When Bigger Isn't Better
-- January 22, 2004

You'll be hard-pressed to find three more recognizable names that AT&T;, Eastman Kodak, and Ford. While these companies are household brands, the three corporate giants are scrambling to turn their core businesses around.

Just today, AT&T; reported that Q4 net income declined $176 million year-over-year. Revenues dropped 12.8% during the quarter. Worse, Ma Bell admitted that its revenue slide would continue into 2004. AT&T; is struggling to compete in the long distance market with wireless companies, regional bells, and upstarts.

Meanwhile, Kodak said today that it will take a $1.78 billion charge to pay for 15,000 job cuts. Couple that with a 94% decline in quarterly net income, and it is clear that Kodak grossly underestimated the popularity of digital cameras.

Then, Ford announced a quarterly loss of $793 million -- more than six times the loss it suffered a year earlier. Ford has been clamoring to find a way to make money in an environment of declining sales prices. Adding to its woes, Ford was overtaken by Toyota for the number two slot in annual car sales. To combat the decline, Ford will roll out a new line of cars this year. That's a good move on the surface. However, the problem is this should have happened several years ago when Ford's market share started to skid.

The common denominator for these three companies was that they were slow to adapt to a rapidly changing marketplace. As the saying goes, "It takes a little time to turn the Titanic around." Let's hope that AT&T;, Kodak, and Ford turn their ships around quickly. Otherwise, as hard as it is to imagine, they could one day be in danger of facing the same fate as the Titanic.

related article:
Kodak to Cut Up to 15,000 Jobs, Stock Up