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Last night I went to Barnes and Noble and was looking at Fortune Magazine, which devotes this month's issue to the fact that China is kicking sand in the face of the 97 pound weakling we know as Uncle Sam.
The article said that during the late 1800's when the world began to be industrialized, the United States then was mostly agricultural. In order to prepare this country for industry, rather than just growing tomatoes and sneep, the government of this country decided to make available FREE public education up to the 12th grade, rather than the previous 8 grades.

They wanted to educate everyone, as much as possible so we could participate in the industrial revolution.

Of course the European cretins thought laughed at us and said this was unneccesary to educate the masses, rather than just the few wealthy who could afford it as they did there.

We went on to become the icon of industry, while Europe has been declining ever since.

Now today, as we face the decline of the United States, and the Chinese and Indians are educating their poplace in the sciences and engineering, we must face this challenge by doing what we did before. And this is my idea - it didnt come from the article:
We need to have the government pay for college education for Science and Engineering. If a student wants to take these subjects HE OR SHE GOES FOR FREE - they only pay room and board.

If they want to take English literature, music, art, ACCOUNTING, Law, medicine, or anything that is not engineering or hard science they have to pay for it.

This will make the opportunity to get these kids here on the right track if we want to save our civilization.

The sooner people realise that the FOUNDATIONS OF ANY SOCIETY, THE PILLARS UPON WHICH IT IS BUILT is ENGINEERING AND SCIENCE.
It isnt law, or philosophy, or art, or music, or accounting or finance or six sigma it is ENGINEERING!

I am willing to bet that if we have any politicians with any sense in their heads, within the next few years this will happen. It has to.
Otherwise we are screwed.

Ed
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I am not sure how much things have changed since I graduated in 1975, but the standard in the US used to be and probably still is that any qualified candidate who applied to graduate school in the physical sciences (and most biological sciences) and got accepted (usually requiring an undergraduate degree with a 3.0/4.0 GPA), automatically got a paid assistantship with that admission.

At University of Oregon, the first year while students were taking core courses and deciding which faculty member to select as a thesis advisor the assistant ship was as a graduate teaching assistant. We monitored lab courses, and exams, graded papers, and sat in for undergraduate student coaching sessions (ie mandatory office hours).

After first year, most students were paid as research assistantships from their thesis advisors grant money essentially for doing their thesis research. With satisfactory progress, they graduated usually in 4.5 yrs without ever missing a paycheck.

The amounts paid were small. $3500/yr for 9 mo was typical in 1970, plus summer salaries. And graduate student tuition was waived.

The funds were sufficient to pay basic living expenses if you lived in the dorm and were not a big spender. Those living in expensive big cities probably needed additional funds. Or a nice life style might require student loans.

But most science students are indeed paid to go to school once they qualify. This has been the way for ages in the US, but really got going after sputnik in 1957. The grant funds come from the Federal Govt under NSF, NIH, and sometimes Air Force, Navy or Military depending on the subject area.

Perhaps more students need to be aware of these programs. The shortage is in those getting undergraduate degrees. Funding for research grants is always less than some would like, but I believe most are still able to go for free if they qualify. When US citizens fail to qualify, then foreign students get the grants.

Don't engineering students studying for advanced degrees also qualify for fellowships from research grants?
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I am afraid you missed my point.
You are referring to the best students getting grants and scholarships.

We are in a situation where we have a distinct dearth of American kids electing to take engineering courses at all.

When the US decided to pay for education of its masses up to the 12 grade in the last half of the 19th century this was unheard of all over the world, where only the wealthiest and perhaps better prepared students were educated at all.

We are in a crisis in this country. If we dont do something to increase the number of technically and scientifically educated young people here, we will become a third world nation in 20 years.

China and India are competitors. We need to answer this challenge with more engineers and scientists and the more people we can get to go into these fields the better chance we will have of taking our country back.

High tech jobs are now being outsources along with all of our manufacturing skills. We cannot afford to have this happen here any longer, or we will become the chump of the world, sitting here suing each other and selling each other insurance policies.

