Growing For The Gold

Dec. 21, 2004
The world's top 1,000 manufacturers generate more than $8 trillion in revenues.

In this Olympic year, the fifth year of the IndustryWeek1000, General Motors Corp. once again earns torch-bearing rights. After falling behind DaimlerChrysler AG in 1998, the automaker regains the top spot on IW's annual list with revenues of $176.6 billion in 1999. While GM's position is the result of a marathon-like effort over 103 years, firms such as Qualcomm Inc., Cisco Systems Inc., and EMC Corp. have sprinted to theirs. Qualcomm, a maker of digital wireless communications products, vaulted higher than any other IW 1000 firm from 1996 to 2000. Five years ago, Qualcomm was ranked below 1,000; this year, it sits more than 500 spots higher at No. 477. Qualcomm clearly has a long way to go to topple GM from our No. 1 spot. The San Diego-based firm remains more than $172 billion behind in total revenues with $3.9 billion in 1999, but its rise demonstrates the increasing importance of the computer and electronics industries in the global manufacturing economy. Also jumping high on our list is Cisco Systems. The manufacturer of switches and routers for the Internet leapt 536 spots, from No. 695 in 1996 to No. 159 this year. Other top performers include EMC, which over five years shot from No. 708 to No. 288; Dell Computer Corp., which jumped from No. 420 to No. 59; and Invensys PLC, from No. 424 to No. 113. "Obviously, the information-technology revolution is behind all of this," says IndustryWeek columnist Michael K. Evans, president of the Evans Group and professor of economics at the Kellogg School of Business, Northwestern University, Evanston, Ill. "The companies that have done well are also all global companies." There are 11 automotive or oil-industry-related firms represented in the top 25 of the IW 1000 this year, and nine companies in either the electronics or computer industries. In 1997 there were 15 automotive or oil firms and only six electronics or computer companies. More than any other trend, the IT revolution continues to transform the makeup of our annual list. The IndustryWeek1000 not only reflects the pure revenue growth of the world's largest publicly held companies, it also indicates which companies have increased or decreased in size due to mergers or acquisitions. Last year again saw myriad changes due to these consolidations. Exxon's purchase of Mobil Corp. for $82 billion in December was last year's largest acquisition. That buy made Exxon Mobil Corp. the largest oil company in the world and landed it at No. 3 on the IW 1000. Additional acquisition activity in 1999 included: Total SA's acquisition of Petrofina SA; TRW Inc.'s acquisition of LucasVarity PLC; and Tyco International Ltd.'s buy of AMP Inc. Notable mergers included: ABB AB and ABB AG to form ABB Ltd.; Honeywell Inc. and AlliedSignal Inc. to form Honeywell International Inc.; AB Astra and Zeneca Group PLC to form AstraZeneca PLC; Sanofi SA and Synthelabo SA to form Sanofi-Synthelabo; and Monsanto Co. and Pharmacia & Upjohn Inc. to form Pharmacia Corp. "We're probably going to see a lot more mergers," says Evans. "It's perceived as one of the best ways to cut costs. Firms still cannot afford to hike prices." This year's acquisitions of Atlantic Richfield Co. by BP Amoco PLC and Warner-Lambert Co. by Pfizer Inc. will continue to reshape the IndustryWeek1000 in 2001. In fact, BP Amoco's purchase makes it the third-largest oil company in the world based on revenues. The Warner-Lambert buy will elevate Pfizer to No. 2 in the world in sales of pharmaceuticals. Within the 36 countries represented on our list of the world's leading publicly held manufacturing companies based on revenues, there are 95 companies that emerged through growth or mergers. At a glance the IW 1000 shows which companies experienced substantial increases in revenues and profits from 1998 to 1999. The list also shows which companies did not. Because revenue performance is not the only indicator of a company's financial success, IW also details each firm's record in areas ranging from earnings per share to return on equity. The U.S., which has the most manufacturers on the list and produced the most wealth of any country, is represented by 341 companies generating $3 trillion in revenues in 1999, up from $2.8 trillion in 1998. U.S. companies on the IW 1000 averaged 