500 area Kodak jobs in limbo

Ty Greenlees/Staff photographer Aerial view of the Eastman Kodak facility in the Miami Valley Research Park.

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An unidentified person enters Kodak Headquarters in Rochester, N.Y., Thursday, Jan. 5, 2012. Eastman Kodak Co. said early Thursday Jan. 19, 2012 it has filed for Chapter 11 bankruptcy protection, as it seeks to boost its cash position and stay in business. (AP Photo/David Duprey)

Kodak bankruptcy leaves questions for local operations

By Thomas Gnau, Staff Report Updated 9:25 AM Friday, January 20, 2012

Eastman Kodak Co.’s filing for Chapter 11 bankruptcy Thursday sets in motion a chain of events that could ultimately determine the economic fate of hundreds of local Kodak employees, contractors, retirees and suppliers.

The Rochester, N.Y.-based company — a pioneer in film and camera development and for a time one of the proudest names in American commerce — filed papers early Thursday seeking protection from creditors while it reorganizes. The 132-year-old company and the bankruptcy court must now decide what businesses, workers and practices Kodak should keep and how can it best compete as a smaller entity.

Kodak considers its operations at the Miami Valley Research Park in Kettering essential to the company’s future. More than 500 employees and contractors work there developing and building commercial inket printers, large systems capable of cranking out 4,000 digital-format, photo-quality pages a minute at a cost of less than one cent a page.

The Kettering operation has grown to become Kodak’s second-largest collection of assets outside of the company’s headquarters in Rochester, officials have said.

“Our commercial inkjet business is one of the company’s four key growth initiatives, and Dayton is its home,” Christopher Veronda, a Kodak spokesman, said Thursday shortly after the company filed its bankruptcy papers.

Independent analyst Mark Kaufman, who follows Kodak, said the company is focused on commercial inkjet printers.

Mark Schwieterman, Kettering city manager, said he is confident that Kodak wants to preserve its local printing operation.

“We are part of their future,” he said.

Bruce Pearson, president and chief executive of Miami Valley Research Park, was also confident that Kodak will continue with its inkjet printing work.

“This operation in the research park is core to what Kodak wants to be,” Pearson said.

Kodak said Thursday it has obtained $950 million in funding from Citigroup to help it operate during the reorganization.

“Kodak is taking a significant step toward enabling our enterprise to complete its transformation,” CEO Antonio Perez said Thursday. “We look forward to working with our stakeholders to emerge a lean, world-class, digital imaging and materials science company.”

Still, much depends on how much Kodak’s assets are worth and which assets are retained as continuing

operations, said Jeffrey Morris, a University of Dayton School of Law professor and an authority on corporate bankruptcies.

There are also the questions of what happens to Kodak’s health care and pension benefits and what role, if any, the federally backed Pension Benefit Guaranty Corp. will play. The PBGC insures and sometimes takes over private employee pension plans, often paying only a fraction of the expected pension payments.

Kodak’s suppliers must adapt to the bankruptcy as well. Kodak needs supplies to operate and generate revenue, but suppliers could become hesitant to extend credit to the company. UD’s Morris said suppliers can demand “cash on delivery” for services and deliveries, but that might be a risky if Kodak finds other suppliers.

Some of the next important steps for Kodak may involve its pursuit of patent infringement lawsuits against Apple and other companies before the U.S. International Trade Commission, Kaufman said. Perez has said he hoped Kodak could draw up to $1 billion through that legal action.

More about Kodak

• Kodak restructuring took effect Jan. 1. It placed the commercial inkjet printing press business in Kodak’s digital and functional printing group, under the commercial business segment. The other business unit in the new alignment is the consumer segment.

• Kodak’s operation in Kettering includes production, marketing, research and development for commercial inkjet printers that are sold in the United States and overseas. Customers use the equipment to print everything from utility bills to lottery tickets to government reports. It signed a long-term lease, which typically lasts for at least five years, in the fall of 2011 for the 320,000-square-foot building it occupies in the research park.

• The local operation is one of Kodak’s key initiatives, company spokesman Chris Veronda said.

Source: Dayton Daily News

Key events in the history of Eastman Kodak Co.

1880 - George Eastman begins commercial production of dry plates for photography in a rented loft of a building in Rochester, N.Y.
1888 - The name “Kodak” is born and the Kodak camera is marketed with the slogan, “You press the button, we do the rest.”
1889 - The Eastman Company is formed, taking over the assets of the Eastman Dry Plate and Film Company.
1892 - The company becomes Eastman Kodak Company of New York.
1900 - The first Brownie camera is introduced. Selling for $1 and using film that costs 15 cents a roll, it brings hobby photography within financial reach.
1929 - The company introduces its first motion picture film.
1935 - Kodachrome film is introduced and becomes the first commercially successful amateur color film.
1951 - The low-priced Brownie 8mm movie camera is introduced, followed by Brownie movie projector in 1952.
1962 - The company’s U.S. consolidated sales exceed $1 billion for the first time. Its work force tops 75,000.
1963 - Kodak introduces a line of easy-to-use Instamatic cameras with cartridge-loading film (selling more than 50 million by 1970).
1972 - Five pocket-size Instamatic cameras that use smaller cartridges are launched. More than 25 million cameras sell in less than three years.
1975 - Kodak invents the world’s first digital camera. The toaster-size prototype captures black-and-white images at a resolution of 10,000 pixels (.01 megapixels).
1981 - Company sales surpass the $10 billion revenue mark. The next year, hometown payroll peaks at 60,400.
1984 - Kodak enters the video market with the Kodavision Series 2000 8mm video system and introduces Kodak videotape cassettes in 8mm, Beta and VHS formats, along with a line of floppy disks for computers.
1988 - Global payroll peaks at 145,300.
1992 - Kodak launches a writeable CD that its first customer, MCI, used for producing telephone bills for corporate accounts.
2003 - Launch of Kodak Easyshare printer dock 6000, which produces durable, borderless 4-by-6-inch prints.
2004 — Kodak begins digital makeover, the same year it gets ejected from the 30-stock Dow Jones industrial average. It cuts tens of thousands of jobs as it closes factories and changes businesses.
2008 — Kodak begins mining its patent portfolio, which generates nearly $2 billion in fees over three years.
2010 — Kodak sues Apple and Research in Motion before the U.S. International Trade Commission, claiming the smartphone makers are infringing its 2001 patent for technology that lets a camera preview low-resolution versions of a moving image while recording still images at higher resolutions. Global employment falls to 18,800.
July 2011: Kodak begins shopping around its 1,100 digital-imaging patents.
September 2011: Kodak hires Jones Day, a law firm that lists bankruptcies and restructuring among its stop specialties.
December 2011 — Judge extends camera patent dispute into 2012.
January 2012 – Kodak files for Chapter 11 bankruptcy protection
2013: Kodak expects to complete its U.S.-based restructuring.