Talk about a chunk of change. Annual sales of the 500 largest U.S. manufacturers equaled $3.6 trillion or one-third of U.S. gross national product in 2002. The revenue total was down slightly from the previous year. New factories in the South may receive a lot of press, but the manufacturing industry remains bound to its historical roots. Michigan, location of the global headquarters of both General Motors Corp. and Ford Motor Co. as well as a number of major automotive suppliers, reports the highest total manufacturing revenues ($514 billion). The Great Lakes state was followed by New York ($475 billion), Texas ($424 billion), California ($383 billion) and Illinois ($289 billion). Home of ChevronTexaco, Hewlett-Packard, Intel and Cisco Systems, California claims the No. 1 spot in sheer number with 64 large manufacturing companies that call the state home. Texas came in a distant second with 43 companies, followed by New York with 41. Looking at raw growth, six acquisition-driven manufacturers doubled revenues in 2002:
- Barr Laboratories purchased several other pharmaceutical makers and launched a generic version of Prozac.
- Tyson Foods devoured beef and pork giant IBP Fresh Meats.
- Two contract electronic manufacturers merged to form Sanmina-SCI Corp.
- Collins and Aikman Corp. purchased the automotive trim operations of Textron.
- The combined operations of ConocoPhillips make it the third largest energy firm in the United States.
- Cleveland-based OM Group Inc. acquired the precious metals unit of the German conglomerate Degussa A.G.
Only two of these six manufacturers (Barr and Tyson Foods) reported positive earnings for the year. A pair of Houston-based energy companies fell at the other end of the revenue-growth spectrum. Total sales plummeted 87% last year for Dynegy Inc., and 79% for El Paso Corp. Dynegy has shuttered its energy trading operations, sold its telecommunications network and is focusing on natural gas and electricity production. El Paso, which oversees 58,000 miles of interstate gas pipelines, is also closing its energy trading division. The company is embroiled in a number of shareholder lawsuits and litigation in the State of California over manipulation of gas prices during the state's energy crisis. The board of directors narrowly avoided being ousted by shareholders in a recent proxy fight. One $9 billion company that might have made the
U.S. 500, but didn't, was Ingersoll-Rand. In 2001, the 131-year-old diversified equipment manufacturer of the jackhammers that helped carve Mt. Rushmore moved its incorporation offshore to Bermuda from New Jersey, where its primary offices remain. Disqualifying it as an American company in the eyes of Uncle Sam, the move lowers the tax rate on income that Ingersoll-Rand earns overseas. What was America's most profitable manufacturer in 2002? Measured in straight dollars, General Electric Co. takes home the title. The widely admired industrial conglomerate reported a net income of $14.1 billion on annual sales of $131.7 billion. In terms of overall profitability, the pharmaceutical and consumer health firm Wyeth led all comers with a profit margin of 30.5% on sales of $14.6 billion.