3M cuts CAPEX by 30%
Working capital, including inventories, targeted for spending cuts also
By Paul Teague -- Purchasing, 1/30/2009 1:20:00 PM
MRO buyers of plant equipment and construction materials at St. Paul, Minn.-based 3M won’t be writing as many purchase orders as they usually do as a result of news out of the company’s corporate headquarters. George Buckley, chairman, president and CEO, said 3M would cut capital expenditures this year by 30% as well as reduce working capital.
The 30% spending cut comes on the heels of 3M’s less-than-stellar financial performance in the fourth quarter. Yesterday, Buckley reported that the company’s sales, operating income and earnings per share were all down in the fourth quarter.
Sales for the full year, though, were $25.3 billion, which Buckley said was 3.3% higher than a year ago. Still, 3M’s overall 2008 earnings per share were down from 2007. Among problem markets for the company were office, residential housing and telecommunications.
“The (CAPEX) cuts would apply to lines within 3M manufacturing plants as well as new facilities,” said spokesperson Jacqueline Berry. She also said the company would reduce its inventories in 2009. The company had already cut 2,400 permanent positions within the company in the fourth quarter and temporarily furloughed 1,000 factory workers.
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