Minnesota Mining and Manufacturing Co. said Thursday that it will consolidate operations, fire 4,500 of its 75,000 workers and take up to a half-billion dollars in pretax charges.3M (MMM) said sales have been hurt by the economic crisis in Asia and other parts of the world.
To bolster results, the company will shed product lines that "earn marginal returns and/or have a decreasing strategic fit. The product lines being reviewed have cumulative annual sales of approximately $350 million," according to the 3M release. After its restructuring, 3M said it expects double-digit earnings growth for the next three years, and sales are expected to grow an average of 8 percent a year.
"We're taking the right actions to strengthen our earnings growth as quickly as possible," said L.D. DeSimone, chairman and chief executive officer, in the release, "and we remain committed to continued investment in our growth platforms."
3M said it has reviewed the strategies of its major businesses, with particular emphasis on major new-product programs. These so-called Pacing Plus programs are expected to generate more than $1 billion in sales in 1998, up from $650 million last year, the company said.
"With today's global economic outlook, it's even more important to continuously improve competitiveness," DeSimone said. "Our approach both addresses current realities and strengthens our ability to generate future growth."
3M is a diversified manufacturing company with 1997 sales of $15 billion and net income of $1.6 billion. 3M makes more than 50,000 products for the industrial, consumer, commercial and health-care markets.
Written By Jeffry Bartash