Since Inge Thulin became 3M Co. CEO five months ago, he's pounded his stamp into the company with new acquisitions, a renewed commitment to research and development in Minnesota and news Wednesday that the big manufacturer will consolidate into five business units, down from six.
Also Wednesday, Thulin abandoned a planned acquisition of Avery Dennison Corp.'s label business that had met resistance from antitrust regulators.
Thulin's streamlining vision is based on the idea that each business category will be broader, simpler and designed to house services and products aimed at similar customers.
3M spokeswoman Jacqueline Berry said in an interview that the restructuring "is not about job eliminations. It's about serving our customers and increasing our presence in the market."
3M's five new business new groups include its traditional consumer, industrial and health care units, plus two newly hybridized groups: safety and graphics, and electronics and energy.
The changes, which start immediately, recast several previously high-profile businesses such as display and graphics; consumer and office; safety, security and protection; industrial and transportation; and electro and communications.
"The new guy wants to put in an organization that he thinks will be more efficient, and this didn't strike me as anything out of the ordinary from what we expected," said Mark Henneman, vice president of the investment firm Mairs and Power, which owns 3M shares. Henneman said he's "not surprised" by anything Thulin has done so far.
Wall Street barely reacted to the news as 3M's stock rose 24 cents to $93.78 a share Wednesday.
Earlier this week, 3M surprised Wall Street with news that it will pay $850 million for Ceradyne, a ceramics and auto components maker in California that is expected to jell nicely with 3M's existing ceramics and auto component products.
The Ceradyne deal is 3M's largest in two years and big enough to dwarf 3M's previous plans to buy Avery's label business for $550 million. 3M put the Avery deal on hold last month after the Justice Department raised antitrust concerns. 3M and Avery officials had hoped to cobble together a deal that regulators would approve.
Henneman said 3M "certainly had plenty of capital to do both" the Avery and Ceradyne acquisitions. But the government "road blocks" probably thwarted back-office negotiations between the two companies.
With that deal officially dead, Thulin is now busy reorganizing 3M for the future.
"This realignment not only matches our leaders' proven skills with new opportunities, but also improves our competitiveness in the marketplace," Thulin said in a statement. He added that the changes should help 3M build critical mass and take advantage of "innovation and commercialization opportunities."
In 2006, George Buckley, who had then just begun his tenure as CEO, formally dropped 3M's business units from seven to six and focused on overseas expansion, new product development and acquiring proven small businesses.
At 3M's annual meeting in May, Thulin emphasized 3M's new focus on "emerging mega trends" such as health care, the booming oil and gas industries and products that foster sustainable, clean technology, clean water and green products. In a video, he noted 3M products are used to make solar panels, windmill blade coatings, gas pipe coatings, aerospace supplies, laptop and TV optical films, asthma inhalers and more.
Wednesday's realignments brightened 3M's spotlight on energy.
Going forward, 3M's new $5.7 billion electronics and energy business will be led by Executive Vice President Mike Kelly, who previously led display and graphics. Now he will oversee 3M Touch Systems, communication and electronic markets, infrastructure protection, mobile interactive solutions, optical systems and renewable energy.
3M's new $5.5 billion safety and graphics business will be led by Executive Vice President Julie Bushman, formerly head of safety, security and protection. Safety and graphics includes: 3M architectural markets; building and commercial services; commercial graphics, industrial mineral products; mining, oil and gas; occupational health and environmental safety; security and traffic safety systems.
The $4.2 billion consumer business will be largely unchanged and led by Executive Vice President Mike Vale.
The industrial business, 3M's largest with $9.6 billion in sales, also remains largely unchanged. It will be led by Executive Vice President Brad Sauer.
3M's $5 billion health care business will be led by Executive Vice President Joaquin Delgado.
Dee DePass • 612-673-7725