News: Kodak Is Cutting Up to 10,000 More Jobs

[bmattock]

http://www.latimes.com/business/inv...7822283.story?coll=sns-ap-investing-headlines

Kodak Is Cutting Up to 10,000 More Jobs
By BEN DOBBIN
AP Business Writer

5:26 AM PDT, July 20, 2005

ROCHESTER, N.Y. — Eastman Kodak Co., which turned picture-taking into a hobby for the masses a century ago, said Wednesday it is cutting as many as 10,000 more jobs as it posted disappointing second-quarter results amid a struggle to make the wrenching transition from film to digital photography.

Kodak, which earlier targeted 12,000 to 15,000 job cuts by 2007, made its shock announcement of more job cuts as it swung to a loss for the second quarter in a row.

The company lost $146 million, or 51 cents per share, in the April-June quarter, compared with a profit of $136 million, or 46 cents per share, in last year's second quarter.

Sales grew 6 percent to $3.69 billion from $3.46 billion a year ago.

Excluding restructuring and research charges and asset impairments from an investment in Lucky Film Co., China's largest domestic film manufacturer, Kodak posted earnings from continuing operations of 53 cents a share.

Analysts surveyed by Thomson Financial had forecast earnings of 80 cents a share.

As part of its effort to fortify its digital businesses to counter a faster-than-expected decline in consumer film sales, Kodak said it will cut deeper into its work force than it set out to do in January 2004.

Several things of interest here. Some may recall - Kodak fought off Fuji in a bidding war to buy a controlling interest in China's Lucky Film Company - and invested a bunch in bringing Lucky's manufacturing capabilities up to par. They believed that China was going to be a boom photo/film market. Looks like Chinese reaching income levels that permit hobby photography are going straight to digital, bypassing film. Like how some countries have gone right to cell phones and bypassed traditional land-line telephones.

"Faster-than-expected decline in film sales." That's important, folks. Hang on, the ride is about to get bumpy.

At the same time...this just in...

http://www.masslive.com/business/republican/index.ssf?/base/business-0/112089523662510.xml&coll=1

Kanzaki's parent buys firm
Saturday, July 09, 2005
By WILLIAM FREEBAIRN
wfreebairn@repub.com
WARE - The parent company of Kanzaki Specialty Papers Inc. has purchased a Swiss firm that makes paper for printing photos from inkjet printers.

Oji Paper Co. Ltd., based in Japan, announced this week it has purchased Ilford Imaging Switzerland for an undisclosed sum.

Ilford Imaging Switzerland is part of Ilford International Holdings, in turn a subsidiary of Ilford Imaging Ltd. of the United Kingdom. Ilford Imaging Ltd. is a leading supplier of black and white film and photo paper that recently emerged from administration, the British equivalent of bankruptcy.

Ilford is cutting loose all non-film-related businesses as it circles the wagons around B&W film and film-centric supplies. No need for ink-jet paper - they need the capital for keeping competive, even though ink-jet paper is liable to be a growth industry and photographic paper most certainly is not. Concentrating on their core business, this may be a wise move on their part for their stated purposes.

It affects the small businesses:

http://seattlepi.nwsource.com/business/233248_digi20.html

And there is more:

http://www.imaging-resource.com/NEWS/1121798123.html

Pentax changes focus as profits fall
By Michael R. Tomkins, The Imaging Resource
(Tuesday, July 19, 2005 - 14:35 EDT)

Several news articles today from Bloomberg.com cover the latest financial information released by Japanese company Pentax Corp.

Imaging Resource readers will likely best know Pentax for its lineup of Optio digital cameras, as well as a range of digital and film SLRs, lenses and accessories. The company also deals in a number of other fields, including medical imaging, sport optics, printers, and CCTV cameras, amongst others. According to Bloomberg, Pentax has today announced a 42% drop in first quarter profits, largely due to losses from its photographic unit.

...

The company intends to concentrate more on single-lens reflex digital cameras rather than compact point-and-shoot models - echoing moves from a number of other digicam manufacturers recently. The company also intends to ramp up the speed of its announcements from two models a year in the past, to three this year.

The important bit here - moving faster from point-n-shoot digicams to digital slrs, and introducing three models per year - the move away from film for the enthusiast (SLR users) is picking up speed.

Folks...do I haveta say it?

Those who insist film is not dead...well, maybe not...but the EMT has rubbed the defibrillator pads together and is shouting "CLEAR!" I'm thinking flat-line here. You?

Best Regards,

Bill Mattocks

 

[Nikon Bob]

If it is dead or dying what can you do about it? Enjoy it while you can or bail out.

