The state of manufacturing in the United States in 2009 can be summed up in four words: "It's the economy, stupid." At the risk of beating a dead clich, there's not much more to it than that, based on the responses to the IndustryWeek 2009 Salary Survey. When asked to cite the biggest challenge facing the manufacturing industry today, nearly 20% of all respondents mentioned the economy. By way of comparison, when asked the same question a year ago, the economy was cited as the biggest challenge by fewer than 2% of all respondents.
So with that as a prologue, let's cut to the chase: the average annual salary of manufacturing managers in the United States dropped by 9.7% over the past year, from $105,581 in 2008 to $95,248 in 2009. And yet, despite a recession that bleeds manufacturing jobs by the tens of thousands on an almost-daily basis and a financial crisis that has seen a marked decline in real wages, savings and investments (and that's not even counting the nightmarish spectacle of what's happening to 401k plans), there is no -- repeat, no -- evidence at all that manufacturing managers are unhappy with their jobs. When asked, "How satisfied are you with your current job?" 76% say they are "very satisfied" or "satisfied," which is actually a slight bump up from the 74% response rate in both 2007 and 2008. And when asked about their choice of manufacturing as a career path, 80% say they are "very satisfied" or "satisfied," a slight dip from the 83% in 2008 but slightly better than the 79% in 2007. Clearly, both resiliency and pride are still alive and well in the U.S. manufacturing industry.
Charts and Tables: The data behind the 2009 IndustryWeek Salary Survey
Additional Survey Comments: More than 1,650 open ended comments from respondents about the biggest challenges confronting manufacturers, as well as their suggestions as to what can be done to improve the lot of U.S. manufacturing.Manufacturing's Biggest Challenge: The Economy Manufacturing at the Crossroads
In this year's survey, nearly 1,700 readers participated in our anonymous survey, revealing not only how much they earn and what challenges they face, but also key demographic data such as where they live, what they do, what industry verticals they work in, and perhaps most importantly, what's right and what's wrong with the current state of the industry.
As we have with previous surveys, our analysis of the 2009 survey results allows us to depict the "average manufacturing manager": a white male, between 50-59 years old, has worked in the manufacturing industry for more than 26 years, lives in the North Central region of the United States (i.e., the Midwest), has been with his current company for 3-5 years, has a bachelor's degree, works for a manufacturing of industrial products or machinery, and earns $95,248. Since there's really nothing "average" about a manufacturing manager, though, you'll hear from numerous individuals throughout this article, explaining in their own words what it means to toil in the U.S. manufacturing industry in 2009.
The Nature of the Job
"My company molds silicone rubber for medical applications and we are doing well right now. Business has not fallen off and the backlog remains strong." -- financial manager at a manufacturer of plastics/rubber products with 20-25 years of experience, living in the North Central region and earning $80,000
"2009 will continue to be an extremely challenging business environment for the automobile industry as it faces perhaps an unprecedented combination of factors including low consumer demand, tight credit markets and an increasing demand from consumers and legislation for significant product change." -- quality manager with an automotive manufacturer with 26+ years of experience, living in the Middle Atlantic region and earning $145,000
The Method to Our Madness
The IndustryWeek 2009 Salary Survey was conducted online via e-mailed invitations to subscribers. The survey took place in December 2008-January 2009. A total of 1,692 people responded to the survey, and of that number, 1,507 completed the entire survey, representing a very significant increase -- 31% -- in completed responses from the 2008 survey. Respondents were not compensated but were offered the chance to provide candid comments regarding their salaries, occupations and employers. All responses were anonymous.
