things from the Kodak newspaper and saved at the Eastman Kodak bank and ate at the kodak cafeteria. We went to the George Eastman House and Kodak dump for odds and ends that we might need for building forts and go carts. We were quiet as the news told us the stock prices because we were "investors"

      We saw the changes.... the parties stopped,the people laid off, the gates closed, the buildings torn down. It is truly sad.

      Life was good in Rochester. I truly lament the shortsightedness of some of Kodaks executives and the greed of others.

    123. Thanks very much for that heart-felt comment. Kodak touched the lives of so many people in so many different ways. To see it all end this way is simply tragic.

    124. Also on December 27, 2011, the Los Angeles Times announced that LG will be debuting a 55 inch OLED TV at CES 2012. That is only 3 years after Kodak sold the patents to them. Here's the link:

    125. Your article confirmed two realities I encountered while at Kodak: 1)they made more money by accident than they did on purpose and thought it was because of their brilliance, 2)because they ALWAYS based their pricing on margin over volume, they couldn't sell blankets to an Eskimo or ice to a desert nomad.
      Retired in March 2011 after 33 years.
      George Fisher, Laura Tyson and that loser Scully that nearly killed Apple, are the main planners of Kodak's downfall. A persistent and pernicious despiser of onsite service, rumor has it, Fisher was ready to sign the documents to sell the entire CESD division to some outfit in Texas until the main guy in Accounting realized what a monumental hit to cash flow it would have been. So much for being the sharpest knife in the drawer. The board of directors members since Fallon should be sued for fiduciary malfeasance and all their millions be put in Trust for current and future retirees health cost.

    126. Well, it's finally here. As an ex-employee of almost 30yrs, I feel for my old friends still there. The incredibly inept management and BOD of this regime is mind-boggling. As bad as G Fisher was, he looks like a saint compared to Perez. Expect Antonio to take his bags of money back to Spain and live out his days on a beach while the people who worked their tails off for the company leave with no or drastically reduced pensions. How the management team and BOD can sleep at night is beyond me.

      This whole thing was brought on by AP's personal vendetta for not being named CEO of HP. 'Hey, I'll turn these guys into a printing company and eat HP's lunch - then they'll be sorry' ....yeah, thanks, Antonio. Now there are literally thousands of people out of jobs, even more that trusted you and lost pension & retirement money on your stock and you still did next to no damage to HP. You should be proud....terrific legacy you have left. You will be in business history books for eons to come....congrats. And my sympathies to the hard-working folks still left at EK - based on my experiences there, the blame is clearly on the shoulders of top management and not on the workers. These talented folks gave and gave but in the end were mowed down by the very people they tried to please....Farewell, EK - may you survive as a branch of a new owner that will actually listen to the workers for the first time in a couple of decades.

    127. Yes, this looks about like the end. Thanks, Michelle, you saved me from making a stupid mistake back in November of this year. I can't get over the number of large shareholders who must have watched this company tank and sat there and did nothing. I won't name names but these were not stupid people.

    128. Dear Ms. Owl,
      I worked at Kodak for 31 yrs(Systems Analyst), and I find your writing, accurate and depressing.
      IMHO, the real turning point came with George Fisher, when he declared that Kodak would be come 'The Image Company' other words we would make anything as long as it had to do with creating an image (printers, cameras, copiers, etc.) For years in the 50s-80s, Kodak was really a chemical co. Urban legend had it that next to Dow Chemical, Kodak employed the largest number of chemical engineers in the US. If you've seen Kodak Park, it is a giant chemical transport facility, with hundreds of miles of piping to transport chemicals to various buildings, each built specifically to manufacture some chemical based item. Chandler's purchase of the Pharm and chemical co's in the late 80's, was the right move but for the wrong reasons. I remember we were told the reason for this massive purchase, was to thwart a takeover of Kodak. At the time we were so profitable,, that the company has virtually NO debt, and the reason for purchasing many other companies was to get a lot of debt on the books asap, debt that would need to be paid by whoever wanted to take us over. If we had kept those businesses, I feel we could have stayed in the high profit margin chemical business.
      As we have seen in the digital revolution, digital equipment (cameras, pcs, printers, etc.) are only profitable for experienced equipment makers (HP, Sony) and even then the profit margins are extremely thin, especially when compared with chemical products, including film (chemicals applied to a flexible media)
      Thanks for your article,

    129. Thanks for the compliments, John. I believe your analysis is correct. Kodak went down the wrong road and is paying the price.

