Kodak committed to making film "as long as there's demand"

[MurrayMinchin]

Had to take a peek at how a companies bankruptcy would affect pensions in Canada. This just came out in June of this year:

Bill C-228, which was passed by the House of Commons and the Senate, puts defined benefit plan members ahead of secured and unsecured creditors in respect to unfunded obligations. Under the bill, priority goes to the unfunded pension liability of private sector, single-employer, defined benefit pensions when a company becomes insolvent. The company will have to declare bankruptcy and either give priority to pension payout or transfer funds into the pension plan to make it solvent...

“Had C-228 been the law, the pensioners of Sears, Nortel, Groupe Capitales Médias, White Birch, and others would not have lost a third or more of their pensions,” the Canadian Federation of Pensioners’s release stated.

https://www.ai-cio.com/news/canada-passes-pension-bankruptcy-protection-bill/

It's worse than criminal (a moral failing?) that a company would dip into their workers pension fund during the last convulsions toward bankruptcy. Some go even further, maintaining executive bonuses while depleting the pension fund.

Boo, hissss.

 

[MattKing]

Doesn't Kodak Alaris have a relationship with that pension fund? It seems that the purchaser of Kodak Alaris would then have to take on the responsibilities they have with the Alaris retirees. No?

Any pension entitlements that Kodak Alaris employees have as a result of their employment with Kodak Alaris are distinct and separate from any pension entitlements that any of those people may have had as Kodak Ltd. employees. With the bankruptcy, all pension contributions to the old Kodak Ltd. pension plan ceased, along with contributions to the old Eastman Kodak pension plan, or the old Kodak Canada Pension Plan, or the old Kodak Australia plan, .... etc.
Although I'm not sure whether all the old subsidiaries were still operating their own pension plans on an ongoing, still being contributed to basis.
The old Kodak Ltd. pension plan owns Kodak Alaris as an asset. That plan, or the government pension security administration infrastructure that it has been subsumed into, only deals with the pension rights and obligations that were in place before Kodak Alaris existed.
The people formerly employed by Kodak Ltd., Eastman Kodak, Kodak Canada et al who were subsequently hired by the new entity, Kodak Alaris, lost their employment with their former Kodak related employers, and became new Kodak Alaris employees.
If they had vested pension plan entitlements from their former employment, they needed to look to the now closed to further contribution pension plans that remained when it became time to claim against them. Those pension plans are still there and many/most of them still have substantial assets - many who started claiming against them before the bankruptcy still are, if they are still alive. And many of those who have vested claims against those plans have not yet started receiving their pension, because they haven't retired yet.
Most of the Kodak Alaris employees never worked for Kodak Ltd. - they worked for Eastman Kodak or one of the other Kodak subsidiaries, and never had any interest whatsoever in the Kodak Ltd. pension plan, other than the fact that that is who owns their employer. For all they care, it could be a bank, insurance company or another, non-photographic related pension plan who owns the corporation they work for.
And of course the creation of Kodak Alaris and the effective offloading of all those non-pension obligations to then current employees that they could no longer afford to pay was one of the biggest reasons that Eastman Kodak came out of the bankruptcy.

 

[MattKing]

Had to take a peek at how a companies bankruptcy would affect pensions in Canada. This just came out in June of this year:



https://www.ai-cio.com/news/canada-passes-pension-bankruptcy-protection-bill/

It's worse than criminal (a moral failing?) that a company would dip into their workers pension fund during the last convulsions toward bankruptcy. Some go even further, maintaining executive bonuses while depleting the pension fund.

Boo, hissss.

Eastman Kodak/Kodak Canada/Kodak Limited didn't do anything like that. The problems that did arise relate to the actuarial assumptions that were made about how much needed to be contributed each year, and what the cost of the ongoing withdrawals would be.
Some of the baked in assumptions included assumptions about the volume of contributing future employment, expected returns on investment, expected administration costs, and the expected payout durations.
The last year I have numbers for the pre-bankruptcy Kodak Canada Employees plan was mid 2014, and that separate plan had investments totaling over $326,000,000.00. By that time, they had made enough post bankruptcy adjustments so that the actuarial projections were that the plan had a very slight surplus of assets over projected obligations.
My Dad died in 2016 and his entitlement under the plan ceased at that time, so I don't have any more recent information.

 

[MurrayMinchin]

Eastman Kodak/Kodak Canada/Kodak Limited didn't do anything like that...

Thanks for the info, Matt.

My post was a broad stroke rant...nothing specific.

