I worked for Creo when it was acquired by Kodak in 2005 for $1B and then later for Kodak for quite a few years. At the time Kodak still had cash but film was obviously in decline. This acquisition was part of a $3B acquisition spree.
Kodak's mangement proceeded to run Creo into the ground through a series of layoffs, remote micromanagement, shuffling things around etc. At the time of the acquisition Creo was profitable (though definitely with some challenges) and had a few growth initiatives that looked promising (all cancelled). Very capable management, good people, and well run. There were a lot of opportunities to create some long term value in different areas but the only Kodak strategy was to keep cost cutting and milk all the businesses to their death.
What was amazing to me is that the CEO kept his job even after Kodak's market cap went below $1B. I forget what that market cap was at the time of the acquisition but probably in the $10-$20B range. Gotta be one of the top ten value destroying CEOs of all times.
For many many years it didn't matter what management did, film kept printing money for the company. Only when things changed you could tell that management was actually incompetent. Before that you didn't need to be competent to keep making money. Kind of like Warren Buffet says, only when the tide goes out you find who is swimming without their bathing suits...
I just saw something on Bloomberg the other day about Kodak finally getting some anti-counterfeiting technology that AFAIK is the same one developed in Creo over 10 years ago (Traceless) released.
EDIT: Another personal anecdote is that the first "real" digital camera I ever used, I'm guessing around 1996, was a Kodak. It was pretty decent. I think the price tag was quite high. At that point in time Kodak had a good reputation in digital cameras. The problem is digital cameras would never replace film as a business even if Kodak went 100% into digital. They needed to diversify.
For context, Creo is the company founded by Dan Gelbart, the extremely accomplished guy who built a micron-precision metal-cutting lathe out of granite in his house: https://www.youtube.com/user/dgelbart
"The problem is digital cameras would never replace film as a business even if Kodak went 100% into digital. They needed to diversify."
In my short time in business, I have noticed how rare it is for a company to successfully get smaller and survive- even when the obvious business is going away.
If you have 1000 mid-level managers, how many of them can you get on board with a plan to end up with 300 mid-level managers? The ones who do not get on board are a huge cost that your competitors don't have to offset in their top line.
Kodak's mangement proceeded to run Creo into the ground through a series of layoffs, remote micromanagement, shuffling things around etc. At the time of the acquisition Creo was profitable (though definitely with some challenges) and had a few growth initiatives that looked promising (all cancelled). Very capable management, good people, and well run. There were a lot of opportunities to create some long term value in different areas but the only Kodak strategy was to keep cost cutting and milk all the businesses to their death.
What was amazing to me is that the CEO kept his job even after Kodak's market cap went below $1B. I forget what that market cap was at the time of the acquisition but probably in the $10-$20B range. Gotta be one of the top ten value destroying CEOs of all times.
For many many years it didn't matter what management did, film kept printing money for the company. Only when things changed you could tell that management was actually incompetent. Before that you didn't need to be competent to keep making money. Kind of like Warren Buffet says, only when the tide goes out you find who is swimming without their bathing suits...
I just saw something on Bloomberg the other day about Kodak finally getting some anti-counterfeiting technology that AFAIK is the same one developed in Creo over 10 years ago (Traceless) released.
EDIT: Another personal anecdote is that the first "real" digital camera I ever used, I'm guessing around 1996, was a Kodak. It was pretty decent. I think the price tag was quite high. At that point in time Kodak had a good reputation in digital cameras. The problem is digital cameras would never replace film as a business even if Kodak went 100% into digital. They needed to diversify.