2011 salary survey

e l e c t r o n i c d e s i g n . c o m

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2011AnnuAl Salary Survey

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T h e A u T h o r i T y

o n e m e r g i n g

T e c h n o l o g i e s f o r

D e s i g n s o l u T i o n s

e l e c t R o n i c D e s i g n M A g A z i n e ’ s 2 011 A n n u A l s A l A R y s u R v e y R e p o R t / t o p 5 0 e M p l o y e R s

Dear reaDer,

Two of Electronic Design’s most popular articles of the year are our annual salary survey and our annual list of the Top 50 Employers in Electronic Design. This year, we expanded the focus of our salary survey to include the “faces of the engineering lifecycle.” We sent out a survey to the incoming class of EEs, working engineers and those that are in the later stages of their careers—those EEs who are thinking about retirement.

To help us in finding out more about the incoming class, we partnered with the IEEE. We were rewarded with more than 5,000 responses from un-dergrads, post-graduate students and recent grads. Among other things our survey shows how they view their education, their current perceptions of the profession and their dream jobs.

In our traditional salary survey, we asked working engineers our usual set of questions, which will give you insight into the financial aspects of the pro-fession including salary, benefits and more. We also asked our readers a series of questions about how they keep up with the profession, in other words, how they educate themselves to keep pace with emerging technologies.

Finally, we decided to take a look this year at engineers nearing the end of their careers. We wanted to know how they were planning to handle their retirement years—personally, professionally and financially—or if they were planning to retire at all.

Beyond the salary survey, we’ve included our Top 50 Employers in Electronic Design, a very popular feature that we did earlier this year. The list includes both EOEMs and manufacturers of end products.

No matter which stage of this great profession that you find yourself in, we’re sure that you’ll find these two features both interesting and informative.

Regards,

Joe Desposito

Editor-in-ChiEfElEctronic DEsign

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Faces OF The engineering LiFecycLeWith this special edition of our annual Salary Survey, we take you on a comprehensive tour of the engineering career, from students and new grads looking for or working their first jobs to

experienced veterans getting ready to retire.

each year around this time, we survey engi-neering professionals for a look at the latest compensation trends and the is-sues that are most important to them. This year we’ve expanded our cov-erage to include the views of the incoming class of engineering stu-dents, as well as recent graduates,

for their emerging opinions of the profession. To do this we teamed up with the IEEE—the

world’s largest professional association for engi-neers—and surveyed more 5000 undergrads, post-graduate students, and recent grads. Among other things, our survey shows how they see their educa-

tion, their current perceptions of the profession, and their dream jobs.

We also decided to take a look at engineers at the cul-mination of their careers to see how they were planning for life after engineering, both financially and profes-sionally. Perhaps not surprisingly, many were planning to stay connected to the profession as teachers, mentors, and philanthropists, continuing to find ways to benefit society even after their official careers are complete.

Of course, we also present our usual look at the sala-ries and opinions of working engineers. All told, nearly

8000 members of the engineering community participated in our research this year—the most comprehensive exami-nation of the engineering profession of its kind.

Jay Mcsherry | Contributing Editor [email protected]

The IncomIng class speaks ouTAre engineering students learning what’s need-ed? And what’s their take on the profession in this difficult job market?

college has always been a time of anxiety and excitement. But for engineering students, that sense of uncertainty has grown along with the growth of the global economy. It’s not simply a matter of competi-tion with foreign counterparts, although that definitely factors into the equation. The global economy means that more products are coming to market far faster. But that doesn’t merely shrink design cycles. It also means new technologies arise at a far faster clip.

Four years can be an eternity in product development and techno-logical growth, but engineering students are challenged to plan a cur-riculum without being certain that their areas of specialization will still be in demand when they graduate. It’s hardly likely, but it remains a nagging doubt—is it possible that some part of a hard-won engineer-ing education will be outmoded by the time graduation rolls around?

About 88% of the engineering students we surveyed said they began their college careers as engineering majors, while the rest switched over to engineering after trying something else. Nearly 42% said they made the choice to pursue an education in engineering on their own, while about a third (32%) said a teacher or professor influenced them and 34% said a parent or other family member involved in engineering influenced them. About 21% said a parent not involved in engineering helped them choose their major.

Only 59% of engineering students today believe a career path in engi-neering and the potential for salary advancement is as promising now as it was when they first started pursuing their engineering education.

“Too many experienced engineers are currently unemployed,” said a postgraduate student attending the University of Colorado in Denver. “There doesn’t seem to be a stable career path. Job security appears to have disappeared.”

One postgraduate student at Virginia Tech complained: “When I entered my studies in medical physics we were told there was a huge demand and that everyone got a job. Now my friends who have gradu-ated spend months searching and end up taking any job they can find, even if it’s not at all what they wanted.”

But most undergrads remain upbeat about the prospects for a good living in engineering. “I still think that engineering graduates have a unique skill set in problem solving and generally getting stuff done

that isn’t fostered in graduates from other majors,” said a senior at Rut-gers University. “Companies recognize this and generally offer good career paths for graduates with this type of training.”

One confident student at the University of Utah put it another way: “Biotechnology is still a growing industry. Besides, if I can’t find a job, I will make one.”

Despite the difficulties that some see for the engineering job market, an overwhelming 92% of the engineering students we surveyed said they would still recommend engineering as a career path to another young person looking to choose a profession. “I never went into engineering for the salary potential,” said a junior at Notre Dame. “I went into it because it’s something I thought (and was correct in thinking) I’d enjoy.”

More than a third (36%) of the students who responded said they’re involved in corporate-sponsored projects, while 42% work with pro-fessors in technology labs on projects for commercial applications as part of their curriculum. And 45% said they’ve entered technology/design contests at their school.

On average, students said that about two-thirds of what they learn in school is theoretical engineering (gaining a fundamental understanding of engineering principles) compared to learning how to apply those theoreti-cal principles to real-world problems. But is this really the best approach? Nearly 63% of the students we surveyed believe they would benefit more if colleges put a greater emphasis on teaching practical applications.

“Each engineering course should have labs associated with them so that the students can apply the theoretical understanding of the material into a practical design and observe how devices are actually made,” said a junior at Temple University.

A student at Boise State University put it this way: “Students that don’t already have a firm grasp on what engineering covers don’t really get the most from their classes. For example, when teaching op amps, maybe we should understand why we use them. What do they do for us? What are some practical applications where you would see an example of this circuit?”

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Factors recent Graduates rate Most IMportant In choosInG theIr FIrst Job

1. Opportunity for advancement

2. Opportunity to benefit society

3. Salary

4. Hours required

5. Travel time to/from work

6. Health benefits

Some of the students we spoke to complained about being subjected to outdated textbooks, teaching materials, and techniques, while others complained about the spotty quality of tenured professors, too few labs, and a general lack of funding,

“Tenured professors (of which there are many) are uninterested in teaching,” claimed a student from Syracuse University. “And 80% of the courses taken toward my PhD were a complete waste of my time, skill, and money.”

“One of the major issues at my university is the issue of budget,” said a senior at San Diego State. “Of course, every university across the nation, especially public ones, has had to deal with this problem. However, I feel that budget cuts have directly affected engineering, which is a hands-on practice. One or more labs for classes have been cancelled, giving students less opportunity to try their hand at what I would call real-world engineering.”

Working ToWarD The FuTure

About 20% of undergraduate students say they take online courses. Nearly three out of four plan to go on to obtain a postgraduate (mas-ter’s or doctorate) degree, while most of the rest haven’t made up their minds yet. Of those who plan to continue their education, the majority (53%) plans to pursue their postgraduate degrees immediately after graduation, while 26% will hold off until they’ve landed their first job.

Undergraduate students keep themselves busy. Nearly half (43%) work part-time or full-time jobs while attending school, while 86% either currently participate in or plan to participate in internships or co-op pro-grams. A slight majority (53%) of those who work while attending school are employed in an engineering-related field, and on average working students put in about 20 hours a week on the job. Only about one in four (24%) said their employer provides some sort of tuition assistance.

Today’s crop of engineering students is a fairly entrepreneurial bunch. About 20% plan to start their own company within five years of graduating, and another 29% said they probably would strike out on their own at some point in their career.

“My dream is to start up a high-tech company in the telecommunica-tion field,” said a student at Vanderbilt. “As a PhD student at the univer-sity, I like working in research positions. And since my area of expertise is wireless communications, I’d like to start something in this field.”

The rise oF social MeDia

Not surprisingly, today’s engineering students are decked out with the latest technology. About 90% use mobile devices (the Android platform is the smart phone of choice, used by 24% of those polled), and 45% either plan to get an iPad or already own one.

Nearly four in five engineering students have a Facebook page, and most (52%) also belong to LinkedIn. A third have Twitter accounts, and 87% watch videos on YouTube. Engineering-related videos on YouTube are watched by 60%, and one in five peruses engineering channels on the video site. And nearly a third have posted videos of their own on YouTube.