Any country that doesnt recognize that engineering and science are the foundation of civilization is doomed to be what we are fast becoming, a declining has been.

I mean ANYONE WHO WANTS TO BECOME AND ENGINEER OR SCIENTIST SHOULD BE ABLE TO DO SO FOR FREE, just as anyone who wants an highschool diploma gets it for free.

Let them all in, but make the standards strict. No parties, work and study, and more work.

The problem with American youth today is they want to party BEFORE they have finished their schooling. When they have succeeded in getting their degree, and get a job, by all means they can party all they want.

We need to motivate the kids in this country to take our country back and once again be the best in the world.
Otherwise as I said, we will be shining shoes.
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I got an engineering degree and still have $23K worth of student loan debt. I accept donations.

I agree in that there exist a lack of an engineering/scientist pool in the nation. I'm not too sure that providing free degrees would solve the problem. You'd get a lot more engineers and scientist but their average salaries would then be reduced. And that IMO is the problem. I think engineers/scientist are under-compensated relative to the difficulty/importance of their work. I don't know how to solve this problem.

I got an B.S. in Aerospace Eng. from The Univ. of Texas at Austin in 2002 and work in Defense currently $68K in Texas. It's pretty good and can easily support a family off of it but is it really fair relative to these people I know oh so well???

A close family member got a B.S. in Aerospace Eng. from M.I.T. in 2002 and a master of science in Aerospace Eng. from Caltech in 2003 and he works in defense in California making $75K.

Another close family member got a B.S. in Electrical Eng. from M.I.T. in 2002 and a masters in Electrical Eng. from M.I.T. in 2003 and works in defense in California making $78K.

Another familly member just graduated from Med. School from U.T. Southwestern and is doing Anesthesia residency. He makes about $35K but in 3 years when he finishes residency he says it will be $300K to $400K.

My girlfriend is a dental Hygenist (sp?), has an associate degree from a community college, and she makes $90K. She is my age.

As I see it, engineers/scientist are just way under-compensated, especially the advanced degrees. I remember the vast majority of the engineering graduate students at my school were chinese, and no they were not going to qualify for a job in the U.S.

This society does not appreciate engineers/scientist that much. Perhaps it is just too difficult to account for the real value of an engineer within a company. Engineers are overhead by the nature of their work.

It's sad but it's true but we shouldn't hate the players, just the game.

rruyy
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I don't think pauleckler missed your point. He's saying there's some funding available for those who really want it enough to find out where to get it. The problem isn't lack of opportunity so much as motivation.

High tech jobs are now being outsources along with all of our manufacturing skills.

THIS is the REAL problem. Why should any student (note not just the kids but older ones going back after some real-life experience as well) bust butt studying when everybody knows engineers are destined for layoffs and crummy job markets? When everyone knows that partying and beerdrinking can make the connections that get a you a job in some easier field that is better paying, more secure, less overtime, and provides a corporate expense account to subsidize further partying - on company time?

China and India are competitors.

We here may see it that way, but unfortunately our business leaders do not. They see these places as both new market opportunities and great labor sources. Which is why many of us have had our jobs yanked out from under us and sent overseas multiple times.

We need to answer this challenge with more engineers and scientists and the more people we can get to go into these fields the better chance we will have of taking our country back.

Truth is our business leaders think there is a surplus of American engineers - just look at the decline in salaries and engineering employment levels for proof. They don't WANT us to take our country back. No point motivating the kids until this basic problem is solved first.

if we have any politicians with any sense in their heads
....
We cannot afford to have this happen here any longer, or we will become the chump of the world, sitting here suing each other and selling each other insurance policies.

Any country that doesnt recognize that engineering and science are the foundation of civilization is doomed to be what we are fast becoming, a declining has been.


Sorry, I think we're out of luck on that one. Political leaders don't care about such things since they get elected (or at least think they do) based on keeping the business leaders happy and making political donations. Which means allowing the outsourcing, and NOT taking our country back. So OUR problem is how to convince them otherwise. Alas, we tend to be logical folks here, which doesn't work too well where political stuff is concerned - we have an innate handicap in solving this one!
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This society does not appreciate engineers/scientist that much. Perhaps it is just too difficult to account for the real value of an engineer within a company. Engineers are overhead by the nature of their work.

