3M is divesting its own Fortune 500 company, the health care division. Where does he rest? – Twin Cities

Date:

Share post:

[ad_1]

3M Co., a Maplewood-based Fortune 500 company based in Minnesota since 1902, announced in July that it would spin off its healthcare division, a maker of wound care, oral care, healthcare information technology and micro-related products. Filters used in the production of bio-pharmaceutical products. How big of a spiral are we talking about?

In short: really big.

With $8.6 billion in sales last year, 3M’s newly publicly traded healthcare partner qualifies as a Fortune 500 company in its own right and employs hundreds, if not thousands, of workers at an as-yet-undisclosed new headquarters. City officials, developers and business advocates in St. Paul — where 3M has been based since 1962 — have been eyeing the possibility of hosting a major new employer, but competition will be fierce, and not just in the Twin Cities metro.

The new company – in which 3M will hold a 20 percent ownership stake – can, in theory, reach anywhere in the world.

CEO of Greater MSP, Minneapolis-St. Paul Regional Economic Development Partnership.

There are reasons to relocate and stay local. When Fridley-based Medtronic bought Dublin-based Covidien in 2015, the medical device maker moved its corporate headquarters to Ireland for tax purposes, still growing operations in Minnesota.

On the other hand, 3M tested a few A few years ago, 900 employees from the drug delivery department, the new company – Kindeva Drug Delivery – He didn’t go far. It worked with Minneapolis-based Ryan Koss to build 136,000 square feet of new office, warehouse and light industrial space in Woodbury.

“Our experience with major changes like this with a large company is that companies consider a lot of things and consider all their options,” Frosch said. “We strongly believe that the St. Paul region and Minnesota is the best place for this new company to start and grow and achieve great success. We want to take the case to 3M’s leadership.”

Frosch declined to discuss how open 3M officials are to that discussion. So far, he admits, cities like St. Paul and Maplewood are operating within their means.

“It’s not being channeled through the big MSP at this point,” Frosch said. “If mayors are reaching out to the company anywhere, they’re probably going to do it directly.”

Frank Jaskulke, vice president with Medical Alley, based in Golden Valley. He pointed out that 3M, which supports 14,000 health care and health technology companies in the region, is one of the founders of his company.

“Minnesota has the best health care and health technology anywhere in the world,” Jaskulke said. “We think Minnesota is the best place for them to grow their business, as they’ve done for a long time. If 3M, Medtronic, Mayo, UnitedHealth Group, and all of them are neighbors, where else are they going to find it?”

In St. Paul, private developers are watching 3M’s plans with equal interest.

Jim Crockerell, one of St. Paul’s largest building owners, said the open space around the Central Station light rail stop on Cedar Street could easily accommodate a new 40-story office tower. In downtown St. Paul over the decades.

His company, Madison Equities, recently purchased the 975 Capital City Plaza parking lot.

“If 3M were to put that $9 billion in downtown St. Paul, it would be great for the city,” Crocarell said. “It’s a big hole in the middle of St. Paul’s, so it deserves a high tower.” 3M can be found there along with convention hotel, condominiums, apartments. We are interested in submitting a proposal to the city. … It ties the whole downtown together.

LAYOFFS, LEGAL SETTLEMENTS AND LAWS

The news of 3M’s spin-off plans comes at a difficult time for 3M, which is said to be considering major layoffs and other cost-cutting measures following years of slow growth and supply chain challenges. Legal problems are also increasing.

Bloomberg News recently reported that 3M, which employs about 95,000 people and makes everything from Post-It notes to dental adhesives, faced a major legal challenge on Aug. 26 when an Indiana bankruptcy judge refused to halt a series of lawsuits against the manufacturer and its employees. Aearo Technologies, which went bankrupt after selling faulty combat earplugs that caused hearing loss to thousands of US military veterans.

According to Bloomberg, jury awards in 10 trials so far have resulted in $300 million in damages, and that’s before legal fees. At that rate, about 230,000 individual lawsuits could result in more than $100 billion in damages.

So is the company. Legislative pressure to regulate PFAS in Minnesota, Belgium and elsewhere; or so-called “permanent chemicals,” which are said to have leached into the ground and drinking water from the manufacturing plants.

On Thursday, Lansing-based Neogen Corp. announced the completion of a previously announced merger with 3M’s food safety business. That merger was first announced in December 2021.

A campus with a factory floor, an office tower or something else?

When it announced the health care plan in July, 3M officials said at the time that they would complete the transaction by the end of 2023. Since then, the company has refused to release more details to the media. And unanswered questions drive progress.

