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#BREAKING 3M $MMM 104.08 +3.65 (+3.63%) After Hours
– Settles ‘Forever Chemicals’ Litigation for Up to $12.5 Billion via WSJ
– Say company’s PFAS chemicals used in firefighting foam contaminated drinking water
– Will cover public water systems across U.S3M agreed to pay up to $12.5 billion to settle hundreds of lawsuits brought by cities that said their drinking water was contaminated with “forever chemicals” the company made for decades.
The tentative national class-action settlement in a landmark environmental fight involving PFAS chemicals in firefighting foam was reached Thursday. 3M will pay between $10.5 billion and $12.5 billion, and the settlement will cover public water systems across the U.S., plaintiffs’ attorneys said.
If completed, it would be among other major settlements involving litigation over products deemed to be health risks, including the massive agreements reached in lawsuits involving tobacco, opioids and asbestos.
In the current case, the risk of exposure came from chemicals in firefighting foam that seeped into the ground in communities around the country.
The move to resolve the current litigation comes as companies in numerous industries search for alternatives to PFAS—once used in everything from pizza boxes to cosmetics and semiconductors—and attempt to contain liabilities from decades of use.
3M, which manufactured and used the chemicals since the 1940s, is at the center of a wave of litigation alleging that they have contaminated drinking water and caused health problems. PFAS are called forever chemicals because they don’t break down in the environment.
3M Chief Executive Mike Roman called the proposed settlement “an important step forward for 3M,” and he said it builds on the company’s other actions, including investments in water-filtration technology and a prior announcement to stop all PFAS manufacturing by the end of 2025.
3M said the agreement isn’t an admission of liability and that if it isn’t approved by the court or certain conditions aren’t met, the company is prepared to defend itself in the litigation. The company said it would take a $10.3 billion charge in the second quarter to reflect the settlement that will be paid over 13 years.
3M announced the agreement nearly three weeks after a judge postponed a bellwether trial in which 3M had been scheduled to face off against a Florida city that alleged the company was responsible for drinking water contamination.
About 300 municipalities, from Philadelphia to San Diego, say PFAS chemicals in firefighting foam leached into drinking water.
Just before jury selection had been set to begin, Judge Richard Gergel
in the U.S. District Court for the District of South Carolina said he wanted to give the two sides more time to negotiate a settlement. The proposed settlement is subject to his approval.Plaintiffs’ attorneys said the 3M settlement would help cities and water providers across the country upgrade treatment systems to filter out PFOS, a type of PFAS that 3M used in firefighting foam for decades and that has been found in drinking water nationwide.
“Water is a fundamental necessity, and by holding 3M accountable for the PFOS contamination, we are fortifying the right of every American to clean and safe drinking water,” said Paul Napoli, a lead plaintiffs attorney.
About 300 municipalities, from Philadelphia to San Diego, say PFAS chemicals in firefighting foam leached into drinking water. Cities have sued 3M and other companies to recoup the costs of installing treatment systems, typically seeking damages in the tens of millions of dollars.
The current proposed settlement applies to those water-related cases, but leaves hundreds of other lawsuits involving personal injury and property claims unresolved. More than 4,000 lawsuits involving firefighting foam that contained PFAS have been consolidated in federal court in Charleston, S.C., and are being overseen by Judge Gergel.
PFAS have increasingly been the focus of regulations and efforts by companies to remove them amid mounting evidence linking them to cancers and other health problems.
In March, the Environmental Protection Agency proposed the first federal limits on six types of PFAS in drinking water, which the agency said could require water systems serving up to 94 million people to install costly treatment systems.
The number of lawsuits involving the chemicals has exploded amid growing regulations, with firefighting foam cases growing from about 75 in 2018 to more than 4,000 today.
3M and other companies also face PFAS liability from other lawsuits that don’t involve firefighting foam, such as personal-injury claims tied to industrial discharges of the chemicals.
The firefighting foam, known as aqueous film-forming foam, or AFFF, had been widely used since the 1960s by the military and fire departments. The highly durable chemicals resist heat and helped create a blanket that effectively smothered liquid-fuel fires. During training exercises the foam was allowed to seep into the groundwater.
A lawsuit filed by Stuart, Fla., a city of 18,000 north of Palm Beach, had been chosen as a bellwether for the water system cases. The city said foam that firefighters trained with for decades included chemicals made by 3M that had tainted the city’s drinking water.
It had sued 3M for $115 million to recover the cost of installing and operating a filtration system over the next 40 years to remove the chemicals and to clean up contaminated soil. A trial had been set to begin June 5.
3M and the other companies have said in legal filings that PFAS haven’t been shown to cause health problems at the levels being discovered in drinking water. It has argued in court filings that Stuart was seeking “wildly inflated damages.”
3M has said that “PFAS are safely made and used in many modern products” but that it would no longer manufacture the chemicals by the end of 2025 because of increased regulations focused on reducing their presence in the environment. 3M stopped producing some PFAS chemicals in the early 2000s but has continued to make other types.
Earlier this month, three companies with ties to former chemical maker DuPont announced a separate agreement to pay $1.185 billion to settle water-related claims in the foam litigation.
Chemours, DuPont and Corteva reached the proposed nationwide class-action settlement to resolve their part in the water-provider lawsuits brought by the roughly 300 communities.
The companies said the agreement could eventually cover public systems that provide drinking water to the majority of the U.S. population.
—Dan Frosch and Bob Tita contributed to this article.