Bob

 

[GeneW]

Ouch. This is ominous ...

So let's lobby Epson to bring out an R-D2 at an affordable price so there'll be a DRF "for the rest of us" ...

Gene

 

[Trius]

I don't know what to think, except to support and stockpile b&w film/paper ... supporting those, like Ilford, who are committed to it. As for colour, I'll shoot chromes as long as possible, especially Kodachrome, but that's about the only support I'll give to EK. It's not that I don't wish Kodak well, but I think they are actually missing an opportunity to secure themselves as an important player in a niche area, i.e. film.

That said, I'm slightly optimistic that Konica/Minolta may be building a digital Hexar RF. I think that's good for b&w, because I can't imagine RF users accepting a D-RF that doesn't give good b&w out of the camera.

IOW, I'm resigned to the move to digital, but I'll go kicking and screaming because I can, and it will be fun to make the noise. 😉

Trius

 

[Socke]

[/i]
Looks like Chinese reaching income levels that permit hobby photography are going straight to digital, bypassing film. Like how some countries have gone right to cell phones and bypassed traditional land-line telephones.

When I was in Shanghai in 1997 everybody was into pagers and you could buy them everywhere. It was the year when Siemens won a contract for ISDN and GSM telephony in Shanghai and as I've been told only the companies got ISDN, everybody else went mobile!

In China it is most important to show what you have, even if you live in a den you have to have the newest gadgets to become socialy acceptet, status is everything there!

No wonder they don't bother to use equipment which is considerd outdated, this must not aply to professional photographers, they still use film for the effect but they'd use the most impressive medium format camera they can get 🙂

 

[Trius]

Gene: That's a spiffy new avatar photo you have there!

Trius

 

[wlewisiii]

Eh, it's becoming a niche market. Just as there is enough demand for, say, oil paints for that type of art there will be enough demand for companies to produce film. There are billions of people in the world for whom digital won't be cheap enough for a long time to come as well. Kodak may get out of film soon (though I doubt it. The equiptment exists and the R&D is long since paid off. It's as close to pure profit as a product gets.) but even so, there will be room for Bergger, Efke, Foma, Lucky, even Illford for quite some time to come.

Dead? No. Different? Yep. Not really any bigger a problem than for those who only liked Super-XX or Verichrome Pan once upon the day. Or one could do as these two did http://www.michaelandpaula.com/mp/tech.html and buy up all of the remaining supply of your favorite emulsion when Kodak does stop making it.

So it goes.

William

 

[bmattock]

If it is dead or dying what can you do about it? Enjoy it while you can or bail out.

Bob

Oh, exactly!

Best Regards,

Bill Mattocks

 

[bmattock]

Ouch. This is ominous ...

So let's lobby Epson to bring out an R-D2 at an affordable price so there'll be a DRF "for the rest of us" ...

Gene

Think we can get them to make an R2-D2? Hehehehehe.

Best Regards,

Bill Mattocks

 

[bmattock]

I don't know what to think, except to support and stockpile b&w film/paper ... supporting those, like Ilford, who are committed to it. As for colour, I'll shoot chromes as long as possible, especially Kodachrome, but that's about the only support I'll give to EK. It's not that I don't wish Kodak well, but I think they are actually missing an opportunity to secure themselves as an important player in a niche area, i.e. film.

That said, I'm slightly optimistic that Konica/Minolta may be building a digital Hexar RF. I think that's good for b&w, because I can't imagine RF users accepting a D-RF that doesn't give good b&w out of the camera.

IOW, I'm resigned to the move to digital, but I'll go kicking and screaming because I can, and it will be fun to make the noise. 😉

Trius

KM announced a new cheaper DSLR a couple of days ago. They've got a good thing going with their anti-shake body, compared to anti-shake lenses of Canon and Nikon. Makes sense.

I also agree with your sentiment about kicking and screaming. It is a lot of fun.

Best Regards,

Bill Mattocks

PS - Look for Olympus to merge with Sony. You heard it here first.

 

[bmattock]

Eh, it's becoming a niche market. Just as there is enough demand for, say, oil paints for that type of art there will be enough demand for companies to produce film. There are billions of people in the world for whom digital won't be cheap enough for a long time to come as well. Kodak may get out of film soon (though I doubt it. The equiptment exists and the R&D is long since paid off. It's as close to pure profit as a product gets.) but even so, there will be room for Bergger, Efke, Foma, Lucky, even Illford for quite some time to come.

Dead? No. Different? Yep. Not really any bigger a problem than for those who only liked Super-XX or Verichrome Pan once upon the day. Or one could do as these two did http://www.michaelandpaula.com/mp/tech.html and buy up all of the remaining supply of your favorite emulsion when Kodak does stop making it.

