Kodak Sale Of Assets To Impact Local Workers
By: Mark Gruba
Updated: August 24, 2012
Kodak announced Thursday it will sell off its personalized imaging and document imaging businesses to help raise money for the company as it works toward emerging from Chapter 11 bankruptcy.
The move will impact an unspecified number of employees in the Rochester area.
Kodak CEO Antonio Perez said the company is selling its profitable kiosk and scanner businesses to raise much needed cash. "Ensuring that Kodak has sufficient funding for a successful emergence is obviously critical," Perez said during a conference call while on a business trip in Europe. "The sale of these businesses are important components in this regard."
Although profitable, the businesses do not fit Kodak's strategic vision going forward. "You throw overboard what doesn't fit, and in the Kodak of the future photo printing is not going to fit," said financial analyst George Conboy of Brighton Securities.
Kodak wants to focus primarily on commercial, packaging and functional printing solutions and enterprise services. "These are segments of our business that are very large, segments that have long term growth opportunities and where our capabilities are well matched with the needs of the market," said Perez.
The CEO said the decision to sell the businesses was made prior to the patent auction. On that front, Perez offered little insight into the continuing negotiations. "We expected this to be a complex process, and it has been all of that and more," he said.
An unspecified number of Rochester area employees will be impacted by the sale of the kiosk and scanner divisions. Those we saw Thursday leaving work said very little, except that they weren't surprised by the news, which was announced through an email late in the afternoon.
As it relates to local employees in the two businesses, Conboy envisions two potential scenerios. "One is that the buyer wants to keep in place a skilled and knowledgeable workforce, the other is that the buyer wants to take the business and fold it in with an existing business," he said. "In the first scenerio they keep the workers, in the second scenerio they don't, and right now we don't know which that's going to be."
EKRA President Art Roberts said he is not surprised Kodak is selling two healthy and profitable businesses during its bankruptcy restructuring. He believes the businesses will generate lots of interest and fetch a good price on the open market. As for how the sales will impact the legacy benefits for retirees, Roberts said that remains to be seen.
The move will impact an unspecified number of employees in the Rochester area.
Kodak CEO Antonio Perez said the company is selling its profitable kiosk and scanner businesses to raise much needed cash. "Ensuring that Kodak has sufficient funding for a successful emergence is obviously critical," Perez said during a conference call while on a business trip in Europe. "The sale of these businesses are important components in this regard."
Although profitable, the businesses do not fit Kodak's strategic vision going forward. "You throw overboard what doesn't fit, and in the Kodak of the future photo printing is not going to fit," said financial analyst George Conboy of Brighton Securities.
Kodak wants to focus primarily on commercial, packaging and functional printing solutions and enterprise services. "These are segments of our business that are very large, segments that have long term growth opportunities and where our capabilities are well matched with the needs of the market," said Perez.
The CEO said the decision to sell the businesses was made prior to the patent auction. On that front, Perez offered little insight into the continuing negotiations. "We expected this to be a complex process, and it has been all of that and more," he said.
An unspecified number of Rochester area employees will be impacted by the sale of the kiosk and scanner divisions. Those we saw Thursday leaving work said very little, except that they weren't surprised by the news, which was announced through an email late in the afternoon.
As it relates to local employees in the two businesses, Conboy envisions two potential scenerios. "One is that the buyer wants to keep in place a skilled and knowledgeable workforce, the other is that the buyer wants to take the business and fold it in with an existing business," he said. "In the first scenerio they keep the workers, in the second scenerio they don't, and right now we don't know which that's going to be."
EKRA President Art Roberts said he is not surprised Kodak is selling two healthy and profitable businesses during its bankruptcy restructuring. He believes the businesses will generate lots of interest and fetch a good price on the open market. As for how the sales will impact the legacy benefits for retirees, Roberts said that remains to be seen.
