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bjbjLULU JUDY WOODRUFF: And finally tonight: a once-powerful American brand struggles to
stay relevant and in business. Hari Sreenivasan has the story. HARI SREENIVASAN: For decades,
Eastman Kodak dominated the world of film photography with its iconic yellow boxes of
film. But that was then; this is now. The photography pioneer filed today for Chapter
11, federal bankruptcy protection, after 132 years in business. CEO Antonio Perez. ANTONIO
PEREZ, Eastman Kodak Company: We're taking this step at this point in our transformation
in order to build the strongest possible foundation for the Kodak of the future. HARI SREENIVASAN:
At its peak, Kodak employed more than 60,000 people at its headquarters in Rochester, New
York. But trouble began in the 1980s, in the form of global competition from Tokyo-based
Fuji. Compounding the problems, Kodak was slow to shift from film in the 1990s as digital
technology emerged. In 2006, this video played at a business conference promised an aggressive
comeback effort. MAN: Kodak is back. They're taking this digital thing to a level undreamed
of, pioneering technology that will redefine the digital revolution. HARI SREENIVASAN:
But the troubles have continued. Kodak has been in the black only once since 2004. Its
Rochester work force has fallen to just over 7,000. And earlier this month, Kodak stock
closed at an all-time low of 37 cents a share. In a final blow, the company was unable to
sell some 1,100 patents in a bid to raise cash. Even so, a message today on the corporate
home page declared it's still business as usual while Kodak tries to reorganize. For
more, we turn to Julie Philipp, news director of WXXI Public Television in Rochester, New
York, where Kodak is headquartered. Thanks for being us. JULIE PHILIPP, WXXI-TV: You're
welcome. Good to see you. HARI SREENIVASAN: So, the first question is, why now? Was there
a particular event that forced Kodak to declare Chapter 11? JULIE PHILIPP: Well, I think the
idea was to declare a Chapter 11 before running out of money completely. The company already
owes so much to creditors, and many of the creditors were demanding cash on delivery,
meaning Kodak would have to cough up cash in order to get supplies, in order to stay
in business. And that cash was running low. They wanted to have enough to play around
with during bankruptcy. So they declared it in the middle of the night last night. HARI
SREENIVASAN: So, some analysts that are covering the company are also wondering what took you
so long, that this has been a very long and slow and painful decline, right? JULIE PHILIPP:
It sure has. As you mentioned in your report, in 1982 in Rochester, Kodak employed 62,000
people. I think that number is actually below 7,000 now. The company is not confirming that.
So, over 25 years, they have shed an awful lot of employees and a lot of businesses.
HARI SREENIVASAN: Now, on the one hand, the company was excellent at marketing, in the
sense that it's a household name. And when we think of Kodaks, we think of photographs.
JULIE PHILIPP: Mm-hmm. HARI SREENIVASAN: What did they crucially miss? JULIE PHILIPP: There
are a lot of armchair quarterbacks these days pointing at different things Kodak could have
done differently. Obviously, their slowness to adapt digital is a big one. They actually
invented the digital camera, but kind of stashed it away. Reports show that they were afraid
others would see it, and they were still making so much money off film that they decided to
hold off on that invention and keep the cash rolling in. And it was just too hard to turn
a 100-year-old company around quickly enough. HARI SREENIVASAN: Let's talk a little bit
about the relationship that Kodak has with Rochester. In some ways, it was a company
town. And Kodak was the company. JULIE PHILIPP: It was the quintessential company town. They
call it Ma Kodak or Pa Kodak. People really thought this company was going to take care
of them. And it did for a very, very, very long time. Their benefits are unmatched in
today's work force. And people really depended on it for their livelihood. It's very difficult
to find anyone in Rochester, unless they have just moved here, who doesn't have some connection,
either a family member or a business connection, to Kodak. Everybody has some connection to
the company. HARI SREENIVASAN: Because the decline has taken such a long time, there
are probably a lot of ripple effects. It's not that the doors closed in one day and everybody
was out of a job. What are some of the other impacts that -- how has Rochester changed
over time, as Kodak has gotten smaller? JULIE PHILIPP: Actually, there have been some really
positive impacts, because Kodak is really behind so many of the major educational, cultural,
philanthropic institutions that are still going fairly strong. They're much smaller
these days, perhaps, but they were started by Kodak or the Kodak employees. So it's had
a really positive impact. And on top of that, many of those employees who left the company
took information, ideas, learning with them, and they're starting new high-tech startups.
So we have a lot of smaller high-tech startups that are connected to Kodak ideas and Kodak
people. So they ve left a positive impact, though a much leaner, meaner, smaller impact
than the big Kodak days. HARI SREENIVASAN: And so if the company ends up having to close
its doors, 6,000 people out of work would still have a significant -- would put a strain
on Rochester. JULIE PHILIPP: It s still one of Rochester's larger employers, by no means
the largest anymore. So, yes, there will be -- we anticipate there will be some layoffs
as part of this bankruptcy proceeding. And that will put a strain on some of the services
in the community, yes. HARI SREENIVASAN: And what about the folks who are receiving retirement
pensions? Did they get any information today? JULIE PHILIPP: They're nervous. They were
not mentioned in the statement released by Kodak. The general expectation is pensions
are fairly safe, that Kodak has enough money to pay for those, and that money can't really
be touched during bankruptcy proceedings. There is some concern that pensions could
be frozen for a little while and there could -- maybe not be able to withdraw from them.
But, overall, the pensions are fairly safe. Other benefits such as health care benefits
might be at risk. They could pull those for retirees who weren't old enough to qualify
for Medicare. That could be a big hit to their wallet if they have to go out and buy their
own health insurance for a few years. HARI SREENIVASAN: Let's just clarify for folks.
Chapter 11 is not the same as Chapter 7. We are not talking about liquidation. How did
the company clarify that distinction today? JULIE PHILIPP: Right. They re talking about
a reorganization. They're talking about getting smaller, getting more efficient, really tightening
up the ship a bit. And they insist they're going to be in business throughout bankruptcy
and come out better on the other side. HARI SREENIVASAN: And so what was the mood around
Rochester today as you walked around, as you talked to people who all have these Kodak
connections? JULIE PHILIPP: Yeah, it's really funny. Everybody saw this coming, but no one
saw it coming. Everybody expressed some sort of mild shock, at least, a lot of sadness,
some anger, some bitterness particularly directed to some of the CEOs who came and went during
the transformation, took away their golden parachutes and didn't make things better for
Kodak. So it's a lot of sadness, I guess, would be the biggest emotion that we ve been
hearing. HARI SREENIVASAN: All right, Julie Philipp, news director at WXXI in Rochester,
thank so much for joining us. JULIE PHILIPP: You're welcome. urn:schemas-microsoft-com:office:smarttags
State urn:schemas-microsoft-com:office:smarttags City urn:schemas-microsoft-com:office:smarttags
place urn:schemas-microsoft-com:office:smarttags PersonName JUDY WOODRUFF: And finally tonight:
a once-powerful American brand struggles to stay relevant and in business Normal Microsoft
Office Word JUDY WOODRUFF: And finally tonight: a once-powerful American brand struggles to
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