not 3D: Kodak Shifts ALOT of Jobs Overseas (fwd)

[P3D Michael Kaplan <mkaplan@xxxxxxxxxxxxxxxxxx>]

Kodak Shifts ALOT of Jobs Overseas

Leading ALOT Member Shows Jobless Future if Fast Track Is Approved

  Eastman Kodak Corporation is a leading member of  ALOT [America Leads on
Trade] the pro-fast track business lobby.

  Eastman Kodak Corporation Supported NAFTA.

  Eastman Kodak's Promise of Increased Exports to Mexico if NAFTA were
passed did not come true (see "NAFTA's Broken Promises, Failure to Create
U.S. Jobs.) Instead, imports of Kodak products to the U.S. from Mexico
increased.

  Now, according to the attached Reuters story, Kodak plans to eliminate
14,000 U.S. jobs and shift production to Mexico.

  According to Reuters, "Assembly operations in some of its photo equipment
units -- including the assembly of throw-away cameras -- are likely to be
shifted from U.S. plants to sites with lower labor costs, like Guadalajara,
Mexico."

  According to Reuters, "Other manufacturing -- such as photofinishing --
may be completely outsourced."

  Eastman Kodak has large U.S. production facilities (thousands of workers)
in Rochester, New York and Windsor, Colorado.

  According to Reuters, Kodak may sell its paper mill at Kodak Park in
Rochester, N.Y., stop manufacturing photographic paper, and buy from outside
vendors.

NEW YORK, Nov 5 (Reuters) - by Jeffrey Benkoe - With its long-awaited
restructuring plan to be spelled out next Tuesday, embattled photography and
imaging giant Eastman Kodak Co may cut 14,000 jobs, slash costs by as much
as $1 billion, consolidate several businesses, and expand joint ventures.

"It's going to have to be a rather large restructuring in order to have
sufficient impact and give them the flexibility to compete with firms like
Fuji," said Robert Curran, an analyst at Merrill Lynch.

Kodak is also expected to slash film prices to recapture U.S. market share
it has lost to competitors like Fuji Photo Film Co Ltd <4901.T>. But Kodak
is not likely to offer much detail next week, since it would complicate
negotiations with big retail customers.

Some analysts expect Kodak to get out of businesses like microfilm and
microfiche. "I suspect they will close down those businesses," said one
buy-side analyst who declined to be identified. "I can't say for sure that
they're money-losing businesses, but from what they've alluded to in the
past, they're not good businesses."

More deals are expected similar to the one announced last month. Kodak
signed a deal for a joint venture with Dainippon Ink & Chemicals Inc's
<4631.T> Sun Chemical to supply film, paper and other products to the
graphic arts industry.

Assembly operations in some of its photo equipment units -- including the
assembly of throw-away cameras -- are likely to be shifted from U.S. plants
to sites with lower labor costs, like Guadalajara, Mexico.

Other manufacturing -- such as photofinishing -- may be completely
outsourced, analysts said, with the aim of reducing manufacturing costs by
10 percentage points.

Analysts are looking for Kodak to attack labor costs. By some calculations,
a minimum of 4,000 to 5,000 layoffs are expected at a cost of $300 million.

Others see bigger cuts.

"Kodak has to cut employment levels to 80,000" from the current level of
about 94,000, said Ulysses Yannas, an analyst at Mercer Bokert, Buckman and
Reid.

Yannas said an estimate of $1 billion in total writeoffs that is circulating
around Wall Street is too high. He expects a total closer to $900 million,
with two-thirds to pay for layoffs and the other third for facilities.
Analysts said they expect Kodak senior managers to shoot for a benchmark of
20-21 percent of costs as a percentage of sales, down from the current 27-28
percent.

"As the business moves towards digital, they've got to take out a
significant percentage of SG&A (selling, general, and administrative)," said
Michael Ellmann at Schroder & Co. Kodak has said it will cut the SG&A
workforce by 10 percent, but analysts expect that to be the tip of the
iceberg.

Ellmann said that, compared with a company like Fuji, Kodak has a bloated
staff -- due to it being a traditional vertically-integrated company.

He said Kodak may sell its paper mill at Kodak Park in Rochester, N.Y., stop
manufacturing photographic paper, and buy from outside vendors.



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