Decades of selling PFAS left the iconic American manufacturer mired in legal liabilities. A new CEO is hoping to spark a turnaround.
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The Command strip is one of those quintessential 3M products. Released in 1996, it was simple yet revolutionary, strong enough to hold items without stripping paint when removed. Soon it was fastening framed photos, bathroom towels and outdoor decorations around the world.
The adhesive that made the strip possible was invented by a 3M scientist in the late 1980s. The exact science is a closely guarded secret, but it can resist gravity while somehow pulling away clean when tugged as instructed. In hindsight the market for such an invention is obvious, and yet it was almost lost to corporate bureaucracy. 3M shelved the project at one point in the ’90s and revived it only after impassioned pleas from a determined product development executive. His persistence paid off: Within three years of its debut, the Command strip was turning a $10 million profit. 3M Co. now sells more than 200 varieties, bringing in $500 million a year.
As Command strips turned into a product empire, though, they also became captive to 3M’s unique form of industrial sprawl. Historically the company has organized its factories by material science and manufacturing processes, rather than by product—think chemicals in one facility, adhesives in another and packaging somewhere else, for example, regardless of their ultimate end use. This way, the thinking went, with each innovation, 3M could wring more value from existing machinery and underlying technologies. But every new product and geographic market also brought with it new costs and complexities, resulting in a labyrinthine factory network. This approach meant that Command strip production took place at multiple sites, sometimes hundreds of miles apart. Add in more steps for distribution, and the journey to Walmart shelves of what is, at base, just a particularly good sticky plastic hook looks pretty convoluted.
3M is one of the most sparkling brand names in US business history, known for advancing material science to the point that the first astronauts who walked on the moon were equipped with boots made from its synthetic rubber. If America wanted it, 3M could invent and produce it, building its fortunes on products as innocuous as Post-it notes and as dangerous as chemicals lining nonstick pans. From its headquarters in St. Paul, the company also became known in the business world for its Minnesota-nice corporate culture, a contrast to the ruthlessness championed by the likes of longtime General Electric Co. Chief Executive Officer Jack Welch. 3M’s executives were unfailingly polite, its senior scientists were allowed to devote 15% of their time to research projects of their choosing, and many employees worked at 3M for their entire careers, long after staying in one job forever ceased to be fashionable.
But problems were bubbling under the surface, ones that went well beyond struggles with successful lines like the Command strip. First and foremost, those pan-lining chemicals—specifically certain types of perfluoroalkyl and polyfluoroalkyl substances, or PFAS, which were also used in products such as Scotchgard fabric protector and firefighting foam—have been found to increase the risk of cancer, decrease fertility and suppress the immune system, including weakening response to vaccines. Those findings have fueled a vast array of lawsuits that analysts estimate could end up costing 3M in the neighborhood of $20 billion, including ones it has already settled. Adding to those legal woes, the company spent years facing down major multidistrict litigation claiming it knowingly sold defective earplugs that left US military service members with hearing loss and tinnitus. (In agreements to resolve both of those lawsuits, 3M hasn’t admitted to any liability or wrongdoing.)
As 3M dealt with these issues, its traditional strengths were atrophying. New product introductions slowed to a trickle, and sales growth was lackluster. If America wanted it, 3M grew less and less likely to be making it. By late 2021, as most businesses were regaining their footing after the pandemic, it appeared to many observers almost as if 3M had forgotten how to be a manufacturing company. Investors stopped treating it like one, viewing it more through the lens of liability and risk than of factory output and projected revenue.
Even 3M’s Minnesota-nice reputation has taken some hits. Senior executives privately complain that in recent years, beneath all the Midwestern cheer, the working environment has been marked by tone deafness, overbearing bureaucracy and resistance to change. Decisions were slow, fixes pushed by management felt blunt and grating, and accountability was hard to come by. Worker-safety protocols also lapsed, with the incident rate at its factories becoming significantly higher than at North American peers such as Corteva, Dow and GE.
