News today from Kodak

[kb3lms]

It sounds to me like some of the folks involved in the KPP in the UK looked at the Ilford management buyout and weighed that against their resources and assets and say "well, we could do that too!" Surely there are some former Kodakers that know something about the film business dependent upon the pension plan and willing to go head to head with Ilford, even if only in an advisory capacity to the people really running the business. Think about our friend PE, for instance. He's not in the UK, though, but there must be someone over there like him. Kodak had a major facilities in the UK, right?

The company I work at has an arm in the UK and I have often gotten the feeling that over there they are more interested in "doing business" and willing to stick their necks out a little for the potential return. (vs the US where sometimes it seems to be more like "where can we buy it and get the production to China.") They usually seem to find a way to make it work - Ilford would be a case in point. Or, Adox.... etc.

Ilford doesn't supply color film, so maybe these KPP guys see an opportunity there, in addition to Kodak's great B/W products. If my thoughts are correct, two great film manufacturers going head to head with the best products in the world in a competitive and healthy way could be a very good thing for all of us.

 

[kb3lms]

Perhaps KPP will being back Ektachrome ? !!

Could they coat film products today at Harrow or Leeds? I would imagine they did at one time. I have some Portra NC that says manufactured in Great Britain.

Or, is there enough value there to justify building a smallish coating facility on an Ilford scale? You know, there was that lady who wrote about Kodak's supposed technology to make any film at any time in any quantity.

 

[AgX]

Kodak had a major facilities in the UK, right?

Kodak still has a coating facility in the UK. But I don't understand why you exclude the Rochester facility. It's part of that deal.

 

[nickrapak]

Kodak still has a coating facility in the UK. But I don't understand why you exclude the Rochester facility. It's part of that deal.

No, it's not. Please show me one news article that says that EK will be selling off the Rochester coating facility.

 

[MattKing]

Eastman Kodak is a US company, and is the only Kodak that is in bankruptcy.

The other Kodaks around the world (Kodak Limited in the UK, Kodak Canada in Canada, etc.) are separate entities and are not in bankruptcy. They have their own assets and their own liabilities, including (as I understand it) their own pension funds, and pension obligations to their employees.

Each of the international Kodaks operate their pension systems under the pension laws of their own country.

As I understand it, all the international Kodaks are owned by Eastman Kodak. In most cases, therefore, each of their net values show as an asset on Eastman Kodak's balance sheet.

It appears to me that the pension obligations of Kodak Limited (the UK Kodak):
1) are at least partially shared by Eastman Kodak, because the Kodak Limited pension fund shows as a creditor of Eastman Kodak; and
2) apparently have been seriously underfunded in the past, because the extent of the claim is 2.8 billion dollars, and is the largest claim in the bankruptcy.

As I understand it, Eastman Kodak has no liability to all or most of the other pensioners in the other international Kodaks. I expect that they are set up like Kodak Canada, where the pension fund and its obligations have been set up by Kodak Canada, and that funds assets and obligations are the responsibility of the Canadian corporation - not Eastman Kodak. While the Canadian employees and retirees are not without concern, they have some security in the fact that, when last evaluated (in 2010?) by the department of the Ontario Canada government charged with monitoring private pension funds, the Kodak Canada fund was estimated to have assets sufficient to fund approximately 97% of its projected obligations.

As I understand it, the majority of those in the USA entitled to pensions from Eastman Kodak have a more complex situation, but there are set aside substantial sums for them as well.

I don't know why the shortfall is so large in the UK. I expect that Eastman Kodak is a creditor for UK pensions because of the peculiarities of UK law.

 

[AgX]

Kodak states:

Under the agreement, which will be filed with the U.S. Bankruptcy Court, Kodak’s Personalized Imaging and Document Imaging businesses will be spun off under new ownership to KPP.

The settlement agreement provides, among other things, for the spin-off of Kodak’s Personalized Imaging and Document Imaging businesses to KPP for cash and non-cash consideration of $650 million.

Perez is quoted:

The KPP transaction moves us past several key hurdles in our reorganization, resolving all potential claims worldwide, assuring continued operations outside of the United States, placing our Personalized Imaging and Document Imaging businesses with a new owner

I admit though that the latter statement could be read either as closure of the Rochester plant concerning filmmaking, or as retaining a second plant abroad in addition to the mother plant...

 

[MattKing]

from AgX:

Kodak states:

Under the agreement, which will be filed with the U.S. Bankruptcy Court, Kodak’s Personalized Imaging and Document Imaging businesses will be spun off under new ownership to KPP.


and Kodak has previously stated that they are retaining the film and paper manufacturing equipment outside of the Personalized Imaging and Document Imaging divisions, in order to fulfill their commercial motion picture film contracts that they still have.

 

[Hatchetman]

So Kodak would still produce the film in Rochester for the new entity. That's how it sounds.

 

[AgX]

That press release of today does not indicate any retaining of film making equipment. Kodak did sell plants before and hired production capacity from the new owner when necessary.


And...what would anyone spend $650million on?

The whole Agfa consumer branch, seemingly not smaller than the resting Kodak filmmaking business cost only €175 about 9 years ago.

 

[Sal Santamaura]

So Kodak would still produce the film in Rochester for the new entity. That's how it sounds.

