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Kodak quits printers, wants new deadline

2:13 PM, Sep 29, 2012   |    comments
(Photo by Kevork Djansezian/Getty Images)
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by Matthew Daneman, USA TODAY
ROCHESTER, N.Y. -- After spending untold hundreds of millions of dollars creating a new line of business in desktop inkjet printers, Eastman Kodak is pulling the plug.

The struggling printing and imaging company on Friday said that it would shift its focus in 2013 on ink sales to printers it has sold, the most profitable part of that business, and stop selling printers, where competitive forces narrow margins considerably.

Kodak also said Friday it was asking federal bankruptcy court for more time to put together a Chapter 11 bankruptcy reorganization plan.

Such plans -- which ultimately have to be approved by the court -- spell out how a reorganized company will operate after bankruptcy and what steps it will take to make creditors as whole as possible.

According to Kodak, it is seeking a Feb. 28 deadline. That raises the likelihood that Kodak's much-repeated intention to get out of Chapter 11 early in 2013 won't happen and that such an emergence -- if it happens--- would come sometime in the second or third quarter of the year.

Since filing for Chapter 11 bankruptcy protection in January, Kodak has made a number of huge sweeping changes to its business to raise money and cut costs, from shutting down its digital camera business and selling its online Kodak Gallery operations.

The company currently has a variety of other business lines up for sale, including document scanners and still camera film.

It has laid off 2,700 people worldwide so far this year, and said Friday it plans to lay off another 1,200 - 200 more than previously announced.

Not least of all, Kodak also said Friday that it is in negotiations to find "a fair, equitable and permanent resolution of Kodak's U.S. retiree benefit liability, which amounts to approximately $1.2 billion.

The company has long talked about profits in desktop inkjet printers being in so-called consumables, such as the ink, and Kodak says that getting out of the printer business "will significantly improve cash flow in the U.S. beginning in the first half of 2013."

The inks used in Kodak's desktop inkjet printers are manufactured at Eastman Business Park. The shutdown of the printer line points to a major and abrupt shift in Kodak's business plans.

In recent years, Kodak has continually pointed to desktop inkjet printing -- along with commercial printing, packaging printing and printer workflow software -- as the four legs that would be its foundation in a post-film, digital world.

As recently as August, Kodak's plans after bankruptcy included desktop inkjet printing as one of its anchors. But Kodak's move comes as the desktop printer market suffers from slipping sales.

Daneman also writes for The Rochester Democrat and Chronicle

USA TODAY

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