After PFAS lawsuit, 3M new CEO Bill Brown is the reason why stock is u

It was a big day for 3M, as midday trading showed the conglomerate’s stock up 4% after it named its new CEO.

Role of Handing:

Known for a litany of consumer products, from Scotch tape to medical supplies, 3M has had a troubled past few years. Its CEO of six years, Mike Roman, is now stepping down and handing off his role to Bill Brown. (Roman will still serve as executive chairman of 3M.)

Roman led the company as it battled litigation over its use of PFAS, known as “forever chemicals,” which are manufactured chemicals that don’t degrade in either nature or the human body. Thousands of people have come out against 3M, saying that the chemicals have made them sick. As a result of this litigation, 3M will pay up to $12.5 billion dollars to collections of individuals, municipal water systems, and states that say the company has irreparably polluted their soil and waterways.

Announcement:

The company also recently announced a $5 billion settlement that included $1 billion in stock to veterans who claim 3M’s military-grade earplugs did not protect their hearing. While the company said this settlement wasn’t an admission of liability, the case certainly contributed to 3M’s dips in share price, which has gone down by around 50% over the past five years.

While the announcement of Bill Brown taking the reins of the company led to a boost today, he’s still stepping in at a time when the company is reeling from massive payouts and what critics claim is stifled innovative progress. Brown comes to 3M after a two-year tenure as CEO of the Florida-based defense contractor, L3Harris Technologies. He served as executive chair for an additional year after stepping down as CEO, and he was CEO of the Harris Corporation before it merged to become L3Harris Technologies.

Leadership Experience :

Brown’s outside experience surely brings some much-needed change to the leadership at 3M. However, he will still face off with a slowdown in demand for the company’s products. The company has already announced a plan to restructure by laying off thousands of workers, and by parlaying its healthcare arm into a listed company on its own.