3M’s CFO Warns Inflation Is Running Hotter Than Expected, Auto Production Dropping

Inflation is running hotter than expected amid ongoing supply chain disruptions and a shortage of semiconductors, the chief financial officer of 3M said Monday.

Speaking at a Morgan Stanley conference, 3M CFO Monish Patolawala said input costs were rising at a faster than expected pace.

The company has been raising prices for its goods but “we are seeing inflation outstrip price,” Patolawala said.

Patolawala raised the cost impact on earnings from a range of 50 to 100 basis points to a range of 100 to 150 basis points, citing the rising price of raw materials and higher labor costs.

The finance chief said that the chip shortage is expected to continue into next year. The company raised its estimate for the downward pressure on auto production from three percent to six percent.