Minnesota has long promoted itself as a state built on innovation, stability, and global business leadership.

For more than a century, one company symbolized that reputation more than any other.

Minnesota Mining and Manufacturing Company, better known as 3M, helped define the state’s economic identity through invention, manufacturing, and global reach.

Today, that relationship appears to be unraveling, as state policy decisions collide with corporate retrenchment, job losses, and growing uncertainty about Minnesota’s business climate.

Founded in Two Harbors in 1902, 3M grew from a small mining operation into one of the most innovative manufacturing companies in the world.

Over the decades, the company introduced products that became household staples and industrial standards.

Scotch tape, Post it notes, and reflective materials used on road signs across the United States all trace their origins to Minnesota laboratories.

Each year, approximately fifty billion Post it notes are sold worldwide, a product born from a failed adhesive experiment at 3M headquarters in Maplewood.

For generations, the company stood as proof that Minnesota could produce ideas with global impact.

That legacy now faces unprecedented strain.

Over the past decade, Minnesota’s government has taken increasingly aggressive legal, regulatory, and fiscal actions that directly affect its largest and most recognizable corporations.

The most significant of these actions involved a prolonged legal battle between the state and 3M over alleged groundwater contamination linked to PFAS chemicals.

In 2010, the Minnesota attorney general filed a lawsuit accusing 3M of contaminating groundwater in the eastern Twin Cities metropolitan area.

The case extended for eight years, consuming legal resources and creating ongoing uncertainty for the company.

In 2018, the dispute concluded with a settlement requiring 3M to pay eight hundred fifty million dollars to the state.

The funds were designated for drinking water and environmental remediation projects, but the scale of the settlement sent a clear signal to the business community.

The settlement did not end the state’s involvement.

In 2023, Minnesota joined twenty three other states in objecting to the terms of a national PFAS settlement involving 3M.

The company had already agreed to pay up to twelve and a half billion dollars nationwide to resolve claims related to public water systems.

Minnesota’s attorney general argued that the national agreement did not go far enough.

The message to corporate leaders was unmistakable.

Even historic employers were not insulated from aggressive legal action.

At the same time, Minnesota enacted one of the largest tax increases in state history.

In 2023, the state reported an eighteen billion dollar budget surplus, an amount rarely seen in state finances.

While many states used post pandemic surpluses to reduce tax burdens and attract investment, Minnesota chose a different path.

Governor Tim Walz and the legislature approved tax increases totaling nearly ten billion dollars over four years.

The Minnesota Chamber of Commerce criticized the process, noting that several tax measures advanced with limited public debate and minimal transparency.

Business leaders warned that the increases compounded an already challenging tax environment.

Minnesota now has the highest corporate income tax rate in the United States at nine point eight percent.

According to the Tax Foundation, the state ranks forty fourth overall for business tax climate and forty seventh for corporate tax competitiveness.

Beyond corporate income taxes, the state expanded taxes on investment income, international business earnings, payrolls, and consumer transactions.

New fees were added to deliveries, vehicle purchases, and other everyday economic activities.

Analysts observed that Minnesota’s approach stood in contrast to national trends, where most governors prioritized tax reductions to improve competitiveness.

As neighboring states moved in the opposite direction, Minnesota’s relative position worsened.

Iowa reduced its corporate tax rate from twelve percent to five point five percent.

North Carolina lowered its rate to two point five percent, the lowest in the nation.

Texas and Tennessee continued to levy no corporate income tax at all.

For companies evaluating where to expand or consolidate operations, Minnesota increasingly appeared as an outlier.

The consequences became visible at 3M.

In 2022, the company employed nearly thirteen thousand seven hundred workers in Minnesota, making it the twelfth largest employer in the state.

These were high paying positions that supported middle class families and anchored entire communities.

Within a year, that workforce began to shrink dramatically.

In January 2023, 3M announced plans to eliminate two thousand five hundred jobs globally.

Three months later, the company announced an additional six thousand layoffs.

In total, eight thousand five hundred positions were cut in a single year, representing nearly ten percent of the company’s worldwide workforce.

Approximately eleven hundred of those job losses occurred at the Maplewood headquarters, directly affecting Minnesota employees.

Company leadership stated that the restructuring was necessary to streamline operations, improve efficiency, and focus on core businesses.

