Kodak on the brink of bankruptcy

The iconic American company -- once an industrial powerhouse -- just doesn't have the cash to continue operating.

By Kim Peterson Jan 4, 2012 5:38PM
Image: Woman with camera (© Corbis)Sad news out Wednesday that Eastman Kodak (EK) may file for bankruptcy. The company has been trying desperately to sell its huge collection of digital-imaging patents, but that may not happen.

If the sale falls through, bankruptcy is all but assured. Kodak already said it will run out of cash if it can't sell the patents or get enough loans.

The stock has plummeted 28% Wednesday to 47 cents. Kodak shares went from $20 in the late 1970s to a peak of around $90 in the mid-1990s. With a high and steady dividend yield, it was known as a safe buy. But now, the end is near for a legendary American company.

I wrote a long piece about Kodak in November, and said the company's problems were bigger than just the move away from traditional film photography. Kodak made bad decisions and refused to adapt to changing times until it was too late.

Kodak plunged into digital with a vengeance at the turn of the century, and by 2005 it had topped the U.S. market for digital camera sales. But there was a problem: Digital cameras didn't have the profit margins that film did.

And so Kodak embarked on a technology crusade, offering everything from the super-fast scanning service called Scan the World to online photo-sharing tools like EasyShare. The company's chief executive, Antonio Perez, was optimistic: "In two to three years, this will be seen as one of the most successful transformations in the history of our country," he told BusinessWeek in 2006.

But Kodak again missed the boat. The prices of digital cameras would continue to drop to the point where profit was almost nonexistent. And the digital-photo services Kodak invested in were lost in a crowded field of innovation.

Tags: EK

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34Comments
Jan 4, 2012 10:23PM
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Kodak was run like alot, most?, American companies...do what will get the execs running it the biggest bonus and pump up the stock price so they can dump their stock options and cash in even if it makes the company go belly up 5 or 10 years from now.  Why should they care how many people they put out of a job?  They got theirs, screw everyone else.   
Jan 4, 2012 6:51PM
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Nothing ,I say nothing lasts forever, what a great company this has always been though.

Jan 5, 2012 10:11AM
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Its a shame, another pride of American know how going down the toilet! Just like the Postal Service and Sears and Roebuck. Many of you younger readers probably would not know that Sears and Roebuck were the founders of catalog shopping, delivery service, layaway plan and even credit. I guess this is what happens when CEO`s are counting bonuses and charter flights and lets not forget that expense account.
Jan 5, 2012 7:21AM
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Such a great legacy ending this way. We have an old Polaroid camera. The film, if you can find it, costs more than the camera did. You can still get Zenith, RCA, and Westinghouse TV's, but you have to look around some to find them. "You can be sure if it's Westinghouse",  Zenith "The quality goes in before the name goes on" How about the old RCA Victor dog looking into the speaker? In 1980, I sold the RCA VHS recorder and the Sony Betamax for $999.95. I can't remember what we sold the Atari's for? We still had a TV tube tester on the sales floor. Days gone by. Kodak is like Wheaties---been there as long as we can remember.  
Jan 4, 2012 9:19PM
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For decades, Kodak was fat and happy from outrageously high margins from their film business.  It was a great run, especially if you were a Kodak executive in its heyday.  Unfortunately, there was way too much baggage to change course.  It's a sad reality, but as one previous poster noted, all companies eventually die.  Tough blow for upstate NY and especially Rochester.
Jan 4, 2012 8:29PM
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So sad to see any american company in bad shape,i can rember when american companys led the world, sad, and i really liked thier products years ago..
Jan 4, 2012 11:13PM
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I HAD faith in Kodak, bought the printer to save money on ink as advertized, good price but had a severe problem installing on the computer after an update to their software.  Even spent 5 hours on the phone with tech support, bottom line they blamed Microsoft. Whatever the printer now sits as a paperweight on my desk. Really left a bad taste in my mouth. Had to buy another printer, different brand and this one worked right out of the box-0 problems. Seems when Kodak went out of the US they left the consumer behind. They forgot that we are the ones paying their paychecks. Anyways, So be it..
Jan 5, 2012 12:13AM
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Eden...you're right.  Kodak was the world's best film maker for decades, but never diversified when its competition was.  Their printers and other products have been unreliable for years, their price points have become noncompetitive, and their decision to outsource all their production overseas has ruined them with poor quality control.  They just refused to adapt to a changing domestic and world market, figuring on consumer loyalty -- which evaporated, as consumers have become more sophistocated shoppers and demand quality products at a fair price. They spelled their own downfall when they fell years behind in digital camera technology, and never could reclaim the customer base who left for manufacturers who had it. 

 

Kodak's demise is much like Radio Shack, who introduced the TRS-80 in the late 70s/early 80s as one of the first PCs designed for home use, but when they tried to make their Tandy PC (anyone remember that one?) compatible with the new IBM-PC, shrinking profit margins and a lack of economies of scale led Radio Shack to exit the computer-manufacturing market by the mid-1990s.  They had a tiger by the tail, but didn't have the infrastructure or the in-house ability to make it work.

