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Kodak Announces Major Management Restructuring

11/14/2001 12:41:00 PM Eastern

Rochester, N.Y. - Kodak announced today significant changes to its operating structure in an attempt to assuage its financial woes and return to profitability.

The new model is the result of a six-month review by president and COO Patricia F. Russo and creates three new business units: Photography, Commercial Imaging, and Components.

The Health Imaging and Entertainment Imaging business units will remain as presently structured. All units will report to Russo.

The Consumer Imaging unit (the arm that deals with, among other things, consumer digital cameras) will now be incorporated into the Photography Group, which will also be composed of the photographic portion of Kodak Professional and Digital & Applied Imaging.

This Photography unit will be led by Martin M. Coyne II, currently the president of the Commercial Business Group and an executive VP, who will become Group Executive.

Within the Photography Group, Daniel P. Palumbo continues as president of Consumer Imaging, Willy Shih continues as president of Digital & Applied Imaging, and Karen Smith-Pilkington will remain the president of Kodak Professional.

Instead of the varied and complex sharing arrangements between Kodak's business units in the past, the new model gives business units and product managers authority for making those decisions that have the biggest influence on generating profitable growth, the company said.

Under this new model, the various businesses will be more responsible for managing those activities that affect sales and earnings, such as supply chain management, inventory, administrative spending, marketing and customer-service activities. Previously, businesses shared those responsibilities with the company's Global Operations division and other corporate-wide departments.

In the new model, the Global Operations organization and most of its functions will be integrated into the various business groups during the next six months.

"These changes will create the foundation for profit improvement and, ultimately, pave the way for growth," Russo said. "Over time, we will operate with less complexity, more accountability and more cooperation among businesses. We will manage our strategic product groups for maximum profit, and increase our coverage of the markets we serve. We believe this is how the company must be positioned to achieve profitable growth in an increasingly competitive environment."

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