The recession on Tuesday overtook the 3M annual meeting, where shareholders are accustomed to getting free lunches and free bags loaded with 3M products.
But 3M has cut 4,700 jobs over the past year, and CEO George Buckley told shareholders it would not be right to "party" and spend lots of money for the annual gathering. That comment drew applause from the 1,000 attendees, which was a much smaller turnout than the 2,000 to 3,000 who have attended in recent years.
He said 3M saved about $500,000 Tuesday by taking the austere approach to the meeting, held at RiverCentre in downtown St. Paul. In addition to dropping the lunches and gift bags, 3M broke with tradition and didn't set up a company store, popular with retirees who like to buy company goods at a discount.
The display area the company uses to showcase its latest products also was smaller. And once the business meeting started, nobody was manning a camera so there weren't any images of Buckley flashed up on the big screen this year.
As Buckley talked about preserving cash, cutting costs and pursuing revenue opportunities, the red seats in the balcony were nearly empty. While roughly 1,000 people were seated on the main floor, it was still easy to find an open seat there.
Mariar Gannon, a retired teacher and businessperson from Bloomington, was among those who bypassed the meeting.
It's a "family type of thing, even though it's a large company," said Gannon, who departed last year's meeting with a lot of Post-it notes "in all different shapes and forms." And she used other free items for hanging up posters and pictures.
When she got her proxy materials this year, she read the notice that 3M was cutting back on perks for Tuesday's annual meeting. She thought that decision was financially "prudent," but she said the lack of lunch and gifts prompted her to stay away.
"This is a very special meeting for employees. It's typically a lot of retirees that come here to meet their friends," Buckley said after the meeting. "It's not surprising that some people don't like" the changes.
Warren Poole, a retired soil chemist from St. Paul, said the meeting frills were nice, but on Tuesday he was more interested in looking at a hand-held projector 3M was demonstrating.
"I'm waiting for them to put it in a cell phone," Poole said of the new technology, which allows the device's operator to project an image onto the top of a desk. Like many who showed up Tuesday, he didn't care that he wasn't getting a lunch. "I'd rather make money on the dividends," said Poole, whose wife is a retired 3M employee.
"It makes sense to get rid of the freebies," said Richard Newmark of Woodbury, who retired from 3M after 33 years. Since there was lower attendance at the 2009 annual meeting, Newmark said it was much easier to get a look at some of 3M's new products.
A steady stream of attendees surveyed a Littmann electronic stethoscope, which 3M launched last week. "A stethoscope is all about the listening experience," and this one filters out about 85 percent of ambient noise so doctors can focus on heart sounds, said 3M's Warren Wasescha, a marketing manager.
He was demonstrating the medical instrument, with a $425 list price, during a 90-minute product display session that took place before the business meeting.
Robert Ulrich, former Target CEO and 3M board member, was among those scanning the displays and mingling with shareholders Tuesday morning. 3M saw its sales slide 21 percent in the first quarter of this year, but Ulrich said 3M's future is secure as long as it continues to focus on product innovation.
In his address to shareholders, Buckley emphasized 3M has spent more than $4 billion on research and development over the past three years.
Buckley said 550 U.S. employees have volunteered for early retirement. In April, 3M offered early retirement packages to 3,600 employees, or 11 percent of its U.S. workforce. Buckley said the company still might hit its estimate of 700 people accepting the offer, which runs through May 31.
He reiterated Tuesday that he expects additional job cuts overseas this quarter. But he remains optimistic that the economy will recover in the second half of the year.
Buckley also took 16 questions from the audience. A man from Hudson, Wis., elicited some news when he asked how the pension fund was doing. In 2008, Buckley said that 3M's pension fund investments fell by 13 percent.
In recent years, 3M's pension fund was seeing an 8.5 percent return, Buckley said.
On Tuesday, 3M's board approved a contribution of up to $600 million in 3M common stock to the company's defined pension plan in the United States. It also declared a dividend of 51 cents per share for the second quarter, the 371st consecutive quarterly dividend that 3M has paid.
Liz Fedor • 612-673-7709
