Case 35: Kodak Reverse Discrimination
Part (5) - Supplier Diversity Program

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kodaquotas_sml.gif (6057 bytes) (5) Kodaquota Supplier Diversity

Web Posted July 18, 2003
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NEWS UPDATE - On Jan. 19, 2012 Kodak filed for bankruptcy. The once mighty photo giant -- which pioneered high quality film and inexpensive cameras for the masses -- succumbed to competition from digitial media and was slow to adapt to the changing, digital market. One has to wonder if Kodak would have fared better if it had paid more attention to running its business, and to hiring the best qualified employees without regard to their race, gender or sexual orientation. -- Editor.

Non-Minority Suppliers Need Not Apply

Kodak's world headquarters in Rochester
Kodak world headquarters in Rochester, NY
          Kodak's aggressive Supplier Diversity Program virtually guarantees that small, non-minority-owned businesses will be unable to obtain contract work from Kodak. 

          Established Kodak suppliers who are non-minority owned have had their volume of business from Kodak severely reduced, or eliminated altogether, because of their skin color.

          The surviving non-minority Kodak suppliers must certify to Kodak that they, too, have an aggressive, race-based program in place for their 2nd and 3rd tier subcontractors.   The non-minority survivors must also certify in writing to Kodak that they directly employ a satisfactory number of persons of color, or POC's (Kodak's term).

          Between 2001 and 2006 Kodak has promised to double its purchasing from minority suppliers to more than $200 million annually.  [Ref: Note 1]

          This means that existing non-minority suppliers will have $100 million in Kodak business taken away from them during the next three years because they are the wrong color.

          Stated another way, all non-minority owned suppliers will be excluded from a total of $200 million in Kodak business by 2006 because of their race. 

          In their 2002 annual report, Kodak states:  "Kodak continues to take aggressive steps to identify and partner with diverse suppliers. In addition to supporting, sponsoring and participating in many external events, Kodak successfully hosted two internal Supplier Diversity events in 2002: Supplier Alliance for Diversity and Power of Diversity: Matchmaker." [Ref: Note 2]


Supplier Diversity:
Kodak Follows the Feds' Lead

          Kodak's supplier diversity program is a virtual carbon copy of the federal government's race-based contract set-aside system.  Every federal government agency must set-aside a percentage of its annual contract work for businesses owned by the following races and ethnic groups:

Black Americans, Hispanic Americans, Native Americans (American Indians, Eskimos, Aleuts, or Native Hawaiians), Asian Pacific Americans (persons with origins from Burma, Thailand, Malaysia, Indonesia, Singapore, Brunei, Japan, China, Taiwan, Laos, Cambodia (Kampuchea), Vietnam, Korea, The Philippines, U. S. Trust Territory of the Pacific Islands (Republic of Palau), Republic of the Marshall Islands, Federated States of Micronesia, the Commonwealth of the Northern Mariana Islands, Guam, Samoa, Macao, Hong Kong, Fiji, Tonga, Kiribati, Tuvalu, or Nauru), Subcontinent Asian Americans (persons with origins from India, Pakistan, Bangladesh, Sri Lanka, Bhutan, the Maldives Islands or Nepal)

          Kodak's official list of preferred races and ethnicities is virtually identical (see below).  Caucasian males and light skinned males of Northern European descent are not mentioned in Kodak's list of preferred suppliers.

          Additionally, Kodak requires that "minority owned businesses" be officially certified as such by the federal government. This saves Kodak a lot of time and effort in determining of the contractor or supplier is really owned by an approved minority.

          Thus, if the U.S. Small Business Administration has certified that your company is owned by an officially preferred minority or racial group, then Kodak will do business with you.

          Kodak's official supplier diversity guidelines and policies are set forth below.  These have been quoted directly from Kodak's web site.


Supplier Diversity:
Kodak's Official Statement of Policy

Last known link to original Kodak page as of 7/17/03:
http://www.kodak.com/US/en/corp/supplierdiversity/ceo/index.shtml

          "It is the policy of Eastman Kodak Company to utilize diverse businesses in our supplier base in order to expand opportunities for all segments of society to experience economic progress and competitive advantage.