      Anonymous - glad to help. Lord knows I've made plenty of mistakes myself not the least of which was a company I won't name but their initials were WCG (Williams Communication Group).

      I bought in at 5 on the recommendation of my now former broker. Then I watched it sink to 4, 3, 2, and 1. I finally called up Mr. Broker and told him to sell at 21 cents.

      The next day it traded to 19 cents and the day after that they declarded bankruptcy at 16 cents. In retrospect, it was a good, if expensive learning experience.

    130. There are many of us in Rochester, NY starting 2012 with somber thoughts. Here is my tribute...

      The very sad feeling I have, is that there is not enough praise for all of the good things, and lasting "Kodak moments", that came about from the efforts of so many "individual contributors" at The Eastman Kodak Company. In the seventies I supported the Komstar line of Computer Output Microfilmers (COM) that saved many many trees. Then, unfortunately there was a most ambitious project called KIMS, which shared its failure along with the Digital Equipment Co. FNMA had a system installed and other Customers were threatening with orders, before management pulled that plug. There were some good years in the Hi Volume Copier area, escaping the Lo Volume and the Danka deal. And there were some very good years with the best High Speed paper scanners that ever scanned a HCFA, or Census Form, in the USA or elsewhere. I ended my EK career being spun off to Carestream Health, while supporting Computed Radiography products, that I hope helped to save or enhance the lives of those being diagnosed. None of these products used TRI-X, Ekta, or Kodachrome, but most probably were "enabled" by their profits.

      George's "Kodak" film may no longer be in high demand, but the iconic name he created for it, will be seen on the preserved microfilm data, and both negative and positive images of life for a very long time.

      After all, just like Alexander the Great, and other "Greats", who are also dead, may they still be referred to as having been Great. "Success WAS the objective, of successful people" Vaclav

      Next, see the Oct 27, 2011 comment below that highlights a huge contrast between George Eastman taking quick leave of his company and this world, by saying "my work is done, why wait", versus, the slow divestiture of EKC assets into many other spinoff companies. George did not have children, but there are many "spunoff children" companies that I believe he would be proud to have fathered, not the least of which is Eastman Chemical. Some others, not so much...

      Almost all of the comments appended above, attribute the company's demise to management mis-steps. There is one comment (perhaps by current BOD, or an ex-CEO?) to which I concur...

      Anonymous said... October 27, 2011 4:28 PM

      "I take a contrarian viewpoint. Kodak management has more or less executed a soft landing; they kept the company going, trimmed it gradually and regularly, preserved the cash cow of film as long as humanly possible, for as many people as humanly possible (but not all of them). With a major technology change, firms tend not to survive. No ocean passenger line entered the Trans atlantic airline market; no railroad entered successfully the automobile market. HP has been modestly successful transforming from workstations to PCs, thanks to Compaq acquisition. None of the traditional department stores have been successful becoming a big box retailer. I would venture that no Chinese restaurant owners can run a family casual dining facility. Going out of business is in Kodak's future, but they did not crash and burn, they have gone down the glide path. Kodak management could not tell everyone this was the fate for morale purposes; may as well have them focused on some kind of digital printing future where a smaller company might eke out an existence. But all in all, I found the Night Owl posting illuminating and comprehensive coming from an external perspective without significant internal contacts to provide input". October 27, 2011 4:28 PM

    131. To Jan 6 Anon.
      So you know there are a couple Komstars in operation to this day. Not under contract but still in use at least until consumables are no longer available. Global 360 has them and maybe they are grabbing some more business as the Bell and Howell COMs have left the world.

