Jan. 30--3M Company's strategy of relying on foreign sales has buoyed profit for years. No more.

International sales fell 14 percent in the fourth quarter and overall profit dropped 37 percent, as the recession's grip on 3M and most other industrial companies tightened across the globe.

"We saw all the classic signs one would expect at times like these: canceled orders, inventory corrections in the channel, factory shutdowns, layoffs and overall weak business conditions," 3M CEO George Buckley told Wall Street analysts Thursday during a conference call.

"While weak business conditions, poor consumer confidence and a fear factor made it worse, we believe the principal cause of the severe downturn was the shortage of credit to lubricate the wheels of global commerce."

Buckley said that he expects conditions to worsen during the first quarter this year before starting to level off in the second and third quarters, which prompted the company to cut its 2009 earnings forecast and predict deeper cost cutting in the months ahead. Buckley said he's not expecting signs of real growth until the fourth quarter.

That's disappointing news for Wall Street and Main Street alike. In the fourth quarter, Minnesota's largest manufacturer slashed 2,400 jobs worldwide and furloughed 1,000 more factory workers. It also terminated most contract workers. That's on top of 1,000 job cuts in the third quarter.

Buckley told analysts Thursday that "more [cuts] are likely" in 2009 as he tries to trim $235 million in salary and benefits this year.

Last month, 3M froze salaries, deferred merit pay and ended vacation accruals. The vacation change is expected to save $100 million annually in 2009 and 2010. Rumors from the company's corporate campus in Maplewood are that 3M will force some workers to a four-day workweek. 3M also put its stock repurchase program on hold.

It's a stunning reversal of fortune for 3M, which until recently had been a Wall Street darling with robust growth coming out of China, India, Brazil, Poland, Russia and other developing countries.

International results were so good that 3M enacted a plan several years ago to accelerate foreign investments. International sales jumped from 53 percent of total sales in 2001 to 65 percent last year and were on pace to hit 70 percent next year.

But in October, November and December, international sales fell 14 percent compared with a 6 percent decline in the United States. As a result, Buckley and CFO Patrick Campbell said that capital expenditures worldwide will be cut by $500 million, or about 30 percent.