3M 2009 Annual Report Download - page 75

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69
2007 and 2006 Restructuring Actions:
During the fourth quarter of 2006 and the first six months of 2007, management approved and committed to
undertake the following restructuring actions:
• Pharmaceuticals business actions — employee-related, asset impairment and other costs pertaining to the
Company’s exit of its branded pharmaceuticals operations. These costs included severance and benefits for
pharmaceuticals business employees who are not obtaining employment with the buyers as well as
impairment charges associated with certain assets not transferred to the buyers.
• Overhead reduction actions — employee-related costs for severance and benefits, costs associated with
actions to reduce the Company’s cost structure.
• Business-specific actions — employee-related costs for severance and benefits, fixed and intangible asset
impairments, certain contractual obligations, and expenses from the exit of certain product lines.
In connection with this targeted 2007/2006 restructuring plan, the Company eliminated a total of approximately 1,900
positions from various functions within the Company. Approximately 390 positions were pharmaceuticals business
employees, approximately 960 positions related primarily to corporate staff overhead reductions, and approximately
550 positions were business-specific reduction actions. Of the 1,900 employment reductions, about 58 percent are in
the United States, 21 percent in Europe, 12 percent in Latin America and Canada, and 9 percent in the Asia Pacific
area. As a result of the second-quarter 2007 phaseout of operations at a New Jersey roofing granule facility and the
sale of the Company’s Opticom Priority Control Systems and Canoga Traffic Detection businesses, the Company
eliminated approximately 100 additional positions.
Actions with respect to the 2007/2006 restructuring plan were substantially completed in 2007. The net restructuring
expenses (credits) incurred in 2007 related to these actions are summarized by income statement line as follows:
(Millions) 2007
Cost of sales ............................................................................................................
.
$ 40
Selling, general and administrative expenses .........................................................
.
5
Research, development and related expenses .......................................................
.
(7)
Total restructuring expense .................................................................................
.
$ 38
The amount of net expenses (credits) incurred in 2007 associated with the restructuring actions are reflected in the
Company’s business segments as follows:
(Millions) 2007
Industrial and Transportation...................................................................................
.
$ 2
Health Care..............................................................................................................
.
(11)
Safety, Security and Protection Services ................................................................
.
28
Display and Graphics ..............................................................................................
.
3
Electro and Communications...................................................................................
.
18
Corporate and Unallocated......................................................................................
.
(2)
Total .....................................................................................................................
.
$ 38