Kodak out of bankruptcy as reimaging is complete
ROCHESTER, N.Y. — Kodak emerged from bankruptcy protection on Tuesday, vastly different from the company of old.
Gone are the cameras and film that made it famous. The company hopes to replace them with new technologies such as touch screens for smartphones and smart packaging embedded with sensors.
“Look for a case of a company that had to go through this kind of excruciating restructuring and kept innovating,” CEO Antonio Perez said. “It just doesn't happen, but we've done it.”
Kodak said its old stock is canceled as of Tuesday. Creditors are getting stock in the restructured company.
Eastman Kodak Co., credited with popularizing photography at the start of the 20th century, started to struggle toward the end of the century, first with Japanese competition and later when it failed to react quickly enough to the shift from film to digital photography.
Perez was appointed CEO in 2005. Under his leadership, the company had restructured its money-losing film business by 2007. The company closed 13 factories, shuttered 130 film-processing labs and eliminated 50,000 workers around the world at a cost of about $3.4 billion.
Kodak expected demand for film to decline, but gradually. The company anticipated that new demand from emerging markets such as China would offset some of the decline in the United States. But Perez said Chinese consumers opted for smartphones instead of cameras, and demand for film plummeted.
Meanwhile, the economic collapse of 2008 and the resulting plunge in interest rates left some of the company's pension obligations underfunded. It was those obligations, along with other legacy costs, that Perez said eventually resulted in the January 2012 bankruptcy filing.
Revenue dropped from about $13.3 billion in 2003 to $6 billion in 2011.
Under court oversight, Kodak continued to shed costs in the form of businesses, facilities and workers. It shut down its consumer camera business and sold off an online photo service. It spun off its personal and document imaging businesses to its pension plan and sold off many of its patents. It took its name off the theater that hosts the Academy Awards each year.
The company will emerge with about 8,500 employees, just a fraction of the 145,000 it had at its peak in the 1980s. Revenue is expected to total $2.7 billion this year.
Perez said that by slimming down, Kodak is able to focus research and development on businesses the company sees as more profitable. The restructured company's operations are split between a trio of businesses: packaging, graphic communications and functional printing.