Kodak on twitter: "We're hiring to keep up with demand for 35mm film"

[Alan Edward Klein]

The charges were marked up nicely of course. The final cost was what the North American lawyer quoted in the first place, so the client agreed to it ahead of time. And the North American lawyer was ultimately responsible for the work product. Free market you know. Essentially, the industry was replacing more expensive local lawyer work with less expensive offshore work, and keeping the difference.

Deceptive practices.

 

[MattKing]

Deceptive practices.

Nope - services provided, they just subcontracted the grunt work.
And that sort of work truly is grunt work. It is just that the lower minions doing it happen to be across the globe, instead of in the cubicles down the hall.

 

[Alan Edward Klein]

Nope - services provided, they just subcontracted the grunt work.
And that sort of work truly is grunt work. It is just that the lower minions doing it happen to be across the globe, instead of in the cubicles down the hall.

Did they charge an hourly rate or flat rate?

 

[Huss]

Apple and Costco can replace their subcontractors if they get greedy. Alaris has nowhere else to go if Kodak charges too much for their film.

They can go to CatLabs.

 

[MattKing]

Apple and Costco can replace their subcontractors if they get greedy. Alaris has nowhere else to go if Kodak charges too much for their film.

How do you know what the terms of the contracts between any of these entities are - what the contractual terms are with respect to determination of pricing?
The UK pension plan paid $600,000,000.00 USD to the Trustee for Eastman Kodak as part of the deal. Do you think the terms of the deal were haphazard or slapdash? Or that the newly re-negotiated deal is likely to ignore pricing or other concerns?
By the way, Ilford/Harman is locked into the same sort of exclusive distribution contractual arrangement with their sole US and Canadian distributors. As is Foma - at least in the US.
The US is the largest market for Ilford products.
And Harman was put into serious financial difficulties as a result of the sudden unexpected bankruptcy of their previous sole US distributor.
These are complex financial arrangements that involve, among other things, a whole bunch of experienced industry insiders, lawyers, accountants, tax specialists, import/export experts, and a slough of other specialists with expertise in world-wide trade of a specialized commodity. It isn't just a couple of people standing behind a counter trying to figure what they can squeeze out of a mom and pop shop.
And don't forget that many of those experienced industry insiders on the Kodak Alaris side used to do exactly the same work for Eastman Kodak. In fact, Eastman Kodak lost the majority of their experienced people with respect to these issues to Kodak Alaris, because essentially the UK pension plan bought the international marketing division of Eastman Kodak as part of the bankruptcy.

 

[MattKing]

Did they charge an hourly rate or flat rate?

The big push for much of this work was moving to Requests For Proposals and quoted project fees. Even if it was an hourly rate based fee, local lawyers assuming full responsibility were entitled to bill out their subcontractors at a rate that includes a mark-up, provided that the base for calculation of a fee was disclosed to and agreed upon by the client.
In olden days, the work was done by support staff and junior lawyers that were local to the office, then reviewed and refined by the senior lawyer with conduct of the file. The support staff and junior lawyer rates had the markup built in. The offshore work was billed more like the way your car mechanic bills for the parts they install - not at the price they pay for them, but rather at the marked-up price that they sell them to you for.

 

[BMbikerider]

I have not read all the posts minutely, but where or what will these '300' extra people work or have to do?

If it is doing the analytical or software work, all well and good, they could work remotely from almost anywhere with a good internet connection. But will any of those '300' be employed to maintain the machinery making film or, printing paper, load it with new quantities of film base/paper. Pack the products. Manufacture the necessary chemicals and fill the containers to go to wherever they are to be sold. In other words are they going to be- 'boots on the ground' or 'bums on seats'!

They have made a statement suggesting that they are sitting up and taking notice, but there are a lot of questions that remain un-asked and/or un-answered so the presently mythical '300' extra will remain a questionable quantity.

I remain cynical and believe it when I actually see an improvement.

 

[koraks]

are they going to be- 'boots on the ground' or 'bums on seats'!

