Posted on 01/22/2004 5:08:49 AM PST by 2banana
MASSIVE LAYOFFS AT KODAK
Number may reach 15,000 worldwide; local job losses uncertain
By Ben Rand Staff writer
PAULINA REID and KEVIN M. SMITH Eastman Kodak Co. said today that it will eliminate 12,000 to 15,000 jobs worldwide over the next three years because of accelerating declines in film sales and a need to be more aggressive in digital imaging. When the dust settles, the cuts likely will trigger an epic change in Rochester’s economic landscape as its share of the work force, historically the largest among local employers, continues to decline. [Day in Photos]
(January 22, 2004) — NEW YORK — Eastman Kodak Co. will eliminate 12,000 to 15,000 jobs worldwide over the next three years because of accelerating declines in film sales and a need to be more aggressive in digital imaging.
When the dust settles, the cuts could bring an epic change in Rochester’s economic landscape.
Kodak said it could not project how many of the cuts would take place in Rochester — but history and logic suggest it will be a high number since the region is home to Kodak’s largest manufacturing base. As a result, Kodak could surrender its title as the region’s largest employer — a designation the company has held longer than almost anyone can remember.
Job cuts at Kodak have a ripple effect on the area’s economy, cutting into everything from retail sales to capital investments to property taxes in the region.
“We understand this is going to be painful for everyone to go through, but if we don’t change, there is a bigger price to pay,” Chairman and Chief Executive Officer Daniel A. Carp said in an interview. Kodak released the news at 3 a.m. today.
In addition to cutting 20 percent to 25 percent of its global work force, Kodak will also drastically reduce its physical presence here and around the world.
The company expects to close or sell about a third of the square footage it now occupies for offices, manufacturing, research and other functions.
The new cutbacks are part of an increasingly historic shift in priorities at the company, known around the world for products that convert special moments into memories.
The cuts were to be announced this morning in New York City, where the company is discussing fourth-quarter and year-end financial results with investors and analysts.
Calculating in previously announced cuts, and assuming that any acquisitions Kodak makes would not dramatically increase the Rochester work force, local employment could fall to between 13,000 and 15,000 workers.
Kodak said the cuts were necessary to stay ahead of the biggest threat to the company in its history.
The growing popularity of digital cameras has triggered a permanent decline in sales of photographic film, Kodak’s marquee product.
“These plans are the consequence of market realities, and they will help us to fund a future for Kodak of sustainable, profitable growth,” said President and Chief Operating Officer Antonio Perez in a statement.
“They are absolutely required for Kodak to succeed in traditional markets as well as the digital markets to which our businesses are rapidly expanding.”
Kodak will use a combination of layoffs and early retirements worldwide to counter what is expected to be a precipitous drop in operating profit delivered from film.
An estimated 2,500 to 3,500 layoffs will take place worldwide in 2004.
The entire package of reductions will target manufacturing, corporate administration and portions of the company’s traditional photographic business, such as wholesale photofinishing.
The new reductions are on top of an already sizable package of layoffs announced last year.
The cuts should reduce costs $800 million to $1 billion a year by 2007, Kodak said.
The company will use that money to finance even more aggressive investments in such new opportunities as consumer digital photography, home inkjet printing, commercial printing, consumer electronics, radiology and more.
The new digital opportunities, Kodak says, will help build a company that is more successful and financially sound because it is less tied to the fortunes of a single product. Carp, in a statement, described the moment as “the dawning of a new, more competitive Kodak.”
Carp acknowledged the good news-bad news nature of the announcement for the Rochester work force. And on Wednesday night, he reaffirmed Kodak’s commitment to the region.
“We plan to be there a long time,” he said, “but Kodak will look different than it does today.”
Kodak’s accelerated strategy for digital imaging was initially announced in September.
Since then, the program has drawn fire from former employees, analysts and institutional investors.
Critics say the overall plan is risky and say it could lead Kodak into financial turmoil — perhaps even forcing the company to sell itself off in pieces.
Kodak Park is the company’s largest manufacturing site and is heavily vested in the production of film and traditional photographic products. It employs about 15,000 people and stretches across several miles of Rochester and Greece.
At the end of 2002, Kodak said it employed about 21,000 people in the Rochester area. In July, 2003, Kodak announced a round of 2,000 to 3,000 layoffs.