    132. 'Kodak management has more or less executed a soft landing' . Quote from above comments. My foot !
      Kodak Management are paid to manage the company and progress it. Not to bring it to the ground.

    133. For a high-tech firm, surviving 130+ years is still quite an achievement. The high-tech company I work for is 100+ years old. It's still profitable, but I doubt it could survive another 30 years if computers, electronics, software, etc. were suddenly rendered obsolete by new technological developments.

    134. Great article.

      To clarify, my book, What Not to Do in Business, is also available in paperback, iPad, as well as Kindle versions. The paperback was published July 19, 2012.

      If you want a copy of my book, it's available at,, or in the Apple iBookstore. Just enter "berarducci" in the search line!

      Or ir you want you can surf on over to


    135. I think you may be missing two important events in your timeline during Mr Fisher's reign. The construction and startup of a "greenfield" film and paper manufacturing facility in Xiamen China in June of 2000, at a cost of approx 5.1 billion USD to supply the China market, only to shut the majority of it down and sell it for scrap value in 2007. It obvious to anybody who worked in China that George's theory that the mainland population would rather use film than make the technology leap to digital did not hold water.

      As a side note, Management was well aware by 2004 that film was in trouble when they gave (and I do mean gave) the latest emulsion technology to Lucky Film.
      When I asked Charles Brown, on site in Xiamen for this announcement (the then head of world-wide manufacturing for Kodak), why we were giving up this technology, his answer was "we are going to get what value we can out of it, while we can". Of course they ended up losing money on the transaction.

    136. Holy moly, I didn't know about that one though I do recall that part of Kodak's strategy for staying afloat was that while Americans were switching to figital, the "developing countries" like China and India were going to start buying more disposable film cameras.

    137. Another big deal happened 2001/2002 in Europe. While everyone else was happy to get rid of their photo-labs, Kodak was there to buy them. They bought many labs from the Belgian Spector Group, in France, Austria, Germany. Then they spent millions to modernize them.

      Unfortunately these labs have never been fully integrated into the Kodak businesses as they had to be closed a year or so after they had been acquired. Needless to say that Kodak paid again for the closure (compensations etc.).

      Great Deal - for those who were smart enough to sell their labs to Kodak.

    138. Holy moly, I didn't know about that one though I do recall that part of Kodak's strategy for staying afloat was that while Americans were switching to figital, the "developing countries" like China and India were going to start buying more disposable film cameras.

    139. Enough about the past. Their current survival strategy is the one that is really funny: They are relying on 4 product lines that are currently 5% of their revenue (what they call the 4 growth initiatives) to profitably grow and save the company. Mind you, these 4 product lines are still in the red and even if they double or triple in the near future (which is a wild bet as well because these 4 are all to do with printing and they are up against tough players in all of them, like HP and Canon for example), they will still be an insignificant revenue of Kodak that can never pay for 20k employees and for all their liabilities. The current management knew this all along(they cant be that stupid) but the con artists at the top kept BS'ing about this lousy strategy for the past 2 years just to buy time and prolong their stay at the top for the maximum time possible.The board should be taken to court for allowing this mascarade to go on for the past several years.

    140. My geography teacher at high school back in Bombay was a SOVIET sympathizer. He made a statement in class of tenth graders who cared less about such issue considering their age. However, he said made good impression on me and even guides my thinking today, though he was not a fan of the free markets.

      I am paraphrasing from memory; "In capitalist country such as America, companies cannot remain stagnant and survive, they have to periodically grow, shrink or simply ceased to exists."

      All I can really add to his statement is "or change directions without losing the compass".

    141. Ok folks, that enough! It is over. It is sad. It is done. Go and do what you do best. Great people made Kodak great. That is many of you. I left many years ago, but my heart dropped at the news. There is life after Kodak. God speed.

    142. I worked for them in 1981 during their heyday. It was a sweatshop and front-line management propagated that toxic culture. I'm sure glad I didn't stay. I also observed a certain arrogance from upper management, too. Well, times have changed, and the tables are turned, and I am in much greener pastures. Can't say I'd shed a tear for that corporation.
      I'll give a knowing nod to the Kodak name when the very top of the masts of that once-mighty ship plummets below the ocean surface, never again to see the light of day.

