Eastman Kodak (EKDKQ.PK), in bankruptcy with its shares destined to be worthless, is finally starting to make the moves that might have helped it avert this fate had failed CEO Antonio Perez undertaken them sooner. The company announced Thursday that “it plans to phase out its dedicated capture devices business." Perhaps part of its failure lies in its insistence on using obtuse language to describe its actions and products. Dedicated capture devices business? Does McDonald’s (MCD) speak of its “animal derived protein-based human consumables business?" Even the Postal Service doesn’t talk about cutting “physical object routing and transmittal personnel."
With bankruptcy rumors swirling late last year, Kodak’s defenders were talking about imagined strength in Kodak’s digital camera business. With the company killing this business and saving $100 million per year by doing so, we now see that many of the rosy claims made about Kodak were not grounded in reality. One wonders why the company is continuing its struggling consumer printer business.
Long ago, the company split into a chemicals business and an imaging business. Its brand was once synonymous with photographs, though the cameras were often made by others. The company needs to return to these roots and pursue an asset-lite “Kodak-inside” business model, licensing its brand, intellectual property, and components for inclusion in others' products.
Disclosure: The author holds no position in any stock mentioned