A story spanning more than 130 years could be coming to an end. Kodak, the iconic company known for its legacy in the photographic industry, may be on the verge of declaring bankruptcy, according to the company’s latest earnings report. But why is the company facing this situation? We tell you everything about its possible disappearance.
Why could Kodak shut down?
On Monday, August 11, Eastman Kodak Company released its earnings report, warning investors that it does not have committed financing or available liquidity to cover all its debts, which are estimated at \$500 million, meaning the business might soon be unable to continue.
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Kodak aims to improve liquidity by suspending payments on its pension plan. The company also stated it does not expect tariffs to have “significant repercussions” on its operations, since many of its products, including cameras, inks, and films, are manufactured in the United States.
Jim Continenza, Kodak’s CEO, highlighted in the quarterly report that despite the challenges of an uncertain economic environment, the company continues to advance its long-term plan during the second quarter.
However, Eastman Kodak shares dropped more than 7% in pre-market trading on Tuesday, reflecting investors’ concerns about recent decisions and market conditions.
This is not the first time the company has faced financial difficulties; in 2012, it filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code after failing to cover \$6.75 billion in debt.
In 2020, it managed to recover after the U.S. government selected it as a producer of pharmaceutical ingredients, which helped raise its stock price. Now, debts have once again outpaced its finances, and the company’s future remains uncertain. It is also unknown if the disappearance would affect other countries, such as Mexico.
Kodak’s History
At the end of the 19th century, London was the epicenter of the photographic industry, and George Eastman traveled there to obtain a patent for his plate-coating machine. The following year, he secured the patent in the United States, marking the beginning of his business venture.
In 1880, Eastman began producing dry plates in a rented space in Rochester, New York. He bought a used two-horsepower motor, although he only needed one, confident in the growth of his business. His innovation caught the attention of Henry A. Strong, who invested in the company, and together in 1881 they founded the Eastman Dry Plate Company. Eastman left his bank job to fully dedicate himself to the company and to improving photography through his research.
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The company quickly evolved: in 1884 it became the Eastman Dry Plate and Film Company, with 14 shareholders; in 1889 the Eastman Company was founded; and in 1892 the Eastman Kodak Company was officially established, headquartered in New York, followed by a New Jersey subsidiary in 1901.
Kodak built its success on four key principles: customer focus, mass production at low cost, global distribution, and extensive advertising. Eastman believed these elements were interconnected: large-scale production required wide distribution supported by advertising, and everything had to be aimed at satisfying consumer needs. This vision laid the foundation for Kodak to become a global photography giant.
What Does Kodak Manufacture?
Initially, the company was famous for its cameras and photographic films; however, it gradually diversified its offerings. Currently, it also manufactures and sells products such as:
- Traditional printing
- Digital printing
- Advanced materials and chemicals
- Brand licensing
