Business

Kodak's bankruptcy captures a moment

Empty employee parking lots surround Kodak headquarters in Rochester, N.Y. The company, which filed for Chapter 11 Thursday, is hoping it can emerge from bankruptcy as a new powerhouse built around printers and ink.
Empty employee parking lots surround Kodak headquarters in Rochester, N.Y. The company, which filed for Chapter 11 Thursday, is hoping it can emerge from bankruptcy as a new powerhouse built around printers and ink. AP

ROCHESTER, N.Y. — Kodak's moment has come and gone.

The glory days when Eastman Kodak Co. ruled the world of film photography lasted for more than a century. Then came a stunning reversal of fortune: cutthroat competition from Japanese firms in the 1980s and a seismic shift to the digital technology it pioneered but couldn't capitalize on. Now comes a wistful worry that this icon of American business is edging toward extinction.

Kodak filed for Chapter 11 bankruptcy protection Thursday, raising the specter that the 132-year-old trailblazer could become the most storied casualty of a digital age.

Already a shadow of its former self, cash-poor Kodak will reorganize in bankruptcy court, as it seeks to boost its cash position and stay in business. The company is pinning its hopes on peddling a trove of photo patents and morphing into a new-look powerhouse built around printers and ink.

Even if it succeeds, it seems unlikely to ever again resemble what its red-on-yellow K logo long stood for — a signature brand synonymous in every corner of the planet with capturing, collecting and sharing images.

"Kodak played a role in pretty much everyone's life in the 20th century because it was the company we entrusted our most treasured possession to — our memories," said Robert Burley, a photography professor at Ryerson University in Toronto.

Its yellow boxes of film, point-and-shoot Brownie and Instamatic cameras, and those hand-size prints that made it possible for countless millions to freeze-frame their world "were the products used to remember — and really define — what that entire century looked like," Burley said.

Through the 1990s, Kodak spent $4 billion on developing the photo technology inside most of today's cellphones and digital devices. But a reluctance to ease its heavy reliance on film allowed rivals like Canon and Sony to rush largely unhindered into the fast-emerging digital arena. The immensely lucrative analog business Kodak worried about undermining too soon was virtually erased in a decade by the filmless photography it invented.

Kodak has notched just one profitable year since 2004. At the end of a four-year digital makeover during which it dynamited aged factories, chopped and changed businesses and eliminated tens of thousands of jobs, it closed 2007 on a high note with net income of $676 million.

It soon ran smack into the recession — and its momentum reversed.

Its stock, which topped $94 in 1997, skidded to less than $1 a share for the first time and, by Jan. 6, hit an all-time closing low of 37 cents.

Kodak has focused its future on new lines of inkjet printers that it says are on the verge of turning a profit. It expects printers, software and packaging to produce more than twice as much revenue by 2013 and account by then for 25 percent of the company's total revenue, or nearly $2 billion.

CEO Antonio Perez said in a statement Thursday that the bankruptcy filing was "a necessary step and the right thing to do for the future of Kodak." The company has secured $950 million in financing from Citigroup, and it expects to be able to operate its business during bankruptcy reorganization and pay employees.

The bankruptcy filing in the Southern District of New York does not involve Kodak's international operations.

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