So it goes.

William

William,

Difference in semantics - from my point of view - 'dead' means 'no more improvements, no more expansion, continually contracting market share.' Not 'no longer extant.'

There are enough descendants of dinosaurs around (birds, reptiles, etc) that one could say that dinos are not really dead. But face it, they're extinct. T-Rex won't be making a comeback.

Call film an 'evolutionary dead end' instead of 'dead' and that might be a more apt description of how I think of film when I say it is 'dead'.

And remember, I'm still a big fan of film. I intend to stockpile it, use it, and I prefer it for many things over the digital equivalent. I am one of those who still thinks that some LPs sound better than some CDs. But that doesn't make LPs any less dead. Oops, well, they still make LPs, right? Well yes, but there are no new record stores opening up. Dead is dead. Niche is dead - at least under my description of dead.

I'm not against film or for digital. I just read the headlines and try to interpret the tea leaves.

Best Regards,

Bill Mattocks

 

[GeneW]

Think we can get them to make an R2-D2? Hehehehehe.

Best Regards,

Bill Mattocks

Bill, I'd buy one in a flash if it had that name. I hope the sound effects are built in 😀

Gene: That's a spiffy new avatar photo you have there!

Trius

Thanks, it was time to ditch the cat 😀

Gene

 

[wlewisiii]

Ah, I see where we're missing each other. I'm fine with the emulsions that exist and as long as they continue to exist, I'm satisfied. It would be nice if someone continues to advance the state of the art (and my understanding is that Fuji is still investing in color film R&D), but it's not especially necessary for my personal world. As long as I can buy a decent quality panchromatic film in 135, 120 & 4x5, I'm a happy camper and film is, to my definition at least, not dead.

That said, I see your position a bit clearer now and I can understand that approach as well. As well, I'd like to thank you for posting these news stories. I find them very helpfull in understanding what it happening in the industry.

William

 

[tetrisattack]

First of all, there are new record stores opening up. I buy vinyl all the time! More and more indy artists are pressing records, and shockingly, the vinyl is often cheaper than the CD. It's not some sort of growth industry but there's a demand and a supply to meet it. I see film going the same direction, which isn't such a bad prospect after all.

In that PI article you cited (a paper dear to me, seeing as how I drive past their huge electric globe all the time), people would do well to note the final paragraphs:

"Seattle has a few traditional photo labs that continue to optically print both color and black-and-white images. And, in an ironic twist, they're flourishing.

At Panda Photographic Laboratories Inc., on lower Queen Anne, revenue has increased this year as the 12-person company picks up business from shuttered color labs elsewhere in the city, said co-owner Dana Drake."

Well, alright, that paragraph was mostly about color photography, but I remain optimistic that b&w materials will be available for some time to come. The market's deflating but I doubt it'll evaporate. In fact, I keep hearing about newcomers to b&w photography asking questions about how to develop at home, which has to be worth something.

 

[XAos]

Bill, I'd buy one in a flash if it had that name. I hope the sound effects are built in 😀
Gene

Noooooooooooo

Don't you remember the first wave of inexpensive digital cameras? How soon we forget, I had this Intel that played shutter noises and motor drive sounds which had to complete before it would take the picture.

 

[DerekF]

My big worry is that my favorite films won't be available in five to 10 years. I appreciate the capabilities of digital and all, but I still find film far more satisfying with which to shoot, from a hobbyist standpoint. With Kodak's ongoing troubles and the fact that they have a policy of completely winding down their film division over the next several years, will Tri-X still be available? Will HP5+ still be available? I don't know much about the costs of producing film, but even if the R&D is already all paid off and making film is relatively cheap, it still costs money to run a factory (capital costs, salaries, inventory...) and distribute the film to retailers and/or end users. I'm willing to pay a little extra for film (in fact, I already do since the local camera shop started charging more per roll of Tri-X last year), but that won't help if (when) Kodak decides to stop producing film. And once that happens, you can bet that many others will follow suit, especially since that would probably just cement the demise of film-based photography in the minds of average consumers (who, like it or not, are the ones who are, and will continue to, dictate the direction of this market).

I've often wondered whether the analogy of photography to painting was appropriate when some people argue why film won't die.. painting requires paints and brushes, which are already readily available anywhere (not just art shops) and can be used for a number of different purposes aside from art-making. Film, OTOH, is a specialized medium. It requires a darkroom of some sort to process it and to actually produce prints, which most people do not have. It doesn't have the same global applications that paints and brushes do. So once the film companies stop making film, the mini-labs will likely follow suit within months or years. And when that happens, film photography will become even less accessible to the average consumer or even the hobbyist who can't set up her own darkroom for one reason or another. And so it goes... A niche market, maybe, but how big must that niche remain before it simply becomes too unprofitable for any company to produce even a small quantity of high-quality film?

