January 10,
2007
Our
last newsletter article about design engineering jobs moving outside North
America caused quite a response. Apparently the ongoing news of high-quality
jobs leaving U.S. shores continues to strike a painful nerve. Many engineers
chose their profession because they loved designing things. Many were
encouraged to join the engineering ranks by a father or uncle was an engineer
and experienced it as a rewarding way to spend each workday. But many engineers
now don’t have the same encouraging words to say to their own sons, daughters,
nephews and nieces.
Dick
Ketchpel, president and CEO of Industrial Forming in Ventura, Calif. notes that
his company switched products because of the shift in global manufacturing.
“Recently we decided to get out of high-tech products such as liquid crystal
displays,” explains Ketchpel. “That went offshore. After that we decided to get
into low-tech products such as plastic forming.”
The
change came because manufacturing shifted to Asia. He notes he’s also watching
engineering jobs move out of the United States as well. “When I came out of
engineering school, the companies were recruiting people on campus. You had
four or five good engineering job offers,” says Ketchpel. He notes that his dad
was an engineer and when he grew up, he also wanted to be an engineer. But
things have changed in the past generation. “My nephew gets an engineering
degree and he has to go back to school in computer programming to get a job.”
He notes that his nephew now programs video games.
We
talked with another engineer who switched from design engineering to computer
programming when the design engineering jobs dried up in the Raleigh-Durham
area of North Carolina. “I trained as an electronics engineer and I worked as
one for about 15 years,” says the engineer who spoke anonymously. “Twenty years
ago, there were two dozen places you could find a job designing power supplies
in the Raleigh-Durham area. Now I can only find one. And that’s a privately
held company that’s having problems meeting China’s prices.” He notes that
design engineering has been following the migration of manufacturing outside
the United States. He sees it as a logical progression. “Why would design and
manufacturing be in geographically separate locations?” he asks.
There
are a variety of reasons design-engineering jobs are shifting outside North
America. For one, engineers in Asia, Mexico and Eastern Europe work at
substantially lower wages than American engineers. With much of the manufacturing
now outside the United States, it makes sense that the products would be
designed near the manufacturing. At an increasingly fast pace, products are
coming and leaving the market. OEMs are subsequently less worried about
protecting their designs, and thus it matters less if the product is designed
outside the company’s four walls. On top of that, the quality of engineering
outside North America is improving.
Other
factors also encourage the migration of design engineering jobs. OEMs trimmed
their engineering staffs dramatically during the last downturn. As things
picked up, they looked for alternatives to hiring new engineers. They turned to
design help from third-party firms, distributors and contract manufacturers.
Given this environment, Asia started to develop “Original Design
Manufacturers.” These ODMs are essentially contract manufacturers that design
the product as well as manufacture it. This model began in Taiwan with laptops
and cell phones, but the model has spread to other consumer products in other
low-cost manufacturing areas of Asia.
All
the trends in design engineering seem to point to jobs outside North America.
This leads our source in the Raleigh-Durham area to discourage young people
from taking up engineering. “I can’t really recommend that people go into
engineering because it’s a tough road to hoe,” says the source. “It’s a
demanding curriculum and the rewards are just not there like they once were.
When I got out of school in 1980, the kid with the worst grades got a job
offer. I’ve watched it go steadily downhill since then.”
Ketchpel
from Industrial Forming doesn’t believe the shift is simply a matter of free
trade. He insists that firms outside the United States have an unfair
advantage. “We have health care and pensions built into our prices,” says
Ketchpel. “Our prices are cut by offshore sources that don’t pay those costs.
That’s not free trade. Globalization has been a disaster.”
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