Well of course I agree that engineers are way undercompensated. THIS IS BECAUSE ENGINEERS DO NOT RUN ENGINEERING WORK - MBA'S DO.
And they have no business doing so.

Unless this country wants to fall into third world status, alot of things have to change around here - like REPAYING HARD WORK WITH HARD CASH, and paying those who breeze thru school MUCH LESS.



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Greeneyedlady COME ON NOW
You want to give up? You want idiots run YOUR COUNTRY???

I dont

Your post is negative and smacks of "oh well you cant fight city hall"

Oh yes we can.

It is time that those of us who put in the real sweat in our educations stand up to the crap heads who think they can run things.

As long as we accept the status quo we are doomed.

It starts with our youth. Those who have the nads to push themselves to learn the mathematics should be the "cool" ones, not those cowards who run away from it and do something easier and then turn around and make fun of so called "nerds".

If it were not for engineers and scientists these cretins would be living in the stone age.

It is time engineers and scientists stood up and pushed back.
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Most scientists feel they are underpaid. And most of them will have to have PhDs to earn the kind of money you mention for BS engineers. Long years in school. And others consistently make better money.

The business guys are quite keen at putting their money into opportunities that will pay off. That does include research and engineering when the opportunity is there. They are also quite clever about making noise about shortages so they can keep those professions over supplied. That gives them the chance to pick the best from the group and to play them off to pay less money.

Yes, our society is truely technology driven in many ways. And you would think we would want to continue staffing at high levels to maintain a leadership position. But until people are compensated better, most will take their 700 math scores on the SAT and get MBAs or MD degrees if they are looking for maximum income.

Science and engineering is mostly for people who love it. Job satisfaction is the key. Compensation is secondary. It is nice that you can earn a decent income to support your family.

There are programs out there designed to encourage more high school students to pursue engineering careers. First Robotics is big in NJ and it has first rate sponsors (like Johnson & Johnson, Bristol Myers Squibb, Mercedes Benz) for what is a relatively costly program. But the kids seem to enjoyed it. I have volunteered two years now at regional competitions. I notice there are quite a few other similar programs. Most hope to attract underrepresented groups like women and minorities.

You too can help by encouraging your employer to sponsor a team.
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It's not that I don't like the idea of free education for engineers and science majors, but from my perspective, these degrees must not be what they use to be. The question of recommending engineering to new college recruits has been recent subject of some friends of mine, and the consensus among us seems to be 'no'. I really hate this answer, and have taken some time to reflect on this.

I really enjoyed my course work in engineering, but have had great difficulty translating this into a successful engineering career. I went into engineering for the following reasons: my strong math skills, engineers are needed in almost every industry, companies liked degreed engineers, they are well paid, and best of all engineers never have trouble finding a job. However, after some 7 plus years in the profession, I'm finding that reality has made my perceived pluses of my chosen profession as misconceptions.

While strong math skills are a prerequisite for an engineering degree, it seems few engineering jobs (that I have found) require these math skills, or very little of it. So what was the point of honing your math skills in the engineering program? Don't get me wrong on this one, I went into engineering because math was my strong suit, but it seems I can't find a job where I get to use this skill.

While it is true engineers are needed in almost every industry, the truth seems to be only experienced engineers are needed. If you don't have ### of years in the field you need not apply for most positions. So when you read articles of some industry mangers suggesting there is a shortage of engineers, what they really mean is there is a shortage of engineers with ### years of experience. This one can be extremely frustrating to recent engineering grads if they graduate in a down cycle.

As far as impressing prospective employers with a flashy engineering degree, don't expect much of a result. In all my interviews questions regarding my experience is the focus, rarely do I get questions regarding my degree. In my reviews, promotions, etc my degree never seems to be factor (perhaps this was specific to my employer). After awhile it seems a degree is something they would like you to have, but not a requirement.

