December 24, 2011

Engineering Salaries

Filed under: CAD/CAM/CAE,Money — Terry Wohlers @ 10:33

Most design engineers in the U.S. are happy with their profession and what they are being paid. According to the August 2011 issue of Design News, salaries are $93,465, on average, and are up 4.3% from last year. Also, if you’re seen as a generalist, you may be rewarded more handsomely than if you’re a niche engineer. In recent years, companies have been seeking people who can work with hardware, software, and embedded systems, and can manage projects.

Salaries vary across regions. Engineers in the Mountain States are receiving $109,853, the Design News survey indicates. Those in California, Arizona, and Nevada are a close second, with annual pay of $107,407. Those at the other end of the salary range are in the Southeast region and are receiving $86,076. Engineers working in industrial controls and the defense industry are among those receiving the most pay.

As for satisfaction, more than half (52%) of survey respondents said they were very or extremely satisfied with design engineering. As many as 78% said they would recommend engineering to children. Solving problems, technical challenges, and the opportunity for creativity were the most cited reasons for satisfaction. About 25% said they were concerned about job security.

The picture presented by the Design News survey is quite favorable for the engineering profession. Nearly two-thirds (65%) said that their salary increased over the past year. Only 4% saw a decrease. Now is not a bad time to enter the engineering field, especially as we see product development and manufacturing activity increase. More information on the survey is at here.

Happy Holidays!

April 30, 2011

Universities Create Wealth

Filed under: Education,Money — Terry Wohlers @ 06:23

Someone once said that our university system is the envy of the world. I don’t know whether this is true, but I do know that we have many special institutions of higher education within our borders. One is Massachusetts Institute of Technology, an organization that has produced more than I would have ever thought.

MIT graduates have founded 25,800 companies, according to the January 22, 2011 issue of The Economist. These companies employ 3.3 million people and generate annual sales of $3 trillion, according to the article. This is more than three times the gross domestic product (GDP) of Australia, Austria, Belgium, Finland, Sweden, Taiwan, Thailand, and many other countries.

Another article in the same issue of The Economist stated that 41% of millionaires worldwide live in the U.S. This is an extraordinary percentage when considering the world population. The article went on to say that the world’s most wealthy are entrepreneurs that started a business.

Our university system has undoubtedly contributed greatly to entrepreneurism, which has led to personal and national wealth. If one university can do what it has done—albeit MIT—imagine what the more than 4,800 colleges and universities spread across the U.S. are achieving. Regardless of what you might hear from others, supporting higher education is a wise investment.

September 13, 2008

How Much Do Engineers Make?

Filed under: Money — Terry Wohlers @ 16:19

Earlier this year, Machine Design magazine revealed the results from its annual salary survey. According to the April 24 issue, engineers make from about $68,000 to $148,000 annually. Vice presidents of engineering earn nearly $129,000, while consulting engineers get $148,000. Design, project, and R&D engineers are at the other end of the pay scale, although it’s not dramatically lower than other engineering types who earn in the range of about $70,000 to $91,000.

College degrees play a role as one might expect. Yet, even those without a degree are paid nearly $68,000, on average. With a bachelor’s degree, the pay increases to more than $79,000 for those with a non-engineering degree and to more than $83,000 for those with an engineering degree. The salary jumps to about $99,000 for individuals with a master’s degree in engineering.

If you’re considering a doctorate in engineering to earn more, you may want to spend your time and money elsewhere. Those individuals earn less, at about $95,000. However, people with a non-engineering doctorate receive $135,000, according to the survey.

All in all, engineers do pretty well, but of course they should. If you consider the pressures and responsibilities they face, engineers should be rewarded handsomely. Let’s hope that many of our best and brightest young people pursue engineering or a related field as a career and earn what they deserve.

August 16, 2008

Are Cars in the U.S. Less Efficient?

Filed under: Money,Travel — Terry Wohlers @ 12:57

I was sitting at dinner last week in Austin, Texas when the subject of fuel prices came up. Individuals from the UK were present, so we estimated the cost of gasoline in the UK. Our estimate: $9-10 per gallon. One Brit was quick to point out that cars in Europe are much more efficient than those in the U.S., indicating that they often get 40-60 miles per gallon (mpg). In the past, I had wondered if European cars got better mileage, but dismissed the idea. The conversation, however, motivated me to do a little research.

Wikipedia publishes the 2009 UK fuel economy ratings and the 2009 U.S. EPA fuel economy ratings. The mpg for cars sold in the U.S., both foreign and domestic, ranges from a low of 12 to a high of 41 for highway driving. Most cars fell in the range of the mid-teens to the mid-twenties. (It’s interesting to note that the original Ford Model T got 13-21 mpg, according to Wikipedia.) I did not calculate the average mpg because of the number of cars presented in the list.

