Rochester, N.Y. - Former Kodak spokesman Paul Allen retired from the company ten years ago, and says with considerable pride that he’s been putting much greater focus on his grandchildren than on the company he served for 32 years.
But recent headlines about Kodak running short on cash, a possible selling of patents, and even reports of a possible bankruptcy filing have been hard for the former insider to ignore.
He spoke with me about the company’s troubles and what he hopes will happen next. He also offered his own analysis and opinions about what made the company great in the first place, and some of the decisions that sparked its decline starting in the 1980s.
Allen believes the best course for Kodak would be to remove the so-called poison pill, a provision designed to block any hostile takeover.
He says a friendly takeover would be preferable to a bankruptcy filing because he believes it would allow the company to get top dollar for its assets, and preserve the brand. Allen fears that current management could be trying to protect its own severance packages if it files for bankruptcy protection.
“Kodak needs to find a friendly buyer and lift the poison pill they have in place” Allen says. “A friendly buyer could provide the resources they need to continue those businesses that are viable going forward, and to get top dollar for the company's technology and intellectual property.” Allen says “A bankruptcy cannot provide any of these resources. It can only provide protection from their creditors and a nice severance package for executives.”
Allen also spoke at length about a 1984 reorganization that he believes hurt the company. Allen says “ you had 17 vice presidents walking around doing their own thing.”
Allen says some key people at Kodak saw digital coming, but some could not see how quickly it would change the way we took pictures.
He also reminisced about some of the great technology developed by Kodak that never realized its potential in the marketplace.
Allen says “I can remember writing sales and earnings releases in the early 1970s. And every quarter it was sales up 30 percent, earnings up 40 percent.”
He says, “Kodak went from a company that seemed like it could do nothing wrong, to a company that couldn't seem to get it right. It was particularly frustrating in the 80s and 90s because you had all this wonderful technology coming out of the research labs and the company simply couldn't commercialize it.”
Allen singled out three CEOs as always having the company’s interests in mind as they made some difficult decisions.
“Back in the early 80s when Kodak first started to stumble, Walter Fallon and Colby Chandler and Kay Whitmore came under a lot of fire because things weren't going right,” Allen says.
“But I'll tell you one thing about those three. Every business decision they made was made considering the best move for Kodak to preserve the company to protect it, and try to keep things growing. Never did any one of those people ever base a business decision on someone's bonus.”
Allen compares Kodak’s founder, George Eastman, with the late Apple founder Steve Jobs.
“He was a visionary” Allen says of Eastman. “He developed the technology. Or actually advanced the technology, it was a technology that already existed. He advanced it - made it simple. And in the process of doing that he saw what the consumer could do that the consumer couldn't see. Very similar to Steve Jobs. He built the company much the way that Steve Jobs built Apple, absolute control over everything because he wanted top quality.”
Allen spoke of very difficult times, especially when he had to be the face of Kodak for layoff announcements. Allen’s father and father-in-law were both Kodak workers, and he had hundreds of friends in the company. He says job cuts were necessary for Kodak’s long-term survival, but when Kodak started cutting younger employees just short of their retirement eligibility, it was time for him to leave.
Like so many in this community, Paul Allen hopes for the best outcome for his former employer. Meantime, he’s traveling a lot, and enjoying good times with those grandkids. And like so many of us, he’s recording those moments on a digital camera.
For a longer version of the interview I had with Paul Allen, click here.
Doug Emblidge, Reporter