3M’s major healthcare spin-off will keep a sizable presence in Minnesota under the new name Solventum, which represents the combination of the words “solving” and “momentum.”
The independent company will span some 20,000 professionals in four major business categories — oral care, healthcare information technology, filtration and purification, and “medical solutions” — that resulted in some $8.4 billion in sales in 2022, 3M officials said Thursday.
That qualifies the spin-off to become its own Fortune 500 company, a threshold that Fortune Magazine said was reached when companies reported at least $7.2 billion in revenue this year.
Maplewood-based 3M’s healthcare spin-off, announced in summer 2022, has raised widespread speculation about whether the new company would seek tax and land incentives elsewhere or remain in Minnesota, which has established a medical and health technology network buoyed by major players like the University of Minnesota and the Mayo Clinic.
Workers ‘spread all over the world’
Danette Andley, the senior vice president and chief marketing officer for 3M’s healthcare business group, said that no announcements have been made about where Solventum will be headquartered, but the company’s 20,000 healthcare workers are currently spread throughout 38 countries, including about 1,180 workers in the St. Paul area.
That won’t change, she said.
The workers are “spread all over the world,” said Andley, in an interview Thursday. “We have a large presence (in St. Paul) that we’re committed to maintaining, but we have not named a headquarters. … One of our largest footprints is in the St. Paul area.”
In a written announcement, 3M said “solving” captures the company’s “dedication to finding breakthrough solutions,” while “momentum symbolizes swifter, nimbler innovation.”
It goes on to say: “The new name represents how the independent health care company will focus on solving big health care challenges and emphasizes the tremendous impact it can make on the world. The new logo will take inspiration from the company’s future drive to never stop solving and transforms the ‘S’ from the name into an expressive symbol of limitlessness.”
The spin-off — in which 3M is expected to retain a 20% stake — is expected to become official in the first half of 2024.
A year of challenges for an expanding company
3M, which launched in 1902 in Two Harbors, Minn., was founded as Minnesota Mining and Manufacturing and specialized in mining mineral deposits for sandpaper and grinding wheels.
Since then, the conglomerate best known for Scotch sticky tape and Post-it notes has expanded into some 600,000 products, from stationery to orthodontics. Its products now include health information software, biopharmaceuticals and items such as sealants, lubricants and fillers geared toward the automotive industry. In October, it held an open house for a new automotive collision repairs skills center by its former St. Paul campus.
As of April, 3M employed about 12,635 workers in Minnesota. In May, the company advised state officials that it would lay off 1,100 employees from its Maplewood headquarters, including 500 out-of-state workers who operate remotely but are technically employed out of Minnesota.
Overall, 3M’s restructuring actions were expected to eliminate 6,000 positions globally, at least 6% of its more than 90,000 workers. The company had announced in January it would eliminate 2,500 manufacturing jobs globally.
The cost-cutting moves, intended to achieve annual pre-tax savings of $700 million to $900 million, were blamed on sluggish sales figures in the U.S. and abroad. At the same time, the company has faced costly litigation related to its Combat Arms Earplugs, as well as PFAS, or forever chemicals, in water supplies in Minnesota, Belgium and elsewhere. In June, 3M agreed to a $10.3 billion national settlement with U.S. cities, counties and other plaintiffs who had filed a collective 4,000 lawsuits over PFAS.
Publicly-traded 3M, one of 30 companies in the Dow Jones Industrial Average, said in a written statement announcing employee cuts last spring that it would “reduce layers of management” and “further simplify and strengthen our supply chain structure” to improve margins and cash flow.
It also promised to “prioritize investments in high-growth end markets where 3M science gives us a clear competitive advantage.”
