For executives at 3M, St. Paul, MN, coming out of the current recession as a healthy company requires more than the usual cost cutting measures; it also means changing the mentality with which one views the recession. That was the message presented by George W. Buckley, president and CEO, and Patrick Campbell, senior vice president and CFO, during a recent conference call to present earnings guidance for 2009.
 
When there’s a 2 percent turndown, there’s 98 percent of the market left,”Buckley said.
 
In keeping with this idea, Buckley and Campbell emphasized that 3M intends to maintain its research and development budget even while cuts are being made in other parts of the company. 3M recently announced layoffs of 1,800 people and plans to cut an additional 500 before the end of the fourth quarter. In addition, 15 factories have been closed in the last 18 months.
 
Plants that previously manufactured optical films, an area that has drastically slowed in recent years, have been repurposed to manufacture solar films, an area Buckley identified as having solid growth potential in 2009. The company is also continuing development of a system to repair and maintain city water infrastructure.
 
In addition, the company will continue to focus on development in emerging markets such as China, Campbell said. While conditions are slowing everywhere, these markets provide opportunities for long term investment. In 2001, emerging markets made up 17 percent of 3M’s revenues; currently, that is closer to 30 percent.
 
The company will continue to employ measures to “preserve cash, conserve cash and to cut costs aggressively,”said Buckley but current conditions require more. “Innovation is our best chance – perhaps even our only chance – for success in times like these.”