Most likely the former. When scaling up production and trying to get the people to do that, you generally see ratios like 90% directly production-related personnel being sought and 10% or so miscellaneous/other. Kodak's case won't be that different.
It's easy enough to figure out though by having a look at their vacancies. I haven't done this, but I expect the usual array of 'process operators' and 'quality control staff' that any business like this will look for in a similar situation. Kodak may be unique in the products they make, but they're a pretty normal industrial operation when it comes to the kind of stuff they do.

 

[BMbikerider]

Just to muddy the waters a bit more. A dealer in UK has small stocks of Kodak Gold 35mm 36exp which is going for around £9 per cassette. They also have stocks of Fuji 200. NOT Fuji C200 but plain 200 . It is apparently repackaged Kodak gold and that is selling for £8.50 per cassette. I still have a reasonable amount of 35mm colour neg so I have just ordered another 5 cassettes to top my total. It is dated 09/24

If that is true, are the two companies collaborating after all?

 

[koraks]

There has been some discussion on this recently in the color forum; I'll try to find it for you if you want. The gist of it, AFAIK, is that Fuji for a brief period sourced Kodak Gold and sold it under their own brand, but have since gone back to selling their own film again. Apparently there was a supply interruption possibly related to Covid. So in a way, they have been collaborating for a brief period, in the sense that Kodak apparently supplied Fuji for a bit. But I would't go so far as to recognize this as a true collaboration.

 

[Sirius Glass]

If Kodak is going to work with state-of-the-art production equipment, won't the programmers have to be in the factory most of the time if not all the time watching how their program works rather than working at home? If there's a glitch they need to address, they would want to see the results in real-time and not calling in from their Florida vacation home asking operators if the software patch works.

One has to be on site to make film. It is not a remote job.

 

[Alan Edward Klein]

How do you know what the terms of the contracts between any of these entities are - what the contractual terms are with respect to determination of pricing?
The UK pension plan paid $600,000,000.00 USD to the Trustee for Eastman Kodak as part of the deal. Do you think the terms of the deal were haphazard or slapdash? Or that the newly re-negotiated deal is likely to ignore pricing or other concerns?
By the way, Ilford/Harman is locked into the same sort of exclusive distribution contractual arrangement with their sole US and Canadian distributors. As is Foma - at least in the US.
The US is the largest market for Ilford products.
And Harman was put into serious financial difficulties as a result of the sudden unexpected bankruptcy of their previous sole US distributor.
These are complex financial arrangements that involve, among other things, a whole bunch of experienced industry insiders, lawyers, accountants, tax specialists, import/export experts, and a slough of other specialists with expertise in world-wide trade of a specialized commodity. It isn't just a couple of people standing behind a counter trying to figure what they can squeeze out of a mom and pop shop.
And don't forget that many of those experienced industry insiders on the Kodak Alaris side used to do exactly the same work for Eastman Kodak. In fact, Eastman Kodak lost the majority of their experienced people with respect to these issues to Kodak Alaris, because essentially the UK pension plan bought the international marketing division of Eastman Kodak as part of the bankruptcy.

I don't know. I've been asking but no one seems to know. Do you?

 

[Alan Edward Klein]

Another reasonsKodak film might be more expensive beside the double markup issue from EK and then Alaris. The exchange rate for the US dollar means that the Euro, Canadian dollar, and a few others have devalued vs the US dollar making every US export including film more expensive to buy.

 

[MattKing]

Do you?

The exact terms - no, because they are closely held trade secrets.
But I do know how these sort of agreements are arrived at, and the sort of things that go into them.

Another reasonsKodak film might be more expensive beside the double markup issue from EK and then Alaris.

Using companies that have both manufacturing and marketing and distribution functions in the same entity as a comparable.
If you don't think that companies with separate local manufacturing and international marketing and distribution divisions don't include two sets of profit calculations, you are likely to be surprised by how things work.

 

[Alan Edward Klein]

The exact terms - no, because they are closely held trade secrets.
But I do know how these sort of agreements are arrived at, and the sort of things that go into them.


If you don't think that companies with separate local manufacturing and international marketing divisions don't include two sets of profit calculations, you are likely to be surprised by how things work.