Most engineering students believe that social networking sites will continue to play a key role in their lives once they’ve graduated from school, with close to two-thirds (62%) saying that social networking sites will be useful tools in their future engineering work.

a Tough roaD For recenT graDuaTes

Engineering graduates face uncertain times in today’s faltering econ-omy, particularly when job growth in so many sectors is expected to remain flat over the next few years. Also contributing to this climate of uncertainty is offshoring, the increasing reliance on international engi-neering talent, especially as China and India begin to flex their high-tech muscle. What’s more, the shrinking defense budget being proposed by some in Washington could also drive competition for new jobs.

If there is a hot spot in this rather chill assessment, it’s that high-tech companies must hire new engineering talent if they are to maintain their competitive edge. Shrinking staff through attrition is all too often a shortcut to stagnation.

Is there anything that newly minted graduates can do to sharpen their own competitive edge? Make certain that your skills are as cutting-edge as the companies you hope to find a berth in. Seminars, workshops, and continuing education are excellent ways to preserve or increase your market potential.

Only a slight majority (58%) of the recent graduates we surveyed said they’d landed a job, with the rest either still looking for work or finish-ing up an internship. Of those who were working, more than half (56%) landed their first job after obtaining their bachelor’s degree, while 33%

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AverAge StArting income of recent grAdS By compAny Size

Small firm (fewer than 100 employees) $33,647

Medium-size company (100 to 999 employees) $38,405

Large organization (More than 1000 employees) $44,808

fActorS recent grAduAteS rAte moSt importAnt in chooSing their firSt JoB

1. Opportunity for advancement

2. Opportunity to benefit society

3. Salary

4. Hours required

5. Travel time to/from work

6. Health benefits

7. Vacation time

8. Bonuses

9. 401(k) matching

10. Relocation opportunity

11. Tuition reimbursement

12. Pension plan

13. Stock options

startInG salarIes

WhAT’s IN yOuR WAllET?

under 30,000 61%

30,000-39,999 10%

40,000-49,999 6%

50,000-59,999 5%

70,000 or more 10%

Employed full-time 44%

Unemployed/seeking work 31%

Post-graduate studies or internship

11%

Employed part-time

8%

Contract worker/

consultant 5%

Entrepreneur 1%

Employed fulltime 44%

Unemployed/seeking work 31%

Post-graduate studies or internship 11%

Employed part-time 8%

Contract worker/Consultant 5%

Entrepreneur1%

said they’d waited until they’d achieved their mas-ter’s or doctorate before heading off to work.

For those who held off, it might have been worth the wait. Incomes for recent graduates with advanced degrees average nearly $46,800, or about 25% more than the $37,400 starting pay for those with only their bachelor’s degrees.

Nearly 43% of the recently employed grads had a job lined up before they graduated, while another 40% found their first job within six months of leaving school. About one in four (26%) learned about the job from company recruiters on campus, and another 21% found their first job online, either at an Internet job site or company Web site. But it pays to have friends. Nearly 40% learned about their first job by way of a referral from a friend, colleague, or family member.

The good news is that nine out of 10 recent grads who have landed a job were able to find work in an engineering-related field, and 60% felt confident that there was a clear path to growth at the company they’d chosen to start their careers at.

Nearly three out of four of those surveyed said they were generally sat-isfied with their first job. Also, many saw it as an opportunity to develop new ways of thinking, acquire new skills, learn how to work under pres-sure, and network with people who could be important to their careers.

“The tasks were coordinated according to my level of experience, but challenging enough that I was able to learn and grow quickly,” said a recent graduate from Lakehead University in Ontario.

Another recent grad put it this way: “At first I was not satisfied, because I felt what I was doing wasn’t engineering work. I did more actual engi-neering before I graduated. After about eight months, I had the oppor-tunity to change departments. At that point, I was doing what I felt was more suited to engineering.”

But young engineering professionals are quickly learning that satis-faction with the job doesn’t always extend to satisfaction with the pay. Barely half (56%) of those surveyed felt they were being adequately compensated for the work they were doing. In fact, only about a third said their total pay was on par with what they believed other recent engineering graduates were making, while close to 40% felt their take-home pay was less competitive.

“It’s hard finding a decent engineering job nowadays,” said one recent grad of the University of Texas at Arlington. “I graduated with a degree in electrical engineering, but it was my software skills that landed me a job. The EE job market in Jacksonville (where I live) is

pretty much dead, really. So even though the salary may not be the best, it’s definitely better than being jobless right out of college. Hopefully I can gather experience and move up the ladder in the near future.”

The real WorlD

Some of the recent grads we surveyed were fortunate to land their dream jobs right out of school. “I had wanted to work at NASA since I was a kid,” said a recent engineering graduate from Maryland. “To have the opportunity to work there now is just amazing.”

But even some of those who were fortunate to find work quickly often found themselves in situations that either weren’t rewarding enough or didn’t fit the job description. “My employer was not honest about what my job would be or about the hours required for the job,” declared a recent grad from Oklahoma. “The job itself was something that in my opinion didn’t require a college diploma.”

The majority (52%) of recent grads still seeking to land their first job said they were looking to get into the bigger firms, where they expect the money and career opportunities to be better. And that shouldn’t be so surprising. Among their recently employed peers, 70% at large organizations say they see a clear path to career growth, compared to only 43% who landed their first jobs at small-er companies.

Many still looking to land their first job out of school found them-selves frustrated with the current job prospects. “There just aren’t many opportunities available right now,” complained one recent grad from Hawaii. “Most of the employers that I had a chance to meet with wanted certifications and experience in addition to my BS in engineer-ing. It’s very frustrating since I’m a recent graduate just hoping to gain any kind of work experience.”

“Companies are not willing to train new graduates. They always expect you to have some experience within their field,” another recent graduate complained. “They see the new graduate as an expense more than a potential answer for their needs. Another factor is outsourcing.

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recent Graduates—Where are they noW?

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Many big companies have a freeze on local hiring. They would rather employ and train employees overseas.”

Many recent grads are finding that while their education provided them with a broad set of knowledge, most employers are seeking spe-cialized skills. “That’s a difficult situation new graduates face,” said a recent grad from Maine. “I cannot wait for the ideal job opportunity, so I have to move to other options in my top preference list. But it’s practically impossible to have in-depth knowledge and experience in every area.”

Some recent grads felt their education left them ill prepared for their first jobs in engineering. “I wish we had done an actual non-trivial chip design with tape-out and lab characterization, rather than talk about the process all the time in school,” one complained.

Another felt unprepared in parts procurement. “In college, you usu-ally learn to use generic parts, but the bits and pieces on how to decide which, out of a thousand, components do the same thing would be a valuable asset.”

One simply put it this way: “I wish we were explicitly taught why things are done the way they are, instead of a lot of focus on how they are done.”

DreaM Jobs

Many students imagine themselves in dream jobs designing state-of-the-art products like renewable energy, biomedical engineering, robotics, nanotechnology, virtual reality, and defense systems and hope to work for leading technology centers like Apple, Google, NASA, Microsoft, IBM, and Intel.

“I want to work for Google, maybe in security or software development,” fancied one sophomore now studying at the University of Minnesota.

“My dream job is to be a deep brain stimulation development engi-neer,” mused one graduating senior. “I would like to design the cir-cuitry of medical devices.”

“I am torn between the desire to run my own technology com-pany and the desire to be a CTO of an existing technology company,” dreamed one sophomore enrolled at Lehigh University. “I see myself happiest being a liaison between the IT staff and the board of directors. The combination of technological prowess and social skills that such a position requires would be perfect.”

“I want to work in applied robotics and artificial intelligence,” said a senior at the University of Alabama at Birmingham. “I’d like to research how the brain works so we can replicate it and help people with things like Alzheimer’s and other types of memory loss.”

“My dream job is one geared towards programming AI modules for either videogames or real-life robots,” said a junior at Notre Dame. “I don’t mind corporate grunt work, but it’s not something I’d see myself doing for the rest of my life.”

“I’m sort of stuck between renewable energy and music technology, the former having more jobs and a higher salary, but the latter being more in line with my hobbies and interests,” said a freshman at the Georgia Institute of Technology.

“My dream job is research and development in robotics, most likely my own company, contracting to the military or government,” said a senior at the University of Nevada, Reno.

“The future lies in space travel,” envisioned a junior at the New Jersey Institute of Technology. “As a power-engineering student, I see tremendous potential for new energy technologies that can be safe, compact, and economical for future space endeavors. One day, man-kind will be mining asteroid belts for ores, traveling across systems at incredible speeds, and harnessing the power of stars for abundant, reliable energy. I hope to explore every stage of these concepts so that one day, this may become a reality.”

