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The new Kodak

In a June 2010 interview with this newspaper, Chairman and CEO Antonio Perez observed that Eastman Kodak Co. was “a very successful company for 100 years that … stayed too long in the old path.” As Kodak’s leader, Mr. Perez saw his task as finding a way to recover from that mistake. “I have complete faith,” he said, “this is going to be the best turnaround in the industry that I’ve ever heard of.”

A year and a half later, in the early hours of Jan. 19, 2012, Kodak filed for Chapter 11 bankruptcy protection. In the eyes of many, Mr. Perez’s turnaround strategy had become a Hail Mary bid for survival. More than a few obits for the company were written.

Yet if all goes as expected, Kodak in a matter of days will emerge from Chapter 11 with another chance to achieve Mr. Perez’s goal of a return to sustained growth and profitability.

The skeptics, of course, were not entirely wrong. The “old Kodak” will no longer exist, though significant portions of it will live on, some under different ownership.

The “new Kodak” created through bankruptcy reorganization will be a much smaller and more narrowly focused company. It no longer will produce goods and services for consumers but will serve commercial imaging markets such as commercial printing, packaging and functional printing.

These markets are anything but small—in its reorganization plan, Kodak estimates their size at $720 billion—but that does not guarantee success. In fact, the company does not project a return to even marginal profitability until 2015.

Without question, this second chance for Kodak has come at a steep cost—to employees who have lost jobs, to creditors who will get pennies on the dollar or nothing at all, and to investors who will see the value of their shares wiped out.

But a business that employs several thousand people and generates more than $2.5 billion in annual revenues remains a significant asset to this community.

As noted here after its bankruptcy filing, Kodak’s struggles likely would not have surprised its founder. For all his success, George Eastman also faced repeated setbacks and knew the prospect of failure was always present.

Determination and not a little luck helped him to prevail. Let’s hope the new Kodak will possess both in good measure.



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