Effectively, 3M became “a case study of everything not to do over a very long period of time,” says Scott Davis, an analyst at Melius Research LLC. It became a “broken company.” And when that happens, Davis says, “you want change, you crave change.”
With almost $100 billion of market value wiped out from the peak in 2018 to the start of 2024, 3M last year tapped Bill Brown, an outsider who’d spent much of his career in the defense industry, to turn things around. He hosted his first earnings call about three months into the job. Analysts and investors expected him to offer the usual platitudes about hosting listening sessions and considering all options. Instead he talked about the Command strip—how it demonstrated perfectly that the company had gotten too big, too slow, too convoluted. Brown said he had a plan to tackle all that. 3M’s stock price shot up more than 20% by close, its best one-day rally in more than four decades on the public markets.
The company declined to comment on the reporting in this story, instead saying in a statement that it’s “focused on creating shareholder value and positioning 3M for success by driving profitable growth, embedding a culture of operational excellence across the enterprise.”
It will help Brown’s turnaround plan that 3M’s liabilities have become less open-ended: A major settlement with water utilities over PFAS pollution and a deal to resolve the earplugs litigation, both agreed to in 2023, have reset investor expectations for the overall bill. The Trump administration also appears set to take a lighter touch to environmental regulation, providing relief to companies like 3M.
But even the optimists concede that this is no easy fix. In the months since Brown took the reins, he’s been relying on the same playbook that Dave Cote used to restore Honeywell International Inc. in the early 2000s, when it faced a raft of asbestos lawsuits and the aftereffects of several dubious megamergers, and that Larry Culp deployed this decade to resuscitate GE when it was overwhelmed by debt and a $15 billion mess in a legacy insurance business. Brown’s plan starts with running 3M better. Get that right, and the really big problems—the amorphous liabilities, the cultural corrosion, the public-image crisis—won’t seem quite as insurmountable.
Minnesota Mining & Manufacturing started in 1902 as a venture to mine corundum, which is harder than all other minerals save for diamonds and an ideal ingredient in sandpaper. But when its founders discovered they were in fact extracting a different low-grade material, they decided to get out of mining and into making the sandpaper instead, using raw materials sourced elsewhere.
Similarly, 3M didn’t discover PFAS. These synthetic chemicals trace back to the Manhattan Project, which required scientists to invent a way to extract uranium to make an atomic bomb. A chemical engineering professor at Pennsylvania State College named Joseph H. Simons developed a process to create almost unbreakable carbon fluorine bonds by passing raw fluorine, a highly volatile gas, through a carbon arc. He later developed a method for practical production of fluorocarbons, a process 3M employed to pioneer the use of PFAS in consumer and industrial products starting in the 1950s. The company eventually became a major producer both for its own products and for customers such as DuPont de Nemours Inc., which used it in Teflon.
Near-indestructibility is useful for everything from developing nuclear weapons to repelling grease and water. But these chemicals take years to break down, making them highly problematic in the environment and the human body. For a long time, 3M billed manufactured PFAS and its PFAS-infused products as perfectly safe, even as internal documents and studies unearthed through lawsuits showed the company was aware of the chemicals’ toxicity at least as far back as the 1970s.
In 1998, Richard Purdy, an ecological toxicologist at 3M, conducted a study that found PFAS even in the blood of bald eagle nestlings, which primarily eat fish and inhabit remote areas. He quit the next year and sent a copy of his resignation letter to the US Environmental Protection Agency, saying the company had failed to properly communicate to customers and regulators the results of research showing how prevalent the chemicals had become in people and the environment. In 2000, 3M announced it would voluntarily stop making the forms of the chemicals that had the most research documenting their hazards, even as it maintained the chemicals were safe and didn’t pose a long-term health issue. In 2006, the company reached a $1.5 million settlement with the EPA over reporting violations related to PFAS.