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5

10

15

20

25

30

35

40

landInG the oFFer

Before graduation 40%

Within one month of graduating 21%

Within 6 months of graduating 20%

Within a year of graduating 6%

It took more than a year 7%

It’s been over a year; still no luck 7%

What’s your dreaM Job?

engIneerIng salarIes remaIn sTable For 2011For the second consecutive year, compensation levels stay flat as OEMs continue to ride out the recession.

hunkering Down anD holding on—in this, engineers are really no different from professionals in other market sectors. With the unemployment rate pegged above 9% for the foreseeable future and not expected to return to a “natural rate” until 2016, engineers will likely have to learn to be happy with the job they have rather than the job they want. Compensation, meanwhile, is expected to remain flat over at least the next few years, which may see some engineers losing financial ground to inflation—an unusual trend in what is typically a well-paid profession.

The continued globalization of engineering will likely dampen domestic employment growth to some degree. There are many well-trained, English-speaking engineers worldwide willing to work at much lower salaries than U.S. engineers.

The rise of the Internet has made it easy for part of an engineering project previously done by engineers in this country to be completed by their counterparts overseas. Still, the reality is there will always be a need for onsite engineers to interact with other employees and clients.

During his speech to a joint session of Congress last month, Presi-dent Barack Obama specifically cited small businesses as a key to job creation. “Everyone here knows that small businesses are where most new jobs begin,” Obama said. “And you know that while corporate profits have come roaring back, smaller companies haven’t.”

IEEE-USA President Ron Jensen believes that to help encourage job growth in the engineering sector, Congress should reauthorize the Small Business Innovation Research (SBIR) program and invest in America’s technology infrastructure.

SBIR is a competitive, federally funded program that helps small companies conduct research into new technology. However, because Congress has failed to pass a long-term SBIR reauthorization, compa-nies cannot be sure of the program’s reliability.

“High-tech entrepreneurs are job creators, and our country should do everything we can to support them,” Jensen said. “Congress’ fail-ure to reauthorize the program for more than a year at a time has cre-ated uncertainty among small technology companies, and uncertainty

breeds hesitation, which breeds stagnation. Congress could end this uncertainty by passing a long-term reauthorization of the program.”

Obama also highlighted the important role that infrastructure invest-ments play in the economic health of our country. Jensen believes that Congress should recognize that infrastructure in the 21st century must include a robust and intelligent electrical grid.

The recent blackout in parts of Southern California, Arizona, and Mexico demonstrates that our grid needs to be strengthened. Emerg-ing technologies offer innovative ways to increase the reliability and efficiency of the system.

“A reliable, efficient, and affordable electric grid and IT infrastruc-ture can power job growth across our country,” Jensen said. “Investing in our nation’s electrical infrastructure not only creates jobs today but also lays the foundation for a strong economy tomorrow.”

Pay increases reMain FlaT

Increases in pay have been tough to come by in recent years for engineers. Last year, raises averaged a paltry 1.2%, and this year’s raises were barely half that amount. Across the country, engineers report an average total compensation of $104,370 in 2011 (in salary and bonuses), compared to $103,680 last year. The situation today seems a lifetime away from 2008, when average engineering incomes hit a peak of $106,271 and pay raises were nearly 4%.

“In today’s environment, salary advancement seems to be nonex-istent,” said a project engineer in Ohio. “Any meager increases that might be doled out are quickly consumed by rising employee contribu-tions to benefits.”

Design & development engineers earned average base salaries of $92,484 this year and total compensation of $100,700. Engineering managers saw the biggest boost in their paychecks in 2011, on average

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non-cASh And indirect cASh rewArdS you expect to receive in 2011

Health benefits 63%

401(k) match 57%

Time off 40%

Further education/training 20%

Pension plan 18%

Stock purchase plan 16%

Stock options 15%

Professional organization dues 15%

Company-paid phone line 13%

Tuition reimbursement 14%

fActorS thAt Affect your BonuSeS And other direct cASh pAymentS in 2011

Performance of company or division 50%

Personal performance 49%

Company profit sharing 25%

Patent awards 11%

Project milestone completion 9%

Retention bonus 4 %

Certification/training 3%

Signing bonus 2%

earning $119,366 in base salary and $131,556 in total compensation. About half (53%) of the corporate managers we surveyed work in small companies and startups (annual revenues under $5 million), and the ones we spoke to take home an average base salary of $108,078 and total compensation of $120,865.

Engineers are evenly split over whether engineering offers the same opportunity for salary advancement as it did five years ago. “I see reports that new grads are earning average salaries of $50k to $65k, so I think the potential to begin there and advance up the career path is still there,” said a hardware engineer in Michigan.

“There seem to always be jobs in engineering versus other fields and there are not enough engineers graduating each year, so that should push salaries up due to supply/demand,” noted a design engi-neer from Colorado.

“The industry is changing, but the opportunities are still out there,” said a consumer electronics engineer from Texas. “Engineers must shift their thinking and be prepared to migrate to new opportunities in order to remain successful.”

But some survey respondents were less bullish. “Five to 10 years ago, companies still saw the value in core product experience as something that needed to be retained and passed on,” stated an engi-neering manager from Connecticut. “With the expanding reliance on sourced labor and little permanent hiring of young engineers, there are few people to carry the knowledge forward. The average age of engineers is climbing and reduced enrollments in engineering majors are creating a perfect storm of the need to turn elsewhere (offshore) to fill those needs.”

Geographic location plays a big role in income levels, and the Pacific region is still on top with total incomes averaging $117,984, followed by the West South Central region ($116,416). Next up was the New England states ($108,838) and the Mid-Atlantic region ($106,295).

The market segment you work in is another major factor that’s influencing pay. Chip houses led the way in engineering pay again this year, at $141,272, followed by computer OEMs ($119,496), military contractors ($113,313), communications systems ($113,266), and medical electronics firms ($106,969).

But no matter where you work, chances are you’re working harder for the money than ever before. This year, engineers on average claim to be putting in a whopping 65 hours a week on the job, including 41 hours at the office, 11 hours at home, seven hours at other locations, and six hours on call.

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Average Salaries By Engineering Title

Base salary

Total compensation

Software engineering manager $130,107 $141,762

Vice president/VP of engineering $124,357 $137,226

Technical director/ director of engineering/R&D/ engineering manager

$113,170 $125,335

Chief engineer/senior engineer/lead engineer/principal engineer

$107,630 $116,693

Department head/section head $105,750 $115,885

Group leader/project team leader/project manager

$103,437 $112,966

Applications/systems engineering manager $100,274 $110,388

President/owner/CXO/ other executive management

$98,025 $109,364

Software engineer $99,384 $107,172

QC/evaluation/test manager $92,923 $104,144

Systems engineer/ applications engineer

$93,351 $102,750

Consulting engineer/scientist $88,538 $98,680

Other (please specify) $89,078 $98,340

Manufacturing/production manager $86,500 $93,341

Design engineer/project engineer/R&D engineer

$83,879 $90,427

Member of technical staff $83,280 $89,827

Test engineer $80,290 $87,801

Manufacturing/production engineer $74,558 $80,192

Average Salaries By Geographic Region

Base salary Total compensation

Pacific $107,441 $117,984

West South Central $106,352 $116,416

New England $100,101 $108,838

Mid-Atlantic $98,362 $106,295

West North Central $96,918 $104,790

Mountain $90,583 $99,545

East North Central $89,239 $97,124

South Atlantic $88,110 $95,435

East South Central $88,656 $94,769

Average Salaries By Job Function Base salary Total compensation

Engineering management $119,366 $131,556

Executive/operating management $108,078 $120,865

Design & development engineering $92,484 $100,700

Other engineering $85,723 $94,029

Average Salaries By Industry Base salary Total compensation

ICs and semiconductors $125,849 $141,272

Computer systems/boards/ peripherals/software

$109,360 $119,496

Government/military $106,327 $113,313

Communications systems/ equipment

$103,625 $113,266

Medical electronics $97,085 $106,969

Avionics/marine/space $99,791 $106,729

Test and measurement equipment $92,974 $100,875


Software $91,547 $99,899

Research & development $90,562 $99,204

Components and subassemblies $92,260 $99,105

Automotive electronics $89,706 $97,725

Consultant $85,726 $95,892

Consumer electronics $87,729 $95,328

Industrial controls systems/ equipment

$85,604 $94,038

Contract design or manufacturing $74,914 $82,588

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e l e c t R o n i c D e s i g n M A g A z i n e ’ s 2 0 1 1 A n n u A l s A l A R y s u R v e y R e p o R t

“I think companies are expecting more work from fewer indi-viduals,” commented an R&D engineer from Pennsylvania “This was established during the recession, and I don’t see that expectation changing back to where it was previously.”

One department lead engineer in California put it this way: “Corporate America is squeezing the life out of every employee possible. I’ve survived four layoffs and essentially absorbed the workload of six other colleagues. My pay has changed by 3%, up thankfully. The only place growing is upper management and their friends.”

Certain perks made a comeback in 2011. Nearly 57% of survey respondents say they expect to see 401(k) match plans from their companies this year (compared to only 49% last year), and 63% were back to getting company-paid health benefits (compared to 57% in 2010).

