Thread regarding 3M layoffs

Post ID: @2rht+1nw7G0Fl

Little people need to belittle.

@2rht+1nw7G0Fl wrote: "Do you truly think that a team of people who see all of the financials are just blindly cutting the profitable part of the business?"

Yes, yes I do. I would even give you some of their names if this site's rules allowed it. It happens because 3M leadership is being bossed around by investment bankers that have never built anything more complex than a Lego set.

I have seen too many executives actively and knowingly make decisions that caused 3M to make less profit because it made other financial metrics look good for the bankers.

The significant dead weight in 3M was cut out about 15 years ago. Some tiny pockets remain for sure, but they are just that, tiny. There are far larger areas where staffing up properly would provide near-immediate (<1 year) payback and massively improved profitability.

Wow, there's a lot of whining from the plants, I see.

Do you truly think that a team of people who see all of the financials are just blindly cutting the profitable part of the business? Or is it more likely that they're cutting the dead weight?

Enjoy your layoffs.

@1nfz+1nw7G0Fl

Okay, that's it, I've found the worst take on this site. We can all quit looking now.

Let's go point by point:

Licensing - Has never, and I do mean never, been significant to 3M's revenue or profit. Lots of little 1-5M a year deals, but nothing major. I doubt licensing ever been $250M year in fees.

Acquisitions - Name one that has been significant and truly accretive in the last 25 years, I dare you. CUNO - no, Ceradyne - no, Acelity - no, Aearo - he-l no...

"the technology itself, regardless of who actually makes it" - Most of 3M's value, and biggest product success stories, comes from figuring out how to make things that literally nobody else on the planet can make. I could give multiple examples, but they would all be very closely held trade secrets.

I guess no one should get a free ride by sitting around complaining or by flying around wasting resources. The only way to stay in business is to make stuff and sell stuff.

Marketing is a waste of money and it should be outsourced. Same with IT, Recruiting, HR, etc. Too many administrative staff too. If a manager can’t do their own expense reports they should be terminated.

Next, line up the VPs in their closest office parking lot. Have them count odd, even, odd, even. When the count is done, terminate the odd ones.

It’s time for Jack Sprat.

Right you are... there is no problem that a few more sales will not solve. However, those who do not generate revenue should be expunged from 3M.

Post ID: @1aup+1nw7G0Fl

If your job does not generate revenue, then your job should be first on the chopping block. We do not need more pontificators of theories, bean counters, so-called marketing experts, administrative personnel, analysts, or parking lot attendants. We need revenue generating activities such as sales, manufacturing, research & development, et al. 3M is overrun with jabberwocky employees who do nothing but create a giant su-king sound by taking revenue and turning it into a pile of dung.

The guy who says that people in the plants are being childish isn't wrong. He might have been abrasive, but hear me out.

3M is not and has not been a manufacturing company for a while now.

Plants are being closed because that portion of business isn't profitable. Look at our problems and see that they all come from the manufacturing side of the business.

Look at what's profitable: the IP portfolio; licensing, acquisitions, and the technology itself, regardless of who actually makes it.

We are closing plants because the manufacturing side is a combination of added liability and supply chain challenges.

Anyone who believes otherwise is ignoring the writing on the wall at this point.

TO: Post ID: @1aup+1nw7G0Fl

In the case of 3M the head and a significant portion of the fish is rotten. The "childish" aspect is the perpetual denial by the management team (all levels) that anything is even wrong. Insofar as I am concerned, all management, repeat all management, should be dismissed posthaste. Their mindset is outdated, lacks imagination, and is consumed with the glory days of the past, which will never return. The company is figuratively bleeding to d-e-a-t-h and defending management of any situate, demonstrates a complete lack of understanding. Educated derelicts got us into this mess. Full stop.

This board has all sorts of inane nicknames for the board, and no love of anyone with a college degree.

I'm no fan of the board, either, but the way everyone here insists that everyone who isn't working on the line at a plant is somehow slacking and running the company into the ground is ridiculous.

Yes, the board needs to go, but the commentary here is so childish and reveals such a complete misunderstanding of how a large company operates that I can't take half of you seriously.

