You can get that car with gull wing doors now, it just depends on how much you're willing to spend.
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
....they said, while making sure high-skill jobs were exported to China and India and Mexicans took up the remaining low skill jobs.
I left Rochester 3 years ago, but it appears "Rochester" will be everywhere soon.
It was nice having a middle class, but I guess that's obsolete now.
You can get that car with gull wing doors now, it just depends on how much you're willing to spend.
Speaking of technologies that quickly fade away, what of the analog cassette tape? For many years, I had been buying high-end cassette tapes to tape my Christmas programs off the radio. When I looked for my tapes this past year, there were pretty much none to be found. They literally disappeared from the shelves. I eventually found some run-of-the-mill cassette tapes at Wal-Mart. So next year, I'm going to have to consider getting a CD-recorder for my stereo to tape...er, record off the radio. In the meantime, I am already digitalizing the analog tapes that I have.
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.
Ah. That explains why we are shipping chipmaking companies and software jobs overseas.
Computers are obsolete.
Gotchya.
Because the market for film that slow is just about zero - consumers don't want anything slower than 100 for print film, and most don't really want anything slower than ISO 200, which means the only people buying it were hobbyists and a few pros, and there probably just wasn't enough money in it to justify making it. Nobody else makes a film that slow any more either, so it's not just Kodak - Agfa's B&W 25 is long gone, and the only thing close is Konica's Impresa 50, but who knows how much longer that will be around?
Bad news for the Rochester area which already has some of the highest property tax rates in the country on top of serious budget problems. Much of the property Kodak abandons will likely go idle, further depressing commercial property values up there. Residential properties in Rochester already sell for about half of what they did 20 years ago.
AMD was planning to build a new FAB plant in Austin in 2003. Being the liberal bastion that it is, Austin thought that a few tax breaks would keep the plant there (AMD already has quite a campus there already).
AMD kept telling the city and state it would have to do better.
Well, Singapore got the plant and the $3 billion investment. And AMD will likely shift more production there due to, as they put it, the "friendlier business climate."
Surely you forgot the </sarcasm> tag, right?
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.
I remember something about them firing an employee because he refused to participate in Kodak's mandatory "Diversity Day" celebration.
Ever since then, they've been on my boycott list.
Yup. I saw that story here on FR a couple of years ago (year ago?). I joined the boycott. When it came time to buy a digital camera, I considered a Kodak, but due to their persecution of dissidents, I bought a Fuji Finepix instead. I love the Fuji.
Uh, have you visited upstate NY lately? It is a basket case. This will just make it worse. Everywhere you look are shuttered buildings and crumbling plants with weeds growing up through the empty parking lots. It seems three jobs move out for every one that moves in.
It's fine to talk about buggy whip crafters being replaced by auto manufacturers. That's a natural part of the cycle. What is different today as opposed to fifty years ago is, many of those newly created jobs are going overseas, while our population continues to increase - mostly driven by illegal aliens who infiltrate in and take the remaining jobs at the bottom - and increasingly higher up the ladder, such as construction and food processing. Retraining doesn't help somebody who is laid off when there is no job to retrain for and entry jobs are increasingly denied.
The middle class in this country is in trouble. Politically, that means the Republicans are also in trouble, and much more so than they think.
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