    143. I disagree, It had nothing to do with inbreeding. Many giant companies have recently failed other than Kodak, GM for example. Kodak's problem is very simple and is the first lesson learned in economics 101...don't put all your eggs in one basket! Film is all they knew and it was profitable. The one common factor with Kodak and companies like GM is the increasing permeation of out-of-touch management. We have developed a culture were we hire or promote executives simply because as Carl Icon put it, won a popularity contest. GM wasted millions in mass media advertising marketing Hummers and Cadillacs (small market, low profit) rather than producing cars for the masses which is what mass production is all about. I my youth, I worked briefly at Kodak and at least in my department, despite a supposed honor system and the fact that we had a group leader, you were secretly watched by a snitch at all times (afraid of unions?). Coffee breaks were exactly 10 minutes to the second, the snitch watched the clock and had the balls to come over and tell you your time was up although he had no official authority. He reported at the end of the day, each day to the boss and got paid extra for his services. And if you as much as slightly crossed the snitch, you were sure to end up and the bosses shit list without knowing why. It was as close to a totalitarian system as one could get.
      Much, much later on, ending up in the advertising business, I did a project indirectly for them and came up with the simple slogan "Get Digital, Get Kodak". It was used one time and then I was told to drop it. I protested with a letter to George Fisher. He referred me to the head marketing manager with whom I had a meeting whereupon he explained why they did not want to use it. To my amazement, I was told digital photography was a toy for computer geeks, a fad that would eventually peter out.
      Later I was equally dumfounded when they sold their profitable pharma business to plow back proceeds into their core business, you guessed it, FILM!!
      Voila!! Monkeys could have done a better job.
      I don't believe you can bring an outsider and turn things around. It's like making the CEO of Pizza Hut a General in the Army simply because he had a high position at Pizza Hut. To formulate a successful action, a General must know the capabilities of each weapon from the smallest rifle to the biggest tanks. Today's CEO's don't want to know details, they want to be figure heads, like monarchs they make a declaration, wave the scepter and the deed is done, all in a vacuum.
      Understanding the markets, the technology, knowing products, having an imagination and vision are the critical components of good corporate leadership. Unfortunately these are intangibles and since most major companies are now run by lawyers and accountants who have no value, concept or understanding of intangibles, business failures as in Kodak will surely continue elsewhere.

      1. I disagree that they put all of their eggs in one basket - they had invented / developed tons of great products across different lines of business. Poor management either didn't support these properly or decided to changes horses mid-stream. Having worked in many areas there over almost 30 years, their problems were not product-related - they were management-related. They sold off every business that made them money and allowed them to be diverse enough to weather economic storms. Then, they allowed themselves to be Antonio's personal tool of revenge against HP and became a 'printer' company...that would have been an incredibly brilliant move - 20 years ago! Instead, it was an incredibly idiotic move and was the final nail in their coffin. I feel for my old friends & co-workers still left there...there are some very talented folks who will be bearing the brunt of this once again. The only 'cost-savings' button EK management has ever know is the 'chop heads' button... Good luck and best wishes to those still left there as they try to pick up the pieces.

      2. That pretty much nails it right there. What would the stock be trading at if they still owned Eastman Chemical, medical imaging, Blood analyzers, Government systems etc.? Their drive to sell profitable entities and put the money into non-profitable "core" entities is what has gotten us to where we are today.

    144. "The only 'cost-savings' button EK management has ever know is the 'chop heads' button..."

      That's a good illustration of their lack of creativity demonstrated time and time again.

      Larry Matteson was an EK exec (headed the disk camera fiasco) who left for the University of Roch to teach in the MBA program.

      He's admitted more than once that for all the years the top EK execs met to come up with a solution to Fuji-film taking more and more market share, their only "solution" ever was to raise the price of EK film.