In a campus-like setting for the 3M spin-off, will business offices for operations, sales and marketing be located not far from the technical labs and on the manufacturing floor? Or will the new headquarters be housed in a new or existing office tower, located far from the site, perhaps in another state? And exactly how many employees are we talking about?

On Friday, those questions elicited an unsigned email response from 3M Media Communications. “This level of detail is not currently available,” says the response. “Further information will be available as the transaction progresses over the next 16 months. We plan to share more when we can.

Officials at the largest MSP said there is little more light to be shed on the corporate manufacturing giant’s plans. “If they had anything to say publicly at this point, I’m sure it would have been widely circulated,” Frosh said with a laugh.

Real estate experts point out that tax structures, state and municipal tax incentives and the availability of developable land are important considerations for Fortune 500 companies on the move, while finding a skilled workforce and industry partners is at least a priority. Other concerns – such as climate challenges, access to public transport, commuting time and overall quality of life – can also weigh heavily.

For the 3M spin-off, the biggest moving cost will likely be building lab space, which is one of the most sought-after areas in commercial real estate right now because supplies are thin, said Ben Krsnak, a commercial broker with Hempel. Real estate in Eden Prairie.

What commercial real estate professionals weigh in on.

Krsnak said there’s good reason to keep 3M’s spinoff in Minnesota, though competition from out-of-state areas with strong university ties and educated labor pools could be intense. Cities with top life science corporations and degree programs like Austin, Texas, San Diego, and Boston come to mind.

“Minnesota has a very strong healthcare community between public institutions such as the Mayo Clinic and the University of Minnesota, which makes sense for the new 3M spinoff to (collaborate) in research and testing new products,” Krsnak said in an email. .

“Their experienced employee roster and employment pool with Medtronic, Boston Scientific, Abbott, Philips and other smaller companies makes it attractive to keep the rotation in Minnesota,” he said. Many are clustered in the northern metro from Plymouth to Arden Hills.

Austin, Texas, is already home to some existing 3M operations, which would allow it to move its backbone headquarters to Texas and keep research and development in the Twin Cities metro. But those existing institutions are not related to health care.

While most of its healthcare division resides in Woodbury, 3M maintains a small healthcare footprint in San Antonio, Texas, as well as a healthcare IT division in Salt Lake City, Utah.

In the metro, Krsnak said potential development sites could include the former Imation Campus in Oakdale, the former Deluxe Campus in Shoreview, the former Hillcrest Golf Course in St. Paul and the former Twin Cities Army Ammunition in Arden Hills.

Additionally, Optum is vacating approximately 800,000 square feet of space in Eden Prairie, including the former ADC headquarters, which has room for expansion. “Future light rail connections nearby could make that a very interesting option,” Krsnak said.

Heavy cities

Officials in several Twin Cities declined to speak directly to 3M about the exit or discuss what land and tax incentives it offered. The Maplewood campus could theoretically remain more or less the same, with 3M leasing part of the existing campus to the new healthcare corporation.

In an email, Maplewood Mayor Merrill Abrams called 3M “a cherished Maplewood asset and vital to the growth of our hometown community.” The city said it plans to work closely with business and community partners, including the St. Paul Area Chamber of Commerce, “to ensure that this level of transit business remains in the Maplewood area and the east metro as a whole.”

Abrams added, “While this process is still in its infancy, I am confident in our ability to sustain the business in our region.” We are home to many healthcare-related businesses with a talented workforce and deep expertise.

Joe Ellickson, a spokesman for the city of Eagan, declined to comment on whether city officials approached 3M, saying in an email that officials are “always working to make sure Eagan is a great place to live, work and play.” . We’re proud to be home to 2,300 businesses, and we’re an active partner in ensuring our businesses have the infrastructure and services they need to thrive.

Bea Kyle, president and CEO of the St. Paul Area Council, said she is working closely with her contacts in the city of St. Paul and Ramsey County to follow up on 3M’s plans, but acknowledged details are murky.

“We don’t have any details yet on the work of this unit or the jobs affected,” Kyle said. “Also, we do not yet know who will buy the division. A lot of unknowns.”

[ad_2]

Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here

spot_img

Related articles

New Soundboard Review: Pricing is Not Always the Only Criteria

I actually first read this as alkalizing meaning effecting pH level, and I was like, OK I guess...

Technology Will Help Keep Your Smartphone from Becoming Obsolete

I actually first read this as alkalizing meaning effecting pH level, and I was like, OK I guess...

Hottest Wearable Tech and Smart Gadgets of 2022 Will Blow Your Mind

I actually first read this as alkalizing meaning effecting pH level, and I was like, OK I guess...

Things to Look For in a Financial Trading Platform Environment

I actually first read this as alkalizing meaning effecting pH level, and I was like, OK I guess...