The 2009 UK fuel economy ratings divided the cars in two groups: 1) 100 cars with the highest fuel economy ratings, and 2) 99 cars with the lowest fuel economy ratings. All of the cars with the best economy run on diesel fuel. These cars range from a low of 66 mpg to a high of 88 mpg for highway driving. The mpg is based on an Imperial gallon, which is about 20% larger than the U.S. gallon. The cars with the worst economy was from about 19 to 29 mpg (also based on an Imperial gallon).

As you can see, the fuel economy of a car with a diesel engine is vastly different than one with a gasoline engine. It is believed that cars with diesel engines are more established in Europe, so this may be one reason for the belief that European cars get better mpg.

The other big difference between Europe and the U.S. is the fleet on the street. According to a March 2007 article titled U.S. vs. Europe in Cars, Gasoline and Energy published by AOL Journals, the U.S. fleet gets about 25 miles per gallon; China about 35 mpg and Europe about 37 mpg. This year, according to the article, automakers are implementing voluntary standards to improve European fuel economy to 44.2 mpg and China to 36.7 mpg. The U.S. will remain at 24.8 mpg.

April 11, 2008

Corporate Litigation

Filed under: Legal,Manufacturing,Money — Terry Wohlers @ 13:12

Can you believe it? Ninety-one percent of our nation’s manufacturing companies were involved in one or more new lawsuits in 2007, according to Fulbright & Jaworski LLP, a law firm in Houston, Texas. The report, published in the January 2008 issue of Manufacturing Engineering, went on to say that 56% of these companies encountered more than 20 new lawsuits in 2007. A depressing 70% of them spend $1 million or more per year on business disputes.

I am in full support of protecting intellectual property and upholding legal contracts. However, many companies have developed a culture of litigation. Rather than considering every possible alternative, companies are quick to throw a team of lawyers at the problem. Once that happens, costs skyrocket and there’s often no end in sight.

What’s it going to take to ease this problem? The money and other company resources that are spent on litigation could be used to design and manufacture better products and improve customer support. If you have ideas, I’d like to hear from you.

June 19, 2006

Today’s Kids

Filed under: Life,Money — Terry Wohlers @ 07:32

Are today’s kids different from the way we were decades ago or is it just me? My impression is that they expect so much for doing so little. Also, they have difficulty understanding the concept of saving money. When I was a kid, my parents encouraged me to get a job at a young age, so I delivered the daily newspaper. This required me to open a bank account, collect and deposit money, and learn the basics of accounting. I learned how to count back change, which few young people can do today because a machine does it for them. Before age 15, I had two paper routes, worked at one of three restaurants in town, assisted a bee keeper for a summer, worked for local farmers, and helped remodel and build many new homes and other structures.

If I’m right about today’s kids, why are they the way they are? I posed the question to a friend this past winter and he and I concluded the following: Much of the adult population (i.e., baby boomers) grew up in small towns or in rural areas in less developed agricultural states such as Nebraska, Iowa, North Dakota, Ohio, and Minnesota. They didn’t live in cities such as New York, Chicago, or Los Angeles. Their parents were middle class with humble beginnings. Many were farmers or somehow tied to a farming community. Few had a lot of money, so most were frugal. Going out for dinner or visiting a shopping mall was infrequent and plane travel was even more rare. Doing research meant going to a library.

Today, kids are exposed to so much. Shopping sprees, dining, movie theaters, and other forms of entertainment are routine for many. Three-car garages filled with cars and toys and high-speed Internet are commonplace in neighborhoods. Many of our kids have only experienced well developed transportation, communications, and retail infrastructures. They lack an appreciation for saving their nickels and dimes so that they may one day afford a car or pay for college tuition. 

Some of us may be a part of the last generation to live in a time when the art of saving and frugal spending was so deeply integrated into our daily lives. Many of today’s kids are a part of a new generation—the first ever—to not live at a time when lives were basic, people had little money to spend, and there was much less to do and buy. This, in my humble opinion, is why kids are so different from the way we were.

April 17, 2006

CEO Salaries

Filed under: Life,Money — Terry Wohlers @ 08:20

According to USA Today, many of our nation’s CEOs are doing just fine, financially. The median salary for chief executives from the 100 largest companies rose 25% to $17.9 million in 2005. This compares to a gain of 3.1% for typical American workers. The CEOs of small to midsize companies received pay that was similar to or exceeded that of large companies. 

How well did some of the CEOs do last year? Oracle’s Larry Ellison was given $74.2 million. Starbucks chairman Howard Schultz, $42.5 million. Autodesk CEO Carol Bartz, $28.9 million. Domino’s Pizza CEO David Brandon, $25.2 million. Corning chairman James Houghton, $7.4 million.

