$5.5B for earplugs and $12.5B for PFAS. SpinCo will give ParentCo about $7B in one time dividend/payment and the 19.9% ownership of SpinCo should be worth about $6B. That'll be about $5B short, and the smaller RemainCo won't have as much income to generate heaps of cash. Float more bonds?
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Looks like the funding may be dirty. Takeoff those masks and let’s see who’s really behind old Mike.
Agree, reduction of dividend. Many 3M stock owners do not understand this is part of the spin. 3M stock is the perfect value trap.
Likely they cut the dividend to $4
They'll cut the divy.
Hope the lawyers get the stock and the vets get the cash and not the other way around. I can see the headline now - "Veterans unsure what to do with paper stock certificates for 40 shares of Forever Chemical maker 3M. Financial advisors weigh in."
"3M would make the payments between 2023 and 2029, splitting it between $5 billion in cash and $1 billion in stock."
So in other words settling for $5 billion.
https://finance.yahoo.com/news/3ms-legal-troubles-arent-over-despite-185-billion-in-settlements-115913197.html
Why are the people responsible for this fiasco not being held accountable??
CEOs and C suites from the year 2000 onwards should be held accountable, e.g. a congressional hearing, and brought to task.
Jim Mcnerny, George Buckley, Inge Thulin and our very own Mike Roman along with their C suite cohorts should be answerable as to their actions (PFAS , acquisition of Aearo) that have collectively led to this disastrous situation today !
The answer is to have some MBBs put some LSS math to the problem. Kinda like how a cost savings charter that took 6 months of meetings, slide decks revisions, and closing presentations to get buy in and approval from the MBB and executive sponsor to allow Jim Happyworker to finally turn off the valve that was letting a hundred grand of waste to run through the pipe each month. Jim had pointed out this problem a year ago, but it didn't make it into the hopper session in time. But don't worry! Once the valve was finally turned off and the results were immediately realized--Jim just saved 3M $100K--the MBB applies the magic LSS math to the problem and voila---the charter has just saved $1.2 million! The MBB and executive sponsor gets to claim a 12X benefit (because you can claim the savings for an entire calendar year). And ol' Jim Happyworker might get one hundred Everyday Wins points!
Those questioning our brilliant managers are clearly just a bunch of window lickers who failed algebra.
When you lay off employees that are currently employed, it results in a restructuring COST. However, once you lay off the last employed employee, you can then lay off employees who are NOT employed at 3M, resulting in a restructuring CREDIT. Once 3M gets to around negative 1000 headcount, it can really start to ramp its laying off of unemployed employees, resulting in massive restructuring CREDITS. These now re-unemployed unemployees will draw negative salaries, resulting in a positive cash flow for 3M.
Simple.
Our very capable top management has only strategy, which they have implemented numerous times over the last 5-7 years when faced with a challenging situation.
Yes, you guessed it right. Cost cutting.
More cost cutting and layoffs for sure.
Easy.
- Suspend the pension. No more accruing future benefits. Offer modest 401k matches. Don't like it? Leave.
- Sell off a few divisions like those serving automotive. A dinosaur.
- Combined the new companies pay less than 30 percent of current dividend.
Wash, rinse, repeat
Siphon more AIP payout? That's like blood from a turnip. The current (rosy) projections are 80% or less, and with Uncle Monish's new formulas they go to zero soon after. Pretty sure he came up with those as he was swimming around in his piles of gold...
Sell assets
Makes you wonder if 3M will end up going Pooph.
More layoff, more savings from CI projects, or siphon more AIP payout