"The fastener manufacturing industry outside of automotive has seen little decline and we are currently experiencing issues with keeping up with orders. Professional challenges moving forward include the ability to produce more with less." -- corporate/executive manager in the metals industry with 11-15 years of experience, living in the North Central region and earning $90,000
"I miss the production of furniture in the U.S. and it really was the backbone of the U.S. when it was here. I don't have a figure on jobs lost in the furniture industry but I would like to hear them if anyone could get them. Made in the USA sure sounds great to me." -- plant/facilities manager at a manufacturer of wood products/furniture with 20-25 years of experience, living in the South Central region and earning $74,000
"I'm very concerned about the future of the carpet industry." -- product development manager with a consumer goods manufacturer with 26+ years of experience, living in the South Atlantic region and earning $85,000
"Medical manufacturing is a good industry to be in during difficult economic times as the need is always there." -- plant/facilities manager with a medical devices manufacturer with 26+ years of experience, living in the Mountain region and earning $124,000
Although we speak of U.S. manufacturing as a single entity, of course the practical reality is that the manufacturing industry is actually made up of discrete, process and batch manufacturers in many diverse vertical sectors. For the purposes of the survey, we looked at 18 specific verticals to learn, first of all, which sectors employ the most managers, and second, which sectors tend to pay the best.
The top three industries in terms of overall employment are what could be considered the "metal bending" sectors, namely industrial machinery and products (15%), automotive/transportation vehicles and equipment (12%) and metals (11%). As you might expect, these industries also had average salaries in the bottom half of all sectors. Although a lot has been written about the high average wages of union workers at the Detroit Three automakers, managerial salaries in the automotive sector ranked 16th out of 18.
At the top of the salary rankings are consultants/academics (probably better defined as a profession rather than an industry) at $113,418, followed by the pharmaceutical/healthcare industry. Given the intense scrutiny the incoming Obama Administration promises to direct toward the healthcare sector, it will be interesting to see what effect, if any, this scrutiny will have on salaries at those companies.
From Sea to Shining Sea
"The federal government and California tax structure do not support manufacturing. This leads to electronic manufacturing moving to countries such as Malaysia with its 'tax holiday' and Ireland, which has a low corporate income tax. This has led to the U.S. giving away much of its long-term technological innovations to other countries. We have de-focused the country on value creation and moved it to value redistribution." -- manufacturing/production manager with a medical devices manufacturer with 16-20 years of experience, living in the Pacific region and earning $110,000
"The uneducated part of the workforce has too much to say about the technology, business, etc. This is a common problem of the Midwest -- too much power in the unions." -- VP of manufacturing/production with an industrial products manufacturer with 16-20 years of experience, living in the North Central region and earning $105,000
"South Dakota is a great place to live, but salaries are low. Manufacturing in remote areas is years behind the industry as a whole. Good personnel are very hard to find." -- engineering manager in the high-tech/electronics industry with 20-25 years of experience, living in the North Central region and earning $70,000
"It's unfortunate Vermont is manufacturing-unfriendly and has very high taxes. This affects all, including base salary, standard of living, etc. With so many rule and regulations no one wants to come here." -- manufacturing/production manager with an industrial products manufacturer with 26+ years of experience, living in New England and earning $49,000
"The salaries in this part of Texas are very low even though we work in a very high risk industry -- steel mills." -- manufacturing/production manager in the metals industry with 11-15 years of experience, living in the South Central region and earning $60,000
Most U.S. manufacturing companies are still based in the Rust Belt, and the survey results reflect that: 39% of all respondents live in the North Central region, which includes the Midwest states. And given the rough times the Detroit Three automakers (as well as their suppliers) have undergone over the past year, it should be no surprise that manufacturing managers living in the North Central have the lowest average salary, at $90,807. Adding insult to injury, that amount is nearly $10,000 less than managers in the same region earned in 2008 ($100,752).
Midwesterners aren't the only ones feeling the pain, though. Salaries were on the decline from coast to coast, with those living in the Pacific region seeing average salaries drop by nearly $16,000. The one exception to this trend was the South Central, an area where many foreign automakers have established plants, and where salaries were up an average $1,863.
The region with the highest average salary in 2009 is New England, at $101,138. The Pacific region, which ranked at the top in 2008, slipped to third place this year, behind New England and the South Central.
