Loading Poll...The Destruction of Eastman Kodak
Dr. Michael P. Riccards is Executive Director of the Hall Institute of Public Policy – New Jersey. Riccards is a former college president and a presidential scholar who has authored 15 books.
The Kodak Company, another American iconic firm, is going into bankruptcy—a victim of executive incompetence. The employees, stockholders, and the city of Rochester will pay the price, of course. Eastman Kodak was the very standard of film and cameras. At one time in 2003, the number of employees was 64,000 people: today it is 17,000.
The film industry is gone with the rise of digital imagery—oddly enough it was Kodak that pioneered such a venture. But its executives feared that digital cameras would kill its cash cow—film. Of course it did; for film has virtually disappeared, and other companies put forth digital cameras for the future. It was classic capitalist error.
The current president of the company has decided to spend his seed corn. Kodak will sell its patent portfolio and reduce its obligations to retirees, especially in medical coverage. The patents are worth $2.2 billion to $2.6 billion. The strategy is now to compete with Hewlett-Packard, another failed company once on the top of the heap of computers. How Kodak could become a printer company is unclear. It has twice as many retirees drawing benefits as it has active employees. Meanwhile vendors are cutting ties to Kodak, seeing a ship going down.
Its board approved by telephone during a 75 minute meeting to filing for bankruptcy. The Wall Street Journal compared Kodak to Fiji, the Japanese film giant. Fiji, facing the digital revolution, went into chemical enterprises businesses such as design and liquid crystal display panels. They responded like a small, assertive company would—accept, readjust, expand and survive.
Proponents of capitalism led to talk of “creative destruction.” But companies require leadership that earns its pay that looks how down the road a piece beyond the Rochester NY paneled rooms. To those of us who grew with Kodak box cameras and Brownies, this demise of Kodak is a melancholy reflection.
But my Cannon digital takes beautiful pictures, is easier to use, easy to develop, and easy to carry. Too bad Kodak did not come out of the past with a digital cameras worthy of the great Kodak name. I don’t miss film, but that company traded away the future by protecting it old assists. Bad lesson, bad leaderships. And it was not a Kodak moment.
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