Kodak announces manufacturing reductions in United States and China; 900 jobs cut

Kodak has announced that it is moving some things around and reducing it’s workforce by 900 people. Color paper will no longer be produced in Rochester NY. Consumer color paper will be moved to the facility in Colorado and professional color paper will be moved to the UK. Kodak will also trim back their film production facility in China and around the world. Film sensitizing will still be done in Rochester but then shipped to Mexico for packaging. With all the changes about 900 people will be let go from Kodak in Rochester and around the world. We expect to see these changes go into effect as early as this fall. It is a shame to see this happen but it makes sense to move things around to other facilities.

Kodak announces manufacturing reductions in United States and China; 900 jobs cut

Eastman Kodak Co., Rochester, N.Y., USA, will consolidate its worldwide manufacturing operations as part of its ongoing program to adjust to the accelerating decline in demand for consumer film and photographic paper. Pursuant to a restructuring program originally announced in January 2004 and expanded last month, and consistent with marketplace demand, current actions include:

• Consolidate color photographic paper manufacturing for North America at plants in Windsor, Colo., and Harrow, United Kingdom, resulting in the closure of an operation in Rochester by the end of October;
• Close by year-end an operation in Rochester that recycles polyester waste and part of an operation that processes polyester raw material in the manufacturing of Estar polyester film base. Kodak will purchase finished raw material and will contract to have polyester waste recycled by firms with resource recovery expertise;
• Reduce manufacturing capacity for consumer film products at its plant in Xiamen, China.

Together, these actions will result in a reduction in employment of about 900 positions, more than half in Rochester. Kodak is not breaking down that number more specifically, Charles S. Smith, director of Kodak's Worldwide Communications and Public Relations, told Newsline International.

Charges totaling about $153 million, primarily related to asset write-offs and separation benefits, will be taken related to the actions. None of these actions will impact Kodak's ability to continue serving worldwide customers with traditional film and paper products, says the company.

"These actions are regrettable because they impact our Kodak people whose performance has been outstanding, but they are necessary in light of the accelerated declines in consumer film and paper," said Daniel T. Meek, director of Global Manufacturing & Logistics. "We will continue to move aggressively to competitively position our operations and adjust our manufacturing footprint and capacity for the marketplace realities."

Meek noted that Kodak is committed to strengthening its leadership position in the three segments of the imaging market: consumer, health and graphic communications, both traditional and digital.

The consolidation in color photographic paper manufacturing means Kodak will not be making color paper in Rochester anymore, verifies Smith to Newsline International. Thermal media for digital imaging kiosk and printer docks will still be made in Rochester, N.Y., and in Windsor, Colo., he says.

The U.S. retail consumption of color photographic paper will be moved to the Colorado operation, notes Smith. A majority of the professional color photographic paper consumption in the United States will be moved to the United Kingdom operation, he explains, and all color photographic paper in Europe will come from the manufacturing operation in the United Kingdom.

The film consolidation in China will impact other worldwide film operations. The sensitizing of consumer film will still take place in Rochester, but the finishing and packaging will be done in Mexico for retailers in North and South America, explains Smith. One-Time-Use-Cameras will be assembled in Mexico for retailers in North America and Europe, he says.

As Kodak works its way through these changes over the next several months Smith expects there to be little or no affect on the inventory and supply chain process. "Hopefully this will be transparent to retail and professional customers," he explains.