Even after a Fantastic failure to re-invent itself over the last decade, Eastman Kodak, the iconic film manufacturer, is forcing down its current strategy for rejoining the ranks of leading technology companies. Eastman Kodak filed for bankruptcy protection early Thursday morning, trying to follow the path of similar American corporations that have reinvented themselves after a court-supervised reorganization.
Bankruptcy’s Ripple Effect
The wave from Eastman Kodak Co.'s bankruptcy reshuffle and restructuring extends in several directions. Employees support for layoffs, retirees worry over health care coverage, and the photography icon's biggest creditors and stakeholders, from movie studios and big-box retailers to CEO Antonio Perez, are preparing for a sharp throb in their wallets.
Business news lists that Kodak listed assets of $5.1 billion and debt of $6.8 billion. Kodak also said in the bankruptcy filing that it needed immediate access to the financing in order to refinance debt, pay suppliers, and fund restructuring costs.
The company’s often CEO, Antonio M. Perez, has been trying to turn the company around since 2005. Antonio Perez commented in an industrial magazine saying, “The bankruptcy was a step in our transformation in order to build the strong possible foundation for the Kodak of the future.”
As Kodak filed bankruptcy protection, it raised an image that the 132-year-old industry leader could become the most storied casualty of a digital age.
As mentioned in the court papers, ‘the terms of the bankruptcy financing require Kodak to file a motion with the bankruptcy court by June 30, seeking approval of bidding procedures for the sale of its digital-imaging patent portfolio, according to court papers.’
Kodak’s Momentum Reversed
Kodak stock, at a point of time in 1997 topped $94. It slid below $1 a share for the first time and, by Jan. 6, Kodak shares hit an all-time low closing at 37 cents. Recently, when Kodak was preparing to file for bankruptcy protection, three board members resigned, and last week, Kodak announced in several business magazines that it realigned and simplified its business structure in an effort to cut costs, create shareholder value and accelerate its long-drawn-out digital transformation.
Every few years, Kodak employees experienced a mass layoff, unraveling a cozy relationship of company and community that was perhaps beyond comparison in the annals of American business. Global payroll at Kodak has cut down to 18,800 from a peak of 145,300 in 1988, and its hometown rolls to 7,100 from 60,400 in 1982.
Kodak’s Future Focus
Kodak is developing its future plans on new lines of inkjet printers. Kodak believes that inkjet printer is on the verge of turning a profit. It expects printers, software and packaging to produce more than twice as much revenue by 2013 and account by then for 25 percent of the company's total revenue accounting to nearly $2 billion.