3M CEO McNerney Outlines Plans to Drive Growth and Competitiveness

     ST. PAUL, Minn., May 30 In a meeting with investors
today, W. James McNerney, Jr., 3M chairman and CEO, said that 3M
is advancing despite a tough economy and discussed several initiatives to
unleash the full power of the company's size and scope.
    "After several months on the job, I'm impressed with the way 3Mers
everywhere have addressed a challenging business environment," McNerney said.
"I'm also impressed with the company's strengths, especially its culture of
innovation and vast global reach.
    "3M possesses a special and powerful ability to create new-to-the world
product categories," McNerney said. He highlighted four newer 3M technology
platforms with large potential -- optical films for electronic displays, an
entirely new class of 3M pharmaceuticals that stimulate the body's immune
system to combat certain diseases, optical components for the
telecommunications industry, and new 3M ventures in the areas of energy
management and distributed power.
    3M's global presence, McNerney said, "is matched by few companies and is
our single largest growth platform."  In 2000, 3M achieved 53 percent of its
$16.7 billion of worldwide sales outside the United States.
    McNerney said that, on a longer-term basis, 3M continues to target
per-share earnings growth of 13 percent a year.  He discussed the dramatically
more challenging environment facing 3M and other companies over the
foreseeable future, and he laid out five initiatives the company is
aggressively driving to deliver this objective.  These are Six Sigma, global
sourcing effectiveness, indirect cost reduction, e-productivity, and "3M
Acceleration" -- an initiative aimed at achieving even greater growth and
returns on 3M's more than $1 billion annual R&D investment.
    "At the top of my agenda is a headlong and companywide implementation of
the Six Sigma approach to process and business improvement," he said.  "I've
seen firsthand how Six Sigma can energize an organization, increase sales and
cash flow, satisfy customers better, and strengthen management development."
    He said that Six Sigma projects could contribute a gross benefit of
$300 - $450 million of pre-tax income and $250 - $400 million of cash by the
end of the initiative's second full year of operation.
    In the global sourcing area, 3M sees the opportunity to reduce costs by
more than $100 million per year during the next five years by taking fuller
advantage of the company's purchasing power.  Thirty-seven 3M teams are
driving the company's worldwide sourcing initiative.
    McNerney said that 3M efforts to reduce indirect costs -- costs not
directly associated with a product or service -- are off to a good start.  For
the year 2001, these costs are expected to be at least $275 million below last
year's level.
    3M is also targeting significant improvement in its payback on web
technology investments through increased online order entry, e-auctions,
online travel management and other efficiency efforts.
    Commenting on the 3M Acceleration initiative, he said the company is in
the process of reallocating 30 percent of its R&D investment to
higher-potential, more global projects.
    "These across-the-company initiatives, combined with 3M's powerful
competitive advantages, give us confidence that our 13 percent earnings growth
target is realistic and achievable on a longer-term basis," McNerney said.
    As stated at its first-quarter 2001 earnings conference, 3M expects more
moderate earnings growth this year due to the weak U.S. economy, the slowdown
in international economic growth and a persistently strong dollar.  3M expects
earnings in the range of $4.75 to $5.00 per share, excluding non-recurring
items, up from $4.68 per share excluding non-recurring items in 2000.  The
company also indicated at that time that earnings for the second quarter
ending June 30 are expected to be similar to, or up slightly from, the
$1.18 per share the company earned in the same quarter last year excluding
non-recurring items in both periods.
    "The entire 3M organization is aggressively driving down costs given the
current, difficult economic environment," McNerney said.  "At the same time,
we continue to make significant investments in technology and new product
development, and pursue Six Sigma and other initiatives that will drive
healthy growth on a longer-term basis."

    Forward-Looking Statements
    This news release contains forward-looking statements that reflect current
views and estimates of 3M's management of future economic circumstances,
industry conditions, company performance and financial results.  The
statements are based on many assumptions and factors including: (1) worldwide
economic conditions; (2) foreign currency exchange rates and fluctuations in
those rates; (3) the timing and acceptance of new product offerings; (4)
purchased components and materials, including shortages and increases in the
costs of such components and materials; (5) 3M's ability to successfully
manage acquisitions, divestitures and strategic alliances; and (6) legal
proceedings.  Any changes in such assumptions or factors could produce
significantly different results.

    About 3M
    3M is a $17 billion diversified technology company with leading positions
in electronics, telecommunications, industrial, consumer and office, health
care, safety and other markets.  Headquartered in St. Paul, Minn., the company
has operations in more than 60 countries and serves customers in nearly 200
countries.  3M businesses share technologies, manufacturing operations,
brands, marketing channels and other important resources.  3M is one of the 30
stocks that make up the Dow Jones Industrial Average and also is a component
of the Standard & Poor's 500 Index.  Additional information about the company
is available on the Internet at http://www.3M.com

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