There were some glimmers of hope on the employment outlook in this year’s survey, as 33% of survey respondents say their company plans to increase the number of engineering jobs in the coming year, up from 29% a year ago. What’s more, nearly half (48%) say their organization is having difficulty finding qualified candidates for open engineering positions, compared to 42% last year.

“Due to job market growth in the sector, and competitive career recruitment, my company has been forced to step up the game to

retain top talent,” offered one development engineer currently with the International Automotive Components Group. “Wage increases and additional benefits have been reinstated this year.”

The toughest positions to fill are in analog design (38%), software (37%), systems engineering (36%), power electronics (29%), and mechanical design (27%).

Despite the tough job market, most engineers remain bullish on the profession. The majority (55%) still find themselves suf-ficiently challenged intellectually with the projects they work on, while only 10% claim they’re not. Nearly two-thirds (63%) feel adequately compensated for the work they do. And, 86% would recommend engineering as a career path to a young person looking to choose a profession.

“Comparing other career choices with engineering can show how engineering is still a very promising and challenging career today,” said a senior engineer with more than 30 years of experi-ence. “Considering the current economic crisis in the USA and in most other industrialized nations, engineering continues to be a leading technologically oriented career that has more opportuni-ties for employment than other choices. Technology is advancing faster than ever, so engineering is the best career choice to keep up with technology, and keeping up with technology is the best bet for any profession.”

sTaying sMarT

Engineering remains a field that requires constant education to keep up with emerging technologies as well as the latest applications. In fact, staying current with new and emerging technologies is the num-


Average Salaries By Type Of DesignWork You Do


ICs and semiconductors $128,250 $142,992

Computer product design (supercomputers, mainframes, workstations, servers, PCs, notebooks/laptops, peripherals, boards, etc.)

$113,552 $123,222

Military electronics products $107,012 $114,338

Communications systems and equipment (local-area/wide-area networking products, wireless, cellular, RF and microwave, Bluetooth, etc.)

$101,986 $111,941

Avionics, marine, or space $102,382 $110,296

Software design/development/programming $100,920 $110,2011

Medical electronics products $100,713 $109,975

Power design $95,193 $103,914

Automotive electronics products $91,046 $99,831


Research & development $89,605 $97,581

Safety/security $87,379 $97,010

Test and measurement equipment $88,055 $95,845

Components and subassemblies $88,675 $95,736

Consumer electronics products $87,858 $95,449

Industrial controls systems and equipment (including robotics)

$86,518 $95,422

Average Salaries By Size Of Company


$10 billion or more $116,361 $126,416

$5 billion to $9.9 billion $108,812 $118,798

$1 billion to $4.9 billion $109,197 $120,695

$500 million to $999.9 million $106,197 $115,648





$5 million to $9 million $85,804 $93,451

Less than $5 million $80,474 $88,607

Average Salaries By Years Of Engineering Experience


40 years or more $93,391 $103,161

35 to 39 years $112,423 $122,739

30 to 34 years $109,995 $119,154

25 to 29 years $105,500 $114,879

20 to 24 years $97,008 $106,218

15 to 19 years $89,784 $98,571

10 to 14 years $82,749 $90,645

5 to 9 years $71,688 $79,278

1 to 4 years $57,857 $62,865

Less than 1 year $51,053 $59,107

ber one issue causing engineers to lose sleep this year—even more than concerns about the general health of the economy. But 44% of those surveyed feel their company doesn’t do enough to support con-tinuing education among its engineers.

“They don’t offer to pay for seminars or conferences for engineers anymore,” said a senior product development engineer at a military contractor. “To attend a conference, I must use vacation time rather than paid work days. This indicates to me that the company isn’t inter-ested in furthering my knowledge/skill sets, even though it would be a benefit to the company.”

“Tuition reimbursement was reinstated very recently after being suspended for several years,” said an electronics products manager in Detroit. “Travel authorizations for trade shows are almost impossible to get, and there’s no money in the budget to cover tuition charges for online seminars or training classes. In-house course offerings have also been scaled back drastically over the last decade.”

“It isn’t a lack of financial support, so much as a lackof emphasis on staying current and sharing information,” said a senior project engineer in Indiana. “I think this is common in many companies. Some people will do it on their own, but I think the results are more synergistic when there is a corporate emphasis.”

What’s more, only 47% believe that today’s graduating engineers are as well prepared for the job as they were—and 40% feel they’re less prepared.

“Students coming into the field have far too little hands-on expe-rience with technology,” said a senior project engineer, “although wonderful tools, computers, and the Internet have replaced many of the technical hobbies of previous generations. Since many public high schools cannot afford to maintain industrial arts programs, many stu-dents have no idea how anything is actually made.”

“The universities today teach you how to solve problems, but they don’t teach you about leadership, contract negotiations, or the legal hurdles that can affect engineers,” observed an engineer from North Carolina.

“Many of the new hires and interns have the engineering knowl-edge, but many of them lack basic Unix skills,” quipped a senior MTS

from Wisconsin. “They have grown up on Windows PCs and are not prepared for working on real systems. It takes them much

longer to become self-sufficient.”But not everyone sees it this way. “Internships and co-op

assignments are more common today, so many new gradu-ates come into the workplace better prepared than I was for the realities of the working world,” said a product manager who responded to our survey.

A senior engineering manager at Rockwell Collins had this to say: “Today’s graduating engineers have a greater opportuni-

ty to make an immediate impact to society because of the amount of information available at their fingertips, namely, the Internet.”

We asked survey respondents this year to tell us some of the things they didn’t learn in school that they wish they had. While many got specific about particular technologies like embedded programming, CAD, and analog circuitry, most talked about things outside of engi-neering like project management, team building, mentoring, time management, interpersonal skills, business law, marketing, regulatory requirements, accounting skills, technical writing—and dealing with corporate politics.

“I could have used a stronger business background,” complained a lead engineer now at Honeywell. “The ability to make a business case for spending money on engineering development is essential to any engineer working in commercial engineering.”

But in reality, there are no shortcuts to on-the-job experience. “I learned in college that there is more to know than you can learn in col-lege,” said one senior engineer. “As one of my professors explained, college gives you the skeleton of knowledge to be an engineer. Experi-ence puts the flesh on the bones.”

And what advice does today’s working engineers have for students getting ready to enter the field? Continue to learn the basics, don’t discount graduate school, do as many internships as possible, don’t expect to get your dream job overnight, bring passion to your first job—and start saving early for retirement.

“Do not stop learning,” advised a principal engineer at Oracle. “Stop and you will fall behind and likely never catch up. Be open to new ideas and creative solutions. Be willing to share new ideas with peers. Working together in a team is the only way projects can move forward with the speed needed to keep up with your competition.”

“Believe in yourself,” suggested one senior electrical engineer. “You are the one who has the tools and ability to solve the difficult problems that the world faces. Find energy alternatives, and develop ways to provide safe water and healthy environments. Politicians and lawyers can’t do these things—but you can.”

“You have the knowledge, but experience takes time,” pointed out a research lab technologist at the University of Toronto. “Make a thousand rules of thumb for yourself to cover every aspect of design, and use them.”

An engineer/developer at Ericsson summed it up this way: “Don’t just rely on your college degree to make you successful. Find some-

11


the top 10 profeSSionAl iSSueS thAt Keep you up At night

1. Staying current with new and emerging technologies

2. Concerns about the general health of the economy

3. Looming project deadlines

4. Product reliability issues

5. Price/performance issues

6. Concerns about job security

7. Outsourcing issues

8. Component availability issues

9. Dealing with reductions in staff

10. Concerns about financial health of your company

the fActorS thAt influence your JoB SAtiSfAction moSt

1. The challenges that accompany the design of new products

2. Researching potential design solutions

3. Opportunity to design products that can benefit society

4. The compensation you receive for the work you do

5. The recognition you get from others for the work you do

6. Working in team situations with peers

7. The pressures associated with solving design problems

8. Working independently of others

12


thing in your field or specialty to become intensely passionate about and focus as much time and energy as you can to becoming an expert in that thing. Then, find another, somewhat related aspect to become an expert in and also become an expert in how this new information ties into the previous information. Continue doing this and never stop. You may not be able to directly apply a lot of the experience and information that you’ve attained, but you’ll have a better understanding of how the world works, and that type of information can be applied everywhere.”

It’s been a bumpy ride for engineers over the past few years, and that’s not likely to smooth out in the near future. Many companies

have cut engineering budgets to the bone, and then some. Amenities are almost nonexistent. Money for travel and training are difficult to come by, which has many engineers frustrated and in some instances worried about their futures.

At the same time engineers tend to be very self-reliant. They typically believe that talent and hard work will carry them through, despite what may be temporary tough times. If their outlook can be summed up in one sentence, it might be that people who are good at what they do will continue to advance through good times and bad.

when Dave Fullagar retired in 1999, he left behind some tough shoes to fill. Fullagar is well known in technical circles for design-ing the first internally compensated op amp, the ubiquitous µA741, while at Fairchild in 1968. He also designed the first monolithic FET-input op amp while at Intersil in 1972 and helped cofound Maxim Integrated Products in 1983.