I thought Flim Flam was Mike lol it really would be an accurate nickname for any one of the big wigs at this point

once they announce first dividend cut, stock will plunge to $80

Flim Flam Rhodes

They poisoned half the country and will possibly be the company that ki-led mankind. Give them another ethical achievement award. How can they even sleep at night?

I belive Flim Flam man is also known as Tireman or Wee Pete.

3M and the so-called Board of Directors, is a Augean stable that needs to be cleaned out.

This farce has gone on long enough.

Third time this story appears on this website.

Got it!

Horrible place to work. No one believes in the current “leadership”. Restructuring again and again is the solution for everything. No vision, no plan, running away from the real challenges, not investing in R&D, the list goes on and on. “Forward 3M” (the current slogan), the same as “Advance 3M”. They are running out of synonyms to cover their incompetence.

Insiders also think this isn’t working and it is not the right team. Mike, Monish, Flim Flam and Eskew have lost credibility with employees.

MINNEAPOLIS — 3M's beleaguered executives are facing perhaps the most significant set of challenges in the company's 121-year history.

The Maplewood-based industrial giant, one of Minnesota's most storied companies, is hobbled by litigation, slowing sales and a stock price cut in half over the past five years. Thousands of jobs are being shed. The company's prized dividend payment may soon shrink, affecting not just Wall Street investors but 3M retirees and employees.

Its promised turnaround is taking too long for some investors who are losing patience with 3M and its leaders.

"I think they need an outsider, someone who can say: This isn't working," Morningstar analyst Josh Aguilar told the Star Tribune. "How can you regain trust? I don't think this is the right team to do it anymore. They're good people but they don't have credibility with the market."

One of 3M's largest investors, Flossbach von Storch, expressed a similar lack of confidence earlier this year.

"We find it increasingly unacceptable to be constantly put off in anticipation of a distant better future," the German firm's co-founder wrote to 3M's chief executive in January, according to the Financial Times. "We also ask ourselves to what extent your leadership team and employees still stand behind your decisions."

Amid all this pressure, CEO Mike Roman is orchestrating a companywide transformation ahead of his mandatory retirement in 2024.

Roman was not made available for an interview for this story. 3M did not directly respond to questions about its leadership and instead referred to comments Roman made in May at an investor conference.

"We reduced costs at the center of the company. We simplified our supply chain model, and we've streamlined our commercial go-to-market models," he said. "And I would say [we are] focusing our strategy around how we can best prioritize our innovation."

By next year, 3M's health care business will be a separate company, and the smaller 3M left behind will have a renewed focus on climate tech, automation and consumer electronics. In 2025 it will quit making the "forever chemicals" known as PFAS that have embroiled the company in controversy and legal battles.

The company recently agreed to settle one set of PFAS legal cases for up to $12.5 billion.

"This is only the first step, albeit it is an important step," Wolfe Research analyst Nigel Coe wrote recently.

More payouts may be looming. Some observers, including Coe, expect $20 billion to $30 billion in settlements over the next few years, which 3M would likely be able to weather. Still others have proposed legal costs higher than the company's entire market value.

However, 3M's chief technology officer, John Banovetz, strikes an optimistic tone about the company's future and the path it's on. Banovetz says it all comes back to the reason the company was created: to solve problems with science.

"Our technology and science are the elements we stand on to differentiate ourselves and how we grow as a company," he said. "For me, the future of 3M is incredibly bright."

3M focuses on 'Forward'

While some of its largest investors and analysts dismiss the company's future-looking plans, 3M has nonetheless outlined a path for what it says will be crucial for its transformation. This includes a focus on "megatrends" like industrial automation, vehicle electrification and augmented reality as part of the 3M Forward initiative.

"How do we continue to drive innovation in a changing world, where climate change is important, where the digital and physical worlds are colliding, where demographics are changing?" Banovetz said. "At 3M we look at those trends and you say, OK, where can we have an impact? Where can we solve tough challenges for our customers?"

One way is to address the labor shortage in manufacturing plants with robotic solutions for automakers.

3M now makes the attachments, abrasives and software for robots that fix paint imperfections, replacing some of the last remnants of labor-intensive work on automobile assembly lines. BMW has already adopted the automated approach at a German factory.

Typically if one automaker takes a risk on technology like this and finds it successful, others will follow fast.

"When things start to look successful, our deployments will all of a sudden rocket — so you better be ready," Scott Barnett, 3M's director of robotics and automation application engineering, said.

