Kodak Replaces Consumer Chief Amid Management Shake-Up
Eastman Kodak Co. on Thursday replaced the head of its consumer business, the company’s largest, as Chairman George Fisher begins an overhaul designed to boost profit at the struggling photography company.
Kodak said Senior Vice President David Biehn, 54, will retire early next year, making him the last of the top three officials of the consumer unit to depart recently. Biehn will be replaced Oct. 13 by Robert Keegan, 50, who now runs Kodak’s professional unit.
The move comes a week after Kodak said it will trim management by about 20% and consolidate assembly plants as Fisher responds to the deepest crisis in his four-year tenure. Kodak’s U.S. market share is shrinking, its losses from digital imaging are widening and its bloated work force puts the company at a competitive disadvantage to archrival Fuji Photo Film Co.
“This is obviously the start of those changes,” said Schroder & Co. analyst Michael Ellman. “The company has not been successful in maintaining the profitability of this most important business unit.”
Kodak’s shares fell $1.63 to close at $64.38 on the New York Stock Exchange.
Fisher’s first task after joining Kodak from Motorola Inc. in 1993 was to end the company’s experiment with selling such items as household products and pharmaceuticals. Now he’s taking on the company’s main photography business, a move he should have made years ago to preempt Fuji, analysts said.
Kodak said last month that its third-quarter earnings may be halved because of falling prices for its products, driven in part by competition from Fuji’s discount film prices and widening losses in its digital imaging business. The company also announced that it is doing a review of as many as 200 businesses in an effort to eliminate those that lose money.
The replacement of Biehn represents the first of a series of changes expected out of Kodak in the next few weeks, said Goldman Sachs analyst Jack Kelly.
“What we’re going to continue to see are announcements that allow [Fisher] to restore the earnings power of the company,” Kelly said.
The company will release more information about its plans at a Nov. 11 meeting with investors and the press in New York.
