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Restructuring Actions

9 Months Ended

Sep. 30, 2024

Restructuring and Related Activities [Abstract]

Restructuring Actions

NOTE 6. Restructuring Actions

2023 to 2025 Structural Reorganization Actions: As described in Note 5 in 3M's 2023 Annual Report on Form 10-K, in the first quarter of 2023, 3M announced it would undertake structural reorganization actions to reduce the size of the corporate center of the Company, simplify supply chain, streamline 3M’s geographic footprint, reduce layers of management, further align business go-to-market models to customers, and reduce manufacturing roles to align with production volumes. This aggregate initiative, beginning in the first quarter of 2023 and continuing through 2025, is expected (as updated to exclude discontinued operations) to impact approximately 8,000 positions worldwide with an expected pre-tax charge of $700 million to $800 million over that period. During 2023, management approved and committed to undertake associated actions resulting in a 2023 pre-tax charge of $415 million. During 2024, management approved and committed to undertake additional actions under this initiative impacting approximately 900 positions resulting in a pre-tax charge of $40 million and $178 million in the third quarter and nine months ended September 30, 2024, respectively. Since its beginning in 2023 through committed third quarter 2024 actions, this initiative has impacted approximately 6,600 positions worldwide. Remaining activities related to the restructuring actions approved and committed through September 30, 2024 under this initiative are expected to be completed in 2025. 3M expects to commit to further actions under this initiative.

The related restructuring charges for periods presented were recorded in the income (loss) statement as follows:

						Three months ended September 30,												Nine months ended September 30,
(Millions)						2024						2023						2024						2023
Cost of sales						$	19					$	2					$	23					$	61
Selling, general and administrative expenses						18						53						141						224
Research, development and related expenses						3						3						14						25
Total operating income impact						$	40					$	58					$	178					$	310

The business segment operating income (loss) impact of these restructuring charges is summarized as follows:

						Three months ended September 30,
						2024																		2023
(Millions)						Employee Related						Asset-Related and Other						Total						Employee Related						Asset-Related and Other						Total
Safety and Industrial						$	15					$	3					$	18					$	10					$	—					$	10
Transportation and Electronics						8						1						9						9						—						9
Consumer						4						9						13						3						—						3
Corporate and unallocated						—						—						—						4						32						36
Total operating expense						$	27					$	13					$	40					$	26					$	32					$	58
						Nine months ended September 30,
						2024																		2023
(Millions)						Employee Related						Asset-Related and Other						Total						Employee Related						Asset-Related and Other						Total
Safety and Industrial						$	54					$	28					$	82					$	64					$	—					$	64
Transportation and Electronics						24						19						43						46						—						46
Consumer						13						20						33						19						—						19
Corporate and unallocated						6						14						20						129						52						181
Total operating expense						$	97					$	81					$	178					$	258					$	52					$	310

Restructuring actions, including cash and non-cash impacts, follow:

(Millions)						Employee-Related						Asset-Related and Other						Total
Accrued restructuring action balance as of December 31, 2023						$	99					$	—					$	99
Incremental expense incurred in the first quarter of 2024						46						57						103
Incremental expense incurred in the second quarter of 2024						24						11						35
Incremental expense incurred in the third quarter of 2024						27						13						40
Non-cash changes						—						(81)						(81)
Adjustments						9						—						9
Cash payments						(124)						—						(124)
Accrued restructuring action balance as of September 30, 2024						$	81					$	—					$	81

2023 to 2025 PFAS Exit Actions: As described in Note 5 in 3M's 2023 Annual Report on Form 10-K, 3M announced in 2022 that it will exit all PFAS manufacturing by the end of 2025. In 2023, 3M management approved and committed to undertake certain related workforce actions resulting in a pre-tax charge of $64 million ($40 million and $24 million in the third and fourth quarter respectively) primarily impacting cost of sales. During 2024, management approved and committed to undertake additional related workforce actions impacting approximately 100 positions resulting in a pre-tax charge of $7 million and $19 million primarily impacting cost of sales in the third quarter and nine months ended September 30, 2024, respectively. These charges are reflected within the Transportation and Electronics business segment. This initiative, beginning in 2023 through committed third quarter 2024 actions, has impacted approximately 650 positions worldwide. The remaining period of activities related to these approved and committed actions aligns with 3M's PFAS exit timeframe.

(Millions)						Employee-Related
Accrued restructuring action balance as of December 31, 2023						$	60
Incremental expense incurred in the first quarter of 2024						4
Incremental expense incurred in the second quarter of 2024						8
Incremental expense incurred in the third quarter of 2024						7
Adjustments						(5)
Cash payments						(33)
Accrued restructuring action balance as of September 30, 2024						$	41

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The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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