If just a third of the new cuts are local, Kodak’s Rochester work force would fall to between 13,000 and 15,000 people by 2007.
BRAND@DemocratandChronicle.com
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Officials' opinion The Democrat and Chronicle was unable to reach public officials for comment prior to press time, but here are comments made in previous reports: “While we may not be able to do anything to help Kodak as it continues to downsize and lay off people and do what it has to do to survive, we can create the business climate in this community so that when people do lose a job at Kodak, there is a better opportunity for them to be absorbed into a work force here.”
Maggie Brooks, now Monroe County executive Oct. 12
“At a time when Kodak is asking its workers to make sacrifices and this community to make sacrifices, it doesn't seem inconsistent to ask something of shareholders. It seems they are at least being even-handed at a difficult time. They could keep the dividend, but how would a worker feel if investors still were to make money when Kodak wasn't keeping resources.”
Assemblyman Joseph Morelle, D-Irondequoit Sept. 26, reacting to news of change in Kodak's business plan
Kodak killed off Ektar/Royal Gold 25 -- and then 100 -- as well as Supra 100, and Kodachrome 25 -- and now, according to the rumors floating around the 'net, Kodachrome 200 -- and Panatomic X, and Super XX, and... and... and... and...
They got rid of those products for the same reason Chevy killed off the Corvette, and Dodge got rid of the Viper, and Ford got rid of the Mustang, and so on. It's SOP for any sucessful business. You kill off your flagship products -- products that no one else has -- unique "niche" products. You let the beancounters reign supreme, as they remind you that you can shave a few nickels by dumping those flagship products that "very few people buy", even though they excel, and meet a need that nothing else meets.
The fact that these flagship products lend a prestige to the rest of the corporate products means nothing.
Right?
That is why Chevy dumped the Corvette, etc., right?
Oops, they didn't.
Dang. There goes my whole argument.
/sarcasm
Oh, well. At least Kodak has now "committed to being the low-cost manufacturer and provider," so who needs that "prestige" thing anyway?
As long as my freezer is filled with Kodachrome 25, Ektar 25, Agfa APX 25, Panatomic X, Super XX, and several other classic emulsions, I'll have no interest in digital for anything more than quick snaps, like ebay listing pictures and the like.
There is more to photography than faster/cheaper. There is more to life than faster/cheaper.
The emulsions I listed above -- as well as several others I've stored (Verichrome Pan, Supra 100, etc.), and, several I can still buy off the shelf (Plus X, Tri X, Kodachrome 64, etc.) have advantages that digital will likely never meet.
As far as "archival", don't kid yourself. Bits on a disk -- even a CDR or DVDR -- are far from archival. And, even a scratched/burned/otherwise abused negative or transparency can be at the very least partially recovered. Not so for a hard drive that's been wiped out by a virus or hard head crash, or a CD/DVD that's delaminated, or had its dyes fade, or warped/cracked/etc.
As to image quality, don't kid yourself there either. A 35mm Kodachrome transparence has something along the lines of 450 megapixel equivalent. Get back with me when you can get a digital camera even remotely as competent as a humble Nikkormat or Spotmatic -- both currently available for under a hundred bucks each, with optics capable of obscenely high resolution.
Oh, that digital camera will also need to cost the same price range (hey, "used" is OK with me if it'll help you spec out the camera), and, it'll need to have a 450 megapixel sensor.
And, of course, it'll have to deliver that incredible Kodachrome image "flavor". (When you look at a good Kodachrome, you don't feel like you're looking at an image -- you feel like you're there. You won't understand what I'm saying until you see it for yourself -- but once you do see one, you'll know it in a heartbeat.)
I'll be waiting... but I won't be holding my breath. :)
PS: it'd be nice, too, if that camera can hold 36 uncompressed, full resolution images in a memory module that fits internal to the camera. By my back of the matchbook calcs, that would need to be something a wee bit larger than 16 gigabytes -- and, it'll need to have none of that "hangfire" when I hit the shutter release -- and, no delay before I can hit it again. Yeah, I want those 450 megapixels to be stored instantly.
And, of course, I won't accept any image artifacts like aliasing, moire, or so forth -- let alone Bayer Pattern interpolation. I want each pixel to be what the lens captured, not what some guy in China decided to have an algorithim fabricate for me based on his idea of "typical" adjacent pixels.
