3M 2008 Annual Report Download - page 3

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$25
$20
$15
$10
$6.00
$4.00
$2.00
0
0
$2.00
$1.50
$1.00
$30
Net Sales (billions)
Earnings Per Share–Diluted*
Dividends Per Share
* As indicated in the Financial Summary on
page 4, certain years include net gains (losses)
related to sales of businesses, restructuring and
other items.
2004 2005 2006 2007
2004 2005 2006 2007
$3.56 $3.98 $5.06 $5.60
20082004 2005 2006 2007
$1.44 $1.68 $1.84 $1.92 $2.00
2008
$4.89
2008
$20.0 $21.2 $22.9 $24.5 $25.3
Steadfast Amid Uncertainty 1
The real questions we all wrestle with are, how long and how
deep will the recession be? Economists around the world have
differing opinions and differing models and, of course, we do
as well. I want you to be reassured that no matter how long
its duration, 3M is well prepared to overcome the economic
difficulties that face us all. We have capable people all over 3M
who know exactly what to do in times like this and we have
already taken huge steps to protect and to advance our company.
Our recent actions are designed to properly balance our cost
structure with our revenue stream. Nobody likes layoffs, but they
are a fact of life in modern business. Our approach has been to
do as many as necessary but as few as possible. We have used
furloughs, pay cuts, overtime bans, mandatory vacations and
stringent incidental cost control to limit the number of layoffs,
but in the end some were needed.
In the fourth quarter alone, we reduced over 2,400 full-time
positions worldwide, and about 3,500 over the full year. These
job eliminations spanned all geographies, but were particularly
focused on those businesses and economies experiencing the
highest level of sales pressure. In addition, we have furloughed
over 1,000 factory workers until production volumes return
to more normal levels. Contract workers have been severely
reduced. These 2008 actions in total are expected to save the
company $250 to $300 million in 2009.
In October 2008, the leadership team decided to defer merit pay
increases for all employees in 2009 (except in those cases where
local laws prohibit it). We are also amending our policy on banked
vacation — essentially phasing it out— which is expected to
reduce expenses by an additional $100 million in each of the next
two years.
Actions of this nature are neither pleasant nor uplifting, but
they are absolutely essential for the company’s well-being and