      Problem was this company hadn't been in a "war" like forever and no one knew, or wanted to learn, how to fight. Now it's lost the non-war via death by 1000 cuts.

    145. "Anyone with a laptop and a soldering iron can get into digital."


      I admire the post and sympathize with most of the comments, but a statement like this can only have been made by someone largely unacquainted with digital production printing technologies--an area where Kodak's technology is 100% competitive with any other vendor's. In fact, Kodak's best hope for emerging survivably from Chapter 11 may lie in its prowess in high-end digital printing.

      I've seen that plant--and yes, they do have a lot of soldering irons.

    146. Well it's finally happened even though they've been denying it right along. Thanks Antonio! Wonder if he'll get his performance bonus this year?

    147. I am now a retired Commercial Photographer. Right at the start of the film/digital photography switch I was at a trade show Kodak booth and talking to a Kodak rep and kinda telling him how I felt about Kodak being left behind. He said "the biggest problem was that the Kodak divisions Did Not Talk to Each Other". He could see it then, What a shame.


    148. The fact is Kodak neglected and walked away from ALL of it's core competencies to try to develop new ones. That is a recipe for failure. and decision makers must have the confidence to admit when they have made mistakes and take corrective action. Management at the highest levels are arrogant and self absorbed and they refuse to take accountability. The core competencies have kept the company alive for over 130 years what did the moran think would happen by walking away? Maybe he should have taken some business classes in the USA. The Board is as much at fault for allowing all of it.

    149. My father worked in the research labs his whole career and one story I remember well was of a particular eccentric scientist that every year would profess his agenda of single use cameras and get shot down, year after year. Kodak was for serious photographers! Finally Fugi introduced there single use camera and management ressurected this guy out of oblivion and started their single use camera business.

    150. When George Fisher arrived on the scene, he was paid three times what Kay Witmore received. I'm sure his successors were paid just as well. Just look what kind of talent money can buy. What kind of bonuses will the BOD grant senior mgt this year?

    151. Very insightful blog article. Thanks for posting. I must say, though, that your title doesn't quite fit. There is no mention whatsoever of the rise of Kodak, only the fall...

    152. Well, you're right. The rise of Kodak is a well-known story that has been told before. This post was mainly to document the fall, which I found much more interesting. In the interests of keeping the size manageable, something had to give. The book will have more background on Kodak's glory days.

    153. Your excellent article has only recently come to my attention. Many of the comments are also insightful. However there are a couple of additional points worth considering.

      For decades, Kodak enjoyed a virtual monopoly on color film, the company’s cash cow that funded everything else. This led to an organization heavy with staff, needless jobs, many layers of management, generous employee benefits---all great for the local economy. Only lip service was given to controlling costs as middle managers built their empires.

      Flush with cash, the company invested heavily in research, developing many excellent products. However, these were in competitive markets and the Kodak culture that worked fine as a monopoly could not compete. As has been pointed out, other companies have been successful with these products developed by Kodak. Management at Eastman Chemicals have gone on record as saying they could not have flourished as a Kodak company. (

      In the 1970’s, under Walter Fallon, Kodak made the disastrous foray into instant photography. Fallon said the future of amateur photography was instant. It was well known the quality of instant could never match that of conventional film, but the thinking was that amateur photographers were more interested in ease and convenience than image quality. Chemical research was devoted to instant and conventional film was essentially ignored.

      Two major events transpired. 1. Camera manufacturers developed, affordable, excellent, easy to use 35mm cameras. Quality photography became accessible to the average consumer. 2. Fuji, a me-too company using outdated Kodak technology learned how to make a superior color film and became a viable competitor. As market share eroded, necessary cost cutting at Kodak was too little and too late. Always benevolent, the company initially gave attractive buyouts rather than forced layoffs.

      While Kodak invented digital photography, the conventional wisdom was that the quality and cost would never rival silver halide based film. Furthermore, this was an electronic technology rather than chemical. Even if Kodak had entered this market early, they would have had a year at the most before a dozen competitors joined them with good products at better prices.

