Chemicals, Materials and Liabilities

In 2022 3M, the St. Paul, Minnesota materials company best known for Scotch tape and Post-it Notes, said it would stop making all per- and polyfluoroalkyl substances (PFAS) by the end of 2025 and work to stop using them across its product range. It was not a small line. 3M had built a fluorochemistry business over decades, and it supplied fluoropolymers, fluorinated fluids and additives to semiconductor, automotive, aerospace and electronics customers, many of whom had few substitutes for the seals, membranes and coolants it sold them. It had already announced a phase-out of PFOS, the compound in its Scotchgard and in firefighting foam, in 2000. What it was giving up in 2022 was the rest of the chemistry, in plants that had made it for decades.

The money that followed explains the decision. In June 2023, in the federal multidistrict litigation over PFAS in South Carolina, 3M agreed to pay up to $10.3 billion in present value over 13 years to US public water systems for removing PFAS from drinking water; its SEC filing put the nominal total at $10.5–12.5 billion. The court in Charleston granted final approval on 29 March 2024. Two months after the water deal, on 29 August 2023, 3M announced a second settlement, of up to $6.0 billion paid from 2023 to 2029, to resolve claims by military veterans that the Combat Arms earplugs made by Aearo, a company 3M had bought in 2008, had damaged their hearing; the consolidated earplug case in Pensacola, Florida, had 254,943 pending actions in June 2023 and was described by the court as the largest multidistrict litigation in history (court order, reported). Aearo, by then a 3M subsidiary, had filed for Chapter 11; the bankruptcy court dismissed the case on 9 June 2023 for lacking a valid reorganisation purpose (reported). More than 99% of claimants registered for the earplug settlement, and the first $250 million was paid on 26 December 2023. 3M denied liability in both matters while settling them. On 12 May 2025 it also settled New Jersey's PFAS claims, about $285 million in present value by 3M's account and "up to $450 million" by a press account.

By the time the exit date arrived, the line was small. 3M's results for 2025 reported sales of $24.9 billion and "adjusted sales" excluding manufactured PFAS products of about $24.3 billion, which implies roughly $0.6 billion of PFAS product sales in the final year. Adjusted operating margin was 23.4%, a measure that excludes the settlements; GAAP earnings per share were $6.00 against adjusted earnings of $8.06, the gap largely litigation. A product line that had been worth perhaps a few per cent of the company's sales had become, measured by what was owed for it, worth less than nothing: up to about $16 billion of settlements across the two matters, paid out of the cash flow of a company that by then made other things.