As Kodak struggles, Eastman Chemical thrives
NEW YORK: George Eastman is best known as the inventor of photographic film and founder of Eastman Kodak Co, but his century-old legacy of entrepreneurship now rides on the lesser-known Eastman Chemical Co.
That was hardly the case in 1994, when Eastman Kodak spun off its chemicals business to help pay down debt. At that time, Kodak was still a colossus in photography whereas Eastman Chemical was a small player very much in its parent's shadow.
But because of a sea change in digital technology and different approaches to business, Eastman Chemical's stock market value has since increased 71 percent to $5.5 billion today, while Kodak's has plummeted 99 percent to about $185 million.
Interviews with former executives, retirees and analysts describe two companies that were polar opposites in many ways, despite their shared heritage: where Eastman Chemical was swift to move into new markets, Kodak rested on its laurels for too long; where Chemical had a management team obsessed with the bottom line, Kodak retained cushy employee benefits even when the advent of digital cameras caused film demand to crater.
Speculation flared in September that Kodak was on the verge of bankruptcy, after the Rochester, New York-based company hired restructuring experts. Last month, Kodak warned that unless it could raise $500 million in new debt or sell some patents in its portfolio, it might not survive 2012.
"George Eastman's legacy will be Eastman Chemical and not Eastman Kodak," said Willy Shih, a Harvard Business School professor who ran Kodak's digital imaging business from 1997 until 2005. "I am absolutely convinced of that." (Reuters)
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