3M

Last edited by crocodyl on July 15, 2008 - 12:51pm

Company Snapshot:

3M is a leading manufacturer of adhesives, tapes, and a variety of industrial and medical products. There are six divisions: consumer and office supplies; industrial and transportation, electro and communications (connecting, splicing, and insulating products); display and graphics (specialty film, traffic control materials); health care (dental and medical supplies, and health IT); and safety, security, and protection (commercial care, occupational health and safety products).

Ownership status:

Publicly traded

Number of employees worldwide:

76,239

Chief executive officer:

George W. Buckley

2008 Global Fortune 500 rank:

327

Website:

Tel:

651-733-1110

Fax:

651-733-9973

Corporate accountability

Labor:

In 1985 3M closed its plant in Freehold, New Jersey, causing the Oil, Chemical and Atomic Workers union to organize a campaign that garnered unusual attention, in part because it was backed by Bruce Springsteen, who grew up nearby. (Springsteen recorded "My Hometown" for his hit album, Born to Run). Not only was it "the Boss'" hometown, but the facility also produced high-end audio tape for music recording studios. Workers at the plant also tried to connect with black South African 3M workers living under the yoke of apartheid. With help from the Labor Institute, they allied with Amon Msane, a leading worker at a 3M facility near Johannesburg, who drew attention for organizing a "reverse solidarity" rally in Johannesburg. After visiting the U.S., Msane was thrown in jail twice for his anti-apartheid activism. Meanwhile, OCAW leader Tony Mazzochi used the campaign to champion a "Superfund for Workers." (See Les Leopold, The Man Who Hated Work and Loved Labor: The Life and Times of Tony Mazzocchi, 418-22).

Age Discrimination Charges

In Whitaker, et al. v. 3M Company, No. 62-C4-04-012239 (Ramsey County, MN), filed in 2004, two current and former 3M employees filed an age discrimination case against the company. For details, read the {http://www.sprengerlang.com/files/2006-01-25%20Second%20Amended%20Complaint.pdf Second amended Complaint]. And for updates on the status of the case see the plaintiffs' attorneys' web site. The case was certified as a class action on April 11, 2008. At issue in the suit is whether Six Sigma, a corporate managerial practice pioneered by General Electric and other companies, discriminates against older workers.

Respirator Issues

From 3M's 2007 10-K report: "For more than 25 years the Company has defended and resolved the claims of hundreds of thousands of individual claimants alleging injuries from occupational dust exposures. As of December 31, 2007, the Company is a named defendant, with multiple co-defendants, in numerous lawsuits in various courts that purport to represent approximately 8,750 individual claimants."

Environment and product safety:

3M has worked hard to build a reputation for clean production. In 1975 it established its "Pollution Prevention Pays" program, which began to reduce plant emissions while yielding demonstrated cost-savings and efficiencies emulated by other companies.

More recently, the company has come under fire as the leading producer of perfluorochemicals (PFCs) -- toxic fluorine-based chemicals used in Teflon, Stainmaster, Scotchgard and Gore-Tex. For background, visit the Environmental Working Group.

PFCs have rapidly become a regulatory priority for scientists and officials at the U.S. Environmental Protection Agency (EPA) because they persist in the environment and build up in the tissues of living beings, including humans.

"As more studies pour in, PFCs seem destined to supplant DDT, PCBs, dioxin and other chemicals as the most notorious, global chemical contaminants ever produced," EWG says.

In 1999 3M began a study to quantify the sources that lead to PFCs' "bioaccumulation in the human food chain." (See 3M. 1999. Quality Assurance Project Plan for Empirical Human Exposure Assessment Multi-City Sampling Task. U.S. EPA Administrative Record AR226-0952, cited by EWG).

Former 3M employees and nearby residents have filed lawsuits alleging damages from exposure to PFCs at or near the company’s manufacturing facilities. (see 2007 10-K, page 77).

"Toxic Traces"

In 2005, Minnesota Public Radio began to air "Toxic Traces", a series of investigative reports about groundwater pollution near a 3M St. Paul facility.

Superfund and Contaminated Site Cases

According to the company's 2007 10-K report, filed with the SEC on 2/15/08, 3M had recorded liabilities of $147 million for estimated other environmental liabilities at the end of 2007.