Wow, talk about a tangent! 😀 All that to say, the news out of Kodak this morning does not seem to be a very good sign of things to come... 🙁

PS: Yes, I know that Ilford produces HP5+; it was more of a general statement about the films I use.

 

[canonetc]

"The important bit here - moving faster from point-n-shoot digicams to digital slrs, and introducing three models per year - the move away from film for the enthusiast (SLR users) is picking up speed." - Bill Mattock partial quote

Introducing three models per year is part of the problem. Too many digital cameras to choose from. They're wasting money making more cameras that do basically the same thing instead of investing in one inexpensive, full-frame rangefinder with 8.2 megapixels and TRUE noiseless black-and-white!!

All they have to do is read this forum to know what to invest in. Maybe Kodak should get out of the stock market and go private. No need to please investors anymore!!

C.

 

[Ted Forbes]

How expensive is it to produce film and chemicals? I agree - the R&D is long since paid off... I agree that its a niche market already.

I honestly don't know how expensive this stuff is to produce, I assume not much. If Kodak can stay in business at all... their digital stuff seems cheesy...

 

[bmattock]

First of all, there are new record stores opening up. I buy vinyl all the time! More and more indy artists are pressing records, and shockingly, the vinyl is often cheaper than the CD. It's not some sort of growth industry but there's a demand and a supply to meet it. I see film going the same direction, which isn't such a bad prospect after all.

In that PI article you cited (a paper dear to me, seeing as how I drive past their huge electric globe all the time), people would do well to note the final paragraphs:

"Seattle has a few traditional photo labs that continue to optically print both color and black-and-white images. And, in an ironic twist, they're flourishing.

At Panda Photographic Laboratories Inc., on lower Queen Anne, revenue has increased this year as the 12-person company picks up business from shuttered color labs elsewhere in the city, said co-owner Dana Drake."

Well, alright, that paragraph was mostly about color photography, but I remain optimistic that b&w materials will be available for some time to come. The market's deflating but I doubt it'll evaporate. In fact, I keep hearing about newcomers to b&w photography asking questions about how to develop at home, which has to be worth something.

As markets contract, there are often opportunities for small businesses to pick up profitable niche areas - boutiques, as they're often called. This is seen by the those who wish their market was not dying as a sign of revival - but sadly, it ain't.

For LPs and small high-quality photo labs - there will be opportunies. But the market will continue to shrink. In smaller cities and towns - no chance of survival at all - and I wish that wasn't true, but it is.

Ilford has positioned themselves to assume the mantle of B&W champions of the western world, since Kodak appears to be floundering and/or abdicating. They're circling the wagons and concentrating on their core business. Great stuff. They'll be gone in less than 10 years. My prediction, sorry.

As you say, niche markets are not bad things. My take on traditional film photography is that it is moving rapidly from the mainstream into the niche, where it will survive for a very long time, more or less intact. But I don't see a lot of R&D money poured into chemically-based photography - that's over. And as the last of 'us' get old and give it up, there goes film. The only interest our grandkids will have in film is as a historical curiosity - there will be villages where tourists can go and see a guy dressed like Ansel Adams talk about LF photography and actually (gasp) develop a film plate with chemicals and produce a print.

Any new covered wagon dealers open up in your town lately? Didn't think so! 😀 😀 😀

All in fun,

Bill Mattocks

 

[bmattock]

How expensive is it to produce film and chemicals? I agree - the R&D is long since paid off... I agree that its a niche market already.

I honestly don't know how expensive this stuff is to produce, I assume not much. If Kodak can stay in business at all... their digital stuff seems cheesy...

Actually, I admire Kodak. They are making the hard decisions up front - even though it hurts their valued and loyal workforce, if they close their doors, that helps no one. They screwed up by not moving into digital faster - they know that now, and they're moving as fast as they can in that direction. And this is a hundred-year-old plus company, trying to reinvent themselves.

I think they have a winner by concentrating on their original core market - the happy-snap and family photo crowd. That's the biggest market, after all.

Kodak started with 'press the button, we do the rest' and now they're trying to do a digital Brownie all over again. I cheer for them.

If they want to re-emerge into the pro and semi-pro arenas after they get their house in order, then more power to them - they've still got the size, the science, the name brand recognition. But for now, the basics.

Best Regards,

Bill Mattocks