Some Jobs Are More Equal Than Others
"Women are not as respected as men in manufacturing. They are seen as clerical workers and given the bulk of the work." -- female VP of purchasing with a manufacturer of plastics/rubber products with 20-25 years of experience, living in the North Central region and earning $32,000
"The manufacturing industry is plagued by an aging management population, most of which is male. Unfortunately, it is difficult for a woman to advance in an environment which promotes the 'good old boy's club.' For manufacturing to remain competitive in the United States, the current attitude of management needs to become more welcoming to the points of view of not only women, but younger managers as well." -- female sales/marketing manager with a consulting firm with less than 3 years of experience, living in the North Central region and earning $49,000
"My recent personal history includes being laid off at age 59. It took 2-1/2 years to find an employer willing to hire me, even though I would take a job for the salary that would be paid to any candidate with lots less experience. My search was nationwide with very few limitations on location. I have to say that age discrimination is alive and well in the U.S." -- manufacturing/production manager with an automotive manufacturer with 26+ years of experience and over 60 years old, living in the North Central and earning $73,000
"I'm getting less pay due to ethnicity." -- VP of manufacturing/production with an automotive manufacturer with 11-15 years of experience and of Asian heritage, living in the North Central region and earning $110,000
Sexism. Agism. Racism. By virtue of its size (representing 10% of the U.S. GDP), the manufacturing industry is an easy target for the litigious, particularly when it comes to hiring practices. As the survey responses indicate, the vast majority of all manufacturing managers are white (88%) and male (91%), so the idea that the management ranks are a closed shop is understandable, though not necessarily accurate.
For instance, while black managers represent only 2% of all respondents, they earn an average of $101,923, significantly higher than the $95,142 earned by white managers. Native American managers (1%) average $94,159, while Asian managers (3%) earn $92,179. There does appear to be some bias against Hispanic/Latino managers (2%), who average $88,707.
Agism does not appear to be a widespread problem. More than half (52%) of all managers are over 50 years old, and in fact as a group they earn much more than their younger counterparts. If anything, agism seems to be working in reverse, as only 3% of all manufacturing managers are in their 20s. There's also a correlation related to education, whereby those managers with a bachelors degree (33%) and those who have pursued or obtained a post-graduate degree (34%) earn substantially more than those who have not.
Unfortunately, the data also reflects an imbalance between male and female workers, although the gender gap is narrowing slightly. A year ago men earned 26% more than women, and this year that gap dropped to 23%. Male managers now average $97,068, while their female counterparts earn $75,116. The biggest problem is that the percentage of female managers continues to decline. In 2007, they represented 12% of the total; in 2008, that number slipped to 10%; and in 2009, the number dropped another point to 9%.
A Cloudy Future
"We have difficulty finding new engineers and other technical people that want to work in a manufacturing environment (shop floor). My company has started to hire interns from local high schools and colleges, and have talked to high school and college administrators about reinstituting the 'old' shop classes in high school to train people to enter the 'trades.' It seems the high school level is the time to start. College may be too late." -- engineering manager in the metals industry with 26+ years of experience, living in the Pacific region and earning $120,000
"I'm concerned about the lack of young people getting into manufacturing." -- purchasing manager with a chemicals manufacturer with 20-25 years of experience, living in the South Atlantic region and earning $104,000
"Aging executive management must recognize the importance of mentorship for the next generation of managers. Too much responsibility has been left to the individual to learn the business, which causes abuse of the management and financial systems." -- corporate/executive manager in the automotive industry with 6-10 years of experience, living in the Mountain region and earning $80,000
"The older generation is retiring and it seems as though the younger generation just have not learned about work ethics nor output versus the pay they get. Too easy, too long and no discipline. Whose fault is it, parents?" -- product development manager with a manufacturer of construction/building products with 26+ years of experience, living in the North Central region and earning $51,000
"I have worked with or for most of the manufacturing in the U.S. and what I have witnessed as a prominent point of manufacturing decline is the rise of college-based educated management rather than floor-trained personnel into process level management positions; thus you have a growing number of managers with no process experience." -- plant/facilities manager with a manufacturer of industrial products with 26+ years of experience, living in the North Central region and earning $60,000
"I regret that I cannot recommend manufacturing as a career goal to any of my three children." -- plant/facilities manager with a manufacturer of industrial products with 26+ years of experience, living in the South Central region and earning $65,000
With the economy in a shambles right now, it's only natural that the one thing that matters most to manufacturing managers about their job is job stability (29%), which is up 8% from a year ago when job stability was also the number one concern. Base salary was a close second in 2008, only a few percentage points lower than job stability, but in 2009 job stability is now a distant second, with 20% of all respondents claiming it as their main job issue. All other categories also either fell in overall percentages or stayed the same as 2008, which helps explain how job stability gained so much dominance among respondents.