More research about the health consequences of PFAS followed, including an influential 2012 study of children born in the remote Faroe Islands that found the chemicals in bloodstreams at levels comparable to the US population and indicated a resulting weakened immune response to vaccines. As the production of certain kinds of PFAS declined, the concentration of the chemicals in people’s bloodstreams fell sharply, according to research from the US Centers for Disease Control and Prevention and others. But after decades of use, the legal challenges, and the public fallout, were just beginning.
The tipping point came in 2018. That January, The Devil We Know—an investigative documentary examining a West Virginia community’s fight against a plant, then owned by DuPont, that made Teflon—premiered at the Sundance Film Festival. A few weeks after that, 3M agreed, without admitting wrongdoing, to pay $850 million to settle a lawsuit brought by Minnesota over claims the company had poisoned drinking water in its own backyard. And in June the CDC, drawing on scientific advances that allowed PFAS detection at much lower levels, published a draft report warning that the chemicals can cause health problems at significantly lower exposure thresholds than what the EPA had claimed at the time was safe.
The following month, Michael Roman took over as 3M’s CEO. A 30-year company veteran, Roman had overseen businesses in the US, Europe and Asia and had served as 3M’s chief operating officer. He was the embodiment of its culture of politesse, but this ultimately wouldn’t help him much with the storm that was brewing. PFAS claims came to span challenges from state attorneys general, water utilities, people with personal injury and property complaints, and foreign governments such as those of Belgium and the Netherlands.
Adding to the pile, 3M was also being sued over an earplug business it had acquired through the 2008 purchase of Aearo Technologies. In July 2018, the same month Roman took over, 3M had agreed, without admitting wrongdoing, to a $9.1 million settlement with the US Department of Justice to resolve allegations that it had sold earplugs to the US military without disclosing defects. Cases brought by veterans claiming hearing damage mushroomed after the settlement and dragged on for years.
With potential liabilities stewing outside its factories, 3M was simultaneously dealing with issues inside them. Having long prided itself on being a desirable and safe place to work, the company was seeing an uptick in the number of safety violations at its factories. From 2019 to 2024, 3M received at least 27 “serious” initial citations, which are based on worksite investigations, from the Occupational Safety and Health Administration—more than any other company among a group of its North American industrial and health-care technology peers, according to a Bloomberg Businessweek analysis.
3M also got one repeat admonishment and notice of three willful violations, meaning it knowingly failed to comply with a legal requirement or acted with “plain indifference to employee safety.” (3M and other companies in the dataset have contested many of the citations, and have in some cases succeeded in getting them downgraded or dismissed as part of settlements. In response to requests for comment from Businessweek, Carlisle said that its injury rate is “very low” compared with the industry average and that it seeks to “continuously improve” its safety standards, and GE said it took immediate action to report the incident that led to its citations and to prevent a reoccurrence.)
Two of 3M’s willful violations were linked to inadequate safeguards for a plastic extrusion machine that required employees to thread material through by hand. Trisha Jones, who operated the machine at the company’s plant in Prairie du Chien, Wisconsin, died in May 2023 after getting caught in the large rollers and suffering traumatic head injuries. “They’re not managing these facilities well,” says David Michaels, who ran OSHA from 2009 to 2017 and is now a professor of public health at George Washington University. “That’s a sign of safety management not being implemented.”
The safety incidents jarred with the benevolent culture workers had come to expect. Peter Gibbons, formerly in charge of overseeing supply chains across the company, would regularly contend that the biggest cause of injuries at factories was employees falling down stairs while using their phones, so much so that “Use the Handrail” became a running joke among staff, according to people with the company who, like others interviewed for this piece, asked not to be named discussing private interactions or information. (Gibbons didn’t respond to requests for comment.)
People close to 3M say the rise in safety incidents reflected years of underinvestment in factories to save costs, as well as a decision by Roman in 2020 to make oversight of manufacturing operations the responsibility of managers in charge of the business lines, rather than ones who were on-site at plants. The shift was part of a 2020 reorganization, dubbed “Advanced 3M,” that was intended to make the company more responsive to customer needs.