    154. That's a pretty good summary of what happened to them. It's a real shame.

    155. Like many here, I was associated with Kodak for some years but starting in 1968 until 1982 or so. I also wrote five books for the Motion Picture Products division. The case of Kodak is not just about bad, arrogant and stupid management, which any half-wit could clearly see who was doing their communications, but the entire environment of Rochester, headed the conservative political philosophy and the years of high living that masked the truth from uncaring men.

    156. And, the pain train rolls on. They've discontinued all cameras (Kodak? Not selling cameras?!?) and they just discontinued all their slide film - the only branch of the company that wasn't suffering.

      Poor, poor Kodak. At one time the company was synonymous with modern photography - and now they're just one shutter-click away from extinction, a stark lesson of Darwinism in technology: you adapt and evolve, or you die.

      No Kodak cameras? Kodak was once such a pervasive part of our lives that the "Kodak moment" - a personal event that demanded to be recorded for posterity - entered our lexicon. When you realize how intertwined Kodak is to us - to not just photographers, but the collective photographic memories of anyone who has ever found a shoebox full of dusty old negatives under their parents bed or flipped through their grandfather's photo album from World War II, it's quite sad indeed.

    157. I still work for Kodak - and have since 1984, but at the facility in Dayton, Oh. We have always been a digital printing company - designing and building large commercial systems. We have been told for years that we are the future of Kodak, which a this point is hardly comforting. Prior to Kodak's purchase of our business several years ago (for the second time) we had a decent business model working. We weren't a billion dollar company, but we had good people who enjoyed their work, and we kept several hundred people employed. Most of us feel we could be that company again, but as long as the current Kodak management team is at the helm, few of us believe we will survive to reach that point.

    158. You have written a remarkable piece, and this is from someone who has watched it from inside. A couple of points: the story of Eastman Gelatin is an interesting one, since G. Eastman originally set up that operation after a batch of modified gelatin nearly bankrupt the company (turns out the cows used to make the gelatin had been eating mustard flowers, which are high in sulfur).
      On the "where did it go wrong" front, I would argue that the company was way to insular and still is resistant to widely accepted best practices.

    159. And now I see on the news that the Board of Directors is suggesting $13.5M hand-out as incentive to keep 300 resources "critical to restructuring"?!? One last hurrah for the "good ol boy" network that has plundered EK shamelessly for decades.

      This company cannot disappear fast enough. What a pathetic joke.

    160. The OLED story is missing a few large pieces and therefore slighting significant efforts by a great team:
      Do you know who made this panel?

      1. I hope I didn't give the impression that I was down on OLED technology. I merely cited it as yet another example of Kodak's failure to capitalize on the technology it invented.

        This page is already quite long. I have to leave some things out.

    161. Eastman Kodak--$349M in cash and cash equivalents and bleeding cash. $1.4B owed to secured creditors. Probably another billion or so owed to unsecured creditors who will get nothing. Plus, an estimated $500M in bankruptcy proceeding fees.
      Chapter 7 is inevitable.

      1. LOL - you forgot to mention that their CFO took a powder last month and that their vaunted patent auction that was going to generate (twist pinky in corner of mouth) billions of dollars for the company, never got off first base.

        I'd put Chapter 7 odds right up there along with the sun rising tomorrow and the Pope being Catholic.

    162. Hi Michele,

      My name is Mariana and I work at the iconogrophy department of Moderna, a Brazilian Publisher.

      We are now producing this online didatics book called "Upgrade".

      In this book there will be a "History of Tecnology timeline" and the editors would like to use a kodak first digital camera photo, like you have in this post.
      For that I need to know who took this shot and get and It's authorization...
      I understand that you are criticizing the company and it's products but we can not deny that It's part of history, that maybe we would like to change from now.

      Anyways, if can help me doing my job I would really appreciate that.

      Thanks a lot any way,
      Hope you have a wonderful week,

      1. That particular image came from here: I'm afraid that's all I can tell you about it.

        Anyway, good luck with your book and thanks for reading the Night Owl.

