In the first quarter, 3M faced the combined challenges of the sharp economic slowdown in the United States, a stronger U.S. dollar and a spike in energy costs. We overcame these combined negative forces through continued strong international volume growth and aggressive management of costs, McNerney said.
The CEO told stockholders that 3M held sales, general and administrative costs flat compared with the first quarter last year, and that We’re committed to that same level of discipline for the rest of this year.
Future economic conditions remain very uncertain, McNerney said. The U.S. remains weak, and while Europe and Asia Pacific were good for us in the first quarter, growth there is clearly moderating fast, he said. Overall, there are no signs that economic conditions will improve anytime soon. Therefore, he added, 3M will maintain an intense focus on costs.
McNerney described a previously announced restructuring plan, which will result in an employment reduction of about 5,000 jobs worldwide over the next 12 months. By selectively streamlining the organization, we make the fundamental changes necessary to sharpen 3M competitiveness, advance our market leadership across the globe, and build an even stronger 3M for the future, he said.
The CEO also described several initiatives launched recently to further accelerate 3M’s growth. At the top of my agenda is companywide implementation of the Six Sigma approach to process improvement, he said. Other initiatives include leveraging 3M’s global size to drive down costs of raw materials and other supplies, reducing indirect costs, increasing returns on electronic-commerce investments and accelerating the pace of new product commercialization.
Noting that 3M will continue to invest in research and development, McNerney described the company’s participation in dynamic markets, such as touch screens and light management products for electronic displays, and a new class of proprietary immune response modifier pharmaceuticals. He said international market expansion also remains a key growth driver.
McNerney thanked 3M employees for their ongoing dedication and contribution. Around the world, our people are creating opportunities, delivering innovation, accelerating growth and working hard to fully realize this company’s tremendous potential, he said.
At the meeting, 3M stockholders elected the following three directors to the company’s Board of Directors, for terms ending in 2004:
Edward A. Brennan, retired chairman of the board, president and chief executive officer, Sears, Roebuck and Co.
W. James McNerney, Jr., chairman of the board and chief executive officer, 3M.
Kevin W. Sharer, chairman of the board and chief executive officer, Amgen, Inc.
Shareholders also ratified the appointment of PricewaterhouseCoopers LLP as 3M’s independent auditors for 2001 and rejected a stockholder proposal regarding the board member nominee process. Proponents prior to the meeting voluntarily withdrew two additional stockholder proposals regarding executive compensation.
