A former 3M dealer told Parking Today that his company was “energized by the opportunity” they have, now that 3M has released them from exclusivity and they can shop and provide other vendors to their customers.
The larger dealers, we are told, required very little support from Federal APD or 3M to maintain existing systems, and most have extensive spare inventories. Major concerns by all 3M resellers are the ongoing issue of PCI compliance and the upcoming conversion to EMV chip and PIN cards due in the third quarter of 2015.
The company released the following:
3M has announced that it will transition out of its global Parking Access and Revenue Control business (formerly known as Federal APD).
This decision is a result of 3M’s ongoing strategic portfolio management.
3M’s Traffic Safety business, which offers a wide range of high-quality solutions to customers worldwide, will focus investments in its more differentiated core product lines and will exit the parking business, which has not met 3M’s overall business expectations.
The company is committed to fulfilling all existing contractual obligations and product warranties for its parking products and to assisting customers and VARs in the upcoming transition.
This decision does not impact any of 3M’s other product lines.
Aaron Mills with the Parking Division’s marketing department told PT in late November that every effort was being made to work with 3M customers to affect a smooth transition. He said that all existing contracts would be honored, and that warranties would be supported for two years.
The decision was made because its parking business was not meeting the overall expectations that 3M had when it acquired Federal APD in September 2012. 3M has ongoing portfolio management evaluations and had just completed the evaluation of its parking business.
Mills said that new orders would be taken into the first quarter. He stressed that the company would be working closely with the VARs to assist them in the transition.
The PIPs and Sirit units that were purchased with Federal APD are not affected by this decision. They have been wholly integrated into 3M.
People employed in the Parking Division who will be without jobs after the first of the year were to be offered opportunities to “transition” into other 3M divisions.
“This happens all the time,” said Nan Farnsworth, Marketing Communications Manager, 3M Traffic Safety and Security Division. “In a company this size, there are many opportunities.”
OPINION
The 3M Conundrum – Why?
By John Van Horn
I have received input from around the globe concerning 3M’s decision to close its Parking Division after only about 18 months in the business.
The comments go from …
3M never wanted the parking business in the first place. It “came along” when they bought FS Tech and its toll road and LPR businesses. It’s like you bought a new suit and the store threw in a tie. You didn’t want the tie, but it was part of the deal. The tie wasn’t your taste, but you took it home, hung it in the closet for a few months, then threw it out …
To …
There are discrete but effective barriers to entry for new entrants to the parking industry. The barriers come in various forms, but [a key one] for new entrants is the challenges around overcoming long-standing relationships, entrenched work practices and small appetites for risk.
“Risk” can also be characterized as “change.” These attributes, in tandem with long gestation periods for decision-making and even longer “tender” preparation, processing and evaluation time lines, result in lengthy time lapses between investments.
The sector is characterized by multiple vendors, most of whom are small to medium business enterprises operating in niche market segments and within select geographical boundaries.
I suspect 3M’s decision to exit the sector was driven by the realization that while innovation is [respected] within the parking industry, there are insufficient rewards and incentives to apply the full force of the “3M innovation machine” to the disaggregated parking industry …
I believe the reality is somewhere in between.
I have no idea how decisions are made in companies the size of 3M, but my guess is that considerable study goes into the process. This takes time. Even if they didn’t want the Parking Division in the beginning, companies such as 3M don’t just make quick decisions. They study, they review, they attempt, and then they close.
If one looks back with 20/20 hindsight, you can see that 3M’s marketing wasn’t focused on parking but on 3M. They featured “bar codes” and the 89,000 people who work at 3M. Yes, we use codes in parking, but we use a lot more, too. It looks like 3M didn’t really talk to the industry, or if they did, they didn’t appear to be listening.
When I toured the 3M facility in San Antonio and compared it with what I saw when I toured Amano-McGann, Scheidt & Bachmann, Designa, TIBA, HUB and Skidata, I should have realized that 3M wasn’t in this for the long haul.
They took a large room, sat some parking equipment in various stages of completion, and talked about the “3M Way” and “Six Sigma” [management techniques], and how they were converting everything to the 3M manufacturing process. That may be unfair, particularly since they had just moved the plant from Illinois, but still …
Frankly, I thought 3M would raise prices considerably and be able to maintain a higher pricing level because they were “3M” and would provide world-class training and support to the systems they sold.
3M dealers, who had ridden the Federal APD airplane nearly into the ground, were ecstatic. 3M did what they do best: They showed [the dealers] their huge facility in Minneapolis, toured them in G5’s, then brought in the heavy guns when they toured San Antonio.
Whereas, all the companies I mentioned above – Amano, S&B, etc. – welcomed photos and provided meetings with CEOs and plant managers, the leaders at the 3M meetings were high-level VP’s who had flown in from Minneapolis. I was required to leave my camera in the car.
Looking back today, it seems that all the 3M activity was not done in-depth. There was excellent PR, beautiful two-story booths at trade shows, concerned managers who promised fixes to FAPD legacy problems. But did the fixes really ever come? You will have to ask a member of the PARCS Group about that.
3M did what was necessary, but at the same time kept an eye on the bottom line. 3M didn’t really want the FAPD Parking Division but took it anyway. Then they kept a close eye on it.
When it didn’t perform as well as its other divisions, they made the only decision a company such as 3M
can make.
In the short term, this will be difficult for dealers and end users; in the long term, maybe not so much.
The companies I listed above provide quality products and have been doing so for decades. They are committed to the market and to their customers.
It will be short-term pain for long-term gain.
