3M is realigning its business groups, combining its safety business — which it has beefed up in recent years with large acquisitions — with its industrial unit.
3M realigns corporate structure, combining safety with industrial businesses
Its new Safety & Industrial group will have annual revenue of $12 billion.
March 19, 2019 at 1:12AM
The moves announced by the Maplewood-based global company's new CEO cuts down 3M's business groups from five to four.
The change will enable the company to better serve global customers and markets, said CEO Mike Roman, who took over the CEO job in July from retiring Inge Thulin.
The reshuffling of businesses appears to be a common tool practiced by incoming chief executives at the $33 billion giant. At one time, 3M had seven business groups.
"We are continuing to advance 3M into the future, and today's actions will strengthen our ability to meet the fast-moving needs of our customers," Roman said in a statement. "Our new alignment will leverage our business transformation progress, accelerate growth and deliver greater operational efficiencies."
The new business segments are: Safety & Industrial, Transportation & Electronics, Health Care and Consumer.
3M in 2015 bought Capital Safety for $2.5 billion. It followed that buy in 2017 with the $2 billion purchase of Scott Safety.
3M said Monday that the new Safety & Industrial business group will focus on global industrial, electrical and safety markets. The business segment will consist of personal safety, worker harnesses, ear protection, adhesives and tapes, abrasives, closure and masking systems, electrical markets, automotive aftermarket and roofing granules.
Both the safety and industrial businesses serve the same distribution channel partners, which made their pairing a smart choice, officials said. This segment will have annual revenue of about $12 billion.
3M's new Transportation & Electronics business returns the transportation section to prominence and puts electronics with a new partner. 3M previously paired its electronics business with energy.
Going forward, the $10 billion unit will focus on global transportation and electronic original equipment manufacturer customers as well as electronic display materials and solutions, automotive and aerospace, commercial solutions, advanced materials and transportation safety.
3M spokeswoman Lori Anderson said the new combination of business units better align with 3M's customers and how the company brings products to market.
Analysts noted that in the past five years, 3M has worked hard to bolster its presence in the auto electrification sector.
3M sensor-enhancement technology is increasingly used by automakers experimenting in the autonomous or self driving vehicle arena.
3M has increased its products used to make smart dashboards and high-tech informational displays that pop up on vehicle windshields. It is also working with state transportation departments around the country to embed smart chips and sensor products into cars, road signs or roads so smart vehicles can better "read the road" and prevent accidents.
With 3M's emphasis in this area, it may makes sense that 3M combined its transportation and electronics units into one division, said Edward Jones analyst Matt Arnold.
3M's Health Care will continue to stand alone as a $7 billion beast. It will focus on the global health care industry, medical solutions, oral care, separation and purification, health information systems, drug delivery systems and food safety.
3M's Consumer business will have $5 billion in revenue and focus on home improvement, stationery and office supplies, home care, and consumer health care products. Consumer's home improvement division will include the retail auto care business that was previously part of 3M's automotive aftermarket business.
With the business realignment comes announcements of new leadership appointments, which will become effective on April 1.
Michael Vale will move from overseeing the Health Care unit to executive vice president of the new Safety & Industrial group. Vale will succeed James Bauman, who is retiring as the Industrial unit's executive vice president.
Ashish Khandpur, currently head of Electronics & Energy, will be executive vice president of Transportation & Electronics.
Mojdeh Poul, currently head of Safety & Graphics, will become executive vice president of the Health Care group.
Paul Keel will leave his job as senior vice president of business development and marketing to become executive vice president of the Consumer unit. Keel succeeds the retiring Joaquin Delgado.
Keel's business development role will be taken over by Stephen Shafer, who currently manages 3M China.
Denise Rutherford, currently vice president of industrial R&D and commercialization, has been appointed senior vice president of corporate affairs.
3M's stock closed Monday at $208.49, up 41 cents.
Dee DePass • 612-673-7725
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