    163. I worked for Sterling Health at the time Kodak sold it to Aventis. Nobody could figure out why they would sell an extremely viable business. SmithKline Beecham bought the Sterling business and sold back the BAYER name to Bayer AG who needed to get back into the USA with the Bayer name.......for big profit. Kodak management = morons.

      1. Well that was their problem all along. They sold off all their profitable business lines and held on to the dogs like inkjet printing. Kodak never figured out that they weren't an imaging company, they were a *chemical* company.

        Today Eastman Chemical is alive and well, along with the rest of the Kodak spin-offs while Kodak itself is bankrupt. Calling them "morons" is too kind.

    164. Ms. Night Owl:
      This is wonderful article I've referred back to and referred many friends to over the past couple years. I'm the son of a "Kodak family" and my father, uncle, and grandfather were all EK employees at some point, and remember witnessing some of the frustration my father and uncle experienced in the early-mid 1990s. Thank you for producing such a fine timeline.
      Only thing I can ask... could you please fix the images? They've been broken for a couple months, I thought they added to the article nicely.
      Thanks again. -Jason

    165. Yes, let me tell you about the images. One day I was looking at my Gmail settings and saw something about a Picassa account there. I knew I never used Picassa so I opened it up and found a whole bunch of images there that I had inserted into my blog. I said to myself, oh these are all already in my blog, I don't need any of this stuff here, so I deleted the whole thing.

      *Then* I discovered that Google uses a Picassa album to store any images you create in a Blogspot blog and then dynamically links them together to display what you see. So I ended up deleting every single image I had ever added to my blog. Thanks a lot, Google! No backups, no warnings, just one more reason to hate you.

      Now I do have some backups of my blog on my own PC, but I don't know if they contain the images or just the text. And if I restore my old backups, I'll probably lose all my newer posts. Either way, it's all just a giant mess.

      And unfortunately, there were a lot of images in this post and I don't really remember where I found them all. So the short answer is that they're probably gone for good, which is a shame. Oh, and did I say I hate Google?

      1. The pictures are (mostly) fixed!!! Yaaay!!! Thank you!!!

      2. Yes, I spent several afternoons a few months ago scounging around the web and my personal files redoing them after I mistakenly deleted them all when I didn't realize that Blogspot uses Picassa to cache all the images in their blogs.

        The only ones I haven't been able to recreate are the stock charts. That's proving a bit more difficult since eSignal no longer serves up EK, the old Kodak ticker. But maybe that's just as well - those charts were all just plain ugly, all headed one way - down. If I can find a historical source of EK prices, I'll try to patch that up too.

    166. Another issue that was talked about internally and frustrated many in the 80's and into the 90's, was the "inadequate" accounting system. Many said it was George Eastman's orignal. Current info was always 4-5 weeks after the fact.
      hard drive duplicator

    167. The saga of Eastman Studebaker.

    168. It looks like Kodak is not RIP as it's relisting on the NY stock exchange. Could you please update your last message in the blog?. Thanks.

    169. I am very interested in the book you mention you were writing in 2012, The Decline and Fall of Eastman Kodak. I did a search to find it and only come up with one by Paul Snyder similar name, but not exact. Where may I find your book? I would like to review it for my MBA course in management (a good review if it's as good as this article!)

    170. Thanks for the kind words. Unfortunately, I was not able to find an agent, something that is apparently hard to do for a first-time author. And without an agent, you can't get a book published. So that was the end of it.

      I realize that in the Internet age one can self-publish an "e-book" but that's just not the same. Then this other book came out, and I'm pretty busy, and excuses, excuses, etc. so basically it never went anywhere.

      But perhaps I should give it another shot. You're not the first person to inquire about this. At the least I ought to try to recover all the images that originally accompanied this post.

      Good luck with your course. The story of Kodak is certainly excellent fodder for a study in how not to manage a company.

      1. :( I am very sorry it hasn't worked out yet. Try Amazon, see if they have online publishing. If you've basically written already, you should really publish it!