But as is the case with many successful engineers, there’s more to Fullagar than his technical accomplishments. In retirement, he and his wife, Betsy, have worked unassumingly on getting children’s books to support African schools and libraries.

In May 2007, on a photo safari to South Africa, the Fullagars came to know their guide, Alweet Hlungwani, who invited them to visit his village of Boxahuku in the northeast corner of South Africa.

There they fell in love with the small village and its people and got to witness firsthand the poverty, illness, and overcrowded class-rooms that don’t get talked about in the tourist brochures (Fig. 1).

The Fullagars began traveling back to Africa every couple of months after that to work with the village elders on developing a plan to help address some of the educational needs in tribal African villages.

In South Africa, there are many local languages. But in fourth grade and after, the lessons are taught in English only. Young stu-dents struggle with English and often drop out before completing high school, so they can’t compete for the college scholarships that are only available to good English speakers.

It wasn’t long before the Fullagars formed InAfricanShoes.org. This non-profit organization focuses on the younger children and raises their English awareness and proficiency by making reading fun, creating a village library and learning center with donated chil-dren’s English picture books and computers (Fig. 2).

After helping raise funds, purchase land, construct a facility, and getting thousands of donated books shipped, the Fullagars opened the Boxahuku library in 2009. Since then, they’ve opened another library in the town of Gwanda in Zimbabwe.

For more information about volunteering opportunities, see the organization’s Web site at www.InAfricanShoes.org/InAfrican-Shoes/Get_Involved.html.

maxIm coFounder Takes hIs skIlls and goodwIll To aFrIca

2. InAfricanShoes.org opened the Boxahuku library in 2009, followed by another

library recently opened in the town of Gwanda in Zimbabwe.

1. Maxim cofounder Dave Fullagar and his wife Betsy travelled to South Africa

in 2007 and fell in love with the village of Boxahuku, leading them to found

InAfricanShoes.org, which builds and equips libraries for children.

Yes, There Is lIFe aFTer engIneerIngEngineers are taking control of their futures and designing their retirement—and planning to give back to society.

engineers have never been known for being passive people, and they will be the architects of their retirement. As they approach their golden years, though, these professionals are no different than their neighbors or most other Americans.

They’re worried about how a wildly fluctuating stock market will affect their retirement accounts. They’re concerned about a recession that shows no sign of ending, despite assurances from Washington. And they’re anxious, once again, about conditions overseas—not as a source of competition but as a potential source of economic collapse, particularly among countries among the EU Zone.

What makes this all doubly difficult is that most engineers see themselves as problem solvers. And perhaps for the first time in their careers, they’re confronting problems for which they can’t design an easy solution.

A series of Gallup Polls taken between April-July 2011 paints a bleak picture:

• For the first time this decade, a majority of non-retired Americans (52%) doubt they will have enough money to live comfortably once they retire, up sharply from about a third who felt this way in 2002.

• Non-retired Americans now project that they will retire at age 66, up from age 60 in 1995. And eight in 10 American workers now think they will continue working full or part time after they reach retire-ment age.

• Six in 10 non-retired Americans believe they will get no Social Security benefits when they retire—more pessimistic than at any time since Gallup began asking this question in 1989. Non-retirees are now projecting Social Security as a major income source in their retirement, paralleling a drop in projected reliance on pensions, 401(k) plans, and other investments. So American workers appear to be in a bind, perceiving an increased need for Social Security while at the same being less sure it will be there when they need it.Like other Americans, engineers as a group now say that, on average,

they plan to retire at age 66. But better than one in four (27%) of those

already in their sixties said they won’t be able to retire until they’re 70 or older—with 42% saying this was later than they’d planned. In fact, only 10% of those already nearing retirement age said that there’s no chance they would accept another engineering job following retire-ment if it were offered to them.

While 18% said the prospect of coming out of retirement would be very unlikely for them, nearly half (42%) of engineers in their sixties said it wouldn’t be out of the question if the right opportunity were to come along. And nearly one in five would definitely take something else rather than retire at this point.

Although engineering continues to be a well-paying profession, engi-neers surprisingly seem to be flying on their own when it comes to their retirement planning. More than two-thirds (68%) say they don’t have a professional financial advisor helping them plan their retirement.

“I find that depending on myself is the best way,” said one respon-dent. “I have to try and save as much as I can now to make sure my future is secure. All of the different financial products are nice, but who really can take those kinds of risks?”

In addition to Social Security, the sources of income engineers will depend on most to help fund their retirement include 401(k) plans (66%), their personal savings accounts, money market accounts and CDs (55%), IRAs (47%), stocks, bonds, and mutual funds (41%), and pension plans (39%).

gaThering no Moss

According to our survey, many engineers as they reach the culmi-nation of their careers are more interested in giving back than get-ting out (see “Maxim Cofounder Takes His Skills And Goodwill To Africa,” p. 41). This is not particularly surprising. Engineers tend to be individuals who want to build a better world. There’s no reason to expect that feeling to fade when engineering professionals begin to think seriously about retirement. Indeed, it seems to grow stronger.

13


retirement SAvingS goAlS of engineerS

Current age Retirement goal

Under 30 $1,602,198

30 to 34 $1,615,044

35 to 39 $1,654,545

40 to 44 $1,573,280

45 to 49 $1,456,818

50 to 54 $1,483,597

55 to 59 $1,336,919

60 and older $1,256,152

SourceS of income (other thAn SociAl Security) engi-neerS Are uSing to fund their retirement

401(k) 66%

Savings account/money market account/CDs

55%

IRA 47%

Stocks/bonds/mutual funds 41%

Pension plan 39%

Whole life insurance 13%

Stock options 11%

One way many engineers express these desires is with an active interest in mentoring. It gives them the double benefit of staying connected to a pro-fession they have deep feelings for—without the stress they’re all too happy to leave behind—while enabling them to help shape the up and coming generation of newly minted engineering graduates.

Many engineers spoke about an interest in teaching engineering-related courses to young students interested in engineer-ing once they retired. “My dream is to work with the local community college to create an alternate energy-related business with high-tech jobs in our city,” said a quality assurance team leader in California.

“Teaching would be great,” said a field applications engineer at Atmel. “I’d love to teach. I just haven’t had the opportunity. As my office is located close to our local university, I have helped several students with engineering projects, and it has been a satisfying experi-ence that I would like to repeat.”

“The most rewarding experience I’ve had is working with middle school students on space related projects,” said an electronic design engineering manager in Connecticut. “Showing how math and sci-ence interacts with everything we do is so enlightening to them. That is where the seeds of engineering need to be sown and I’d like to do more of it.”

Many engineers told us they plan to stay connected to the profession by continuing to attend industry seminars and conferences and get more active in local professional groups and associations.

“I plan to continue my work with professional societies,” said one design engineer from Minnesota. “I do want to take a break from engi-neering for at least one to two years, then see if I want to reconnect more actively with the engineering profession.”

Still others nearing retirement look to continue to find ways to benefit society in non-engineering ways. “My life is becoming less engineering-centric as I get older,” remarked an electrical engineer from North Carolina. “I have plans to continue to be involved in com-munity and philanthropy over time, but in ways that will have nothing to do with engineering.”

Some engineers who have taken a first step toward retiring are finding semiretirement even more rewarding. “I’ve been working part time in engineering for a small firm and am enjoying engineering more now than when I worked for a Fortune 100 firm,” one

survey respondent told us. “Now I am involved in all phases of the business.”

Many engineers talked to us about hobbies they planned to con-tinue or get more involved with. “I have more technical hobbies than my wife is comfortable with,” said another engineer. “I’ll always be working on some kind of engineering project, be it RF, electronics, or astronomical.”

But not all engineers are looking to keep a foothold in the profes-sion. One quipped, “Like a good soldier I plan to just fade away,” while another stated, “I couldn’t care less about ‘the profession.’ I’ll just hang out in the shop and invent stuff.” Still another said, “There’s no telling how I will stay connected. Regardless, I am sure I will be tearing things apart and putting them back together until I die.”

The U.S. finds itself at an interesting point in history. With its financial foundations shaken and the growing economic threat from

China and India, many are questioning our ability to maintain our place as a global technology leader. That doesn’t seem

to be much of a concern for the incoming class of engi-neers, who see themselves as ready and able to take on and overcome the challenges we face.

Meanwhile, today’s working engineers are pragmatic about the situation, taking it in stride as yet another prob-

lem to solve—something they’ve given their professional lives to doing. Perhaps one of the side effects of the situa-

tion is that older engineers who may find it difficult to retire in the current economic environment will instead make a second career out of sharing their valuable knowledge and skills with their younger counterparts.

