Manufacturing News

Kodak to shrink plants in U.S., China

Kodak on Thursday said it would shut or shrink manufacturing in some plants in the United States and China, affecting 900 jobs.

Aug 25, 2005 —?NEW YORK (Reuters) - Eastman Kodak Co.? on Thursday said it would shut or shrink manufacturing in some plants in the United States and China, affecting 900 jobs, the latest move by Kodak as it shifts to digital photography products from traditional film markets, which are in decline.

Kodak plans to consolidate color photographic paper manufacturing for North America at plants in Windsor, Colorado, and Harrow, England, and close an operation in Rochester, New York, where it is based, by the end of October.

It will also reduce manufacturing capacity for consumer film products at its plant in Xiamen, China. More than half of the 900 job cuts will occur in Rochester, which remains Kodak's largest manufacturing center.

Kodak said it would book charges of about $153 million, primarily related to asset write-offs and severance.

The cuts are part of a massive effort, launched in January 2004, to transform the world's largest maker of photographic film into a provider of digital products and services, like cameras, docks, and commercial printing systems. The complex plan calls for Kodak to grow by acquisition, even as it cuts back on operations that serve its flagging film markets.

In July, the company expanded the plan, saying it would cut up to 25,000 jobs in all, and sharply reduce manufacturing assets. Kodak has already cut more than 13,000 jobs, and ended 2004 with some 54,000 employees.

Separately, Kodak said it plans to close the West Virginia manufacturing operations of Creo Inc. following Kodak's acquisition of Creo. Manufacturing operations at the Middleway, West Virginia, plant are expected to cease by March 2006, and Kodak plans to take a related charge of about $28 million.

Kodak shares, which have fallen about 22 percent this year, rose 10 cents to $25.14 near midday on the New York Stock Exchange.

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