3M ‘hasn’t done anything wrong’ in Combat Arms earplugs case, CFO says

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‘[O]n Combat Arms, we don’t believe we have done anything wrong, or Aearo hasn’t done anything wrong.’

— 3M Chief Financial Officer Monish Patolawala

That’s what 3M Co.’s CFO Monish Patolawala said at the J.P. Morgan Industrials Conference in New York, according to a transcript provided by AlphaSense.

Wall Street seems a bit skeptical, however, as shares of the consumer, industrial and healthcare products company
which makes Post-it Notes, Scotch brand adhesives and N95 masks, fell 0.7% to a 10-year closing low of $102.78.

JPMorgan Chase analyst Stephen Tusa told Patolawala that he believes the stock currently reflects “tens of billions of dollars” of risk around Combat Arms liabilities.

The company has been facing litigation related to Combat Arms earplugs for the past year. Plaintiffs allege that use of the earplugs, which 3M sold to the military, have resulted in hearing loss and tinnitus. 3M recently released data that disputed the claims.

In July 2022, 3M’s Aearo Technologies subsidiary, which made the earplugs and which 3M acquired in 2008, voluntarily filed for bankruptcy to establish a trust to resolve all claims, and 3M committed $1 billion to the trust. In February, lawyers for the plaintiffs filed to dismiss what they called a “contrived” bankruptcy.

3M’s stock closed Wednesday at its lowest price since February 2013. It has tumbled 15.5% over the past three months, making it the worst performer in the Dow Jones Industrial Average

over that time.

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