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3M Reorganizes after $860M Acquisition

Friday, October 5, 2012

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In a move designed to “build scale and opportunity for global markets,” 3M has restructured its operations into five segments, instead of six, and set up new roles for some senior leaders.

Photos: 3M

3M offers a wide range of products and technologies, including additives for paint and coating products.

The company-wide realignment, announced Wednesday (Oct. 3), came two days after 3M’s announcement that it would buy the chemical company Ceradyne Inc. for about $860 million.

Strategic Plan

3M’s new structure is comprised of Consumer (2011 sales of $4.2 billion), Industrial ($9.6 billion), Health Care ($5.0 billion), and two newly formed business groups: Safety & Graphics ($5.5 billion) and Electronics & Energy ($5.7 billion).

With $30 billion in sales, the St. Paul, MN-based company employs 84,000 people worldwide and has operations in more than 65 countries. The company’s diverse portfolio of products includes additives for paint and coatings, as well as worker safety equipment and protective tapes.

The new structure is effective immediately, with segment reporting for the new organization effective Jan. 1.

The company will also communicate restated historical financial results for the new business groups in the first quarter of 2013, subsequent to filing its annual form 10K. 

Natural Progression

“The change is a natural outcome of our strategy to increase relevance to our customers and to broaden our presence in the markets we serve,” said Inge Thulin, 3M chairman, president and CEO. “By building scale more broadly, we create critical mass in each business group to take full advantage of innovation and commercialization opportunities.”

Left to right: Chairman and CEO Inge G. Thulin says the new structure is a natural outgrowth of 3M’s strategic plan. EVP Julie Bushman heads the new Safety & Graphics business; EVP Mike Kelly leads Electronics & Energy.

Thulin also said the realignment better matched 3M’s “strong, diverse leadership team” and improved the competitiveness of the overall business.

Segment-by-Segment Changes

The new Safety & Graphics segment is led by Executive Vice President Julie Bushman, who had headed 3M’s Safety, Security and Protection Services business. Safety & Graphics will consist of these divisions:

• Architectural Markets

• Building & Commercial Services

• Commercial Graphics

• Industrial Mineral Products

• Mining, Oil & Gas Solutions

• Occupational Health & Environmental Safety

• Security Systems

• Traffic Safety Systems

The new Electronics & Energy is led by Executive Vice President Mike Kelly, who currently heads 3M’s Display and Graphics business. That group will consist of:

• 3M Touch Systems

• Communication Markets

• Electrical Markets

• Electronic Solutions

• Electronics Markets Materials

• Infrastructure Protection

• Mobile Interactive Solutions

• Optical Systems

• Renewable Energy

The company’s Industrial segment, led by Executive Vice President Brad Sauer, remains unchanged, with the exception of the Renewable Energy division moving to the Electronics & Energy business group. Sauer formerly led 3M’s Health Care business.

Health Care, led by Executive Vice President Joaquin Delgado, remains unchanged. Delgado formerly led 3M’s Electro and Communications business.

Consumer is also unchanged and will continue to be led by Executive Vice President Mike Vale. 

In another leadership change, Chris Holmes was named senior vice president, Corporate Supply Chain Operations. He succeeds John Woodworth, who has announced his intention to retire. Holmes was formerly executive vice president of the company’s Industrial and Transportation business.

Ceradyne Acquisition

The Ceradyne acquisition has been unanimously approved by that company’s Board of Directors and is expected to close in the fourth quarter of this year.

Headquartered in Costa Mesa, CA, Ceradyne is a worldwide leader in the development and production of advanced technical ceramics for demanding applications in the automotive, oil and gas, solar, industrial, electronics and defense industries. The company has annual revenues of about $500 million a year.

Ceradyne will join the 3M Energy and Advanced Materials Division within 3M’s Industrial and Transportation Business.