By Tom Jacobs, The Motley Fool
The tent pole of Rochester, N.Y.'s economy for a hundred years -- Eastman Kodak -- has filed for Chapter 11 bankruptcy. Once, it was one of the world's most recognized brands, the Kodak yellow film box gracing shelves at every little roadside kiosk where you might stop to gas up on a family vacation or a finding-yourself college trek.
No longer. The film expired long ago, and now it's like the turntable and vinyl -- something for a micro-niche of specialists and fans of retro technology.
But for me and many others, Kodak's mindshare hasn't faded. It's personal. I was born and raised in Rochester; Kodak fed, clothed, housed, and educated me and my three siblings. Great Yellow Mother, indeed.
I lived the kid's Kodak dream. My dad, a 30-plus-year employee, surprised me with a Brownie (actual flashbulbs!) and then the first Instamatic (drop-in cartridges!). We had a Carousel slide projector and Super 8 movie gear. And all our film was developed at Kodak itself -- in just a couple of days! Can you imagine?
As a kid, I'd call my father at work sometimes, and he'd answer, "This is Jacobs." It sounded so professional, and he looked it, too... not a hair out of place, and always with two new suits a year from Bruce Macfarlane at The National's men's department. His picture was on his business card. Printed on Kodak shiny photo paper, of course.
The New Kid on the Block
The rumbles of change were barely felt at first. In a Rochester suburb, an unknown company called Haloid became Xerox, and the mimeograph was replaced by the Xerox machine.
The two companies seemed to employ the entire town. Around 1970, the newspaper did a two-page spread comparing the "Kodak man" to the "Xerox man" -- and sadly, I do mean "man." Kodak guys might go so far as a white belt and (shoot me now!) white shoes, but Xerox guys could let their hair grow a little. Some didn't even wear suits and ties!
Kodak wasn't officially nervous (even when its copier was late and then lost), but you could feel it. Xerox was the new, unchallenged, fast kid on the block who didn't even ask your name. Out of nowhere, two of my parents' friends retired in their early 40s on their Haloid stock, now zooming as Xerox.
My dad paid no attention. He would say proudly that Kodak spent a higher percentage on research and development than anybody. I knew his entire pitch by heart: With the top-ranked universities in town and down the road, Kodak was the place to work from Buffalo to Albany. If you went to school, had family, or married someone in Rochester, it was the top of the heap. If you had to endure the awful weather, at least you were at Kodak.
They paid well, too, as my dad reminded me when I grew my hair and called Kodak part of "The Establishment." He reminded me who fed, clothed, housed and educated all of us. It didn't take more than a year or two of college for me to get it.
Promises Were Kept... to Us
We were relieved when, despite Fujifilm and losing an antitrust case, Kodak could still provide my dad with a great pension when he retired in the late 1970s. But soon came the retirement offers to avoid layoffs.
My brother-in-law still worked there, and at every offer, my sister tore at her hair: "Why don't you take it? What if there isn't another one?" Eventually he grabbed what turned out to be the last offer. To our amazement, he chose the lump sum instead of a pension. Had he lost every last brain cell? Now, he looks smart.
I worry now about those who didn't grab the lump sum like he did. Pension obligations receive high priority in bankruptcy, but there will probably be some haircut. More jobs to go, too.
Not the Apple of Dad's Eye
My dad died in 1984, so he was spared seeing Kodak's long, slow death. He would think it crazy that Kodak would someday sue a company named for a fruit -- Apple? Who thought up that name? -- for digital imaging patent infringement. Beyond belief!
But then, his beloved company isn't really dead. In Chapter 11, a company deals with creditors and debts, reorganizes, and emerges leaner and usually meaner. Some estimate its patents are worth over $3 billion. The bankruptcy may -- just may -- create an entrepreneurial company. And there are still a lot of smart people up there dressing warmly and enjoying challenges.
We should all watch and think not of the past, but of the future. An old, rusting giant may come out shiny and small. It made investments in employees and their children, and someday again, it just may be a very good investment for us.
Motley Fool senior analyst Tom Jacobs loves his Kodak camera but he owns no stock in Kodak, Xerox or Apple. He is the Advisor for Motley Fool Special Ops, a special situations and opportunistic value service. You can follow him on Twitter @TomJacobsInvest. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple.