I've seen several comments here saying that BB's plan is to break up 3M into many smaller companies. What's the evidence for this? Has he or leadership ever spoken about this publicly?
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The many many manufacturing synergies as well.
“Splitting up would make for a lot more admin hires for the many silos”
Finally some common sense that can see the strength 3M had in technical and administrative synergies. These outside hire mo--ns just don’t get it.
Splitting up would make for a lot more admin hires for the many silos in enterprise supply chain. You can break up the company a little but down to the BGs will really add to the overhead costs for each company.
Luckily you’re not in charge…
If I were in charge, I actually wouldn't split 3M up. I'd tell Wall St. to go pound sand.
However, since split ups are on trend today:
1) Spin off ASD and AAD together, probably grabbing the commercial cleaning part of CBTD. This is a lot of shared manufacturing with a common distributor-led sales model. Call this one 'Discs in Distribution'.
2) PSD alone - They are big enough and and close enough to self-sufficient. Honeywell sold their personal safety business to private equity recently. Call this one the 'Just keep breathing' spin.
3) All the electronics components portfolios as a unit - Call this the 'Selling to Apple' (oops, I mean 'Selling to Mustang') OEM-led business.
4) This is a stretch, but I think I could build a case for the graphics part of CBTD and IATD to spin off as a unit. 'Sticky in St. Paul' is the working name.
Am I missing AASD, no, nobody is missing AASD. Sell off Interam and Thinsulate, divide what is left into IATD and the electronics spinoff and call it a day.
AdMD - Let it die man, just let it die. Let private equity buy whatever parts they want, then shut down the rest.
Would you break up TEBG/SIBG? Split specific divisions off?
3M at the core is an industrial company that dabbles in consumer products. CBG makes the most sense for a spin, plus with consolidation of divisions/eliminating leadership positions.
@ac CBG definitely has seen better days and much better leadership. The world has changed to value buying vs pay more for better quality. CBG still can make some good money under a more industry savvy CEO. BB will be happy to spin this off and pocket more change.
Excellent summary.
Only thing I would add is that there are at least two potentially attractive spinoffs sitting in SIBG and TEBG as well.
- Spinning off HCBG to Solventum. HCBG at least fit 3M’s historic bread and butter “premium product for a premium price” mantra. CBG is the least fitting to this due to the marketing aspect which 3M is not so good at (look at how much market share Scotch-Brite has lost to scrub daddy over the past 10 years)
- CBG went from 4 divisions to 2 divisions (or pseudo divisions) to 1 division (HG reports to KC who reports to CEO). Leaning up the executive ranks could be a way to make it more appealing to a potential buyer to put their own talking heads in place.
- “The death of the industrial conglomerate” aka GE, Honeywell, United Technologies and now 3M. Wall Street gets what Wall Street wants.
My 2 cents. CBG could very well be better off in someone else’s hands either way a bit more marketing know how.