3M to slash 1,800 jobs, delay merit pay
- Article by: DEE DePASS
- Star Tribune
- December 5, 2008 - 10:30 PM
3M Co. confirmed Friday that it is cutting 1,800 jobs in the fourth quarter, postponing "merit pay" in 2009 and ordering some workers to take vacation time or time without pay during the last two weeks of December.
3M spokeswoman Jackie Berry said the difficult economy forced the company's hand but couldn't say how much the company hoped to save by the job actions. "This is part of the cost reduction efforts but I don't have a dollar amount on that," Berry said.
CFO Patrick Campbell had disclosed last month at a meeting with Goldman Sachs that there would be additional job cuts on top of the 1,000 announced during the third quarter. The 1,800 new layoffs will come from the United States, Western Europe and other developed nations.
Berry wouldn't identify where specific cuts would be made, but said "several hundred" will occur in the United States, including the Twin Cities.
3M is the latest conglomerate to slash employment in the wake of troubled times. This week alone, AT&T announced 12,000 job cuts while chemical giant DuPont announced 2,500.
Locally, the Ford Ranger truck plant in St. Paul shut down for a month beginning Monday affecting 770 workers. And this week, KSTP and the Star Tribune announced dozens of staff cuts.
Job cuts aside, 3M is pushing hundreds of workers across several businesses to take vacation or unpaid time off for one to two weeks this month. Among them are workers in 3M's once high-flying but now beleaguered Display and Graphics unit in St. Paul, who face unexpected leisure time off from Dec. 22 through Jan. 2.
The Display and Graphics business has been under siege for more than a year because of the recession, slowing flat panel TV sales and fierce competition from Asian manufacturers who also make LCD screen brightening films. In July, 3M announced that it would lay off 300 Display and Graphics workers.
Besides Display and Graphics, Berry said, Safety Security and Protection Services and some of the other business units in the company are "encouraging employees to take vacations and personal holidays ... during the holiday weeks of Dec. 22nd and Dec. 29th due to the current economic conditions."
3M has taken similar actions before at the Maplewood headquarters, at plants around the country and at other times of the year, Berry said. "This is not uncommon in the business world and it is not uncommon at 3M."
Still, some employees said privately that they were upset because they had already taken the bulk of their vacation time earlier in the year and now face a surprise leave without income. Officials notified some workers late this summer that they would be required to take off one week. However, word about the second week came only recently.
Officials would not speculate about possible future shutdowns.
As for merit pay, Berry said bonuses are normally distributed annually in April. But not now.
"What we have done is delay that merit increase. It's not part of the 2009 plan. However, that could change if the economic conditions are better than expected," she said.
Edward Jones Research analyst Dan Ortwerth, who has followed 3M for years and has a "buy" recommendation on its stock, said he was unaware of some of the recent cost-cutting measures.
"It is news to me with respect to 3M. But I can't say that I am surprised," Ortwerth said. "Sometimes smart business decisions are painful business decisions."
3M, with $26 billion in annual revenues, saw its stock close Friday at $59.85, up 71 cents but far from its 52-week high of $88.70 a share.
Dee DePass • 612-673-7725
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