14


Average Salaries By Level Of Education


Doctoral degree $111,656 $122,307

Master's degree $103,781 $113,306

Bachelor's plus graduate studies $100,303 $109,988

Bachelor's degree $90,681 $98,860

Attended college $78,054 $85,001

Associate's degree $70,606 $77,615

High school or less $70,481 $76,618

Average Salaries By Gender Base salary Total compensation

Male $95,790 $104,744

Female $79,615 $87,669

Average Salaries By Age Base salary Total compensation

60 or older $96,819 $106,173

55 to 59 $106,595 $116,482

50 to 54 $101,808 $110,957

45 to 49 $100,664 $109,378

40 to 44 $88,655 $97,732

35 to 39 $86,686 $94,609

30 to 34 $72,238 $79,339

25 to 29 $62,963 $68,902

Under 25 $47,750 $53,208

When Will You Retire?

Never 13%

70 or older 21%

65 to 69 29%

60 to 64 13%

59 or younger 5%

Not sure yet 16%

if 2009 was a year for “weathering the storm” symbolized by the fall of Lehman Brothers back in the fall of 2008, then 2010 was a year for taking advantage of “sunnier skies,” though typical engineers may not have felt much improvement in their daily condition. How-ever, many companies stayed faithful to the seven strategies we pre-sented back in our 2010 list of the Top 50 Employers in Electronic Design (see “The Top 50 Employers In Electronic Design” at www.electronicdesign.com):

• Building strength in good economic times• Transparent over-communication• Focused business portfolios• Cutting the right costs• Cutting costs during good times• Increasing R&D• Investing in information systems

These companies were able to begin reaping the rewards of their intelligent planning (Tables 1A and 1B).

crunching The nuMbers

While the unemployment rate peaked at 10.1% in October 2009, by the end of 2010 it came down to 9.4% and is currently at 9.1%. In

2009, we lost 5.7 million jobs, but at least 751,000 jobs were gained in 2010. U.S. GDP decreased 1.7% annually in 2009, but it showed an annual increase of 3.8% in 2010. These improvements may not look substantial, but at a minimum, the negative trends have been reversed.

In 2010, the pool of 96 companies that we analyze collectively showed employee growth of 1.5%, sales growth of almost 10%, and

pretax profit growth of 83%! While we are dealing with a low base, this was a significant improve-ment vis a vis 2009’s employee declines of 5.5%, sales declines of 8.3%, and pretax profit declines of 8.9%.

In 2009, companies did well to hold profit mar-gins flat year over year and prevent debt to equity ratios from worsening more than one point. In 2010, companies knocked it out of the park, improving profit margins by five points and debt to equity ratios by nine points! Last but not least, R&D went from almost a 4% decline in 2009 to almost a 3%

increase in 2010 (Table 2).Another sign of optimism comes from our percentage of companies

reporting growth in key categories. In 2009, 19% of our company pool reported increases in sales while only 9% reported increases in profits.

15


Companies that buckled down during 2009’s collapse saw the positive results of their shrewd strategies as the economy rebounded and profits rolled in in during 2010.

The TOp 50 empLOyers in eLecTrOnic

design

In 2010, these percentages have soared to 89% and 90% respectively. In 2009, 22% reported increases in their employee count and 30% reported increased R&D investment. In 2010, again they have soared to 62% and 67% respectively (Table 3).

A closer comparison of this year’s results versus last year’s reveals five companies that showed tremendous growth. General Motors climbed 78 spots, TRW Automotive Holdings rose 64 slots, Teradyne and Caterpillar jumped up 62 and 61 places respectively, and Cadence Design Systems moved up 56 spots (Table 4).

Meanwhile, components and subassemblies represented the stron-gest category for OEMs, as six of the top 10 OEM companies special-ize in this space (Table 5). Our methodology from 2009 to 2010 did not change, though. For a complete description of how we developed our list, see “The Method Behind Our Mathematics” at www.electron-icdesign.com.

So, what’s on tap for 2012? As employment and capital investment continue to slowly climb back up in 2011 and 2012, those companies that continue to shrewdly expand capacity and invest in their people, design and bring to market quality products that truly address cus-tomer needs, and keep a tight rein on costs and stay efficient enough to offset rising commodity costs and improve margins will be the ones that continue to generate solid gains in sales and profits.

gM MoTors uP 78 sloTs

General Motors Company (GM), which was company number 91 in 2008, moved up in the ranks by 78 places to land in the thirteenth slot this year. It operates as a global automaker, producing cars and trucks

and selling them under the Baojun, Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Opel, Isuzu, Vauxhall, Jiefang, FAW, and Wuling brand names.

The company sells its cars and trucks to dealers for consumer retail sales, as well as to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments. Its major markets include China, the United States, Brazil, the United King-dom, Germany, Canada, and Italy.

GM’s OnStar subsidiary provides vehicle safety, security, and information services. Meanwhile, GM provides automotive financing services through its subsidiary, General Motors Financial Company Inc., which purchases automobile finance contracts for new and used vehicles purchased by consumers primarily from franchised and select independent dealerships. Founded in 1908, GM is headquartered in Detroit, Mich.

gM’s coMPeTiTive lanDscaPe

Demand is driven by employment and interest rates. The profitability of individual companies depends on manufacturing efficiency, product quality, and effective marketing. Large companies have economies of scale in purchasing and marketing. Smaller companies can compete by focusing on specialized markets. The industry is capital-intensive, as GM’s average annual revenue per employee is about $2 million.

Ford, Chrysler, Toyota, Honda, Nissan, Hyundai-Kia, Daimler, Volkswagen, PSA Peugeot Citroen, Fiat, and Renault all compete with GM. Chinese auto manufacturers Geely, Chery, and Build Your Dreams (BYD) are up-and-coming threats.

16


1. The Chevrolet Cruze is one of GM’s biggest hits, topping the charts as the best selling small car in the U.S. in May. It’s also Chevrolet’s best selling car around the world,

with global sales of more than 250,000 in the first four months of 2011. The 2012 model will improve on 2011’s fuel efficiency, as the Cruze Eco with automatic transmis-

sion will see 39 mpg on the highway.

Taking 2009 oFF

We welcome GM back to our Top 50, having emerged from govern-ment oversight in the second half of 2009. The last time GM was in our survey was 2008, where it ranked 91st before the government began its oversight, so it has moved up 78 ranks. While it has shown tremendous improvement and is positioned to take advantage of anticipated global industry growth, there is still work to be done.

GM’s 2011 first quarter sales were up 15%, and operating profits without any extraordinary items were up 13%. Products including the Buick LaCrosse and Regal, the Chevrolet Equinox, the GMC Terrain, and the new Chevrolet Cruze all contributed to this revenue growth. In fact, the Chevrolet Cruze commanded a price that was $3000 higher than the vehicle it replaced.

For the first quarter of 2011, global deliveries were 2.2 million units, an increase of more than 220,000 units from the first quarter of 2010. This increase is attributable to a 1.3 million-unit increase in industry volume and a 0.4 percentage point increase in global market share to 11.5%. In April, North American market share returned to a strong 19.8%, despite managing customer sales incentives down to the lowest levels yet for the new General Motors.

To help offset increases in commodity costs, GM implemented price increases effective May 2. These increases included hot selling products, including the Chevy Cruze and Equinox, Cadillac SRX, GMC Terrain, and Buick LaCrosse. When combined with increases implemented during the fourth quarter and earlier this year, average prices increased 0.8%.

During the first quarter of 2011, GM continued to make progress in strengthening the balance sheet by selling non-core assets and further funding its U.S. pension liability. The crisis in Japan is not expected to have a material impact on full-year results.

First-quarter growth was achieved largely on the strength of stronger sales of fuel-efficient vehicles across the portfolio. GM is much better positioned today to meet the demands of customers looking for fuel-efficient vehicles, with no better example than selling 50,000 Cruzes in the first quarter alone (Fig. 1).

There are more fuel-efficient vehicles to come, as GM introduces the Chevrolet Sonic, the Chevrolet Malibu ECO, the Buick Verano, and the Buick LaCrosse and Regal with eAssist over the coming months and year.

GM Financial has also had a positive impact on the first quarter by improving credit availability and terms to GM customers. The primary objective of GM’s automotive financing strategy is to provide certainty of availability to customers all through the credit cycle and the busi-ness cycle as well as increased competition and transparency.

GM Financial has steadily increased its U.S. subprime financing penetrations from 4% in the first quarter of 2010. Leasing programs are now offered through GM Financial in 21 states through the end of the quarter. U.S. leasing penetrations increased from 7.6% in the first quarter of 2010 to 16.8% in the first quarter of 2011, but still below the industry average excluding GM of 23%.

inTernaTional Moves

Further improvement will come with the company’s target of nation-al coverage for the GM Financial lease program by this summer. To expand availability of leasing into Canada, GMF in April acquired one

of the major lease platforms in Canada. The early signs of this expan-sion are encouraging with GM Canada lease penetrations increasing to 7% in April.