1. "The company's Supplier Diversity Program places special emphasis on minority and women-owned businesses as well as Sheltered Workshops. Towards this end, personnel responsible for procurement and contracting operations will seek out and promote the competitive participation of diverse businesses in the performance of contracts let by the company.
2. "Eastman Kodak Company will comply with all applicable federal, state and local statutes, regulations, and executive orders designed to encourage utilization of small disadvantaged businesses. The company will continue to drive to meet aggressive goals with minority and women-owned suppliers, and other pertinent goals established by the U.S. Small Business Administration.
3. "Periodic utilization reports will be submitted to upper management of the company for review.
4. "All personnel associated with the company's procurement activities will be made aware of this policy. These employees are expected to commit themselves to its implementation through integration into purchasing and distribution strategies, procedures and good faith efforts.

Last Reviewed: 2/2002


Supplier Diversity:
Kodak Requirements and Definitions

Kodak Page 1 of 2.  Last known link as of 7/17/03:
http://www.kodak.com/US/en/corp/supplierdiversity/requirements/index.shtml

          "The following requirements and definitions outline the different types of registered businesses Eastman Kodak Company is interested in. If you have any further questions, please contact us.

Small Business

          "To qualify as small business, a business concern eligible for assistance from SBA as a small business is one that is organized for profit, with a place of business located in the United States. It must operate primarily within the United States or make a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor. Together with its affiliates, it must meet the numerical size standards as defined in the Small Business Size Regulations, 13 CFR 121. To determine the size standard of your business, visit the Small Business Administration (SBA) Size Standards home page (link http://www.sba.gov/size/)


Minority Business Enterprise (MBE)

          "To qualify as an MBE, the firm must be a for-profit enterprise, regardless of size, physically located in the United States or its trust territories, which is owned, operated and controlled by minority group members. Ownership by minority individuals means the business is at least 51% owned by such individuals or, in the case of a publicly-owned business, at least 51% of the stock is owned by one or more such individuals. Further, those minority group members control the management and daily operations.

          "Minority group members are defined as:

  • "Asian-Indian - A U.S. citizen whose origins are from India, Pakistan and Bangladesh.
  • "Asian-Pacific - A U.S. citizen whose origins are from Japan, China, Taiwan, Korea, Vietnam, Laos, Cambodia, the Philippines, Samoa, Guam, the U.S. Trust Territories of the Pacific or the Northern Marianas.
  • "African-American - A U.S. citizen having origins in any of the Black racial groups of Africa.
  • "Hispanic - A U.S. citizen of true-born Hispanic heritage, from any of the Spanish-speaking areas of Latin America or the following regions:
  • "Mexico, Central America, South America and the Caribbean Basin only.

  • "Native American - A person who is an American Indian, Eskimo, Aleut or Native Hawaiian, and regarded as such by the community of which the person claims to be a part. Native Americans must be documented members of a North American tribe, band or otherwise organized group of native people who are indigenous to the continental United States and proof can be provided through a Native American Blood Degree Certificate (i.e., tribal registry letter, tribal roll register number).

          "To certify your business as an MBE, contact your local SBA office or visit the National Minority Supplier Development Council home page (link http://www.nmsdcus.org/). You may also register with SBA Pro-Net. (link http://pro-net.sba.gov/pro-net/register.html)


Women Business Enterprise (WBE)

          "To qualify as an WBE, the firm must be a for-profit enterprise, regardless of size, physically located in the United States or its trust territories, which is owned, operated and controlled by a woman or women members. Ownership by female individuals means the business is at least 51% owned by such individuals or, in the case of a publicly-owned business, at least 51% of the stock is owned by one or more such individuals.

          "Further, the management and daily operations are controlled by the woman or women members.