Like I said, I'll wait, but I won't hold my breath. I'll be too busy using my existing cameras that already meet those specs.
And then there's my MF and LF gear, heheheheheheh... Let me know when you can deliver what my 150mm Apo Lanthar can do on 4x5 sheet of fine grain E6 film, OK? :)
I used to pay close to $3 for each 90-minute cassette tape. These were the high-bias, professional grade types. I can now get a stack of 100 CD-ROMs for about $15, or 15 cents per 74-minute disc. Amazing.
I used to pay five bucks for a wrapped up stack of fresh-caught (that morning!) flounder filets from the seafood store on Allerton Avenue. Now, I can buy a box of "fish sticks" made from chopped up pieces of fish of unknown provenance, for under a dollar, anywhere in the country. Amazing.
From time to time you see those "obsolete" ASA 25 films for sale on ebay. Long out of date, naturally. They sell for upwards of 25 bucks a roll.
You'd think someone at Rochester would catch the vision, and create a "Boutique" line of emulsions. Coat each one only once a year, and sell them until they were gone. Like bock beer used to be made. Name their price, do a wee bit of promotion, and watch 'em fly off the shelves.
Konica does that now, with their IR film. It works. The stuff flies off the shelf, and then everyone has to wait another year.
You'd think they'd have gotten the clue, when the announced the end of Kodachrome 25, and assured everyone that there was a year's supply in the pipeline.
The pipeline went dry within a few weeks.
Same thing with Agfa's Ultra 50. Same thing with Verichrome Pan, and so on.
I don't think they want to pay anyone to continue to manufacture a product facing obsolescence. You know, sometimes a cigar is just a cigar; massive restructuring at Kodak is inevitable. No need to look for ulterior motives.
Au contraire.
Some months back, they announced that they'd be moving their slitting and packaging operations to China and Mexico.
As to "continu[ing] to manufacture a product facing obsolescence," you couldn't be further from reality. Film is where they make their money. Film is propping up digital. Film is a cash cow. Very low cost of production, large demand -- increasing demand in most of the world -- and, it's "mature technology", so they don't have to keep re-inventing it every six months.
It's also lightyears ahead of digital in terms of quality, and "data density".
You can still get Tech Pan, and the "Eastern Europeans" are manufacturing some ASA 25 emulsions that are getting some decent reviews. Then, there's "Gigabit Film" (Agfa Copex microfilm in drag, with a continuous tone developer -- similar to the old High Contrast Copy souped in H&W Control, or Tech Pan in any of the continuous tone developers).
So are morels, now that we can buy cans of mushroom pieces for fifty cents.
Then there's McDonalds, who destroyed the entire prime rib market...
And let's not forget his predecessor, Kay Whitmore who also fiddled while Rochester burned.......
You know what I'd like to know?
I'd like to know how much the top management at EKC knows about photography.
What do they know about films? About film use, and manufacture, and processing? About lighting, and exposure, and printing techniques? About reversal processing? About the purpose of the masking layer in color negative films?
What do they know about the advantages of tempered emulsions versus "traditional" gelatine? What do they know about the history of photography?
I suspect I already know the answer to these questions. It's depressing just thinking about it.
I've never heard of any such thing.
Yes and no. As the electronics component of digital cameras gets better, cheaper, and more commoditized, the factor that determines picture quality is the quality of the lenses. And that's where the traditional camera companies have their expertise.
Not likely. Ektar 25 was capable of over 200 line pairs per millimeter. Zeiss used it for testing their lenses; nothing else was sharp enough. (They needed a color film to test for color corrections as well as sheer resolution.)
There are relatavistic obstacles in the way of digital sensors having that kind of resolution. The smaller you make the individual sensor elements, the more noise you get. If you rigged up a camera with a liquid nitrogen sensor-coolant system, you might be able to tackle some of the noise issues, but you'd still be unable to make the sensor elements small enough to match the resolution of those films. Sure, you could make the sensor elements phsically small enough, but they wouldn't work for a variety of reasons.
Also, keep in mind, Ektar 25, as good as it was, is a 20 year old technology. If they'd kept up with the R&D, who knows how much better it would be today? The fact is, silver-based photography is inherently capable of astronomically better performance than silicon.
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