 

[Alan Edward Klein]

Any pension entitlements that Kodak Alaris employees have as a result of their employment with Kodak Alaris are distinct and separate from any pension entitlements that any of those people may have had as Kodak Ltd. employees. With the bankruptcy, all pension contributions to the old Kodak Ltd. pension plan ceased, along with contributions to the old Eastman Kodak pension plan, or the old Kodak Canada Pension Plan, or the old Kodak Australia plan, .... etc.
Although I'm not sure whether all the old subsidiaries were still operating their own pension plans on an ongoing, still being contributed to basis.
The old Kodak Ltd. pension plan owns Kodak Alaris as an asset. That plan, or the government pension security administration infrastructure that it has been subsumed into, only deals with the pension rights and obligations that were in place before Kodak Alaris existed.
The people formerly employed by Kodak Ltd., Eastman Kodak, Kodak Canada et al who were subsequently hired by the new entity, Kodak Alaris, lost their employment with their former Kodak related employers, and became new Kodak Alaris employees.
If they had vested pension plan entitlements from their former employment, they needed to look to the now closed to further contribution pension plans that remained when it became time to claim against them. Those pension plans are still there and many/most of them still have substantial assets - many who started claiming against them before the bankruptcy still are, if they are still alive. And many of those who have vested claims against those plans have not yet started receiving their pension, because they haven't retired yet.
Most of the Kodak Alaris employees never worked for Kodak Ltd. - they worked for Eastman Kodak or one of the other Kodak subsidiaries, and never had any interest whatsoever in the Kodak Ltd. pension plan, other than the fact that that is who owns their employer. For all they care, it could be a bank, insurance company or another, non-photographic related pension plan who owns the corporation they work for.
And of course the creation of Kodak Alaris and the effective offloading of all those non-pension obligations to then current employees that they could no longer afford to pay was one of the biggest reasons that Eastman Kodak came out of the bankruptcy.

Frankly, Matt, I really don't understand the arrangement as you described it. I'm sure that's my problem, not yours. My point was if Kodak Alaris's profits provide for pension payments, whether for new or the original employees and retirees, any purchaser of Alaris would take on the financial responsibility of making those pension payments long into the future. That sounds like a substantial burden. It could be the reason Alaris has not been able to sell the company.

It also may account for much of the high markup and price of Kodak film.

 

[MattKing]

Frankly, Matt, I really don't understand the arrangement as you described it. I'm sure that's my problem, not yours. My point was if Kodak Alaris's profits provide for pension payments, whether for new or the original employees and retirees, any purchaser of Alaris would take on the financial responsibility of making those pension payments long into the future. That sounds like a substantial burden. It could be the reason Alaris has not been able to sell the company.

It also may account for much of the high markup and price of Kodak film.

Perhaps it will help if you just think as KA as Alaris - a company that contracts with Eastman Kodak, but has no other direct connection with any of the Kodaks, past or present. To help, I'll refer to it as Alaris from now on.
Kodak Alaris happens to be owned - by way of shareholding - by what was before and now is in effect a pension plan. Kodak Alaris has no connection with either the assets or obligations of the entity that owns its shares.
The Alaris arrangements for their employees - which may or may not include a current pension plan - are before profit expenses. Anyone buying Alaris as a going concern will take on any such ongoing future obligations, but isn't going to buy either the assets or obligations of the government entity that currently owns all the shares in Alaris.
The UK subsidiary of Eastman Kodak - Kodak Ltd. - had pension obligations to its employees from before the bankruptcy. Those now old obligations are not the concern of Alaris.
Those pension obligations were taken on by Alaris' owner and shareholder - the UK pension authority/formerly the pension plan itself. As it happens, the intention is that any profits received or other returns to Alaris shareholders are earmarked to be used to reduce any shortfall that may eventually arise in the old, pre-bankruptcy Kodak Ltd. pension plan.
Most of the Alaris employees never worked for Kodak Ltd. - they either are new employees with no previous Kodak connection, or before Alaris they worked for one of the many other Kodaks around the world, and any of their old, pre-bankruptcy Kodak related pension entitlement has nothing to do with any of this - their claims would be against other funds, based elsewhere.
Alaris' centre of business is in Rochester, New York, and its employees or its subsidiaries' employees are spread around the world. A few of them are in the UK.

 

[CMoore]

I continue to be Happy/Surprised that film is still made.

So many things i have enjoyed have been ... rightly or wrongly ... regulated out of existence.
I am glad film has found a way to survive

 

[Agulliver]

We shall grant you the liberty of choosing a condiment of your preference with it.

I'm afraid there's no sign whatsoever of Fuji restarting production of C41 film. To the contrary; what signals there are, point towards further shrinkage of coating operations of photographic materials in Japan.

Could you please explain these signals? One of the problems with FujiFilm is that Japanese corporate culture dictates that they tell us comparatively little about the current and future scale of coating operations.

 

[Prest_400]

Could you please explain these signals? One of the problems with FujiFilm is that Japanese corporate culture dictates that they tell us comparatively little about the current and future scale of coating operations.