In 2003, 3M was fined $15.5 million to help clean up the Krejci Dump Site in the Cuyahoga Valley National Park in northern Ohio.

In June 2008, the company agreed to a $315,000 settlement with the state of New Jersey, for disposal of toxic waste at the Woodland dump sites in Burlington County, NJ in the 1950s and 1960s. The company is also, "...donating 154 acres of woodlands in Buena Vista Township, Atlantic County, as a groundwater recharge area."

Anti-competitive and consumer protection:

With 90 percent of the U.S. transparent tape market, 3M has conceded that it has a monopoly in that market.

Office product seller LePage’s sued 3M under the Sherman Act, LePage v. 3M Corporation, 324 F. 3d 141 (3d Cir. 2003) (en banc). After a nine week trial, the jury returned its verdict for LePage’s on both its monopolization and attempted monopolization claims and assessed damages of $22,828,899 on each. The decision is considered noteworthy because the Court of Appeals for the Third Circuit held up the decision on appeal, finding that a case against illegal monopoly maintenance can be made even if a monopolist's prices are above its costs. (According to LePage, 3M used rebates to squeeze out its rivals.)

In August, 2006, a federal judge gave his final approval to 3M Co. to settle the class action antitrust lawsuit for $28.8 million.

Shareholder Derivative Lawsuits

From the company's 2007 10-K: "In July 2007, a shareholder derivative lawsuit was filed in the U.S. District Court for the District of Delaware against the Company as nominal defendant and against each then current member of the Board of Directors and the officers named in the Summary Compensation Table of the 2007 Proxy Statement. The suit alleges that the Company’s 2007 Proxy Statement contained false and misleading statements concerning the tax deductibility of compensation payable under the Executive Annual Incentive Plan (“Plan”) and the standards for determining the amounts payable under the Plan. The lawsuit seeks a declaration voiding shareholder approval of the Plan, termination of the Plan, voiding the elections of directors, equitable accounting, and awarding costs, including attorneys’ fees. Plaintiff filed a motion for summary judgment, and the defendants filed a motion to dismiss all claims on the grounds that plaintiff had failed to make a demand on the Board and had otherwise failed to state a proper claim under the Private Securities Litigation Reform Act. The defendants also moved to transfer the case from the District of Delaware to the District of Minnesota. In February 2008, the Court denied without prejudice the plaintiff’s motion for summary judgment."

Location(s)

3M Corporate Headquarters

3M Center

St. Paul, MN, 55144-1000

United States

See map: Google Maps

History

3M (Minnesota Mining and Manufacturing Co.) was founded in 1902 to mine corundum (a hard mineral) at a site near Two Harbors, MN (on the northwest shore of Lake Superior, not far from Duluth). After the mining venture flopped, St. Paul investors converted the company into a sandpaper manufacturer and relocated the firm to St. Paul, its headquarters ever since.

For 50 years two Minnesota businessmen -- William L. McKnight and Archibald Granville Bush -- developed 3M into Minnesota's largest corporation. The company was the first to make a waterproof sandpaper. Masking tape was introduced in 1925 and Scotch brand tape was introduced in 1930. By 1950, after 50 years, sales passed $100 million and employment exceeded 10,000. Bush continued to chair the company's executive committee from 1949 to 1966. Mcknight retired as chairman in 1966, but stayed on the board until 1978. (The Bush Foundation and McKnight foundation -- two of the largest foundations in Minnesota -- were established by the two 3M executives and their families.) For a long time the largest single shareholder was John G. Ordway, Jr., the grandson of one of the original investors.

Financial information

Total revenue:

$24,462 Million

Fiscal year:

2007

Net Income:

$4.1 billion

Fiscal year:

2007

Major lines of business/segments:

See company web page for description.

Link to annual report:

Annual reports and proxy statements.

Additional descriptive data

Link to full list of subsidiaries:

Subsidiaries listed in 10-K filing 2008 (Exhibit 21)

Link to complete list of brands:

Index of company brands.

Geographic breakdown of revenues (sales and profits), assets, employees:

Sales outside the US account for about two-thirds of 3M's sales. Major 3M countries include Brazil, Canada, China, Germany, Japan, Korea, the UK and US.

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3M

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