All told, 69% of all manufacturing managers received a raise over the previous year. Another 27% saw no change in their salaries, with only 4% experiencing a decrease in salary. Contributing to the overall drop in average salaries in 2009 were those managers who were laid off at some point in 2008 and thus reported salaries much lower than they received in previous years. It can only be hoped that the current deluge of layoffs at manufacturing plants will soon end; if not, the average salary could decrease even further in next year's survey.
In any event, the future of the U.S. manufacturing will ultimately rest with the next generation of workers and managers, but as many survey respondents lamented, there doesn't seem to be much evidence of a new generation. In the past year, the percentage of managers 60 or older grew from 11% to 17%, while those in their 30s declined from 15% to 13%, and those in the 40s dropped from 33% to 32% (those in their 20s remained unchanged, at 3%). For U.S. manufacturing to have a bright future will require a future generation of decision-makers, but as of now, it's unclear when that new generation will arrive.
"The people in government need a slap in the face for not knowing how each of the different manufacturing companies are tied together, either by the parts they make or the things their employees buy. It's a trickle-down effect all through our nation. If government can't stop jobs going out of this country, then the only jobs left will be fast food. Buy a car or house on those wages." -- plant/facilities manager at an industrial products manufacturer with 26+ years of experience, living in the North Central region and earning $70,000
"Manufacturing in the U.S. is now a victim of common stupidity that values and incents imports and retail over manufacturing, thereby creating a $700 billion dollar trade deficit and the consequent disastrous economic situation we now face. Unless the trade deficit issue is addressed in a serious manner, the trillion dollar federal deficit will leak overseas and not be the long-term stimulus we need to create a lasting and strong recovery." -- corporate/executive manager of a metals producer with 26+ years of experience, living in the Middle Atlantic region and earning $150,000
"There are lots of successful people out there that are doing well because they work hard and do what needs to be done. They take care of their employees when times are slow and bless them when times are good. There are still plenty of people making money and spending it wisely on things that matter for everyone." -- corporate/executive manager of a construction/building products manufacturer with 26+ years of experience, living in the North Central region and earning $82,000
"Companies should be focusing more on lean management, especially with the current need to reduce costs." -- lean/continuous improvement manager with a consumer goods manufacturer with 20-25 years of experience, living in the South Central region and earning $60,000
"Our government needs to recognize the importance of a strong manufacturing base. The financial golden goose has laid her last egg and has now been cooked, leaving us spattered in the grease!" -- corporate/executive manager in the pulp & paper industry with 26+ years of experience, living in the South Atlantic region and earning $206,000
"It's long past time for a shake-up in most industries. Those that have not worked hard to accomplish certain efficiencies in manufacturing should be allowed to fail. Those that operate at the highest levels of efficiency are already profiting from their achievements, and will continue to do so in the future. Companies have failed in the past, and will do so in the future, and from their demise, new companies will emerge that grow and prosper by embracing efficient processes and methods." -- product development manager at an aerospace & defense manufacturer with 20-25 years of experience, living in the South Atlantic region and earning $104,000
"We need to make things, not just push money around. The economy is beginning to look like a giant pyramid scheme." -- plant/facilities manager at a plastics/rubber products manufacturer with 11-15 years of experience, living in New England and earning $97,000