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Scotchgard Pulls Many Products
May 17, 2000 1:15 pm EST

Chemicals Linger In Body And Environment For Years

CHICAGO (CBS News) - Minnesota Mining and Manufacturing Co. said on Tuesday
it would stop making many of its well-known Scotchgard products after tests
revealed the chemical compounds involved linger in the environment and in the
human body for years.

Medical monitoring of employees at plants that make the chemicals have shown
the compounds are present in very low levels in tissue samples, but all
existing scientific knowledge shows no adverse health or environmental
effects, 3M said.

3M and other manufacturers have known for some time that the chemicals are
long-lived, a spokesman said. But sophisticated new testing techniques, some
developed in the last few years, found they can be detected broadly in people
and in wildlife, water and other areas.

The 3M product lines to be phased out involve perfluorooctanyl chemistry and
include Scotchgard fabric protector commercially applied to carpets and the
Scotchgard spray available in grocery and hardware stores.

The phase-out also involves coating used for oil and grease resistance on
paper packaging, fire-fighting foams and speciality components for other
products. The affected product lines account for about $300 million of sales
annually, or about 2 percent of total 3M sales.

"Our decision anticipates increasing attention to the appropriate use and
management of persistent materials," Charles Reich, executive vice president
of 3M's speciality material markets, said in a statement. "While this
chemistry has been used effectively for more than 40 years and our products
are safe, our decision to phase out production is based on our principles of
responsible environmental management."

3M will take a $200 million charge against earnings sometime this year to
cover the phase-out. The company said it still expects to meet the consensus
earnings estimate of $4.69 per share for 2000 and expects to be slightly
above forecasts of $5.21 per share for 2001.

Jack Kelly, an industry analyst at Goldman Sachs, said he viewed the decision
to phase out the chemicals as a natural evolution of the company's constant
review of its product line and removal of less profitable businesses.

"Clearly, 3M is becoming more profit-conscious," he said, and the Scotchgard
business was less profitable than others.

Linda Greer, senior scientist at the nonprofit environmental group Natural
Resources Defence Council in Washington, D.C., said she applauded 3M for
proactively taking the product off the market. "That (Scotchgard) really is a
household name," she said. "It takes guts to do that."

Greer said the fact that Scotchgard is a heavily fluorinated chemical puts it
into a class of chemicals that are notorious for persistence, including CFCs
(chlorinated fluorocarbons) and PCBs (polychlorinated biphenyls). Both of
those have been taken off the market because of government intervention.
CFCs, for example, were found to be destroying the ozone layer.

"Other halogenated chemicals of this class cause a wide range of health
problems in animals and in people," Greer said.

"What you worry about is long-term buildup in tissues or organs to the point
where it could cause some problems."

Dr. Bill Coyne, senior vice president of research and development at 3M, said
in an interview that the main reason for taking the products off the market
is environmental, not health-related.

"It's in a lot of different locations," he said. "We want to focus our
research efforts and our invention efforts on materials and products that are
not persistent in the environment."

3M, a diversified manufacturer, makes Post-It notes, Scotch Tape and many
other consumer and industrial products. Its shares were up 3-13/16 at 89-3/4
in afternoon trade on the New York Stock Exchange.

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