And others? Sporting goods retailer Cabela’s CEO Dennis Highby, $2.3 million. American Express CEO Ken Chenault, $16.3 million plus other bonuses. Capital One Financial CEO Richard Fairbank, $249 million in exercised stock options. Cadence Design CEO Michael Fister, $3 million in compensation and options valued at up to $23 million.

What will these people do with all their money? One year of pay is more than most people could spend in a lifetime. My hope is that it is given to charities, disaster relief funds, student scholarship programs, and other places that help those in need. Perhaps if those of us that make far less could set an example for them, they will follow suit. One can only hope.

February 6, 2006

Why Lawyers Get Rich

Filed under: Legal,Life,Money — Terry Wohlers @ 14:46

This is the title of a short article published in the December 2005 issue of Manufacturing Engineering magazine. Let me begin by saying that I have lawyer friends, including one that I count as among my best. I support our legal system in the U.S. and thank God we have it. Also, in no way do I oppose enterprising individuals and companies that create wealth in a legal and ethical fashion. Now, for the facts, according to the article.

Eight-seven percent of U.S. corporations are engaged in some type of litigation. An average company is juggling 37 lawsuits, while corporations with revenues of $1 billion or more are dealing with 147 at any given time. The article goes on to say that these organizations are spending staggering amounts of money and other company resources on business disputes. Many of them are unable to predict the cost of managing them, so spending soars.

I’m not a legal expert, but I do know that litigation is necessary in some cases. One needs to protect investments in intellectual property, the rights written into agreements, and so on. However, people in business are often quick—too quick, in my opinion—to file lawsuits when alternative methods may be effective and far less expensive. For example, I know of an instance where a simple phone call from one CEO to another solved a problem—one that would have otherwise turned into expensive litigation. Lawsuits often result in years of pouring money down a legal drain and the lawyers are grinning from ear to ear all the way to the bank.

Design and manufacturing organizations in the U.S. need good lawyers, but they also need good engineering and manufacturing professionals. A lot has been published recently on the impressive number of engineers that are graduating in China and India, compared to U.S. schools. Many of the best students in these countries are concentrating on engineering, while ours are pursuing careers in law and other areas. Law, medicine, banking, and advertising, as well as many other professions, are all incredibly important to a community, but they do not contribute to the wealth of a nation. Manufacturing creates wealth. Litigation does not, and it can drain the resources of an otherwise prosperous company.

August 12, 2005

Become an Engineer

Filed under: Education,Life,Money — Terry Wohlers @ 07:56

This commentary is written for young people that are considering career options. Let’s assume for a moment that you have an interest in new product design and manufacturing. Opportunities abound for bright and creative individuals in this field. It is true that many manufacturing-related jobs have been lost to offshore outsourcing, but a large number remains, particularly in niche areas where sophisticated or high-priced products are developed. One example is aircraft. Another is medical devices and instrumentation.

More than 900 people responded to a survey conducted by Machine Design magazine earlier this year. Sixty-eight percent said that they would recommend engineering to friends and children. They went on to say that they enjoyed seeing their ideas lead to new products that improved the lives of others. One respondent said that after years as an engineer, doors open to many careers because engineering offers a breadth of experience that you cannot get from other professions.

Engineers are exposed to some of the most exciting technologies available. Consider the newest generation 3D printers that are used for product design review and validation. Consider also additive processes, such as laser sintering, that are being used to manufacturing highly complex products for the aerospace, motor sports, medical, dental, and consumer products industries.

How much money can one expect to earn? The average salary for engineers, according to the survey, rose to $70,600, up from $68,000 last year. Computer and electronic product manufacturing is the highest paying industry, with an average salary of $81,000. Electrical equipment, appliance, and component manufacturing followed at $75,000. Medical equipment and supplies manufacturing was next at $72,000.

So if you’re unsure what to do in the future, give product design and manufacturing serious consideration. A high percentage of engineers are challenged and like what they do, and are making a comfortable living doing it.

June 11, 2005

High Gasoline Prices

Filed under: Life,Money,Travel — Terry Wohlers @ 09:22

I continue to hear people in the U.S. complain about the high cost of gasoline. The average price for a gallon of regular unleaded is about $2.10 in the U.S. (That’s about €.55 per liter.) Compared to the past, that’s high. In recent years (prior to mid-2004), gasoline ranged from about $1.40 to $1.75 per gallon (€.30 to €.38 per liter).

I don’t like paying a lot for gasoline anymore than the next guy, but is it really that high? I was in Europe earlier this week. The price for regular unleaded gasoline in Belgium was €1.20 per liter, which is $5.54 per gallon. And in England, it was £.85 per liter. That’s $5.82 per gallon. Do we really have it so bad in the U.S.? So the next time you fill up, consider what people are paying in other parts of the world.

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