George Fisher, the former darling of Wall Street who struggled to pull Eastman Kodak Co. into the digital age, will step down as chief executive of the giant photography company effective Jan. 1 next year.
In a move long expected, the company's board announced yesterday that Fisher will be succeeded by his handpicked successor Daniel Carp, a Kodak veteran. Carp has spent much of his career away from the insular culture of the company's headquarters in Rochester, N.Y.
In an interview yesterday, Fisher defended his six-year record at Kodak, saying that while the company had had some "bad moments," he had aggressively attacked its fundamental problems of pricing, overstaffing and new technology.
"The biggest disappointment is the failure of the financial world to recognize all that we have done in the value of the stock," Fisher said. The stock rose steadily in the first three years of his tenure but has stagnated since then, missing out on the continuing run-up of the market.
"There were high expectations that he could quickly turn Kodak more into a digital company rather than one that's based on chemistry," said Jack L. Kelly, a managing director at investment firm Goldman Sachs Group Inc. who follows Kodak. "Some of those expectations have been unfulfilled."
Fisher predicted yesterday that Kodak would fare well under his successor. "I've got to tell you he ranks with the best. . . . He is energetic and brilliant. He gets things done."
Wall Street shrugged over the no-surprise transition. The company's shares closed at $69.75, up 25 cents. The stock traded at a high of $89.75 in early 1997.
The switch comes at a time when Kodak -- the company that invented flexible film and simple box cameras, turned photography into a hobby for the masses and went on to become an icon of American business -- is groping its way toward a digital future.
For decades, Kodak's fortunes have been based on selling such items as film, photographic paper and film-development services and equipment. Now, filmless digital cameras have hit the market at popular prices. By and large they remain toys for enthusiasts, but many of the world's biggest photography companies, Kodak included, are betting that will change.
Yet under Fisher, Kodak's efforts to get ahead of the digital curve have not quite measured up, at least not yet. The company's digital cameras, though technologically advanced, aren't as stylish or as popular as those made by rivals in Japan. Camera companies in that gadget-loving nation long ago walked away with the market for 35-millimeter film cameras, and they're threatening to do the same with digital cameras.
In another digital initiative, Kodak spent heavily to offer consumers Photo CD, a system that takes film-based photographs and puts them into high-quality digital format on a compact disc. Though used extensively by graphics professionals, the system never took off as a mass-market phenomenon.
To make matters worse, the Fuji Photo Film Co., a Japanese concern, has been marketing aggressively around the world and cutting deeply into Kodak's bread-and-butter film business. American families that for generations wouldn't have trusted little Susie's birthday pictures or the summer vacation snapshots to anything but Kodak film have been buying Fuji instead.
Fuji is closing in on 20 percent of the U.S. film business, a humbling blow to the company that once held a virtual monopoly. Kodak finally responded aggressively and managed last year to slow Fuji's rise, but at a high cost. The company cut some 20,000 jobs, close to 20 percent of the work force, so it could sell film at lower prices.
Fisher came to Eastman Kodak in 1993 after a much-praised stint at the helm of electronics giant Motorola Inc., where he helped to improve sales and engineered a turnaround. Holder of a doctorate in mathematics from Brown University, he was deeply schooled in the digital economy.
His era at Kodak, though difficult, was by no means a disaster, many analysts say. He kept the company profitable, sold off businesses that Kodak had no reason to own, including a drug company, and used the money to pay down debt.
Carp inherits a company in which a lot of the heavy lifting has already been done, many analysts contend. It was Fisher, an outsider, who brought fresh thinking and a new focus on competition to Rochester. Losses in digital products are falling fast and sales are growing in the company's digital-products line, and many analysts are betting that some stylish product design and clever marketing could put that end of the company into the black within a year or two.
Kodak is test-marketing a jazzy new version of Photo CD, called Picture CD, that will include photo-editing software on every disk, together with goofy special
Kodak's sales in emerging markets are recovering. It has a particularly strong position in China, where a quarter of the world's population seems poised to take up amateur photography the way Americans did in the early part of this century.
"Overall, I feel really good," Fisher said yesterday. "That's not to say we haven't had our bad moments, which we have."
A measure of Fisher's continuing stature with the Kodak board is that he was allowed to pick his successor. Although Carp becomes chief executive, Fisher will remain chairman of the board for another 18 months.
CAPTION: GEORGE FISHER