The Global Economy in Turbulent Times

CHAPTER 146 Creative Destruction: “Kodak Moment” No More¹

En route to Harvard for the second time in mid-1976, I well recall the family’s visit to Disneyland. At strategic places, the catchphrase for a precious “Kodak Moment” is identified for photo-shoots promising an unforgettable moment captured in time. The delight in posing against Cinderella’s castle is one such “Kodak Moment.” My grandchildren will not experience this. Eastman Kodak Co. (Kodak) filed for Chapter 11 bankruptcy protection in New York on January 19, 2012. Under US law, this provision allows for an orderly process of restructuring under bankruptcy, while being kept afloat in business to protect the company from being ripped apart by creditors. The struggling icon ran short of cash needed to fund a long-sputtering turnaround.

The 131-year-old enterprise had struggled for decades to cope with heightened competition, disruptive technology, and crippling legacy cost obligations. As one commentator observed, Kodak ceded the photography market to competitors such as Nikon, Sony, and Canon. It hung onto its identity, film, and watched it fade away before its eyes. Kodak still hopes to continue in business with the aim of emerging in 2013 after using the bankruptcy court to restructure and sell off some of its treasure trove of patents. Basically, it intends to bolster liquidity, monetize nonstrategic intellectual property, and resolve unsustainable pension and health costs to enable the enterprise to focus on its ...