12% revenue growth from 1998 to 1999; growth from 1997 to 1998 was 4.3%. Among the remaining top-five wealth-producing countries, manufacturers averaged the following revenue increases (or decreases) from 1998 to 1999: Japan, -4.1%; UK, 7.8%; Germany, 6.5%; and France, 13.6%. Of the 258 Japanese firms on the IW 1000, nine experienced revenue growth of at least 10% from 1998 to 1999. Leading Japanese companies in revenue growth were: Welfide Corp., 92.6%; Azwell Inc., 31.6%; Taiheiyo Cement Corp., 25.7%; Mitsui Chemicals Inc., 25.6%; and Koito Mfg. Co. Ltd., 22%. Companies in the IW 1000 producing motor vehicles and parts generated more wealth than any other industry on the list. As a group the 72 companies produced $1.38 trillion in revenues in 1999. Following that industry in wealth-creation were electronic/electric equipment, 102 companies, $1.20 trillion; petroleum/coal products, 72 companies, $1.02 trillion; food, 123 companies, $742 billion; and chemicals, 103 companies, $661 billion. Revenue growth leaders from 1998 to 1999 in each of the top five wealth-producing industries include: Dura Automotive Systems Inc., motor vehicles and parts, 197.6%; Tyco International Ltd., electronic/electric equipment, 82.7%; Tesoro Petroleum Corp., petroleum/coal products, 104.3%; Uni-President Enterprises Corp., food, 163.3%; and Lyondell Chemical Co., chemicals, 155.2%. Ranking Methodology Waltham, Mass.-based Primark tapped database of more than 28,000 firms. For its fifth annual ranking of the world's largest publicly held manufacturing companies, IndustryWeek has partnered with Waltham, Mass.-based Primark Corp. Primark is a $500 million global information services company that serves financial, corporate, and government decision makers through 86 offices in 24 countries. Its customers are located in 61 countries. More than 1,000 of Primark's 3,000 employees are engaged in the collection of financial and economic data. Primark's global databases were used to identify all publicly held manufacturing firms meeting IndustryWeek SIC code criteria. The actual cutoff for inclusion in the IW 1000 was $1.65 billion. Primark obtained the latest available financial data on these companies. This process was supplemented with Internet-based research. Erik L. Fine, a Charlotte, N.C.-based information consultant, managed the data project. Manufacturing companies were defined according to criteria established by IW. Those criteria included: companies with a majority of their business in a manufacturing industry; computer software companies whose primary business is the manufacture of software programs; oil and gas companies that derive approximately 50% of their revenues from the refining of oil and gas products; and companies that derive approximately 50% of their revenues from the manufacture of mined materials. Because all publicly held manufacturing companies were eligible, a number of subsidiary or associated companies that are publicly traded separately from their parent company made the list along with the parent. The data elements are based on information obtained directly from publications issued by the corporations. To more accurately reflect the company's core business, revenue numbers do not include revenue from noncontinuing operations. Currency valuations in U.S. dollars were made using rates as of Dec. 31, 1999. Where 1999 data are not available, 1998 data are given. An asterisk next to the company name on the IW 1000 list indicates that 1998 data were used. Where 1998 figures are given, profit growth is for 1997-98. A not-meaningful code (NM) was used for the return on equity and debt-to-equity ratios when equity was negative. In instances where companies showed negative net income for the comparative year, an "NM" appears in the profit-growth column. An "NA" appears in cases where data were not available. Readers should keep in mind that accounting standards and terminology vary from country to country. Direct comparisons of figures, even when terms appear to be the same, can be misleading.

High Jumpers (1996-2000)*
Company 1996 Rank 2000 Rank Change
Qualcomm Inc.** NR 477 500+
Cisco Systems Inc. 695 159 536
EMC Corp. 708 288 420
Dell Computer Corp. 420 59 361
Invensys PLC 424 113 311
*IW did not include petroleum/coal products firms in 1996.
**Qualcomm Inc. was ranked below 1,000 in 1996.

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