Would Kodak have a chance if they just produced film & chemistry?

[Duane Polcou]

Go over to APUG and read the recent posts by PhotoEngineer, who is a retired Kodak engineer.

+1. Producing film to EK's current level of output, consistency and quality is no small
task.

[Steve Smith]

Many western-branded products are now manufactured to a high quality standard in China.

This is true. I work for a British company which is owned by an American company which is in turn, owned by a massive Chinese company (Johnson Electric).

We do the product development and small production runs here and the mass production is done in China to the same quality standards.

It's easy to judge the whole of another country based on a few poor quality products but the reality is that it doesn't matter where something is made, it is the manufacturing method which counts.

It is true that there are many examples of inferior Chinese products, both past and present, but that is less a sign of Chinese inferiority, and more a sign of Western market demands for the cheapest products (in both senses of the word). Remember "Jap crap"? Well, given a decade or two they wiped us off the planet with it, fair and square... China is next.

I agree entirely. British and American manufacturing is a shadow of its former self due to complacency and resistance to change. It is now China's turn to be the major manufacturing centre of the world and there is nothing anyone can do to stop it.




Steve.

[IanG]

Kodak don't make chemistry so that part of the question isn't relevant.

More interesting is that Kodak's tie up with a Chinese film and paper manufacturer failed. Lucky B&W films were based on Tmax technology but the chinese went cack to their own ways.

Ian

[Sevo]

Something like that might even take out Ilford and the other European plants as well. The problem is the base material. This is special stuff for coating with emulsion, and a certain gargantuan amount must be produced per year to make it worth the plastics companies' time. There's a four roll minimum order, and each of those rolls is well over a mile long.

It will cause problems for 135 film, as that requires a tinted base to stop light piping from the exposed leader - once the global consumption falls below the threshold where a tinted base can be produced at a marketable price point, small format photographers will have to get used to loading film in a dark bag...

Sheet film and 120/220 can do perfectly fine with clear base, so they can be made using general purpose acetate and polyester bases - which aren't likely to vanish, having many applications beyond photography.

[Brian Ellis]

... why can't Kodak just provide something that has a reliable market?

One reason is that there is no reliable market. Unless and until film sales bottom out nobody knows what the market is going to be next year and the year after that etc. etc. Kodak's revenues from film sales just keep declining every year and have done so for about the last ten years with no end in sight. Maybe at some point they'll level off short of disappearing and then there will be a "reliable market" of some unknown size. But not right now.

Just as a tiny illustration of the point, do a search here for threads that have the word "discontinued" in the title. You'll find 35 of them, virtually all involving discontinued films.

[Coelus]

Based on latest quarterly reports, Kodak's overall 2011 revenue should be somewhere just north of $6 billion, with the Film/Photofinishing/Entertainment Group representing roughly a quarter of that - call it $1.5 billion.

That may not seem like much to Kodak and Wall Street, but that is a huge market potential for many smaller companies. That kind of revenue puts you almost into the Fortune 500 range. We're talking billion with a B here, not exactly chump change. I really don't see the company going belly up, which means that it will continue to fight for profits to stay viable. Throwing away a quarter of it's revenue isn't realistic. If you needed more money would you work 25% less and call it an improvement?

All they need is to find a company that would be happy to add almost a billion to it's revenue stream by taking over operations from Kodak and letting them shed the expenses, and have them put together an even halfway decent marketing campaign to stir up a bit of nostalgia in the masses. I'll bet big percentage of the operational costs at this point are old pensions, entrenched managers and bad habits. All things that fresh ownership can strip out and focus on a core product line and process. I would find it hard to believe that the processes couldn't be scaled to smaller lot sizes. I work in industry and process scaling works both ways. It take a team that doesn't have an emotional attachment to the way it was done before to do that though. QA is still possible, and with smaller lot sizes your expected waste can sometimes shrink too.

I see this as a huge opportunity for a company that has a leadership with some passion left in it. Kodak is just beat up and wore out. It needs fresh air, not a coffin nail.

[Drew Wiley]

Steve - I interact a great deal with manufacturers all over the world. 99% of the time
when US companies contract to China is to produce very substand good cheaply and
bait and switch the end consumer. This is a rampant practice in public traded companies which often destroys the corporation in the long run as it divests itself in
hard assets, skilled labor, experienced mgt. It's all about short term profit by basically
committing corporate suicide. There is a reason there's very little mfg still transpires
in this country and it has nothing to do with competitiveness. It has to do with the
get rich quick mentality of a handful of people at the top. My personal day job is quite
involved in spotting this kind of behavior and avoiding these kinds of companies. For all
practical purposes the are just running legalized Ponzi schemes buying and selling other
companies to make their assets look good on paper, at the same time they're killing off
whatever put their brand on the market to begin with. It's been like a plague. In fact,
I've largely had to turn to European manufacturers to find any ethical form of distribution. When anyone around here hears "made in China" it synonymous with junk.
It doesn't have to be that way, but it what our coprorate marketing monkey demand.
I can't even get a Chinese lensboard to fit, much less depend on spending millions of
of dollars a year of my bosses' money on some otherwise worthless Wall Street stunt.

[Drew Wiley]

Sorry for all the typos - my fingers are getting stiff. Cold office and another long purchase order to - well, you guessed it - a German manufacturer.

[Bob McCarthy]

Much of this declining americana, is related to the significant reduction in the workforce in heavy manufacturing often due to new technology. The reduction of the workforce occurs without a reduction in benefits to the retired. The burden spread over a smaller enterprise ends up taking everybody down.

I liked it better when companies just offsourced retirement benefits to an insurance company with fully paid up policies. That hasnt happened in decades. Now we have underfunded, company managed, pensions. and when the company shrinks the pension liability looms. In big industry, it can pull down the giants. Kodak, GM, and on and on.

Frankly 401K's that are portable are very useful for retirement. Other benefits (medical) are going to cause this situation to be lose-lose for everyone.

I suspect you could shrink Kodak to be a lean and profitable industrial chemical, film and photographic company. There would be a lot of human tragedy along the path.

bob

[Coelus]

I suspect you could shrink Kodak to be a lean and profitable industrial chemical, film and photographic company. There would be a lot of human tragedy along the path.

That's what it would take. A hard pill to swallow, but that's the only way I can see for Kodak to come out in good shape. Hell, it's a policy that applies to a lot of bloated corporations these days.