The leaner post-bankruptcy Kodak faces an uphill battle
When Eastman Kodak emerges from bankruptcy this summer or fall, it will be a shadow of the corporate giant it once was.
A celebrated company whose little yellow packages of film documented generations of birthday parties, weddings and anniversaries, the new Kodak will be more commercially focused, providing printing and imaging services to businesses as well as film to the movie industry.
Consumers will probably still be able to find Kodak-brand film and digital cameras, and they will still be able to download and print their digital pictures at kiosks.
Those businesses will no longer be owned by Kodak, however. As part of the more than year-long bankruptcy process, they were sold to others.
Antonio Perez, Kodak's oft-criticised chief executive, who has been trying to stage a turnaround of the company since 2005 and has overseen it through bankruptcy proceedings, said in a news release last week that the company was positioned for a "profitable and sustainable future".
Some sceptics sounded warnings, though, noting that certain commercial businesses that the company is banking on are fiercely competitive and that Kodak's own projections show steep declines in growth in other business lines.
"The company made a big mistake of riding the cash cow — film — to the point that there was simply no more milk coming from it," said George Conboy, chairman of Brighton Securities in Rochester, where the company's predecessor was founded in 1881.
Kodak cleared a big hurdle last week when it said it would spin off two businesses to the Kodak Pension Plan in Britain for $US650 million in cash and debt. The agreement still needs court approval.
The segments that were sold include document imaging and the business that made Kodak a household name, its camera film and photographic paper lines.
The bankruptcy process hit a major snag last year, however, when the company struggled to sell what it considered to be a crown jewel — a package of 1100 digital imaging patents.
Kodak had hoped the patents would go for as much as $US2.6 billion, but a consortium of buyers that included some of the world's largest technology companies — such as Apple, Google and Facebook — bought them in December for far less, about $US527 million.
"What that situation signified — which was part of the problem with the whole business model — is that they thought their technology and their patents were more valuable than they really were," said Jay Westbrook, a professor at the University of Texas Law School.