Not Koraks himself, but we have been having good exchanges about the topic, there was an interesting post where he replied to me about it. Of course, can't locate it now as the alert is archived. More recently, we have been exchanging discussion in the Velvia Thread.

The ramblings from my side usually are about the coherence of the line up, why C41 is gone despite being the high volume film vs. E6; Kodak toll coated Fujicolor, "made in UK" Acros II etc. Also, as to how the pandemic and supply shock early spring for the Japanese market is ambiguous as to the state of manufacturing. I recall also discussing that Fuji brought a single batch of 400CN film in 220 as late as 2016-17; but since 2019 we haven't had a pleasant surprise (Acros II) film wise.

 

[Lachlan Young]

Could you please explain these signals? One of the problems with FujiFilm is that Japanese corporate culture dictates that they tell us comparatively little about the current and future scale of coating operations.

Instax is likely swallowing vast amounts of available coating/ finishing capacity - and the domestic corporate culture seems incapable of admitting fault in terms of misreading the growth of a significant chunk of the market (compared to an extremely mature digital camera market).

 

[Alan Edward Klein]

Perhaps it will help if you just think as KA as Alaris - a company that contracts with Eastman Kodak, but has no other direct connection with any of the Kodaks, past or present. To help, I'll refer to it as Alaris from now on.
Kodak Alaris happens to be owned - by way of shareholding - by what was before and now is in effect a pension plan. Kodak Alaris has no connection with either the assets or obligations of the entity that owns its shares.
The Alaris arrangements for their employees - which may or may not include a current pension plan - are before profit expenses. Anyone buying Alaris as a going concern will take on any such ongoing future obligations, but isn't going to buy either the assets or obligations of the government entity that currently owns all the shares in Alaris.
The UK subsidiary of Eastman Kodak - Kodak Ltd. - had pension obligations to its employees from before the bankruptcy. Those now old obligations are not the concern of Alaris.
Those pension obligations were taken on by Alaris' owner and shareholder - the UK pension authority/formerly the pension plan itself. As it happens, the intention is that any profits received or other returns to Alaris shareholders are earmarked to be used to reduce any shortfall that may eventually arise in the old, pre-bankruptcy Kodak Ltd. pension plan.
Most of the Alaris employees never worked for Kodak Ltd. - they either are new employees with no previous Kodak connection, or before Alaris they worked for one of the many other Kodaks around the world, and any of their old, pre-bankruptcy Kodak related pension entitlement has nothing to do with any of this - their claims would be against other funds, based elsewhere.
Alaris' centre of business is in Rochester, New York, and its employees or its subsidiaries' employees are spread around the world. A few of them are in the UK.

It;s still all very coinfusing. Who is Kodak Ltd. How does Kodak Ltd. make money to pay the pensions of the old Alaris retirees?

what happens if there is a shortfall in pension payments to the old retirees and Alaris has to make up the difference? Wouldn't a new buyer of Alaris be responsible?

 

[mshchem]

Oy Vey !

 

[MurrayMinchin]

Oy Vey, indeed!

what happens if there is a shortfall in pension payments to the old retirees and Alaris has to make up the difference? Wouldn't a new buyer of Alaris be responsible?

Maybe Matt or someone else can explain what a pension solvency ratio is?

This is the best explanation I could find after an exhaustive 5 minute Internet search;

For DB (defined benefit) pension plans, the solvency ratio measures the ratio of the plan’s assets to its liabilities, which are the estimated cost of paying future benefits earned by members. Plans are deemed to have a surplus if their assets exceed 100 per cent of liabilities, or a deficit if they fall short.

Does a positive solvency ratio mean that a pension fund could keep paying pensions if there were no more contributions into the pension from people currently working...stand alone, if you will?

Put another way...about 13% of my take home pay was deducted off of my pay cheques for decades into the pension fund, as was the contribution from my employer. These were invested by the pension fund, such that when I retire, the fund is in a self sustaining position without the need for the contributions of people currently working to help pay my pension. Is that what pension solvency means?

It makes sense...the pension fund grows over the years you work, then if a company ceases to exist, the pension has enough assets to continue paying the members pensions. The number of pension payments would diminish over time as people exit this mortal realm, and in theory, there would be enough in the fund to pay the last surviving member of the pension fund.

 

[MattKing]

It;s still all very coinfusing. Who is Kodak Ltd. How does Kodak Ltd. make money to pay the pensions of the old Alaris retirees?

what happens if there is a shortfall in pension payments to the old retirees and Alaris has to make up the difference? Wouldn't a new buyer of Alaris be responsible?