But for how long?

 

[AgX]

As indicated above the issue of the Document Imaging division is also unclear: A few days ago the coming sale to Brother was announced, now its trade to KPP is stated.


We just got a Kodak PR employee posting here for one of the few times in her years long membership, but still do not get some clarification...

 

[MattKing]

Document Imaging is a different division: "Kodak’s Document Imaging business provides a comprehensive portfolio of scanners, capture software and services to enterprise customers"

 

[kb3lms]

So Kodak would still produce the film in Rochester for the new entity. That's how it sounds.

Or, they might simply continue to produce film in Rochester until the MP contracts run out and by that time the new entity would have to have a coating facility up and running if they wish to make film. (Up and running might include buying out the existing facility.)

Once the contracts are finished, Eastman Kodak (US) could do with the coating facility as they pleased. I'd imagine Perez would just love to find a way to dump it.

So, we know there are Kodak coating facilities in the UK. It's likely that at one time not so long ago most if not all Kodak films were coated there for the UK and European markets. Maybe they can bring that capability back on-line. It's probably much smaller that the coating plant in Rochester.

 

[Paul Howell]

With motion picture copies in the US coming to an end I dont understand what the value is for new owners. $650,000,000 is a lot of money for legacy rights.

 

[MattKing]

The colour paper market is still reasonably robust.

 

[AgX]

Document Imaging is a different division: "Kodak’s Document Imaging business provides a comprehensive portfolio of scanners, capture software and services to enterprise customers"

That Division in the past included the production and sale of microfilms. All the Kodak range of microfilms had been sold to a new company meanwhile, with Kodak still producing those films. Recently though Agfa acquired from that new company the order to supply them with film to be traded then under the Kodak brand. As the market is not growing this can only be read as Agfa substituting a cancelled Kodak production.

 

[Photo Engineer]

All a bunch of speculation here so far, from people who don't know the entire picture.

Kodak is NOT selling their film business. Copies of Motion Picture images is going UP for archival reasons, using digital masters. Professional sheet and roll films will continue to be produced.

PE

 

[Sal Santamaura]

...So, we know there are Kodak coating facilities in the UK. It's likely that at one time not so long ago most if not all Kodak films were coated there for the UK and European markets. Maybe they can bring that capability back on-line...

One cannot simply move production of existing films to a new coating line and expect them to be the same. When Kodak transitioned production of its films to the large Bldg. 38 equipment approximately a decade ago, product characteristics changed substantially.

 

[AgX]

All a bunch of speculation here so far, from people who don't know the entire picture.

Kodak is NOT selling their film business. Copies of Motion Picture images is going UP for archival reasons, using digital masters. Professional sheet and roll films will continue to be produced.

PE

If you know better, please tell us. You have to admit that that Kodak press release is enigmatic. And what I posted so far is what I read out of it.

 

[kb3lms]

One cannot simply move production of existing films to a new coating line and expect them to be the same. When Kodak transitioned production of its films to the large Bldg. 38 equipment approximately a decade ago, product characteristics changed substantially.

Oh, no doubt of that. The only difference here being that they might plan on re-activating a Kodak coating line that has already been used at one time to produce many of the current Kodak products or at least very similar ones. Fifteen years ago Kodak made many of their film products worldwide in many plants. I don't know that ALL products were made in ALL plants. But Kodacolor Gold 100 made in Rochester was pretty much equivalent to Kodacolor Gold 100 made at Kodak Pathe'. And I'd be willing to bet if they made it at Harrow it was pretty much the same there, too. So, they did this all at one time. They can't have completely have forgotten how to do this stuff. It's a chemical manufacturing process, after all.

Now trying to make and coat a Kodak film at an Agfa plant - yeah, that's a whole different ball game.

This is all speculation anyway. But, we can see a possible path to downsizing here. Who knows what they plan on doing?

 

[Sal Santamaura]

...They can't have completely have forgotten how to do this stuff. It's a chemical manufacturing process, after all...

Search APUG for Ron's (Photo Engineer's) many posts on this subject. Continuing existing production of color paper in Enland is one thing; initiating manufacture of one or more films there is quite another. Which, if any, engineering staff members -- of all the different varieties film manufacturing needs -- will be part of this transaction? How many possessing those critical skills are located in or would relocate to England? How old are they and how long does it take to apprentice successors?

At this point, until further details are released, I think the most important unknown for anyone who desires continued availability of current Kodak films is how long will Kodak Rochester guarantee to manufacture them for the new entity.

 

[wblynch]

This announcement makes me wonder a bit about the new Freestyle Black and White films coming from the UK.

Might they be sourced by KPP ?

 

[cdkrenzer]

Hi Sal - You are correct. All film (still and motion picture) manufacturing will remain with Kodak in Rochester. I don't have any information on the 2nd part of the question - all I can say is what we've said previously (as that has not changed). The lifecycle of film will depend on consumer and professional demand for the products.

 

[cdkrenzer]

All of our paper manufacturing capability, IP and team around the world will move to the new company. Our consumer and professional film will continue to be made in Kodak’s film factories via a long-term supply agreement.

 

[AgX]

Thank you for that update, Colleen. That press release though included still film in the Personalized Imaging Division.