It was one of many sweeping gestures Roman undertook during his six years at the helm. Another was Polaris, a suite of digital tools introduced in 2021 to give customers a more Amazon-like experience when placing and tracking orders; the initiative ended up costing more than planned and hasn’t been fully implemented since going online, the people close to the company say. Roman also pursued several cost-cutting efforts that cost hundreds of workers their jobs while barely denting 3M’s financial results. In fact its profit margins went sideways, in contrast to peers that were improving manufacturing processes, raising prices and adding market share.
During his tenure, Roman developed a reputation internally for being thin-skinned. In 2020, at the height of the pandemic, he hosted virtual town halls as part of a planned series. But, according to the people close to the company, the series was abruptly canceled after he learned that anonymous commenters had criticized his presentations for reasons that included a lack of detail and transparency about Covid-19 strategy and protocols. (Roman didn’t respond to requests for comment.)
Roman’s biggest challenge may have been that an outsize amount of his time, rather than being spent running an industrial company, was spent managing the PFAS problem, even though manufactured PFAS represented a fraction of 3M’s business. In 2022 the Biden administration proposed to designate certain PFAS as hazardous materials under the federal Superfund law, and the EPA declared that virtually no amount of the chemicals is safe in drinking water. Not long after, Roman announced 3M would cease all remaining production of PFAS and work to discontinue their use in its products by the end of 2025. In internal deliberations, people familiar with the conversations say, executives had pointed out to Roman that PFAS are integral to the production of semiconductors, electric-vehicle batteries and weapons systems—the very types of goods the US government under President Joe Biden was seeking to make more of at home. At the very least, some argued, 3M should sell its PFAS manufacturing facilities rather than simply shutting them down. Roman didn’t want to hear it: 3M was done with PFAS, and that was that.
Getting all the PFAS out of its products has proved complicated, though. In a testament to how prevalent the chemicals have become, 3M has cautioned investors that they may continue to be present beyond 2025 in certain products that contain components manufactured by third parties, including lithium-ion batteries, printed circuit boards and some seals and gaskets. 3M said this is because approved substitutes that meet regulatory and industry standards may not be available.
In the year after Roman’s announcement, 3M finally started putting some of its legal challenges behind it. The company announced a deal in June 2023 to pay as much as $12.5 billion over 13 years to test and treat city water supplies for PFAS, resolving current and future claims by municipal utilities over pollution. A few months later it announced it had reached a separate $6 billion agreement to resolve claims in the earplug litigation.
3M continued to chip away at its PFAS lawsuits after Brown replaced Roman in 2024. This May it agreed to pay New Jersey as much as $450 million to resolve claims related to PFAS pollution at the 3M-supplied Chambers Works plant, as well as general complaints about natural resource damage from the chemicals.
As settlements have accrued, estimates for how much the company might ultimately have to pay have gone down. Andrew Obin, an analyst at Bank of America Corp., says 3M might be on the hook for $11.5 billion in settlements related to US suits over damages to natural resources alone. But he says the settlement math in New Jersey—which has particularly acute levels of PFAS pollution—implies his estimate for this category of claims should be materially lower, closer to $6 billion.
The regulatory landscape is also changing in ways that might help 3M. The shift began with the US Supreme Court’s decision, handed down last June 28, to overturn the Chevron doctrine, the legal principle that empowered executive branch agencies to interpret and enforce regulations. The ruling gave momentum to lawsuits filed by chemical industry and manufacturing groups as well as water utility associations, challenging the Biden administration’s limits on PFAS in drinking water as arbitrary and financially impossible. This May, President Donald Trump’s EPA announced it was delaying its compliance deadline for removal of the two best-known types of PFAS and was rescinding and reconsidering the limits on four other categories. And earlier this month, in a major shift, the EPA asked the court to vacate the drinking water rule for the four other categories of PFAS, concurring with the water utility plaintiffs that aspects of the process by which the standards had been established were unlawful. The agency has delayed a rule, too, that would have required PFAS manufacturers to file reports about environmental and health effects from 2011 to 2022. (The EPA said in a statement that it’s “committed to protecting public health by addressing PFAS in drinking water while following the law and ensuring that regulatory compliance is achievable for drinking water systems.”)