As GM and GMF become more closely integrated, GM new vehicles as a percentage of GMF’s originations and GMF’s percentage of GM subprime financing and leasing volume have increased significantly. GMF posted strong credit performance for the first quarter with annu-alized net credit losses of 4%, down materially from the prior year.

In Europe, restructuring has focused on reducing costs, but equally important is the retooling of the product line. The Opel Insignia, Meri-va, and Corsa are just a few examples of the product renaissance, and there are many more to come. In fact, by 2012, most of the European product line will be less than three years old.

In China, the largest automotive market in the world, GM maintained its number one position with a market share of 13.6%, and the future looks bright with the introduction of the new Baojun brand, the contin-ued strength of Buick, and the launch of 60 new and upgraded models over the next five years. In addition, the expansion of Korea-built Chevrolet products being sold in countries throughout the Asia-Pacific region and in Europe is a significant contributor to revenue growth.

17


Table 1A: Top 50 Employers

Company nameTotal

company line score

2010 rank

cATerPillAr inc. 84 1

JuniPer neTWorKs inc. 81 2

emc corP. 76 3

BroADcom corP. 75 4

TeXAs insTrumenTs inc. 74 5

APPle inc. 74 5

AnAlog DeVices inc. 70 7

QuAlcomm inc. 70 7

nATionAl insTrumenTs corP. 68 9

AlTerA corP. 67 10

3m co. 67 10

inTel corP. 66 12

generAl moTors co. 65 13

AgilenT Technologies inc. 64 14

inTersil corP. 64 14

honeyWell inTernATionAl inc. 64 14

neTAPP inc. 63 17

TrW AuTomoTiVe holDings corP. 61 18

XeroX corP. 61 18

rocKWell AuTomATion inc. 61 18

meDTronic inc. 60 21

WesTern DigiTAl corP. 58 22

cyPress semiconDucTor corP. 57 23

hArris corP. 67 21

sAic inc. 66 29

eATon corP. 57 23

sAnDisK corP. 57 23

GM South America continues to be in the midst of overhauling nearly its entire product portfolio, with 2000 people hired in Brazil in the first quarter as GM ramps up for a very aggressive prod-uct launch over the next 18 months. In Brazil alone, GM plans to have nine new products by the end of 2012. In the entire region, 40 new products are planned for this year and next. In essence, South America is the new version of what China was or Asia was a year or two ago for GM.

Revenue growth is an important objective for GM, and it is investing the necessary resources to refresh its product line over the next couple of years. The company’s mindset and new operating model center around designing, building, and selling the world’s best vehicle—not better than the model it replaces or as good as the competition, but actu-ally defining the standards of being the best.

As revenue grows, there will be intense focus on cost containment at GM. The company currently faces increasing commodity costs, which need to be offset through cost reduction in other areas, supplier perfor-mance, and increased prices.

Efficiency in the product development cycle will have to be empha-sized as its engineering and capital spending are increased and stabilized

over time. Yet GM is off to a strong start in making 2011 a solid improve-ment over 2010, and it needs to continue to build the momentum.

TrW Flexes iTs Muscles

In 2009, TRW Automotive Holdings Corp. came in as 82 on our list of the top employers. This year, it placed eighteenth, moving up 64 slots. Together with its subsidiaries, the company designs, manu-factures, and sells automotive systems, modules, and components for automotive OEMs and related aftermarkets. It operates in four segments: chassis systems, occupant safety systems, electronics, and automotive components.

The chassis systems segment offers product lines relating to steer-ing gears and systems, foundation brakes, modules, brake controls, and linkage and suspension. The occupant safety systems segment provides airbags, seat belts, steering wheels, and occupant restraint systems.

The electronics segment offers various products comprising safety electronics, radio frequency electronics, chassis electronics, pow-ertrain electronics, and driver assist systems. And, the automotive components provides body controls, engine valves, and engineered fasteners and components.

The company offers its products for passenger cars, light trucks, and commercial vehicles worldwide. Founded in 1904, TRW Automotive Holdings Corp. is based in Livonia, Mich.

TrW’s coMPeTiTive lanDscaPe

Demand for auto parts is driven by new car sales, which are strongly affected by interest rates, and by the replacement market. Company prof-itability depends partly on the difficulty of manufacturing products and partly on demand volume, since many costs are fixed. Small companies can compete successfully by focusing on a small number of products or some highly technical ones.

The industry is capital-intensive, with an average annual revenue per employee of more than $450,000. The structure of the industry is complex, with most smaller companies (referred to as “tier 2” and “tier 3” suppliers) selling parts to larger suppliers (referred to as “tier 1” suppliers), which in turn sell component assemblies or modules to car and truck assemblers such as GM and Ford, collec-tively called OEMs.

Principal competitors include Advics, Bosch, Continental-Teves, JTEKT, and ZF in the chassis systems segment; Autoliv and Takata in the occupant safety systems segment; Autoliv, Bosch, Continental-Teves, and Nippondenso in the electronics segment; and Delphi, Eaton, ITW, Kostal, Nifco, Raymond, Tokai Rika, and Valeo in the automotive components segment.

observaTions

TRW is our most improved company comparing 2010 to 2009, mov-ing up 64 places in the rankings to number 18. The first quarter of 2011 continued to produce strong results with sales up 15% and operating profits up about 24%. Operating profit before special items was $382 million, with a margin of 9.3%. This marked the highest level of oper-ating profit and margin for any quarter in TRW’s history.

Considering seasonality and the capital investments TRW is making to support growth, the company still was able to generate record cash

18


Table 1B: Top 50 Employers

Company nameTotal

company line score

2010 rank

inTernATionAl Business mAchines corP. 57 23

fAirchilD semiconDucTor inTernATionAl inc. 56 27

TerADyne inc. 55 28

lineAr Technology corP 55 28

ADTrAn inc. 54 30

cADence Design sysTems inc. 53 31

forD moTor co. 53 31

micron Technology inc. 53 31

seAgATe Technology Plc 53 31

leXmArK inTernATionAl inc. 53 31

lsi corP. 53 31

generAl elecTric co. 53 31

noVellus sysTems inc. 52 38

APPlieD mATeriAls inc. 52 38

DAnAher corP. 52 38

The Boeing comPAny 51 41

VisTeon corP. 50 42

Tyco inTernATionAl lTD. 50 42

ingersoll-rAnD Plc 50 42

synoPsys inc. 50 42

lATTice semiconDucTor corP. 48 46

moTorolA soluTions inc. 48 46

moog inc. 48 46

uniTeD Technologies corP. 48 46

sPX corP. 47 50

nATionAl semiconDucTor corP. 47 50

sT. JuDe meDicAl inc. 47 50

flow levels and continued to reduce its debt and strengthen its balance sheet. Vehicle production trends continue to be positive, too.

In North America, overall vehicle production was up 14% compared with the prior quarter. On a sequential basis compared to the fourth quarter of last year, production was up around 12%. This level of production has been supported by the gradual increase in consumer demand. For the quarter, the seasonally adjusted annual selling rate averaged 13 million units, up from the mid-12 million range experi-enced in the fourth quarter of 2010.

In Europe, vehicle production was up about 8% compared with last year’s quarter. On a sequential basis compared to the fourth quarter, production was up around 4%. Improving customer demand inside Europe, combined with strong consumer demand outside of Europe, continues to support this level of production. In fact, in Germany and France, TRW recorded 14% and 9% year-on-year increases in regis-tration, respectively, during this first quarter, and these are definitely positive signs as we move further into the year.

For Western Europe, first quarter production was up around 4% or 190,000 units compared to the fourth quarter of 2010. China and Bra-zil continue to be growth champions for TRW. For the quarter, TRW sales outpaced industry production in both markets. Combined sales in these two markets accounted for more than 12% of TRW’s total first quarter sales.

Outpacing industry growth is not limited to China and Brazil, as TRW overall has outpaced the industry growth in each and every year in recent years. TRW expects this to continue in the medium term, with incremental growth in excess of $1 billion per year based on the com-pany’s current views of vehicle build.

The recent production disruptions for TRW’s customers due to the earthquakes in Japan had a minimal impact in the quarter, though Japan-related supply disruptions and commodity costs will have to be managed the rest of the year to maintain margins (see “Distributors Respond To The Earthquake In Japan” at www.electronicdesign.com).

Product launches during the quarter continue to strengthen TRW’s diversification and leadership in intelligent safety solutions. A few examples include electric power steering, the driver’s airbag module, seatbelt systems, and steering wheels on the Ford Focus in North America.

In Europe, Audi launched the Q3 with TRW’s stability control, driver and passenger and side impact airbags, electronic park brake, and steering wheel. The Honda Civic was launched in North America with TRW’s airbag control units, crash sensors, and RF technologies.

As a result of TRW’s ongoing quality and six-sigma programs, it continues to launch world-class quality products. For the quarter, TRW’s quality average was just over 5 parts per million across all products and customers worldwide.