JVH
A former 3M dealer told Parking Today that his company was “energized by the opportunity” they have, now that 3M has released them from exclusivity and they can shop and provide other vendors to their customers.
The larger dealers, we are told, required very little support from Federal APD or 3M to maintain existing systems, and most have extensive spare inventories. Major concerns by all 3M resellers are the ongoing issue of PCI compliance and the upcoming conversion to EMV chip and PIN cards due in the third quarter of 2015.
The company released the following:
3M has announced that it will transition out of its global Parking Access and Revenue Control business (formerly known as Federal APD).
This decision is a result of 3M’s ongoing strategic portfolio management.
3M’s Traffic Safety business, which offers a wide range of high-quality solutions to customers worldwide, will focus investments in its more differentiated core product lines and will exit the parking business, which has not met 3M’s overall business expectations.
The company is committed to fulfilling all existing contractual obligations and product warranties for its parking products and to assisting customers and VARs in the upcoming transition.
This decision does not impact any of 3M’s other product lines.
Aaron Mills with the Parking Division’s marketing department told PT in late November that every effort was being made to work with 3M customers to affect a smooth transition. He said that all existing contracts would be honored, and that warranties would be supported for two years.
The decision was made because its parking business was not meeting the overall expectations that 3M had when it acquired Federal APD in September 2012. 3M has ongoing portfolio management evaluations and had just completed the evaluation of its parking business.
Mills said that new orders would be taken into the first quarter. He stressed that the company would be working closely with the VARs to assist them in the transition.
The PIPs and Sirit units that were purchased with Federal APD are not affected by this decision. They have been wholly integrated into 3M.
People employed in the Parking Division who will be without jobs after the first of the year were to be offered opportunities to “transition” into other 3M divisions.
“This happens all the time,” said Nan Farnsworth, Marketing Communications Manager, 3M Traffic Safety and Security Division. “In a company this size, there are many opportunities.”
OPINION
The 3M Conundrum – Why?
By John Van Horn
I have received input from around the globe concerning 3M’s decision to close its Parking Division after only about 18 months in the business.
The comments go from …
3M never wanted the parking business in the first place. It “came along” when they bought FS Tech and its toll road and LPR businesses. It’s like you bought a new suit and the store threw in a tie. You didn’t want the tie, but it was part of the deal. The tie wasn’t your taste, but you took it home, hung it in the closet for a few months, then threw it out …
To …
There are discrete but effective barriers to entry for new entrants to the parking industry. The barriers come in various forms, but [a key one] for new entrants is the challenges around overcoming long-standing relationships, entrenched work practices and small appetites for risk.
“Risk” can also be characterized as “change.” These attributes, in tandem with long gestation periods for decision-making and even longer “tender” preparation, processing and evaluation time lines, result in lengthy time lapses between investments.
The sector is characterized by multiple vendors, most of whom are small to medium business enterprises operating in niche market segments and within select geographical boundaries.
I suspect 3M’s decision to exit the sector was driven by the realization that while innovation is [respected] within the parking industry, there are insufficient rewards and incentives to apply the full force of the “3M innovation machine” to the disaggregated parking industry …
I believe the reality is somewhere in between.
I have no idea how decisions are made in companies the size of 3M, but my guess is that considerable study goes into the process. This takes time. Even if they didn’t want the Parking Division in the beginning, companies such as 3M don’t just make quick decisions. They study, they review, they attempt, and then they close.
If one looks back with 20/20 hindsight, you can see that 3M’s marketing wasn’t focused on parking but on 3M. They featured “bar codes” and the 89,000 people who work at 3M. Yes, we use codes in parking, but we use a lot more, too. It looks like 3M didn’t really talk to the industry, or if they did, they didn’t appear to be listening.
When I toured the 3M facility in San Antonio and compared it with what I saw when I toured Amano-McGann, Scheidt & Bachmann, Designa, TIBA, HUB and Skidata, I should have realized that 3M wasn’t in this for the long haul.
They took a large room, sat some parking equipment in various stages of completion, and talked about the “3M Way” and “Six Sigma” [management techniques], and how they were converting everything to the 3M manufacturing process. That may be unfair, particularly since they had just moved the plant from Illinois, but still …
Frankly, I thought 3M would raise prices considerably and be able to maintain a higher pricing level because they were “3M” and would provide world-class training and support to the systems they sold.
3M dealers, who had ridden the Federal APD airplane nearly into the ground, were ecstatic. 3M did what they do best: They showed [the dealers] their huge facility in Minneapolis, toured them in G5’s, then brought in the heavy guns when they toured San Antonio.
Whereas, all the companies I mentioned above – Amano, S&B, etc. – welcomed photos and provided meetings with CEOs and plant managers, the leaders at the 3M meetings were high-level VP’s who had flown in from Minneapolis. I was required to leave my camera in the car.
Looking back today, it seems that all the 3M activity was not done in-depth. There was excellent PR, beautiful two-story booths at trade shows, concerned managers who promised fixes to FAPD legacy problems. But did the fixes really ever come? You will have to ask a member of the PARCS Group about that.
3M did what was necessary, but at the same time kept an eye on the bottom line. 3M didn’t really want the FAPD Parking Division but took it anyway. Then they kept a close eye on it.
When it didn’t perform as well as its other divisions, they made the only decision a company such as 3M
can make.
In the short term, this will be difficult for dealers and end users; in the long term, maybe not so much.
The companies I listed above provide quality products and have been doing so for decades. They are committed to the market and to their customers.
It will be short-term pain for long-term gain.
JVH