The US Chamber of Commerce is also leading a lawsuit against the EPA over the designation of certain types of PFAS as hazardous materials under the Superfund law—which it contends could force companies to collectively pay as much as $17.4 billion in cleanup costs just for nonfederal sites that have been identified as a priority. After repeatedly getting the proceedings postponed, the Trump administration announced this month that it would retain the Superfund designation for the two best-known kinds of PFAS, while calling upon Congress to address concerns about entities getting stuck with cleanup bills for chemicals they didn’t themselves manufacture. The litigation itself continues.
Obin, the Bank of America analyst, pegs 3M’s liability for cleaning up Superfund sites at as much as $9 billion but says that bill could also end up being lower as legal challenges drag out the policy’s implementation. And he points out that the company could recover as much as 25% of its total PFAS liabilities through insurance payouts. “In conversations with investors, the narrative has changed,” Obin says. “Maybe three years ago, people would say, ‘Why are your estimates so low?’”
3M’s other big remaining undefined PFAS liability is personal injury lawsuits. These, too, may turn out to be less financially crippling than analysts previously feared. In major multidistrict litigation, plaintiffs are arguing that they got cancer by being exposed to water contaminated with PFAS from firefighting foam and are seeking damages from 3M and other companies. The defendants’ lawyers have sought to exclude expert testimony for the plaintiffs on the link between PFAS and cancer, contending that they relied on research findings that aren’t statistically significant at the relevant exposure levels for the claimants. A bellwether trial had been set to come before a federal district court in South Carolina in October. It’s since been postponed “until such a time as the court deems appropriate,” to allow both sides to sift through a large number of unfiled claims and determine which of these should be included in the proceeding. The judge overseeing the case has urged the two sides to settle, and this latest development may make such an agreement more likely, according to Barclays Plc analyst Julian Mitchell. As it stands, Mitchell estimates that all of 3M’s outstanding PFAS liabilities, including personal injury and natural resources claims, could be as much as $11 billion, down from his $16 billion calculation immediately after an agreement to settle the water lawsuits was announced in 2023.
Companies have recovered from liability disasters before. Davis, the Melius Research analyst, recalls a peer predicting in the early 2000s that Honeywell would go bankrupt because of asbestos claims, as well as a short seller who infamously claimed GE was on a path to financial collapse because of festering liabilities in a legacy insurance business. Neither forecast came true. The critical thing for 3M, Davis says, is improving cash flow so its liabilities seem less like an existential wrecking ball than an expense. It needs to improve to the point that “cash-flow growth is so strong that people say, ‘You know what? They’ve got the liabilities, and they can do buybacks and M&A, and operate as a real entity.’” The key for Honeywell and GE, he points out, was finding the right CEO to clean up their operations.
3M’s choice for that was Brown. Before signing on, he had a successful career overseeing defense contractor Harris Corp., now known as L3Harris Technologies Inc. after he shepherded a merger with L3 Technologies in 2019. Former colleagues say they thought that, after Brown stepped down in 2022, he might land a cushy private equity gig, not join a struggling conglomerate facing giant legal liabilities. Asked earlier this year at a JPMorgan Chase & Co. conference why he took the 3M job given the PFAS baggage, Brown joked that it wasn’t the -15F winter weather at headquarters in Minnesota. Rather, he said, PFAS had been so all-consuming for 3M that it had an opportunity to simply pay more attention to everything else—as long as the liabilities didn’t end up being worse than investors’ downtrodden expectations, then 3M’s stock price could climb much higher. It was, he added, “a great opportunity to engage with this great iconic company called 3M and try to help make it great again.”