3M’s $12.5 billion agreement to settle PFAS claims with 300 cities puts it among the largest liability settlements ever proposed or finalized. The cities claimed firefighting foam made with PFAS contaminated drinking water and posed health risks. 3M has disputed those claims.
Product or company Amount
Tobacco $206 billion
Asbestos $200 billion*
Opioids At least $50 billion
BP $20.8 billion
Bayer $16 billion**
Volkswagen $14.7 billion
3M $12.5 billion**
Johnson & Johnson $8.9 billion**
Enron $7.2 billion
Visa/Mastercard $6.5 billion*Estimate from Tillinghast-Towers Perrin
**Proposed or set asideSmith & Wesson Brands $SWBI beats by $0.03, beats on rev;
Increases quarterly dividend by 20%
$SWBI up 3.2%Amgen stock up after CA, MN, and WI join FTC lawsuit to stop its $27.8 bln deal to buy Horizon Therapeutics (HZNP), according to Reuters
$AMGN 241.03▲ 11.37 (4.95%) After Hours
$HZNP 101.05 ▼ 0.34 (0.34%) After HoursFord Prepares New Round of Layoffs for U.S. Salaried Workers – WSJ
Automaker looks to cut costs as it spends heavily on shift to EVs
In August, #Ford laid off about 3,000 white-collar and contract employees.$F 14.19 +0.01 (+0.04%) After hours
Ford Motor is preparing to initiate another round of layoffs in the coming weeks, according to people familiar with the matter, the latest in a broader effort by the automaker to streamline operations and reduce costs.
The layoffs, expected to mostly include U.S. salaried workers, would be one of several that Ford has initiated in less than a year and could be announced as early as next week, some of the people said.
The number of people Ford plans to lay off in this latest round couldn’t be learned. The cuts are expected to affect employees on Ford’s gas-engine side of the business, as well as its electric-vehicle and software division, the people said.
A Ford spokesman said the company has nothing to announce.
“As we have said, part of the ongoing management of our business includes aligning our global staffing to meet future business plans, as well as staying cost competitive as our industry evolves,” he added, in a statement.
Ford Chief Executive Jim Farley has said the automaker has more work to do than its competitors to get costs in line as it spends billions of dollars to transition its lineup to electric vehicles.
Equity indices in the Asia-Pacific region ended the week on a lower note while markets in China remained closed for Dragon Boat Festival. Hong Kong’s Hang Seng reopened after a one-day holiday with tech and property names leading the index lower.
—Equity Markets—
Japan’s Nikkei: -1.5% (-2.7% for the week)
Hong Kong’s Hang Seng: -1.7% (-5.7% for the week)
China’s Shanghai Composite: CLOSED (-2.3% for the week)
India’s Sensex: -0.4% (-0.6% for the week)
South Korea’s Kospi: -0.9% (-2.1% for the week)
Australia’s ASX All Ordinaries: -1.3% (-2.2% for the week)Australia’s Manufacturing PMI contracted for the fourth consecutive month in the flash reading for June while Japan’s Manufacturing PMI fell back into contraction after expanding slightly in May.
Japan’s flash June Manufacturing PMI 49.8 (expected 50.7; last 50.6) and flash Services PMI 54.9 (expected 56.2; last 55.9). May National CPI 3.2% yr/yr (expected 4.1%; last 3.5%) and National Core CPI 3.2% (expected 3.1%; last 3.4%)
Singapore’s May CPI 0.3% m/m (last 0.1%); 5.1% yr/yr (expected 5.5%; last 5.7%). May Core CPI 4.7%, as expected (last 5.0%)
Australia’s flash June Manufacturing PMI 48.6 (expected 48.1; last 48.4) and flash Services PMI 50.7 (expected 50.1; last 52.1)
Major European indices trade in the red.
—Equity Markets—
STOXX Europe 600: -0.5% (-3.0% week-to-date)
Germany’s DAX: -1.5% (-3.8% week-to-date)
U.K.’s FTSE 100: -0.7% (-2.5% week-to-date)
France’s CAC 40: -0.9% (-3.4% week-to-date)
Italy’s FTSE MIB: -0.8% (-2.4% week-to-date)
Spain’s IBEX 35: -1.2% (-2.6% week-to-date)British homebuilders are among the laggards after yesterday’s 50-bps hike from the Bank of England.
Siemens Energy is down more than 33.0% in Frankfurt after withdrawing its guidance due to a substantial increase in failure rates of wind turbine components at Siemens Gamesa.
Flash June Manufacturing PMI readings from Germany, France, and the U.K. showed a deepening contraction while France’s Services PMI also fell into contractionary territory.
Eurozone’s flash June Manufacturing PMI 43.6 (expected 44.8; last 44.8) and flash Services PMI 52.4 (expected 54.5; last 55.1)
Germany’s flash June Manufacturing PMI 41.0 (expected 43.5; last 43.2) and flash Services PMI 54.1 (expected 56.2; last 57.2)
U.K.’s flash June Manufacturing PMI 46.2 (expected 46.8; last 47.1) and flash Services PMI 53.7 (expected 54.8; last 55.2).
France’s flash June Manufacturing PMI 45.5 (expected 45.4; last 45.7) and flash Services PMI 48.0 (expected 52.0; last 52.5)U.K.’s May Retail Sales 0.3% m/m (expected -0.2%; last 0.5%); -2.1% yr/yr (expected -2.6%; last -3.4%) and Core Retail Sales 0.1% m/m (expected -0.3%; last 0.7%); -1.7% yr/yr (expected -2.1%; last -3.0%)
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