Those solutions have long come with a healthy profit. Many 3M products sell at a higher price compared to competitors because customers have long had faith in the 3M brand.

But that reputation is at risk given the company's ongoing connection to PFAS pollution, which will "start to undermine your value to customers," Aguilar, the Morningstar analyst, said.

"You start to question the products around your home," he said. "They can reframe the story all they want, but it's about the brand promise."

Paying the bills

This spring a federal judge demanded Roman attend a mediation session — in person — to settle thousands of lawsuits over military ear plugs.

"Sometimes, the nature and demands of a situation are far-reaching and consequential enough that the leader must be in the room," Judge M. Casey Rodgers wrote. "This is one of those times."

She could have been talking about any number of consequential situations Roman now faces, but the legal uncertainty looms largest.

Even after the recently announced settlement, 3M faces a number of ongoing and potential lawsuits regarding PFAS. The family of chemicals is found in thousands of products and manufacturing processes but does not break down in the environment and has been linked to health issues. It could cost $10 billion to $20 billion or more to settle the bulk of those issues, analysts estimate.

Then there are the Combat Arms military earplug cases, which 3M tried to circumvent by having a subsidiary declare bankruptcy. A settlement with veterans who say they are suffering hearing loss and other issues due to defective earplugs could cost about $10 billion, by some estimates.

"It's never good to have this kind of litigation hanging over your head, because it's expensive to do, it leaves everybody wondering and it's bad publicity," said Carl Tobias, a professor at the University of Richmond School of Law. "The PR stuff can't be underestimated. It's important to have a relationship with the public and make sure they have a good feeling about the company."

Settlements also avoid new information coming to light at trial, Tobias said — including crucial questions of liability around who knew what, and when.

After years of saying 3M will "vigorously defend ourselves" against lawsuits, Roman's stance has softened.

"The preference is to resolve it," he told investors in May.

Taking steps

The company will attempt to put PFAS in the rearview mirror entirely when 3M stops manufacturing the chemicals in 2025.

The move "might help the company find its footing operationally later this decade, but also supports concerns that there is more litigation risk longer-term," writes Jefferies analyst Laurence Alexander.

3M is spinning off its health care unit by the end of the year, which will provide the company an influx of cash at a crucial time. The remaining 3M will maintain a 20% stake in the $8.6 billion business that will be sold over time.

The company has offered few details about its health care spinoff since the initial announcement came a year ago — no name, no decision on a permanent headquarters or leadership team, no timeline to provide any of that information despite already posting jobs for the new health care company.

"We're making progress and will offer updates as we have them," 3M said Monday.

The company has made a habit of announcing news — such as the health spinoff and Combat Arms bankruptcy — when releasing its quarterly results.

Most recently, 3M announced it would cut 6,000 jobs globally in addition to 2,500 manufacturing jobs being shed this year.

As of May 2022, 3M was the state's 12th-largest employer with nearly 13,700 employees based here, according to the state Department of Employment and Economic Development. At least 500 jobs will be lost in Minnesota as part of the 1,100 headquarters job losses, with most HQ cuts affecting remote workers out of state.

The next quarterly report is due the last week of July. Analysts expect earnings per share to drop about 35% compared with last year.

Once health care is spun off as its own entity and the latest PFAS settlement payments kick in next year, the remaining company's profitability will be tighter than ever.

"In our view, the 3M board needs to protect the balance sheet and cut the dividend," Coe, the Wolfe Research analyst, said.

Such a move could have a drastic impact on 3M stock, which is seen as a "dividend king" — industry parlance for public companies that have paid increasing dividends for more than 50 years. 3M has paid dividends for more than 100 years in a row and has consistently increased the stockholder payouts for more than 60 years.

"If the dividend is cut then its stock will crumble, as the dividend is paramount to 3M's shareholder base," Aguilar said.

Unless 3M's board waives the mandatory retirement age, as it did with Roman's predecessor, the clock is ticking for the CEO to cement his legacy of change and vet a successor before September 2024 rolls around.

Roman's heir apparent, Michael Vale, was fired earlier this year for undisclosed improprieties.

If there is a clear strategy, investors remain wary.

"They need to (shrink) in order to grow again," Aguilar said about 3M's future. "It could be painful for several years."