        Can you recommend anything that is similar to what you are saying here? I have tried several searches and though can find books about Kodak they don't seem to have good star rating, be up to date or be about the mis-management (rather about how brilliant they used to be).

        If you have a suggestion, I'd love to do a book review (rather than a case study - which you've already done!)

      2. I don't suppose you would let me review your unpublished book? :)

      3. Sorry - other than the one book which you apparently already kow about, I do not know of any other in-depth analysis of Kodak from a business perspective.

      4. I really only have one completed chapter at this point, so there's not much there to review.

    171. So how's the book coming? Move past the first chapter yet? I read the Paul Snyder book - PU.

      1. Nah, I've given up on that particular venture. I think I've documented this disaster well enough right here. I'll just note that the New Kodak seems to be headed exactly the same way as the old one was. The heck with 'em!

    172. Okay - but as a 35 year EK employee I think there's a heck of a pent up demand for the real story as this column has established so well over the years.

      1. Well, it's actually been a few years since I visited this topic. And the main problem was that I tried to shop around my manuscript but was unable to secure an agent. However, I'm going to look into the possibility of doing an online e-book.

        And the more Kodak sources I have the better a story I can tell. If you'd like to help, shoot me an email at Thanks for the encouragement.

    173. Great entry. I worked in Building 605 (Distribution) from 2000 to 2007. It was a lousy feeling going to work, knowing that you were shipping other folks jobs to China. We'd receive plywood crates, 20 feet long that contained equipment torn from other buildings in KP and shipping to China. Sometimes it felt like we shipped as many jobs as we did product.

      There's a video on Youtube from when Kodak was looking to sell B-605 of empty room after empty room.

      1. Now that's really interesting. Just the sort of story I like to hear. I know Kodak had a slew of gigantic buildings that could have been used to assemble battleships for all I know. Nice to hear what was really going on in there - though perhaps not too surprising.

    174. Wow, I worked at Kodak and witnessed most of what you talked about. At one time I was a System Admin in a Prototyping shop that made up the early versions of the digital cameras both professional and consumer and I knew Kodak was screwed when I saw the first prototype. I witnessed all the crazy stuff. I was involved in Instant Camera production and helped tear the machines down when we lost the lawsuit with Polaroid and helped tear down production machinery. I saw Ultralife being built and sold and helped them with their Laser welders. I saw how Kodak just couldn't get away from the corporate culture that doomed them. I could write my own book on their demise.

      1. Thanks for the comment. It's good to hear from the people who were there. Otherwise this all sounds so outrageous sometimes I'm afraid people think I'm making it up. But sadly it did happen, all of it.

      2. Michael, the story of the Demise of Kodak reads almost like it was a book published by "The Onion", it was so strange and unbelievable. For a number of years I worked at the Kodak plants in Monterrey and Guadalajara Mexico. Things were even stranger down their. My Boss up here in Rochester thought I was making stuff up so he eventually flew down to Monterrey with me and my crew so he could work alongside us for a week and see for himself. At the end of his visit he apologized to me for disbelieving my stories and admitted that things were even crazier than I had been reporting.

      3. Yup, it's still hard to believe the way this company was mismanaged into the ground.
        - Michele

    175. I feel like it's time for another update of this timeline:

      1. Boy is it ever. This new bitcoin scam is something even ole Tony couldn't have come up with.

        I think maybe the Night Owl should get in on this action. Maybe I'll launch NightOwlCoin. Hey, get in on the ground floor! We bring blockchain to blogging! You can't lose! Oh brother.

    176. Thanks for the memories, it was really a shame how this all went down. In the 80's my first full time job out of tech school was with CESD in CA.

      Kodak was a great employer, wonderful co-workers, my professional basics were honed there. They paid for all my continuing education and when I received my BSEE they offered me a engr position in NY. Even though I left for a career in Silicon Valley, I'll never forget the positive impact Kodak had on my life.


    Due to some people who just won't honor my request not to post spam on my blog, I have had to re-enable comment moderation. Comments may take up to 24 hour to appear, depending on when they're made. Sorry about that.