As far as the pay goes, it's pretty good, if you can stay employed. But staying employed seems to depend on things out of your control, and things you can't predict. The expectation of working for the same employer till retirement has been out the window for some time. The biggest issue I have this one, isn't so much the need to find new employment from time to time, it seems you need to be willing to relocate to be employed. I personally have trouble with this one when it comes to uprooting family every couple of years; not to mention the hassle and expense of actually moving.

I always hear how engineers never have trouble finding work. Well I have been unemployed now for like a year, and I'm no closer today to finding work then the day I got laid off. I'm getting to the point of considering switching careers, but then again I'm not a doctor, or lawyer material either.
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I would say the math skills are needed primarily so you can understand the theory behind the advanced courses.

The engineers who work in design and specification jobs are probably the ones who are most math oriented. But I would bet that most of them have all the math they use in computer programs. Calculations by hand are rare--except possibly to verify the proper range of a computer calculation.

Most engineers seem to work in plant jobs or on construction sites, where the job is to keep the equipment running. There math is not much of an asset. Its mostly people skills and perhaps mechanical skill, knowledge of process technology, and experience keeping that kind of equipment running at peak efficiency at minimum downtime and cost.

Engineering is known to be cyclical. It does go through boom and bust cycles. I'm sure the cycles are different for various disciplines and even segments of industries.

A neighbor who is an electrical engineer sent both of his children to medical school. He found the cycles frustrating. Yes, if you keep your job during a down cycle, you continue to do well. But if you lose your job in a down cycle, getting another one can be very difficult.

In the absence of long term job security, the solution to this problem is to anticipate future developments. So if you are not a highly regarded professional working on a high priority project with your employer, get your resume out there early looking for a job where that can be possible. Ideally this lets you move to a more secure position before the down cycle hits.
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We need to have the government pay for college education for Science and Engineering.

Absolutely not. They failed to graduate students from primary schools who have the basics (reading, writing, and arithmetic). It has gotten to the point where you have to issue written tests for things like basic math skills because the damned diploma is now worth less than 3 sheets of toilet paper. Why in the world would you want to subject everyone to the same crap? As has already been mentioned, if there's motivation, the money is there. My parents were highly paid midwest farmers who had to fill out lots of paperwork trying to prove that their business was an ongoing concern just for me to be able to try to qualify for grants, loans, etc. I was not at the top of my class in engineering or primary school either.

Don't engineering students studying for advanced degrees also qualify for fellowships from research grants?

Pretty much where I went to school across the board unless you were going for essentially coursework degrees such as the usual suspects (MBA), then they almost wouldn't issue coursework degrees. In other words, fellowships & grants were REQUIRED. I had to do work for 3 different companies to pay my way (and work part time at one point), but I was masochistic enough to land 3 engineering degrees. This was 1997, so obviously things haven't changed in the last 25+ years.

We are in a situation where we have a distinct dearth of American kids electing to take engineering courses at all.

Yes, that's the way of things. At one time, pretty much to land jobs in the area you are talking about, you had to be a physicist. For example, there was no such thing as RF or electromagnetic (antennas, radio, microwave ovens) engineers. Then it branched out and became an engineering function. At this point, they have canned software that crunches out the equations (as a CAD program) so you're down to needing a specialized draftsman. No need for that 4 year electrical engineer anymore.

At the same time, the tech schools have gotten better and better. In fact, engineering schools are lagging behind quite a bit because they are into teaching theory that is quite often 10-20 years behind the times. For instance, when I went to school in 1989-1997, they were still teaching about ADC's and DAC's (the component that converts digital signals into analog and back) using the basic concepts of a "flash converter". The fact is that at that time the whole world switched over to delta-sigma (one-bit) conversion and never looked back for the most part. They still are not teaching delta-sigma theory today, so students are graduating without a clue about a key technology that drives something as simple as a CD player. On the other hand, this IS being taught in the tech schools.

Another example: "software engineering". Face it: the barriers to entry are very small and it is not geographically limited. In other words, if I have a laptop, I can write software just as easily in Siberia as I can in silicon valley. The low barrier to entry and high mobility means that anyone anywhere anyplace can do it and your job market is thereby inflated to encompass the entire world.

