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Kodak Implements Cost Reductions Announced Last Month

Press release from the issuing company

Will Improve Competitiveness, Affect 2% of Worldwide Workforce ROCHESTER, N.Y.-- Nov. 12, 2002-- Eastman Kodak today provided follow-up details relating to its Oct. 24 announcement of focused cost reductions in the 4th quarter of this year and into 2003. The changes will affect between 1,300 to 1,700 positions worldwide, or about 2% of Kodak's year-end employment base of 75,000. Specifically, Kodak will: * Reduce approximately 150 positions in its U.S.-based Research and Development (R&D) organizations to keep its research portfolio aligned with changing market conditions. * Transfer two manufacturing operations to other Kodak locations: * An operation at Kodak Park in Rochester that assembles one-time-use cameras, affecting about 500 positions. * A sensitizing operation (a process that applies light-sensitive coatings) for graphic arts and x-ray films at Guadalajara, Mexico, affecting about 300 positions. * Realign and streamline the Global Manufacturing & Logistics organization, resulting in the reduction of about 400 management and staff positions worldwide. * Reduce about 150 other positions in Global Manufacturing & Logistics units at Kodak Park. "Where possible, Kodak will work to redeploy affected employees to open positions in business areas that are growing, or to fill positions currently held by contract personnel," said Robert Berman, Kodak vice president and director of Human Resources. "After redeployment, the company expects to reduce approximately 1,300 to 1,700 positions on a worldwide basis." Berman also noted that Kodak continues to offer a highly competitive assistance package to employees who are separated from the company. As the company continues to streamline manufacturing operations and align its research portfolio with changing market conditions, R&D is also making reductions in selected areas. There are approximately 5,000 employees involved in R&D-related activities worldwide. Within Kodak's Global Manufacturing & Logistics unit, the changes are designed to apply assets more effectively in order to provide competitive products to the global marketplace, while maintaining the high standards of quality for which the Kodak brand is known, according to Charles Brown, Kodak senior vice president and director of Global Manufacturing & Logistics. The one-time-use camera manufacturing operation in Rochester will close next July. Production will shift to Kodak's plants in China and Mexico, which are already supplying the U.S. and worldwide markets. The premium, high-speed film for cameras assembled in those countries will continue to be produced at Kodak Park, which remains the company's largest manufacturing, technical and customer support center, with more than 17,000 employees at the site. The sensitizing operation in Mexico will shut down next April. The plant will continue to employ more than 3,000 people, and Kodak is the only imaging company with a major manufacturing presence in Mexico. The products manufactured in the sensitizing operation will be transferred to Kodak's plants in the U.S. (both Kodak Park and Windsor, Colo.) and Harrow, England. The sensitizing operation in Mexico is being closed because of worldwide overcapacity in the imaging industry for manufacture of graphics arts films, which results from technology changes in the printing industry. Other manufacturers have implemented similar plant closings. When fully implemented in 2004, the changes being announced today will contribute most of the $200 million in annual savings outlined by Kodak on Oct. 24 in association with its third-quarter earnings announcement. The cost reductions will allow Kodak's products to remain competitive in markets experiencing ongoing price pressures.