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Gosh!  I like Kodak and it has been GOOD  to me,  and all their products have always been the best.   Will I still be able to buy KODAK Products???  Good Lord,  I hope I do not have to buy another printer,  from another company???   To bad for the company,   and the many memories of all the good years they have had!!!!!   I sure hope they can turn it around and head down the right road.  I know they can do it.  Greed will not help this situation?????   GOOD  LUCK  KODAK  COMPANY   I know you can do it . . .Light bulb  This is AMERICA . . .   The know how country . . .   GO  FOR  IT,   GET _ R _  DONE . . . Smile   Allegheny  Al
Jan 4, 2012 10:21PM
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Kodak moved it's manufacturing out of the US entirely years ago... first to Mexico, then Asia. Didn't help, did it Kodak? Another greedy traitor American company. Good riddance.
Jan 4, 2012 9:30PM
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Kodak's refusal to adapt and change and invest in the future when it had capital is like a lot of past great American companies, who only think of their past and present and Not the future.
Jan 5, 2012 12:49AM
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Anyone like to see the CEOs paycheck or find out if he got huge bonuses for his "wonderful" managing abilities?  Back when railroads were the great investment - tycoons would buy them - suck out all the profit as the railroad went broke.  The tycoons got out with fortunes and the investors got the shaft.

 

Our do nothing Congress needs to do their job and find ways to ensure that investors have more control over how these companies are run - mostly - how much the CEO gets paid.

Jan 5, 2012 9:29AM
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I'm a professional photographer and have been for over 35 years.   I remember going to trade shows in the 70s and 80s and being totally blown away by innovations that Kodak would present.    Back then,while other companies struggled to be relevant, Kodak would just dust something off from the shelf in the backroom and bring it to the trade show as a new product and everyone would be amazed.     Unfortunately, the paradigm shifted and Kodak didn't move with it.    By the time they realized that the market and the demand had changed, it was too late.    I'm saddened that such a powerhouse in the field of photography and imaging has been, itself, placed on a shelf in the backroom.     Goodbye to Ektachrome and Plus-X...........my personal favorites.
Jan 5, 2012 12:55AM
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hey there's a really new camera that seems to be getting a lot of raves..maybe you heard of it..I think their called Canon.

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Bought three Canon Printers - all were defective - would buy anything from them at this time.

 

Bought two Epson Printers - when the power went out - the ink cartridge has a chip that then said the (full) cartridge was out of ink.  Happened every time - the printer would then have to have a new ink cartridge.  Always wonder how Epson thought people would then buy another printer from them.

 

Companies kill their own business - due to their greed and their stupidity.

Jan 5, 2012 11:14AM
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Kodak is typical of most American Companies.  They got arrogant, got behind in technology, built poorly made products, and expected their customers to continue purchasing their stuff.  Well, American shoppers are more intelligent than that and they turned to products made out of the country whose quality far surpassed anything made here in the USA, televisions, cameras, automobiles, appliances.   It is sad to see another American icon disappearing, but corporate greed, CEO's who only care about their bonus checks at the end of the year, and poor workmanship are the cause once again. 

Jan 5, 2012 10:31AM
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Among other things, I've been a professional photographer for many years, and have shot thousands of rolls of their VPS 160 Portrait color negative films; and hundreds of rolls of their Portra 160 and 400 color negative films after the VPS was superseded. However, the cold, harsh reality here is that a few good products (that are mega high profit) do not make a company a GOOD company. I'm also a businessman, and if you knew what had been transpiring inside of Kodak for many of these past years; and what they were doing with their corporate business model, you wouldn't believe it. It was like watching a bunch of kids hold their breath, stomp their feet, and have a temper tantrum to keep things status quo when the words 'Digital Photography' started gaining popularity. They made almost all the wrong choices, and the ones that mattered they waited too long to make a difference. Either way, they still ended up going out of the country, which didn't work either. So, more proof that C- students simply cannot maintain market share for long when the business climate shifts, and they're too haughty to realize it's not just a flash in the pan (pun intended). I've migrated over to 100% digital during the past five years.
Jan 5, 2012 6:48AM
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In the field of Technology, if you hold on to one specific platform for two long, you're really asking for trouble, technology is constantly changing by the minute. This was Kodak's own undoing. Sad, really. I would hate to see any company once so powerful and significant fall apart like this. Even more so, seeing the effect of Kodak's downfall on a friend's family who is dependent on someone working there is really deep.
Jan 4, 2012 8:48PM
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Sad to see a great company going down.. i guess the recession killed them.. i always bought kodak cameras.. oh well now to buy a nikon if they go down..
Jan 5, 2012 4:27PM
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The government allows every foreign nation to import there cameras and crap into this country tariff free and makes it almost impossible for a company like kodak to make a profit. 

China steals copyrights makes substandard products and still gets to sell there crap here.

It is time we get a businessman in the white house and turn this country around.

Jan 4, 2012 11:00PM
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Kodak was a great company, Upper boss made decision to made product out of USA and I know for a fact employees showed top execs that they were losing money going over sea, they said just do it. Mr. Kodak rolling over along with other great inventors. And the the American people just don't get until the government tells them what to do yes this is called socialism.

USA  government runs the feral reserve and they can make your dollar worth nothing whenever they want to.

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