The Picture Isn't Pretty For Some Kodak Retirees

fromWXXI

Kodak, the film pioneer, is struggling to turn a profit in the digital age. That has thousands of Kodak retirees wondering what that means for their retirement finances.

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STEVE INSKEEP, HOST:

If you leave Wall Street and head up the highway, north, a few hundred miles, you reach Rochester, New York, the headquarters of the Eastman Kodak Company. About half of Kodak's 38,000 retirees live around there, and they are watching closely as the film pioneer struggles to turn a profit in the digital age.

As Julie Philipp from member station WXXI reports, the fate of many retirees is closely tied to the fate of Kodak itself.

BOB VOLPE: I'm Bob Volpe, I'm the president of EKRA.

JULIE PHILIPP, BYLINE: EKRA represents Kodak retirees. And over the past two weeks, close to 1,000 retirees have showed up for EKRA meetings because they're worried the struggling company will cut off their health care benefits.

VOLPE: We can't control what Kodak does, all we can do is control our reaction. Today, you might hear some bad news.

PHILIPP: For example, if Kodak is bought out, declares bankruptcy, or simply decides it can no longer afford the millions it spends every year on retiree health insurance, it can just stop providing it. If that happens, most Kodak retirees under 65 won't qualify for Medicare, and the AARP's Bill Ferris says that would mean a serious case of sticker shock.

JAKE PIETRUSZEWSKI: When you buy health care alone, it's the most expensive you can buy. When companies go buy health care, they're buying for a large group of people. The individual market in New York is very expensive.

PHILIPP: That's what retiree Jake Pietruszewski found out at the EKRA meeting. Private health insurance could add $2,500 to his monthly expenses.

J. PIETRUSZEWSKI: We're spending, on average, 3,500 a month now, you throw on top of that almost double your expenses, it's like - wow.

(SOUNDBITE OF LAUGHTER)

PHILIPP: Jake is 60 years old, his wife Diane is 59. He started working as a Kodak technician in 1961.

DIANE PIETRUSZEWSKI: We felt secure, very secure that, you know, you spent a lifetime at Kodak, you were set.

J. PIETRUSZEWSKI: The first year I was there, you know, I remember talking to one of the people that had been there, you know, 10 or 15 years. And he said, oh yeah, Kodak is a great company. They're really solid, stable. They're as solid as the United States of America.

PHILIPP: Jake and Diane bought a comfortable house, drove dependable cars, and paid cash for their son's college tuition; and they stashed away 20 percent of their income every single year. So they thought they did everything right and were in good shape to take an early retirement package in 2006 - as long as Kodak kept its commitments.

J. PIETRUSZEWSKI: Our financial advisor and the programs I looked at said, you know, we've saved enough and with Social Security and managing our expenses - assuming we have health care - we should have enough money to last probably to our 90s, OK? But now, this changes the whole equation, it's not going to last into our 80s. I mean it's going to be gone.

PHILIPP: The Pietruszewskis say they are preparing for the worst. Jake has thought about going back to work full-time. And, even though Diane was recently treated for breast cancer, they're also talking about going without health insurance. Weighing the options is stressful.

D. PIETRUSZEWSKI: When we get together with friends and play cards or whatever, the conversation always...

(SOUNDBITE OF LAUGHTER)

D. PIETRUSZEWSKI: ...gets to that.

J. PIETRUSZEWSKI: Yeah. How are you doing and what...

D. PIETRUSZEWSKI: I must admit there's times where that fear creeps in.

J. PIETRUSZEWSKI: Yeah.

PHILIPP: Their story would have the founder of Kodak, George Eastman, turning in his grave, says EKRA president Bob Volpe. Kodak was among the nation's first companies to offer employee benefits like pensions and health care. Volpe says Eastman did that, in part, to keep his employees happy, so unions wouldn't organize. But, Volpe says there was more to it than that.

VOLPE: Number one, I believe, was just his personal belief that he had a responsibility to take care of people.

PHILIPP: But taking care of the company is top priority at Kodak now. Company officials would not grant an interview for this story, but released a statement saying they're committed to becoming profitable again, and quote, "we will not speculate on potential future events." For NPR News, I'm Julie Philipp.

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