Kodak Ltd. was the UK subsidiary of Eastman Kodak, and it was, relatively speaking, huge!
It is gone. The only remnant is a relatively large pension fund, which despite being quite large, wasn't large enough to pay the actuarially projected future obligations of the former employees of Kodak Ltd.
That fund has now been taken over by the UK government entity which protects private pension funds, and guarantees payments (or at least part payments) to individual retirees. They are the ones on the hook for any shortfall. They are also the ones that made the deal with the bankruptcy trustee that released Eastman Kodak from its special, UK only obligation respecting the pension obligations of its wholly owned UK subsidiary - in return for a pile of cash and other assets.
Alaris is not Kodak Ltd., or Eastman Kodak, has never been Kodak Ltd. or Eastman Kodak, and has no connection with the old pension plan, other than the fact that, indirectly, that pension plan owns an arms length investment in Alaris. Just like you might own an arms length investment in any company you have shares in.

 

[MattKing]

Does a positive solvency ratio mean that a pension fund could keep paying pensions if there were no more contributions into the pension from people currently working...stand alone, if you will?

Put another way...about 13% of my take home pay was deducted off of my pay cheques for decades into the pension fund, as was the contribution from my employer. These were invested by the pension fund, such that when I retire, the fund is in a self sustaining position without the need for the contributions of people currently working to help pay my pension. Is that what pension solvency means?

Not quite, but close.
A pension is solvent if it has enough to pay projected claims, assuming all reasonable assumptions respecting income, expenses and withdrawals.
If the plan relates to both already retired and not yet retired employees, it has higher administration costs and can expect to receive more contributions than a plan that is no longer being contributed to. As a result, it is appropriate that any projections with respect to that more active plan include projections about those future costs and future contributions. Any calculations about "solvency" would take into account all appropriate projections.
Different plans have different approaches to how the administration costs are paid for - that can have a real affect on solvency projections.

 

[Sirius Glass]

Kodak and Ilford keep chugging along. Kodak makes color and black & white negative films and slides. Ilford only makes black & white negative film. Those are the only heavy lifters we have today. There are smaller companies, but we need to support the two heavy lifters if we are to have film film in our future.

 

[MurrayMinchin]

Not quite, but close.
A pension is solvent if it has enough to pay projected claims, assuming all reasonable assumptions respecting income, expenses and withdrawals.
If the plan relates to both already retired and not yet retired employees, it has higher administration costs and can expect to receive more contributions than a plan that is no longer being contributed to. As a result, it is appropriate that any projections with respect to that more active plan include projections about those future costs and future contributions. Any calculations about "solvency" would take into account all appropriate projections.
Different plans have different approaches to how the administration costs are paid for - that can have a real affect on solvency projections.

Thanks...a bit less murky now.

It's a complex mess, especially when an employer can apply for 'contribution relief' for its portion...lets that slide for a few years...then, right before negotiations for a new contract with employees start, the company pays off what's owed, claims the business is running at a loss, and puts the squeeze on employees for rollbacks.

*Note to Self: Let the grudges go...

 

[MattKing]

Shall we get back to the entities that are actually providing Kodak film? Pensions are a great subject for a forum dedicated to them.

 

[MattKing]

Folks - can we please leave the subject of pensions. The fact that a film distribution company called Kodak Alaris is merely one of the investments of a biggish private pension plan in the UK has nothing to do with the availability of film.

 

[Sirius Glass]

Folks - can we please leave the subject of pensions. The fact that a film distribution company called Kodak Alaris is merely one of the investments of a biggish private pension plan in the UK has nothing to do with the availability of film.

Thank you!!! There are some posters that bring up that subject on 15 second centers and yet they never worked for Kodak or any film company.

 

[eli griggs]

I'd just like to hear they are committed to lowering prices as demand increases, at some point in the coming years, especially when the National Economy recovers to a healthy state.

IMO and Dreams.

Hopefully Ilford can too.

 

[Agulliver]

Kodak have repeatedly said that lower prices are unlikely. But that the only way prices will ever stabilise or get lower is if we buy lots more Kodak film and if the demand keeps rising.

Ilford give a similar message.

 

[Alan Edward Klein]

Kodak have repeatedly said that lower prices are unlikely. But that the only way prices will ever stabilise or get lower is if we buy lots more Kodak film and if the demand keeps rising.

Ilford give a similar message.

Due to inflation, very few things go down in price. After all, labor costs, utility costs, chemicals, taxes, everything it takes to run a business is going up. Of course, if demand goes up enough and their costs to make each roll sold goes down, you might see a small decrease. But that could be offset by greater demand which often causes suppliers to raise prices to increase profits. In any case, I wouldn't bet too much on hope.

 

[BrianShaw]

*Note to Self: Let the grudges go...

Not an easy thing to do...

 

[BrianShaw]

Kodak have repeatedly said that lower prices are unlikely. But that the only way prices will ever stabilise or get lower is if we buy lots more Kodak film and if the demand keeps rising.

Ilford give a similar message.

Not likely a really sincere and honest statement (from Kodak/Ilford, not you). Probably just lip-service.