Pensions are becoming novel in payments

Well, it might work but could be embarrassing...Trojan.

"Kodak to Pay Retired Workers in Film (And Other Adventures in Creative Pension Funding)"

by

Dan Kadlec

April 30th, 2013

Time

Eastman Kodak has reached a deal to hand over its film business to retirees in lieu of paying monthly benefits, making it the latest strapped corporation to resort to non-cash pension contributions.

Kodak, restructuring under bankruptcy protection, will turn over its personalized imaging and document imaging businesses to the U.K. Kodak Pension Plan, according to a report in the Wall Street Journal. This will wipe out a $2.8 billion pension obligation. If all goes well, the pension will sell the businesses and use the proceeds to fund retirement benefits. But no one knows what the businesses will fetch.

In the news game, we like to say three makes a trend. So the Kodak deal raises troubling questions about our collective retirement security. The British food company Dairy Crest recently transferred 44 million pounds of cheese to its pension fund to help plug a $128 million deficit. The spirits producer Diageo (Johnny Walker, Smirnoff) gave more than $760 million in “maturing whiskey” to its retirement fund to help quench a more than $1 billion pension thirst.

What other assets might retirees be asked to accept? Can they be properly valued? How do you turn bricks and mortar, or whatever, into a reliable and long-lasting income stream?

Such creative solutions are born of necessity. Two-thirds of the companies in the S&P 500 have traditional pension plans and only 18 of them are fully funded. Unfunded liabilities total $355 billion. This massive shortfall, by the way, is echoed in public pension plans as well. We have a big mess on our hands.

As a matter of fact, this trend stretches way beyond three examples. U.S. Steel transferred 170,000 acres of Alabama timberland to its workers’ pension fund several years ago. The state of Alabama’s pension system owns 11 golf courses, and a string of hotels and spas.

The New York Times reports that the Pension Benefit Guaranty Corporation, which takes over failed pension plans, has a wide variety of alternative assets, including “water rights in the Mojave Desert, diamonds, oil wells, a hog-slaughtering facility, a restaurant, a hyperbaric chamber, a brewery in Philadelphia, a lien on a terminal at Kennedy International Airport and a stake in a nuclear fuel-reconditioning partnership.”

Pension systems are starting to look like private equity firms. This isn’t how it’s supposed to work.

How we got here doesn’t really matter. Let’s just say there’s a long history of gaming the pension system in the U.S., where financial engineers have found ways to loot once-flush pension plans and policymakers have found ways to paper over the shortfalls. Add in a dozen years of abnormally low investment returns and the demographic time bomb of retiring baby boomers and long-lived elders.

You may argue that pension plans are better off accepting alternative assets than getting nothing at all, and that is probably the case. Yet if an employer can hand over an asset that is difficult to value, and assume a high rate of return on that asset, it permits the employer to contribute even less cash going forward—further eroding the plan’s viability in the event the rosy assumptions fall short.

Camera film? Cheese? Whiskey? Sounds more like a cocktail party than a pension guarantee.

Ansco, Agfa, Eastman Kodak...who's next...Illford, Fugi?

Since Eastman Kodak has dumped its still film and paper interests, I thought it would be timely to note that Kodak did have some competition and also died.

Ansco Film Company

Wikipedia...

Ansco was the name of a photographic company based in Binghamton, New York, which produced inexpensive cameras for most of the 20th century. It also sold rebadged versions of cameras made by other manufacturers, including Agfa and Chinon. A Minolta-built Ansco model was the first 35 mm camera in space.
History

The company was founded in 1842 (pre-dating Kodak in the photography business) as E. Anthony & Co. (later E. and H.T. Anthony & Company, when Edward Anthony's brother officially joined the business) and became the Anthony & Scovill Co. in 1901, after a merger with the Camera business of Scovill Manufacturing (Connecticut). That year the company headquarters relocated to Binghamton New York. This was already a site of one of ANSCO's paper manufacturing facilities. Just after that, in 1905 it settled a landmark patent infringement case against Eastman Kodak, who had been violating the Goodwin roll film patent (Hannibal Goodwin of Newark, New Jersey) held by ANSCO. The Settlement by Kodak was very small compared to the damage done to ANSCO, which already had financial issues as a result of lost business to Eastman Kodak. In 1928 Ansco merged with the German photo company Agfa into a corporation named Agfa-Ansco. Later that year that firm and other German owned chemical firms were merged into a German-controlled (by IG Farben) Swiss-based corporation named Inter-nationale Gesellschaft für Chemische Unternehmungen AG or IG Chemie, for short. In 1929 the parent corporation's name was changed to American IG Chemical Corporation or American IG, later renamed General Aniline & Film, which continued to produce cameras under the Agfa-Ansco name.

During the period before the U.S. entrance into World War II, the Agfa-Ansco business grew enormously, with added manufacturing capacity in paper, film and camera manufacturing. The Agfa-Ansco interests in the U.S. and Binghamton factory were taken over by the U.S. government in 1941 due to its ties with Germany. The company was the last business to be sold as enemy assets to American interests in the 1960s. At that time, a new headquarters was constructed in Vestal, New York, adjacent to the new college campus of Harpur College (now Binghamton University). This location is the only remaining evidence of ANSCO in the Binghamton area, and is currently occupied by the University. It continued to do business after World War II as Ansco until 1967 when the company adopted the parent's name of General Aniline & Film (GAF), and a variety of cameras as well as films were sold under this name until the business was shut down in the early 1980s. The last Ansco cameras were produced in the early 1990s by a Hong Kong business that bought the rights to the name.

 Ansco All-Weather Film

KODACHROME film...died in Parsons, Kansas

Part of Eastman Kodak will close

Part of Eastman Kodak will close

I never thought that this would happen, but then I could see the trends: Digital photography and Kodak's film and paper selection greatly diminished over the years. It is a form of classic photography that will be missed by us old timers.

"Kodak set to quit camera film and photo paper business"

August 24th, 2012

BBC NEWS

Debt-struck photography pioneer Kodak says it may sell off its still-camera film and photo paper divisions.

The firm has already stopped making digital cameras as part of efforts to reduce its losses after filing for bankruptcy protection in January.

It has also been trying to raise funds by selling off more than 1,100 digital imaging patents.

It had originally planned to announce a buyer last week, but said "discussions continue" and a deal might not happen.

Apple and Google had been reported to have made rival bids for the patents, but the Wall Street Journal reports they have now joined forces and have added Samsung, LG, HTC and others to their consortium

The WSJ's sources suggested the offer price for the portfolio would be about $500m (£315m) - well below the $2.6bn estimate that Kodak had suggested it could be worth.

The company recently reported a $665m net loss for the first six months of the year, putting further pressure on its finances.
Film's feel

In its latest announcement the US company said it had hired investment bank Lazard to help it sell its Personalised Imaging and Document Imaging businesses.

This would mean an end to it making films for still cameras, photo papers, souvenir photo products at theme parks, scanners and picture print-out kiosks at stores.

It would leave the business focused on printers, cinema film stock and chemicals.

The British Journal of Photography said the news would concern the industry.

"A lot of professionals still shoot with film and like the quality it gives them," Olivier Laurent, news editor at the journal, told the BBC.

"The resolution is still a thousand times higher than most digital cameras can offer so long as a good scanner is used.

"A film photograph has a different mood thanks to its grain - it's about the love of the image and digital still has a hard time trying to reproduce that feeling."