I have to admit I'm uncertain what this means. The article in the Guardian says, "Eastman Kodak has agreed to hand over its photography and other businesses to its own UK pension fund...." Does that mean its U.K. photography business or all its photography businesses? Yr. Hmbl. Reporter hasn't read a good enough explanation at a basic enough level for him to understand. Kodak did have manufacturing facilities in the U.K. at one point, and probably still. And what exactly would Kodak's U.K. pensioners do with all that once they have it? Aren't they, um, retired...by definition? (I'm being a bit facetious. You could have stopped reading at "I'm uncertain.")
In any event it appears to be one more falling brick in the demolition of the once magnificent edifice that George built.
On the other hand, the company posted its first quarter in the black since 2010, according to this article in the Rochester Democrat and Chronicle.
(Thanks to Earl Dunbar and Matt)
Original contents copyright 2013 by Michael C. Johnston and/or the bylined author. All Rights Reserved. Links in this post may be to our affiliates; sales through affiliate links may benefit this site.
(To see all the comments, click on the "Comments" link below.)
Featured Comments from:
T Hill: "The article from WSJ explains it pretty well." [We can't link to it, but you can get to the article if you're not a subscriber by copying and pasting or typing "( Kodak Gives Assets to U.K. Retirees site:wsj.com )" into Google. And I hope there is nothing unethical about telling you that.... —Ed.]
Jeff: "This USA Today article addresses your questions, I think."
MarkR: "'In the black': $200+M profit, which includes about $500M from a one-time patent sale. So, profitable, but not sustainable. :-( "
Tim Bradshaw: "A pension fund is basically an investment vehicle: individuals pay money into it, it invests the money on their behalf somehow, and then when they retire it pays their pension.
"In the U.K. (I don't know the situation in the U.S.), pension funds are/were often run by companies: so when you went to work for company X you would have the option of joining the company pension fund (and I think, looking back far enough, you might essentially have been forced to join it). It then took some percentage of your salary, invested it, and then when you retired gave you an income.
"So the pension fund is not the pensioners, it's an investment vehicle run on their behalf.
"There are (at least!) two things that go wrong with all pension funds. Firstly people now live an annoyingly long time, which means the pension fund has to pay out more than it expected, and hence can run into trouble. Secondly the return on the investments made by the fund may not be as great as it hoped, meaning it has less money to pay out than it expected, with resulting problems. Both of these things are common to all pension funds and happen because financial people are both stupid and dishonest (setting unrealistic estimates for returns, not understanding the trend for people to live longer).
"An additional thing can go wrong with pension funds run by a company: the company may be tempted to borrow money from its own pension fund, especially if it is in financial trouble. Essentially this is borrowing from its employees, and it is also very often 'borrowing' in the sense of 'stealing': abusing its privileged position with regards to its own pension fund to cause the pension fund, essentially, to make a bad investment in the company.
"Presumably something like this is what has happened here, leaving Kodak owing its own pension fund a lot of money. And they've now settled this debt by giving the pension fund a great chunk of their business, presumably to avoid being sued by the fund."