On July 28, to much fanfare, the Development Finance Corporation (DFC), a government entity formed from USAID in 2018, announced a commitment to loan $765 million to Kodak to have them start manufacturing base chemicals used for pharmaceuticals. Gross incompetent Peter Navarro was deeply involved, blathering some nonsense that I won’t bother to repeat.
Today’s Kodak is just a shell of the former company. It employs a mere 1,300 people (when it had up to 100K employees years ago). Over the years as their film business burned out, they sold off every profitable division, leaving one large, old industrial complex in the center of Rochester, Kodak Park. Imagine everything that the word “park” conjures up, and invert it — Kodak Park is dirty, old and polluted. The story around Rochester is that when it rained near Kodak Park, the raindrops would burn the paint off of parked cars.
Still, Kodak owns a plant that can manufacture chemicals. So, I guess it is a candidate to make pharma chemicals, and perhaps some startup costs and time could be saved by using their existing infrastructure.
But, there’s more than just a chemical cloud over Kodak Park and this deal. In June, while negotiations were happening, Kodak’s grossly overcompensated CEO, Jim Continenza, bought 46,737 shared of stock as part of his compensation plan. So, when the stock went from ~$2 to $30 on the day of the announcement, one might wonder if someone grabbed the invisible hand and forced it to shove $1.3 million into Continenza’s pockets.
Shockingly, even the Trump Administration’s SEC is investigating, and now the whole deal is up in the air. I’ll wager it will never happen, because the “deal” signed on July 28 was a couple vague paragraphs that aren’t even a letter of intent.
This is of a piece with getting GM to manufacture ventilators. It’s as if someone who had been in a coma since the 70’s suddenly awoke and was asked to name two big US companies: “GM and Kodak. Now get me a Tab and a Hostess Fruit Pie – it’s almost time for Bonanza!”