Behind those statements, however, was a broader reality.

Legal settlements, rising tax obligations, and regulatory pressures were forcing the company to reassess its footprint and long term strategy.

By the end of 2024, 3M’s global workforce had declined from ninety two thousand employees to approximately sixty one thousand five hundred.

That represents a workforce reduction of twenty seven percent in roughly one year.

Few major corporations have downsized at that scale without experiencing severe financial or structural stress.

The restructuring continued in 2024 with the separation of 3M’s healthcare division.

The unit was spun off into a new company called Solventum, removing approximately eight point two billion dollars in annual revenue from 3M’s balance sheet.

The new company assumed eight point six billion dollars in debt and immediately began its own cost cutting measures.

By early 2025, Solventum had eliminated eight hundred positions, including more than one hundred jobs in Minnesota.

Instead of one stable multinational employer, Minnesota now hosts two smaller companies, both navigating heavy debt loads, legal liabilities, and workforce reductions.

The transformation marked a dramatic shift from the state’s historical relationship with its flagship corporations.

Business leaders warn that 3M’s experience is not an isolated case.

The Minnesota Chamber of Commerce has repeatedly reported declining competitiveness compared to peer states.

Its 2024 business benchmarks report concluded that Minnesota has lost ground as other states leverage surpluses to reduce tax burdens.

The chamber’s 2026 outlook ranked the state near the bottom nationally for overall tax competitiveness.

Manufacturers have been particularly vocal.

More than half of surveyed manufacturers reported that Minnesota’s business climate is deteriorating.

New labor mandates, regulatory requirements, and rising operational costs were cited as key concerns.

Some companies reported that Minnesota is no longer considered when evaluating new projects or expansions.

Population trends reinforce the economic data.

For twenty of the past twenty four years, Minnesota has experienced net domestic out migration.

Between 2020 and 2024 alone, nearly forty eight thousand residents moved to other states.

Since 2001, the net loss exceeds one hundred twenty three thousand people.

These departures disproportionately involve working age adults and higher income households, groups critical to sustaining tax revenue and economic growth.

Investment patterns mirror these trends.

Between 2020 and 2022, Minnesota based companies invested approximately four point six billion dollars in facilities and expansions located in other states, including Florida, Indiana, Colorado, and Texas.

Those investments represent factories, offices, and jobs that might otherwise have remained in Minnesota.

Site selection professionals report similar findings.

Some indicate that Minnesota rarely appears on shortlists for major industrial projects.

Others note that clients actively avoid the state due to concerns about taxes, regulatory uncertainty, and litigation risk.

The cumulative effect of these developments has reshaped Minnesota’s economic narrative.

Once known as a state that nurtured innovation and long term corporate partnerships, it is increasingly viewed as a high cost, high risk environment for business.

The decision to pursue large legal settlements against legacy employers while simultaneously raising taxes during a historic surplus has intensified that perception.

3M’s story illustrates the broader tension.

For one hundred twenty two years, the company embodied Minnesota’s industrial identity.

Its products reached every corner of the world while its headquarters anchored thousands of local jobs.

Today, its stock valuation has suffered, its workforce has been sharply reduced, and its business structure has been permanently altered.

Other major employers show similar patterns.

Target has reduced corporate staffing in the Twin Cities.

Best Buy has implemented multiple rounds of layoffs.

US Bank and Wells Fargo continue to scale back their Minnesota presence.

Medtronic relocated its global headquarters to Ireland years earlier, citing international competitiveness concerns.

Together, these examples form a consistent pattern.

Minnesota creates and grows major companies, celebrates their success, and then subjects them to policies that erode their competitiveness.

Legal action, taxation, and regulation become tools of state governance, even when directed at employers that have shaped the state’s prosperity.

As Minnesota policymakers confront slowing growth, workforce losses, and declining competitiveness, the experience of 3M looms large.

The question facing the state is not whether accountability and environmental protection matter, but whether balance has been lost.

When government treats its most successful companies primarily as revenue sources and legal targets, the long term consequences can extend far beyond a single settlement or tax bill.

The transformation of 3M from a dominant Minnesota employer into a downsizing, restructured company reflects choices made at the state level.

Those choices will continue to shape Minnesota’s economy, workforce, and reputation for decades to come.