How would you write an agreement that's fair to both entities regarding pricing so Eastman Kodak doesn't get greedy or have to raise its prices beyond what Alaris will find able to effectively compete with other film manufacturers?

 

[Alan Edward Klein]

I suppose you could agree that Kodak charges let's say 30% markup over costs. They have to regularly provide audited ledgers and books to Alaris to show these.

The main problem is that what incentive does Kodak have to work hard to reduce its costs if Alaris has to buy from them? Again, no competition and no free market destroys incentive. This could be why Kodak film is more expensive as well.

 

[MattKing]

How would you write an agreement that's fair to both entities regarding pricing so Eastman Kodak doesn't get greedy or have to raise its prices beyond what Alaris will find able to effectively compete with other film manufacturers?

By putting mechanisms into the agreements that set out pricing rules, along with methods of resolving disagreements.
Agreements like this are complex and require a lot of specialized expertise to put together. They are the sort of things that expensive lawyers make a lot of money on.
People who put together complex labour agreements or international trade agreements regularly deal with similar types of complexity.
In each case, the agreements come into being because each party has a strong interest in the success of the other party. This is exactly the same situation with Eastman Kodak - the product manufacturer - and Kodak Alaris - the product's international first level distributor.
Although the situation is much simpler, the exact same co-dependence exists between Harman Technologies and the exclusive US distributor for Harman's Ilford and Kentmere branded products.

 

[MattKing]

The main problem is that what incentive does Kodak have to work hard to reduce its costs if Alaris has to buy from them?

Because EK can't sell if KA doesn't buy. And KA won't buy if the price they pay is too high for them, in turn, to sell - exactly the same dynamic as experienced by any manufacturer.

 

[Alan Edward Klein]

By putting mechanisms into the agreements that set out pricing rules, along with methods of resolving disagreements.
Agreements like this are complex and require a lot of specialized expertise to put together. They are the sort of things that expensive lawyers make a lot of money on.
People who put together complex labour agreements or international trade agreements regularly deal with similar types of complexity.
In each case, the agreements come into being because each party has a strong interest in the success of the other party. This is exactly the same situation with Eastman Kodak - the product manufacturer - and Kodak Alaris - the product's international first level distributor.
Although the situation is much simpler, the exact same co-dependence exists between Harman Technologies and the exclusive US distributor for Harman's Ilford and Kentmere branded products.

I had an exclusive distributorship in the NYC region for energy management systems when I had my own contracting company. I sold a lot of products and when it came time to extend my three-year agreement, the manufacturer refused to extend our deal and opened their own office in NYC to sell direct. Where were you when I needed help on the contract. I obviously made a bad deal for me and a great one for them

 

[Alan Edward Klein]

Because EK can't sell if KA doesn't buy. And KA won't buy if the price they pay is too high for them, in turn, to sell - exactly the same dynamic as experienced by any manufacturer.

If KA won't buy, how will they sell Kodak film?

 

[MattKing]

If KA won't buy, how will they sell Kodak film?

They won't, if they cannot but it at a competitive price.
Which will mean that EK can't make any money manufacturing it, because they are tied to selling it through KA.
So the parties work out a mutually satisfactory compromise.

 

[MattKing]

I had an exclusive distributorship in the NYC region for energy management systems when I had my own contracting company. I sold a lot of products and when it came time to extend my three-year agreement, the manufacturer refused to extend our deal and opened their own office in NYC to sell direct. Where were you when I needed help on the contract. I obviously made a bad deal for me and a great one for them

You were in a much weaker position than KA when you first negotiated your contract. If you had been in a stronger position, you could have built into the contract a renewal right.
But yes, if I had been acting for you, I would have been able to advise you about your vulnerability at contract end, and you could have decided before signing the contract to hold out for better terms, or walk away.
The Eastman Kodak and KA situation was/is far more complex, with the parties having much more at stake, along with much more leverage with each other.
The other distorting factor was that initially, the paper and photochemical business was far more valuable (due to the land interests) than the film business, and all of the value of those businesses was far less important than the value of the UK Pension fund - from which the $600,000,000.00 USD came - along with the super priority pension shortfall claim against assets, enjoyed by the UK Pension authorities.
In short, things are/were really complex!