Kodak Health Imaging chief Coyne refutes rumors of unit's divestiture

Kodak Health Imaging chief Coyne refutes rumors of unit's divestiture

Speculation had centered on Johnson & Johnson sale

Eastman Kodak is not seeking to divest its Kodak Health Imaging business, according to Martin Coyne, president of the Rochester, NY, film and PACS business. Although Kodak is cutting jobs in the unit along with the rest of the company, Kodak is committed to medical imaging and has no plans to sell off the business, he said.

Coyne was responding to rumors that swept the exhibit floor during last month's Radiological Society of North America meeting. Most of the rumors claimed that Kodak would be selling off the Health Imaging business to healthcare giant Johnson & Johnson.

Like many RSNA rumors, however, this one apparently had little basis in fact.

"We are not being acquired, we are not being divested, and Kodak senior management is committed to the health business for the foreseeable future, for the long term," Coyne said.

Kodak's widely publicized restructuring effort provided fuel for the rumors to spread. Kodak in November announced that it would be cutting 10,000 jobs throughout the company in an effort to improve profitability. The moves are a response to difficulties in the company's core consumer film market, which has been losing market share to arch-rival Fuji. At the same time, Kodak's much-hyped moves into consumer digital imaging have yet to pay off. In December, Kodak announced that it would cut another 6600 jobs, taking a $1.5 billion charge in the process.

Staff reductions have been taking place throughout Kodak Health Imaging since the initial restructuring was announced in November, Coyne said. He declined to detail how many or what type of jobs were being eliminated, other than to say that the division is looking at making its entire work force more efficient. Kodak's R&D efforts have not been spared scrutiny, according to Coyne.

"Our R&D has been refocused. We will do fewer projects than we previously have done, and we will do them better and faster," he said. "The reality was that, as in most companies, we tried to do too much."

The change will probably result in more partnering agreements, such as the relationship Kodak has with Applicare Medical Imaging for Windows NT workstations. The Applicare workstations have been installed as part of Kodak's implementation of a full-scale PACS at New York Hospital in New York City.

The New York Hospital sale was portrayed as a sign that Kodak had arrived on the PACS scene, but since then no new major sales have been announced. This is due to the long sales cycle of PACS, according to Coyne, which can take up to a year to complete. In any event, Kodak is working on a number of large-scale sales, and the vendor does not intend to exit the market.

"We are committed to the digital business, and we are going to grow that business. We have to," Coyne said. "If we are going to continue to be a world leader in health imaging, we've got to be the leader in analog, digital, and hybrid solutions."