3M remains one of Minnesota's largest employers. Even with the latest round of job cuts, 3M's employment in Minnesota will total more than 15,000. But CEO George Buckley said the company won't hesitate to cut more costs, and jobs, if need be.
"If more is needed, then more will be done. Simple as that," Buckley said.
Buckley said 3M has closed about 15 plants around the world in the past 18 months, as the company tried to get a head start on whacking expenses.
"We've been going through a vigorous downsizing, better prioritization, deferring pay increases, eliminating temporary workers, taking furloughs [and] stopping some nice-to-do things," Buckley said.
But one thing will seemingly be shielded from the axe at 3M, spending on research and development. Buckley said R&D is the lifeblood of the company.
"We think we have to continue to innovate to survive, let alone prosper," Buckley said. "This has always been 3M's secret deadly weapon. Innovation.
The manufacturing giant, whose products include everything from cell phone circuits to Post-It notes, is lowering its profit outlook for this year and next. 3M could miss Wall Street's 2009 earnings expectations by more than 10 percent.
That's not so bad, of course, when many companies, in the auto, financial, newspaper and other sectors, are seeing their profits disappear.
CFO Patrick Campbell said the economic downturn is hitting 3M on all fronts, from the housing and automotive sectors to the dental and office supply market.
"Every business we have, every geography we have in November and December, volume is quite a bit below what our expectation was," Campbell said. "So, you're going to find that margins are going to go down proportionately for all the businesses."
3M expects its sales, excluding the impact of currency transactions, acquisitions and other factors, will fall 10 percent in the fourth quarter.
And next year, 3M expects sales to be down 3 to 7 percent by the same measure. In addition, unfavorable currency exchange rates also figure to eat into earnings.
3M execs signaled they think the recession will last longer than many economists believe it will. Buckley believes we probably haven't seen the worst of it.
"We all know the economy is bad today, that it is likely to be bad for some time," Buckley said. "And I think some of us have an inkling that in some segments of the economy it's going to get worse before it gets better."
Despite the sour economy, though, Buckley said he's hopeful about two environmental plays in 3M's portfolio. He believes its solar energy and waterworks infrastructure businesses could do well next year. He notes some cities may lose half of their water to leaks that 3M could plug.
Buckley sees a great opportunity for 3M to emerge as a stronger company after the economy recovers. He expects 3M will be able to enter new businesses and pick up market share as other companies stumble or die.
"The strong here are going to get stronger and the weak are going to get weaker," he said. "There are going to be huge dislocations in value and opportunities for acquisitions are going to pop up. Bankruptcies are going to happen. Consolidations are going to take place."
It's all very Darwinian, Buckley said. But as one of the biggest corporations in America -- and the world -- 3M would be a good bet to emerge from the current economic trials bigger and stronger.
But on Monday, investors focused on the downside as 3M shares sidestepped a strong rally on Wall Street and closed down 4 percent.