3M promotion reveals next in line for CEO job, analysts say
3M on Monday appointed veteran company executive Inge Thulin to the newly created position of chief operating officer.
Wall Street analysts believe Thulin, 57, is in line to succeed CEO George Buckley when he steps down.
A native of Sweden, Thulin joined 3M in 1979 in his native country. He held about nine management positions before leading international operations starting in 2003.
Edward Jones analyst Jeff Windau said it seems Thulin is being groomed for the CEO post.
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"I would definitely assume he's a front runner for the position," Windau said.
Windau said Thulin's stint as COO may essentially serve as a try-out for the top job.
"I think this definitely gives him the opportunity to perform well and potentially take that next step," Windau said.
A former Brunsick Corporation CEO, Buckley took over 3M in 2005, and is only the second chief executive in 3M's 108-year history who was recruited from outside the Maplewood-based firm. The first was James McNerney, who preceded him starting in 2001 and went on to run Boeing.
Naming Thulin as CEO would be a return to the long 3M tradition of promoting from within.
Michael Useem, a professor at the Wharton School at University of Pennsylvania, said Thulin will likely get a chance to learn everything he needs to know to run 3M.
"The chief operating officer is pretty close to the top of the pyramid and should see everything," Useem said.
Useem said that includes finance, manufacturing operations and working with the board and big institutional investors.
"A person in that position should have a pretty good fix on how the company operates," he said.
Useem said it looks like Thulin is on his way to the CEO job.
"Sometimes people are derailed along the way. There may be a couple of dark house candidates as well," Thulin said. "But by all outward features, this person is very well positioned to be the next chief executive."
Analysts say Thulin's foreign business experience is a great strength, given that more than half of 3M's sales — and its fastest growing markets — are outside the U.S.
"He's been with 3M for quite a while and his focus has been on the international side," said Ryan Burgess, an analyst with T. Rowe Price. "3M is trying to grow in international markets that are growing a little bit faster than the developed world. So I think it's a good choice."
But it's unclear when 3M might name Buckley's replacement. Buckley's contract expires when he turns 65 in February 2012. 3M wouldn't say if Thulin's appointment is part of a succession plan.
Buckley has actually said he'd like to stay on with 3M for as long as the company's board will have him.
But Buckley has said he is determined that the next CEO of 3M come from within the company. He's also said he expects the 3M board will announce a transition plan this year.
In a January conference call with Wall Street analysts, Buckley promised the CEO transition would be orderly, that people will know everybody and it "won't be a great surprise."
