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Kodak appoints new CEO
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June 9, 1999: 8:05 p.m. ET
Fisher, once hailed as a savior, to step down early as Fuji price war still simmers
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NEW YORK (CNNfn) - George Fisher, billed as Eastman Kodak Co.'s savior six years ago, announced plans to resign Wednesday, ending a tumultuous tenure punctuated by painful cost cuts and a bitter price war with rival Fuji.
Kodak tapped 29-year company veteran Daniel Carp, 51, as its president and chief operating officer, to take over as CEO from Fisher starting in January next year. Fisher will chairman until the end of 2000, in keeping with his contract, a spokesman said.
The announcement comes as Rochester, N.Y.-based Kodak has come under renewed attack from a price war brought about by top rival, Japan's Fuji Film Co. (FUJIY).
One analyst suggested Fisher may have been blindsided in part by the price war, by focusing on the high end of the film market.
"[Kodak] had been looking at it in an added-value orientation ... [while] Fuji just kept going for price-cutting," said Wendy Abramowitz, an analyst at Argus Research.
Fisher, a former Motorola executive, was the first Kodak outsider to take charge of the film giant when he was chosen in 1993 after its board ousted predecessor Kay Whitemore.
When he arrived, many investors believed he would transform Kodak from a stodgy film company to a technological leader. However, six years and 20,000 job cuts later, some analysts say Fisher has failed to deliver on his vision.
"When Mr. Fisher joined Eastman Kodak, I was a shareholder with great anticipation that he would take a technological problem and make it into a technological opportunity," said Michael Holland, chairman of investment firm Holland & Co. "Lou Gerstner did that at IBM. I thought there was a possibility, actually a probability, that we'd get that out of George Fisher. Unfortunately it hasn't happened yet."
Indeed, since Fisher's arrival, Kodak's stock has lagged far behind the Dow Jones industrial average, gaining only 53 percent versus a rise of 189 percent for the Dow.
Eroding market position
Recent news reports suggested the company is continuing to lose its once-dominant market position to Fuji.
However, Fisher, in an interview on the Moneyline News Hour Wednesday, said Kodak's market share has stabilized, or actually improved, over the last four weeks.
Looking forward, Abramowitz said she expects Carp to turn Kodak's focus onto consumers -- not just on its headlong rush to the forefront of technological innovation.
"We're really pleased with where we are right now," Carp told CNNfn, adding new products such as picture CDs and digital photography "will drive picture-taking profits higher."
"We really think we have a good set of strategies," said Fisher, who appeared on CNNfn alongside Carp, adding that he and Kodak's board "feel Dan is absolutely the best person to become Kodak's next CEO."
Carp said the company has reduced its cost structure by more than $1 billion in the past year and is anticipating growth in the 8- to 12-percent range over the next five years.
Carp also noted Kodak's strong presence in China will help boost earnings. Kodak in April announced it will invest $1 billion to modernize its China plant, which the company is betting will become the dominant photography market in the next 10 years. The plant accounts for about $2.2 billion in annual revenue for Kodak.
In its first quarter, Kodak earned $259 million, or 80 cents per diluted share, excluding one-time charges. That's an increase of a little more than 8 percent from the $239 million, or 73 cents per share, it earned a year earlier. Kodak will report its second-quarter results in July.
Shares of Dow component Kodak (EK), which have fallen more than 46 percent since reaching a high last July of 88-15/16, rose 1/4 to 69-3/4 Wednesday.
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Eastman Kodak
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