Filings show that Brown is either 62 or 63 (the company declined to specify which). Known as an exercise fanatic, he’s trying to bring a comparable rigor of routine to 3M. The plan he’s revealed for fixing it isn’t all that complex. For starters, he cleared out much of the upper management under his predecessor, including replacing the chief financial officer, the head of investor relations and the top supply chain manager. Brown also lured in Amazon.com Inc. executive Wendy Bauer to take over 3M’s transportation and electronics division.
He’s vowed, too, to reboot 3M’s vaunted “innovation machine,” to cut costs and to drag the company’s manufacturing operations into the modern era, including making factories safer. “Our performance in safety has not been where we should be,” he said at the conference. “Our focus is around zero injuries, zero spills, zero incidents.”
Brown has also been pushing to improve how the company satisfies orders—when he took over, more than 10% of 3M deliveries were showing up late or incomplete—and how it makes each product in its sprawling portfolio. He’s suggested the company might reduce its 25,000-strong network of suppliers and eventually its empire of 110 factories, with its manufacturing equipment currently being used at only about 60% of capacity. Every week he and his top lieutenants review 3M’s business lines and factories, hunting for logjams and inefficiencies that cause deliveries to fall short of expectations.
Those who worked with Brown at L3Harris praise his leadership style. An engineer by training, he’s obsessed with pursuing excellence in all facets of a company’s operations, according to Jay Malave, a former L3Harris executive who was recently named Boeing Co.’s CFO. Rahul Ghai, CFO of GE Aerospace and a former Brown deputy himself, says, “What makes him successful is his tremendous attention to detail.” He adds: “This is the right guy for the job.” Both say that even though Brown can be demanding, he delivers marching orders with positivity.
At a Bank of America conference in May, Brown said 3M’s culture needs to encourage more individual accountability if his other improvements are to stick. When he joined the company, only about 10 people had performance-based stock compensation agreements. Now 1,500 people are paid this way. And everyone is being encouraged to act with urgency. The mantra, he said, is “Get it done tonight, not tomorrow. If it can be done in the next minute, do it in the next minute.”
Despite recent market volatility related to the global trade war started by Trump’s tariffs, 3M shares are still worth about 60% more than they were when Brown started last May. That’s more than double the gains for a broader group of industrial companies on the S&P 500 over that time period. But the stock is still down about 30% from its peak in early 2018, before the PFAS challenges came to a head.
Brown has been at pains to emphasize to investors that this turnaround isn’t going to be quick. Success would be resolving 3M’s legal cases without any jarring surprises, revving its innovation apparatus back up to the point that investors are convinced it can increase revenue, and improving the efficiency of its supply chain and manufacturing network.
In a testament to how hard that last challenge will be, Brown isn’t the first 3M CEO to cite the Command strip as an example of what needs to be fixed: George Buckley, who ran the company from 2005 to 2012, used to describe 3M’s disjointed assembly processes for the strip and other products as “hairballs.” At the time he started trying to untangle these knots, one part of the production process for Command hooks began with adhesives made at a 3M plant in Missouri, which were then shipped to Indiana to be applied to polyethylene foam. The foam then went to Minnesota, where the 3M logo was added and the strips were cut to size. Finally the tabs went to Wisconsin to be packaged along with a plastic hook. According to company executives interviewed by the Wall Street Journal in 2012, under Buckley’s oversight, 3M consolidated these particular steps in the Command strip production at one plant.
It was an improvement, sure, though it didn’t resolve the problem. Today, the end-to-end process still spans a handful of factories.
“You will never fix it, because that was how the company was built,” Obin says of 3M’s manufacturing labyrinth. But perhaps that’s OK. He points out that it wasn’t an issue during periods in the company’s history when revenue and profits were growing. “It just needs to be run properly.”