A few years ago there would have been alarm bells ringing everywhere, the minute businesses went below 20% OM’s and HCBG was always premium with high 20’s … look just where the company is now 17% total and not a business over 20% … healthcare became a lower margin business than SIBG 😂
They really screwed this company up … dividend cuts ahead for sure
I question 3M exective recruitment for their top operation roles on a complex network. You make one mistake after another. Without naming names Last guy on the job was an ex finance guy a bean counter who headed it. Without any understanding of manufacturing external innovations and next guy brought in is a coffeemaker .. who comes in and figures out. He is completely out of his depth. Goes for external consultant knowledge and tells them cost out and simplify.
An internal hipo given some backup. Would have done it more sensibly..
3M doesnt trust its own people capabilities. Got an external and consultants who have zero skin in the game. Only dollars which will never materialise long term..
A huge, absolutely huge, part of the margin problem is plant loading. With the shrinking volume (not dollars, but square feet of product) in most plants the fixed overhead has crushed margins down.
(Fixed here being depreciation, basic management, utilities, facility maintenance, etc.) Tireman sounds like an arrogant 13 year old know-it-all when he says "depreciation is the only fixed expense".
Tireman and his foolish consultants think you can cut your way to prosperity. The opposite needs to happen for 3M to actually return to the lovely 22% margins of the past. 3M needs to hire sales teams, not marketers, to go out and sell the existing factories out. Even just 1,000 dedicated sales reps globally would make a Wall-Street-noticeable difference in 3M's fortunes almost immediately.
3M is near stalling due to low volume in many large manufacturing portfolios. If 3M had the courage and brains to try and fill the plants, most of those plants would succeed. Unfortunately 3M executives have developed an allergy to money that prevents them from doing anything to make any.
COC knows that any cut in dividend will send the share price to spiral down quickly. Nobody would suggest any cut until the spin off whereby they will mask it under the spin off