No, I'm not talking about political candidates this time. I'm talking about Eastman Kodak. The photography giant, practically synonymous with cameras for generations of Americans, filed for bankruptcy today, done in by the startlingly swift transition from paper* to digital photography. Kodak failed to see the change coming, then failed to adapt, and now it will pay the price.
Kodak's demise will trigger emotions for those of us that grew up in the days of 35mm film, but bankruptcy is the market's way of culling malinvestment and redistributing assets to more profitable ventures. It is a wholly natural part of doing business and should be welcomed, if not particularly enjoyed by those companies experiencing it.
But there should have been two companies taken down.
About midway down the article is this little note: "To keep the company operating while in reorganization, Kodak said it has
secured a $950 million debtor-in-possession, or DIP, financing with an
18-month maturity from Citigroup."
That would be the same Citigroup that received $45 billion in TARP funds two years ago. In contrast, Kodak's red ink amounts to slightly more than $1 billion.
Unfortunately, Kodak isn't one of those politically connected Wall Street power elites considered "too big to fail".
Too bad for Kodak.
Too bad for the rest of us that the public trough feeder, Citigroup, didn't go down as well.
*Remember paper photography? Kids nowadays have no idea what it was like -- loading a roll of film into a camera, dropping it off for development, waiting to see how the pictures turned out (if at all, sometimes). Kids in high school don't have photography classes, complete with darkrooms, red lights, stopper & fixer, and all that good stuff. Kinda sad.
1 comments:
What's sad is the fact that TARP or any kind of bailout even exist.
Post a Comment