3M Company

Date Founded: 1902

Industry: Diversified Manufacturing

Corporate Headquarters: St. Paul, Minnesota

Type: Public

Overview

Headquartered in St. Paul, Minnesota, 3M is a diversified manufacturer of both industrial and consumer products. Its many distinct businesses are organized into five sectors: industrial, safety and graphics, electronics and energy, health care, and consumer.

The company was founded in 1902 as the Minnesota Mining and Manufacturing Company by five businessmen in Two Harbors, Minnesota. The company’s initial plan to mine corundum failed; nevertheless, it began to manufacture sandpaper in 1907 and became profitable within another five years thanks to the financial help of two investors.

3M is best known for producing masking tape, cellophane tape (sold as Scotch brand tape), Post-It Notes, Scotchgard, and Thinsulate. These and many other consumer products account for nearly 15 percent of revenues. Its largest sector, the industrial products group, caters to other manufacturers as well as to government entities and generates about one-third of 3M’s sales.

3M has operations in more than seventy countries, employing around 95,000 people in 2022, and sells more than 55,000 products to distributors and retailers in nearly two hundred countries. 3M has garnered attention for developing and sustaining a culture of innovation within the company. William L. McKnight, 3M’s president and chair from 1929 to 1966, valued honest mistakes as opportunities from which to learn. He was quoted as saying, "Management that is destructively critical when mistakes are made kills initiative. And it is essential that we have many people with initiative if we are to continue to grow." This ethos inspired 3M to institute the "15 Percent Program" in 1948 to allow employees to devote 15 percent of their time to developing their own inventions and solutions. Following 3M’s lead, other companies, including Google, have implemented similar policies. 3M has been named one of the world's best employers by Forbes. Though 3M beat first-quarter earning expectations in 2023, in April of that year, the company announced a wave of layoffs affecting 3M employees globally in underperforming divisions of the company.

History

Shortly after its founding, 3M nearly went out of business before Edgar B. Ober and Lucius Pond Ordway invested in the company in 1905 and successfully rescued it.

In 1907, the company set up a sandpaper factory in Duluth, Minnesota. Once the business was better established, company headquarters were relocated in 1916 from Two Harbors to St. Paul, Minnesota. During this period, the company set up a research and development laboratory in part to supervise the quality control process. 3M expanded following World War I with its invention in 1921 of waterproof sandpaper, Wetordry, which was sold primarily to automakers. It was less coarse than traditional sandpaper and, when used wet, prevented dust from being released into the air. It was 3M’s first highly successful product. Just a few years later, the company began making adhesives. Two of the resulting products were blockbusters: masking tape, which was introduced in 1925, and cellophane tape, introduced in 1930.

Despite severe economic conditions during the Great Depression, Scotch Cellophane Tape was a product popular with consumers with little disposable income. Profits from the "do-it-yourself" Scotch Tape enabled 3M to expand its research and development facilities at a time when many other businesses struggled. Another innovation from the 1930s was a reflective material that was applied to stop signs. This product, Scotchlite, is now used to make reflective tapes, clothing, and helmets.

In the 1940s, 3M manufactured specialized materials for military aircraft as well as magnetic tape for sound recording. The company went public in 1946 and was added to the list of businesses in the Dow Jones Industrial Average in 1976. 3M created a division for international operations in the 1950s. This venture led to tremendous growth in product development, manufacturing, and marketing overseas.

Scotchgard, a product for protecting fabrics from dirt and moisture, was introduced in 1956. 3M began making microfilm and overhead projection systems and also developed new medical and dental products in the 1960s.

In the 1970s, several of the company’s top executives were accused of financial malfeasance and subsequently resigned. The production of pharmaceuticals and radiology equipment increased during the 1970s. The failure of one of its medical products, breast implants, was widely publicized. From 1977 to 1984, 3M manufactured silicone breast implants, some of which harmed patients, who then sued the company. In 1994, 3M paid $325 million in damages to settle the cases.

Since they were introduced in 1980, Post-It Notes have become an iconic product and continue to be used around the world. The same year, 3M was investigated for releasing toxins from its Oakdale disposal site into waterways and soil, and the cleanup process was still in progress well into the twenty-first century. In 2010, the company was sued in Minnesota for polluting the water in the Twin Cities area with perfluorocarbons (PFCs); an expert hired by the state of Minnesota allegedly found that this pollution had caused higher rates of cancer and premature births, though a report from the Minnesota Department of Health disagreed. The company settled the suit in 2017, paying $850 million to the state to be used to finance programs to improve access to clean drinking water.

In 1981, 3M instituted a company-wide goal to emphasize innovation. Each business sector was directed to generate 25 percent of its revenues from products developed within the previous five years. This mandate has become a company tradition.

The Minnesota Mining and Manufacturing Company officially changed its name to 3M in 2002. Since then, it has produced a number of new medical devices, the most notable being respirators to protect against airborne germs and an electronic stethoscope that can digitally transfer data for vital signs directly from a patient. During the COVID-19 pandemic that began in 2020, 3M increased its production of respirators, a device in very high demand during the pandemic, as well as N95 masks and other personal protective equipment (PPE)—and showed increased profits as a result. 3M has also developed products to support the solar energy industry, in addition to many other advanced materials for a variety of applications. The company's commitment to sustainability can be seen in both the products it creates and the way it operates its business. In 2019, its headquarters began running on 100 percent renewable energy.

3M celebrated the reception of its 100,000th patent in 2014. The company is issued more than 3,500 patents per year worldwide. In 2023, 3M held a total of 131,651 patents.

Impact

3M’s culture of innovation has been supplemented by acquisitions of and partnerships with other companies. In 2012, 3M bought one of its suppliers, Ceradyne, which sells glass powders used in medical devices. The two entities make different types of industrial ceramics that are used in fabrics and equipment to prevent damage when exposed to high temperatures. In 2015, the company bought Capital Safety, which produces safety equipment used by construction workers. 3M has also divested entities it previously purchased, including McGhan Medical Corporation (owned from 1977 until 1984), which produced the defective breast implants.

The company has a long history of working with the automotive industry. It became a sponsor of NASCAR in the 1990s. This role included the sponsorship of the NASCAR Sprint Cup Series and, in 2015, Hendrick Motorsports and driver Jeff Gordon.

In 1953, the company established the 3M Foundation to coordinate its charitable giving. The foundation makes grants to schools and universities with a primary focus on STEM (science, technology, engineering, and math) programs. It also donates to social service agencies that serve young people and low-income families. Providing disaster relief and recovery is another of the foundation’s priorities.

The United States Patent and Trademark Office recognized 3M’s work in translating scientific advancements into practical applications by awarding it the National Medal of Technology and Innovation in 1995.

Bibliography

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