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Shares of 3M Co fell 11 per cent on Thursday after the U.S. manufacturing conglomerate cut its 2019 earnings forecast and said it would lay off 2,000 workers, citing worsening performance in high-growth markets such as China.

The stock’s worst day in more than three decades dragged down the Dow Jones Industrial Average, and added to the gloom across the manufacturing sector following bleak results from Caterpillar Inc and United Parcel Service Inc.

3M, which makes everything from adhesive tapes to air filters, said the dismal performance in the first three months of 2019 was caused by weak demand in the China automotive and electronics sectors, causing it to cut production.

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“We didn’t respond aggressively enough to what we were seeing. And so, we’re behind the curve,” chief executive officer Mike Roman said on a post earnings call with analysts.

Roman added that the maker of Post-it notes and Scotch tape was slow to align its spending with reduced output, and this dented margins.

An analyst on the call peppered management with questions on Roman’s management style and asked if 3M needed to change its incentives or compensation schemes to get its leaders to adapt faster to the changing macro economy.

“We’re going to take stock of what we’re doing, how we’re doing it, and compensation is an important piece and we look at that as well,” Roman said.

3M’s shares have underperformed peers such as Honeywell International Inc since Roman took the helm in July last year, with the stock rising 11.4 per cent, compared with a 24 per cent gain for Honeywell.

“Since the prior CEO stepped down, 3M has really not performed anywhere close to its industrial peers,” Melius Research analyst Scott Davis told CNBC.

The results come a day after heavy equipment maker Caterpillar Inc flagged tepid sales in its construction equipment business in the Asia-Pacific region, pointing to subdued growth in China.

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After a sharp slowdown in the fourth quarter, China’s economy unexpectedly grew at a steady 6.4 per cent pace in the first quarter, but analysts cautioned that it was too early to call a sustainable turnaround.

Sales in Asia-Pacific, 3M’s biggest market outside the United States, fell 7.4 per cent, while Europe, Middle East and Africa reported declines of 9.4 per cent. Sales in the United States rose just 0.1 per cent.

“The only positive that may come out today for the stock is that one of the sell-side bulls may downgrade, as even the most disingenuous analyst has to admit a change in thesis,” J.P.Morgan analyst Stephen Tusa wrote in a note.

3M now expects 2019 adjusted earnings between $9.25 and $9.75 per share, versus its prior forecast of $10.45 to $10.90.

The job cuts would result in an estimated annual pre-tax savings range of $225 million to $250 million, with $100 million in the remainder of 2019, the company said in a statement.

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