Nobody likes being corrected, but it's not so bad here. . .:-)

The demise of any large company is simultaneously more complicated and simpler than reported contemporaneously by the business press. Remember, they rarely have any real business experience or training, instead they are creative types-writers who rely on a quick quill and a basket of sophistry, nostrums and shibboleths to create a veneer of knowledge and a compelling narrative for an audience that loves a good yarn, and is equally unsophisticated but more gullible. They are plucked from the same field as those hyperventilating stock market gurus that always have some story to tell as to why the market is up, when they said it would be down yesterday. The fact is that almost all businesses fail if given enough time.

Kodak certainly saw the digital revolution coming because I remember reading some B-school case on the “extended product concept” –i.e., don’t confuse what you are doing (transport, imaging) with how you do it (railroading, chemical photography) where Kodak execs spoke of being involved in “imaging”, rather than “photography”. In addition, the older your company, the more it will have ossified a certain way of doing things that may not be useful when the new technology displaces the existing one.

Knowing that “disruptive innovation” is coming is one thing, reacting properly is another. It’s a little like trying to pick and hitch a wagon to just one of a stampeding herd of mustangs when 95% are going to follow the herd off the next cliff all while avoiding getting trampled after your horse just bit the dust.

Albert Churella (“From Steam to Diesel…”) made the case that the failure of the legacy builders in general, but Baldwin in particular, resulted from failing to understand that the versatility of the diesel-electric meant that production methods favored a limited number of standardized models built in large volumes, rather than building small batches according to customer specification. It was production methods, as much as any deficient competency or defective product that killed Alco, Baldwin and Lima. A future Churella will no doubt show how Kodak's business model was deficient because it relied on revenues from physical media and processing. By the way, they aren't alone-Olympus is now involved in an Enronesque accounting scandal.

As for lamenting Kodak, surely it will be disruptive to its employees who made their employment part of their identity, especially if they are long term people who were paid for being knowledgeable about how Kodak did things. For these folks, I am sorry; I’ve experienced being made expendable by my employer’s sheering of its "most valuable assets" in an attempt to change to meet conditions. You must move on. For some it means positions that won't match their prior employment.

However outside my compassion for displaced employees, I’m not sorry to see Kodak fail. There were signs that its management failed miserably in staying focused. Among other things, there was the somewhat famous case of an employee who was “offered” the choice between termination and “sensitivity” training, because he asked to be removed from HR notices paying homage to some PC “awareness” month. That was a sure sign of an autocratic corporate culture (ok, that's most) that was more concerned with obtaining mindless obedience than competency. (The beatings will continue until morale improves) Anybody who has done battle with a corporate HR apparatus knows how imperious they can be-often acting like some corporate version of the KGB, accountable to nothing but their own agenda and just as ruthless. For that reason, when HR starts to run the company, bad things happen. Bad managers let HR run wild, rather than keeping them in check. (See Scott Adams’ “Dogbert’s Top Secret Management Handbook” for a far funnier and less charitable treatment of HR and their propensity to excess)


I would be far sorrier if Kodak was to be subsidized by the government, with politicians offering tearful tomes of deceptive nonsense about its indispensability designed to disarm an economically illiterate electorate but in reality propping up a failure and squandering our money to buy votes or reward loyal contributors. This is why capitalism (not the corporatism we are routinely told is capitalism by our benighted business press) works-it punishes entities that fail to meet a need efficiently and effectively with removal. Otherwise, we have subsidized blacksmiths living off taxes paid by tirerack.com.


The customer has spoken, the customer is king. Long live the king!


(Full Disclosure: I owned two Kodaks: a 126 film snapshot camera and a digital 2MP DC3400, the latter purchased about ten years ago. For the past several years, I’ve used my Canon 7MP and am breaking in a new Nikon LS120-which isn't self shuttering but uses AA's)

Hmm...my $42 of Eastman Kodak stock is now worth $81.50. Too bad I didn't make a real investment!

Steve

Hmm...my $42 of Eastman Kodak stock is now worth $81.50. Too bad I didn't make a real investment!


Must have bought that a VERY long time ago. EK peaked at 80 and change in Oct 1996. Since then, the only way you'd have gotten rich with EK was Shortselling, writing calls or buying puts.

Now had you bought some last week when it was 40 cents ... and sold when it was 80 in the last day or so...


http://finance.yahoo.com/echarts?s=EK+Interactive#chart2:symbol=ek;range=my;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

Superheater, he's saying he bought a block of 100 shares at 42 cents a share for a total of $42, and now it is/was up to 81.5 cents a share. He's right, if he had only had the premonition to buy $4200 or $42,000 worth instead......... but that's a real gambler's game requiring more nerve and expendable cash than most have.

Correct. As I said earlier, I missed Titanic and this time I was going down with the ship.

Steve

Superheater, he's saying he bought a block of 100 shares at 42 cents a share for a total of $42, and now it is/was up to 81.5 cents a share. He's right, if he had only had the premonition to but $4200 or $42,000 worth instead......... but that's a real gambler's game requiring more nerve and expendable cash than most have.


Yeah I realized that after I ready fired aimed.

At this point, anybody taking a flyer has to realize there's another risk-delisting, due to persistent below $1/share price. Then you sit on something sold only on "pink sheets", with huge spreads.

I

Can't they do a reverse split to keep the price up?

Steve

Yeah they could, but that costs money and they are already bleeding..

Well, it didn't take too long...............

Kodak filed for Chapter 11 bankruptcy this morning:

http://www.usatoday.com/money/industrie ... 52660342/1

The nostalgia video again:

http://www.youtube.com/watch?v=IhuXLciWGpw