19


2. Caterpillar, known for its construction and mining equipment, took the top spot in our list of the Top 50 Employers in Electronic Design. The rebounding economy, with

an emphasis on infrastructure and new construction, drove this success as the company introduces new equipment like the CT660 Vocational Truck, suitable for mixing

concrete and hauling loads of all sizes.

TRW also unveiled several new products and announced future product launches during the quarter that will continue to strengthen market position. One highlight is TRW’s electronic park brake for front axles, a development that makes the technology more affordable to a wider range of vehicle segments and brings advanced safety to smaller vehicles.

Similar to rear electronic parking brake (EPB) applications, the front axle system enables emergency braking performance and pro-vides a wide range of competent safety features that can include heel and drive oasis, electronically controlled deceleration, rollaway detec-tion, and premium stencil management to support stop and go and also hold functionality.

Within the steering business, TRW secured a major contract to sup-ply a range of vehicles with electrically powered hydraulic systems for light commercial van platforms. This EPHS system offers comparable reductions in fuel economy to electronic power systems (EPS) and reductions in CO

2, and it also accommodates higher rack load applica-

tions for the light van segments.Another area of growth for the company is the growing demand for

cameras and radar driver assist systems in vehicles. TRW has gained a number of production contracts, including Ford collision warn-ing enabled by camera and automatic emergency braking activities using its 24-GHz radars. If the worldwide auto industry continues to rebound and grow, TRW’s product line is well positioned to continue to take advantage.

caTerPillar craWls inTo FirsT

Last year, Caterpillar was number 62 on our list. This year, it inched up 61 ranks to take the top slot. The company manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through two lines of businesses: Machinery and Power Sys-tems, and Financial Products.

The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel exca-vators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground

mining equipment, tunnel boring equipment, and related parts (Fig. 2). It also manufactures diesel-electric locomotives and manufactures and services rail-related products and logistics services for other companies.

The Power Systems business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petroleum, construction, industrial, agri-cultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, as well as power generation applica-tions. It also remanufactures Caterpillar engines, machines, and engine components and offers remanufacturing services for other companies.

The Financial Products business provides retail and wholesale financ-ing alternatives for Caterpillar machinery and engines, solar gas tur-bines, and other equipment and marine vessels. It also offers loans and various forms of insurance to customers and dealers. And, it provides financing for vehicles, power generation facilities, and marine vessels.

The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was originally orga-nized as Caterpillar Tractor Co. in 1925 in California. In 1986, the company reorganized as Caterpillar Inc. in Delaware. Caterpillar Inc. is headquartered in Peoria, Ill.

caT’s coMPeTiTive lanDscaPe

Demand for machinery depends on overall industrial activity and on the health of sectors such as agriculture, construction, and power generation. The profitability of individual companies depends on engineering expertise and efficient production. Large companies have economies of scale in purchasing. Small companies can compete effectively by specializing.

The industry is capital-intensive, as average annual revenue per worker is about $300,000. It encompasses a number of segments: construction, mining & other heavy equipment manufacturing; elec-tronics; electrical products; power generation & storage transportation services; and logistics services.

When it comes to machinery, Caterpillar’s chief competitors include Cummins Inc., Tognum AG, GE Energy Infrastructure, Siemens Ener-gy, and Wartsila Corp. Other competitors, such as John Deere Power Systems, MAN Diesel SE, Mitsubishi Heavy Industries Ltd., Volvo Penta (part of Volvo Group AB), Kawasaki Heavy Industries, multiple

20


Table 2: Industry Losses In Key Areas

Category 2010 versus 2009

emPloyee groWTh 1.5%

sAles groWTh 9.9%

PreTAX income groWTh 83.2%

PreTAX mArgin imProVemenT 5.1 pts.

DeBT To eQuiTy rATio imProVemenT 9.1 pts.

reseArch & DeVeloPmenT eXPense 2.7%

eD reADer Profile surVey resPonDenTs –2.9%

Table 3: Percentage Of Companies That Saw Growth In Key Areas

sAles groWTh 89%

PreTAX income 90%

emPloyee groWTh 62%

r&D 67%

emerging Chinese competitors, and Rolls Royce Group plc compete in other markets where Caterpillar is active.

An additional set of competitors, including Generac Power Systems Inc. and Kohler Co., includes packagers that source engines and/or other components from domestic and international suppliers and market products regionally and internationally through a variety of distribution channels.

In the engines space, Komatsu Ltd., Volvo Construction Equipment (part of the Volvo Group AB), CNH Global N.V., Deere & Co., Hitachi Construction Machinery Co., J.C. Bamford Ltd., Doosan Infracore Co. Ltd., and LiuGong Construction Machinery N.A. LLC all have varying numbers of product lines that compete with Caterpillar prod-ucts, and each has varying degrees of regional focus.

The secreT oF iTs success

Infrastructure investment is back, which is a key force behind Caterpillar’s ascension to the top ranking in this year’s Top 50. The company continued its strong performance in the first quarter of 2011 with sales up 57% and profits up more than 400%, the most profitable quarter in the company’s history. Most of the sales increase came from machinery and power systems, which were up 61%. Financial prod-ucts were basically flat.

Within machinery and power systems, construction industries were up 71%; resource industries, up 84%; and power systems sales were up 51%. Most of the increase came from higher customer demand, but dealers did increase their inventories to meet future demand as well. There was also some improved pricing, as well as the acquisition of Electro-Motive Diesel (EMD), a maker of diesel-electric locomotives, contributing to the sales increase.

Sales improved in all four major geographic regions; North America, up 72%; Latin America, up 90%; Europe Africa/Middle East, up 67%; and Asia/Pacific, up 35%. While commercial con-struction in the U.S. is still very depressed and machinery sales are at about half the 2006 peak, it appears aging machines are starting to be replaced.

During the recession, Caterpillar’s customers cut machine pur-chases much more rapidly and deeply than the overall construction spending decline. As a result, their fleets both shrunk in size and got older. However, customers are beginning to buy enough machines now to slow or stop their fleets from continuing to degrade.

Mining activity and higher commodity prices, including coal, have encouraged investment in large mining equipment. Higher sales to oil and gas and electric power customers, along with the acquisition of EMD, drove the increase in power systems sales.

While the reasons for European growth mirror North America, basi-cally replacement, growth in developing countries has been good and is driving investment in infrastructure and increased demand for com-modities. Incremental margins were good in the construction indus-tries, resource industries, and power systems segments. The company executed well in the quarter and controlled its costs.

Besides EMD in 2010, the company has announced the fairly large acquisitions of MWM Holding GmbH, a Mannheim, Germany-based manufacturer of combustion engines, and Bucyrus International, a company that designs, manufactures, and markets surface and under-ground mining equipment.

Caterpillar’s facilities in Japan were not damaged by the earth-quake and tsunami, but many of its suppliers in Japan were. Caterpil-lar expects to experience sporadic production disruptions at many facilities around the world, which will have a negative impact on sales, factory efficiency, and costs like premium freight. While the situation is improving, the biggest impact will be felt in the second quarter of 2011.

Since the end of the first quarter of 2010, Caterpillar has added almost 21,000 people to its global workforce. About half are full-time employees, and about half are flexible workforce. In total, that repre-sents an increase of over 19% in the total global workforce.

Cash flow has shown excellent improvement, while the machinery and power systems debt-to-equity ratio dropped from over 47% at year-end 2009 to 34.8% at year-end 2010, down to 30.4% at the end of the first quarter of 2011. That’s a drop of almost 4.5 points from year-end, which is an excellent improvement.

While there are some capacity constraints currently forecast for some products such as excavators and many of the company’s large mining products, Caterpillar continues to invest in capacity increases around the world to be prepared for 2012 and beyond, including substantial investment in the U.S. In fact, more than half of the $3 bil-lion that it expects to spend on capital expenditures in 2011 is being invested in the U.S.

After a couple of very tough years, the continued high investment in infrastructure throughout developing countries and the continued replacement of aging machinery in Europe and the United States has Caterpillar well positioned to continue its rebound in growth. If com-mercial construction rebounds in North America and Europe as well, it will only make the company’s prospects even stronger.

21


Table 4: Most Improved Companies

Company Rise in the ranks

generAl moTors co. 78

TrW AuTomoTiVe holDings corP. 64

TerADyne inc. 62

cATerPillAr inc. 61

cADence Design sysTems inc. 56

general motors was compared 2010 to 2008, as it was not in our rankings in 2009 due to government oversight.

Table 5: Top 10 OEM Employers

Company Category

BroADcom corP. components & subassemblies

TeXAs insTrumenTs inc. components & subassemblies

AnAlog DeVices inc. components & subassemblies

QuAlcomm inc. communications

nATionAl insTrumenTs corP. Test equipment

3m co. industrial controls

AlTerA corP. components & subassemblies

inTel corP. components & subassemblies

inTersil corP. components & subassemblies

AgilenT Technologies inc. industrial controls

2011 salary survey

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