"Woman-owned businesses can be certified four ways:

  • "Register with the Small Business Administration's SBA Pro-Net
  • "Register with the Women's Business Enterprise National Council
  • "Register with the National Association of Women Business Owners
  • "Current state or municipal certifications clearly stating woman-owned status (subject to review)

Continue to Next Page...


Supplier Diversity (Continued):
Kodak Requirements and Definitions

Kodak Page 2 of 2.  Last known link as of 7/17/03:
http://www.kodak.com/US/en/corp/supplierdiversity/requirements/index2.shtml

[SBA's Section 8(a) Businesses]:

          "The applicant firm must be a small business, must be unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and citizens of the United States, and must demonstrate potential for success.

          "To certify your business as 8(a), visit the SBA 8(a) Business Development home page."

[Editor's Note:  The 8(a) designation by the SBA is the creme de la creme of minority owned business designations.   8(a) firms get the largest preference in government contracts and, presumably, by Kodak.  To qualify as an 8(a) business, the SBA requires that your business has been 51% owned and controlled by one of the officially preferred minorities for at least two years and that the preferred minority owner is the highest paid employee of the firm.]


Small Disadvantaged Business (SDB)

          "To qualify as small disadvantaged business a firm can be found to be qualified SDB concern, if:

  • "A small business must be at least 51% owned and controlled by a socially and economically disadvantaged individual or individuals. African Americans, Hispanic Americans, Asian Pacific Americans, Subcontinent Asian Americans, and Native Americans are presumed to quality. Other individuals can qualify if they show by a " preponderance of the evidence" that they are disadvantaged.
  • "All individuals must have a net worth of less than $750,000, excluding the equity of the business and primary residence.
  • "All applicants must also meet applicable size standards for small businesses in their industry.

          "To become SDB certified, visit the SBA SDB home page.


HUBZone

          "To participate in the HUBZone Empowerment Contracting Program, a concern must be determined to be a "qualified HUBZone small business concern." A firm can be found to be a qualified HUBZone concern, if:

  • "It is small
  • "It is located in an "historically underutilized business zone" (HUBZone)
  • "It is owned and controlled by one or more U.S. Citizens, and
  • "At least 35% of its employees reside in a HUBZone.

          "To see if your business is located a HUBZone or to become HUBZone certified visit the HUBZone home page.

 

Veteran-Owned Business (VOB)

          "Business must meet the requirements as a Small Business. It must be at least 51% owned and controlled by a U.S. Veteran or Veterans possessing a discharge other than dishonorable.

          "Veteran-owned business can be certified two ways:

  • "Register with SBA Veterans' Program
  • "Register with SBA Pro-net

 

Disabled Veteran-Owned Business (DVOB)

          "Business must meet the requirements as a Small Business. It must be at least 51% owned and controlled by a U.S. Veteran or Veterans possessing a discharge other than dishonorable. Disability may be any degree that was acquired or aggravated during active service.

          "Veteran-owned business can be certified two ways:

  • "Register with SBA Veterans' Program
  • "Register with SBA Pro-net"

Notes, References and Links:

Note 1-- Dow Jones News Service, summer 2001.  Last known link to item:
http://www.idcg.net/newsbriefs_SUMMER01.shtml#kodak

Note 2 -- Kodak 2002 annual report.  Last known link to item:
http://wwwfi.kodak.com/US/en/corp/annualReport02/corpInfo/diversity/diversity3.shtml


Send Us Your Comments:

          If you have specific, additional information about Kodak's racial preferences programs, please send your confidential comments to editor@adversity.net


END Kodak Case 35: (5) Supplier Diversity Program

Make another KodaQuota Selection:

Kodak Case 35:
(1) Introduction and Background
Kodak Case 35:
(2) $13 Million Settlement
Kodak Case 35:
(3) Funding and Involvement with Minority Causes
Kodak Case 35:
(4) Intolerance of Diversity of Opinion
Kodak Case 35:
(5) Supplier Diversity Program
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*  We use the term reverse discrimination reluctantly and only because it is so widely understood.  In our opinion there really is only one kind of discrimination.