ROCHESTER, N.Y. — Is Kodak's moment past?
The glory days when Eastman Kodak Co. ruled the world of film photography lasted for over a century. Then came a stunning reversal of fortune: cutthroat competition from Japanese firms in the 1980s and a seismic shift to the digital technology it pioneered but couldn't capitalize on. Now comes a wistful worry that this icon of American business is edging toward extinction.
Kodak filed for Chapter 11 bankruptcy protection on Thursday, raising the specter that the 132-year-old trailblazer could become the most storied casualty of a digital age that has whipped up a maelstrom of economic, social and technological change.
Already a shadow of its former self, cash-poor Kodak will now reorganize in bankruptcy court as it seeks to boost its cash position and stay in business. The Rochester, N.Y.-based company is pinning its hopes on peddling a trove of photo patents and morphing into a new-look powerhouse built around printers and ink. Even if it succeeds, it seems unlikely to ever again resemble what its red-on-yellow K logo long stood for — a signature brand synonymous in every corner of the planet with capturing, collecting and sharing images.
"Kodak played a role in pretty much everyone's life in the 20th century because it was the company we entrusted our most treasured possession to — our memories," said Robert Burley, a photography professor at Ryerson University in Toronto.
Its yellow boxes of film, point-and-shoot Brownie and Instamatic cameras, and those hand-sized prints that made it possible for countless millions to freeze-frame their world "were the products used to remember — and really define — what that entire century looked like," Burley said.
"One of the interesting parts of this bankruptcy story is everyone's saddened by it," he continued. "There's a kind of emotional connection to Kodak for many people. You could find that name inside every American household and, in the last five years, it's disappeared. At the very least, digital technology will transform Kodak from a very big company to a smaller one. I think we all hope it won't mean the end of Kodak because it still has a lot to offer."
Kodak has notched just one profitable year since 2004. At the end of a four-year digital makeover during which it dynamited aged factories, chopped and changed businesses and eliminated tens of thousands more jobs, it closed 2007 on a high note with net income of $676 million.
It soon ran smack into the recession — and its momentum slipped into reverse.
Years of investor worries over whether Kodak might seek protection from its creditors intensified in September when it hired major restructuring law firm Jones Day as an adviser. Its stock, which topped $94 in 1997, skidded below $1 a share for the first time and, by Jan. 6, hit an all-time closing low of 37 cents. Multiple board members recently resigned, and last week the company announced 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.
The human toll reaches back to the 1980s when Tokyo-based Fuji, an emerging archrival, began to eat into Kodak's fat profits with novel offerings like single-use film cameras. Beset by excessive caution and strategic stumbles, Kodak was finally forced to cut costs. Its long slide had begun.
Mass layoffs came every few years, unraveling a cozy relationship of company and community that was perhaps unequaled in the annals of American business. Kodak has sliced its global payroll to 18,800 from a peak of 145,300 in 1988, and its hometown rolls to 7,100 from 60,400 in 1982.
Veteran employees who dodged the well-worn ax are not alone in fearing what comes next. Some 25,000 Kodak retirees in this medium-sized city on Lake Ontario's southern shore worry that their diminished health coverage could be clawed back further, if not disappear, in bankruptcy court.
It's a long cry from George Eastman's paternalistic heyday.