April 9 (Bloomberg) -- 3M Co., the maker of 55,000 items from Post-it Notes to road signs, is offering 3,600 non-union, U.S. employees early retirement to cut costs as the recession reduces profit.

The voluntary program was presented today to 11 percent of the U.S. workforce of 34,000, Jacqueline Berry, a 3M spokeswoman, said in a telephone interview. She declined to provide the cost and said employees have until May 31 to accept.

3M cut 1,200 jobs in the first quarter and 2,400 positions in the fourth quarter to cut costs. The St. Paul, Minnesota- based company trimmed its 2009 profit forecast in January after fourth-quarter earnings fell 37 percent and sales declined for the first time in six years.

“The payroll savings are immediate and the cost of the benefit can be spread out over several years,” Jeremy Gold, a New York-based pension plan adviser and economist said in a phone interview. “There is a real cash flow benefit to the company.”

3M gained $1.75, or 3.4 percent, to $53.13 at 4:15 p.m. in New York Stock Exchange composite trading. The stock has dropped 33 percent in the past 12 months.

Eligible workers include those who are at least age 59, with five or more years of service. Employees age 55 and above, with 30 or more years of service, also qualify, Berry said.

As an incentive, 3M said that those who accept the early exit will receive benefits that treat the employee as if he worked a year longer and was one year older at the time of retirement. Pension benefits are determined based on an employee’s age and years of service.

‘A Good Idea’

Early exit offers were popular in the 1980s when pension plans were typically overfunded and companies used the surplus to streamline the workforce, Gold said.

“This is a good idea whose time may have come again,” Gold said. “Many companies right now are more concerned about cash flow than earnings, at least for this year. Technology companies like 3M now have the opportunity to hire younger engineers, who are better trained and paid less.”

3M’s defined benefit pension plan was $2.17 billion short of funds to cover its projected obligations as of Dec. 31, 2008, leaving it about 85 percent funded, according to Bloomberg data. At the end of 2007, 3M had a pension surplus of $449 million.

‘Well Funded’

“In the world of pensions, they are well funded,” Jonathan Waite, chief actuary of Oaks, Pennsylvania-based SEI Investments, a corporate pension plan advisor. “Companies whose plans are below 80 percent funded can’t make this kind of an offer. From a corporate planning perspective, this is a pretty good deal for 3M.”

In January, 3M said this year’s profit may be $4.30 to $4.70 a share, excluding some items, less than its previous guidance of $4.50 to $4.95. 3M reports first-quarter results before the market opens on April 24.

“More than any other company, 3M is adjusting people, their biggest asset, rather than plants,” said Nick Heymann, a New York-based analyst with Sterne Agee & Leach Inc., who rates the shares ”neutral” and doesn’t own any. “They are doing what they’ve got to do.”

To contact the reporter on this story: Melita Marie Garza in Chicago at mgarza4@bloomberg.net

Last Updated: April 9, 2009 17:19 EDT