In a technician role, I'd be doing roughly the same things I do most of the time, paid just a little less for it (with less time in school up front), with better job security, better mobility, and less responsibility. I used to scoff at the idea but now in my role "behind the curtain" like in the Wizard of Oz, my perspective is that those tech school jobs look really, really tempting.


As to the job market...ha! What a joke. I would most likely be branded as a "plant engineer" or "industrial engineer". I can turn wrenches, run conduit and wiring, and be equally at home with either one as well as design and project management. The summer of 2001 qualified as my worst year ever. I was out of work for a huge stretch of 8 weeks. However, in 10 years I've worked for 5 different companies. The labor market is cyclical. Nobody anywhere is safe anymore and nobody has "job security". Hell, one of my primary job goals right now is to eliminate 4-6 positions every year!

The safest positions are production and maintenance. That's a known fact and has been published widely. It's not that there's any more or less engineers out there. It's that there are more qualified people doing traditional engineering functions (technician level) and that companies are restructuring faster from a strategic objective point of view.

So...you have to be willing to go where the jobs are. 4 years ago, I was plant engineer for a basic chemical company. Then it was industrial silica. Today it's a foundry making pipe. Tomorrow...who knows. Other than the hassle of moving though, I can confidently say that I am far more employable and far more experienced and talented than if I had stayed where I started.

The fact is that I have very good job security now. My salary continues to escalate at more traditional increase levels (far more than 3-5% a year that you get these days). I have created job security for myself. I am confident that should I have to go looking again, I'll once again land something within a month or two at the outside, with yet another decent pay increase, although I probably won't top the last one (25% pay increase; the result of working for a company known for low salaries and no increases for 2 years straight). I have so much job security in terms of simply not worrying about whether I will still have a job with my current employer that it gives me the ability to take greater risks (and rewards) that would otherwise not be possible.

Any country that doesnt recognize that engineering and science are the foundation of civilization is doomed to be what we are fast becoming, a declining has been.

Not quite true. Step back a minute and take a more world view of the whole situation. For this country to remain competitive and not fall into the economic doldrums that plague Europe, you need a certain number of things. The biggest thing you need is to be able to create wealth, which means that you create value for other people. Our GDP growth is usually 5-15% compared with 1-3% in Europe and elsewhere. Obviously we are very, very good at doing that. Impediments to wealth creation are what you have to watch out for. Since there is nothing competitive about anything government run, this creates inferior "product" and reduces the value. In the end, we as a nation (which will be taxed more in order to pull your scheme off) will have poorer engineering and science talent but pay more to get it.

There are just as many issues at every level within companies in this country. Managers are coping with problems of motivation, leadership, and efficient utilization of resources. Accountants are dealing with the fact that activity based accounting is superior to the older accrual-based methods for internal valuation. Engineers and scientists are hell bent on either making it cheaper or making it better in SUPPORT of management's goals of improving profitability. Engineering is a support function, not an end unto itself. Make no mistake about it. That's why engineers so typically fail so badly when they are put in business decision making positions.

Well of course I agree that engineers are way undercompensated. THIS IS BECAUSE ENGINEERS DO NOT RUN ENGINEERING WORK - MBA'S DO.
And they have no business doing so.


Yes. That's the way it should be. My engineering role is to provide solutions based on similar problems and issues that have occurred elsewhere. I should not as an engineer have the role of making decisions directly since it is a supporting role. In reality, I do make decisions every day. I'm in charge of the engineering department and the electrical maintenance group.

When it comes to business decisions, that is a supporting role. For instance, the plant manager recently asked me to investigate the COST of installing what is essentially a railroad car for moving refractory vessels around a part of the plant. The reason for doing this is to improve safety, productivity, and housekeeping in that part of the plant as opposed to jockeying a fork truck around there the way it is done now. I will provide a solution how to do it and a rough cost estimate (which gets refined down the road if we actually decide to do it). This has to be evaluated vs. the cost of how we do it now (and all the other "soft" reasons I mentioned). The plant manager's role is to decide whether to spend money on this project (even if it makes sense) or a myriad of other projects which may have a greater value to the company than this one. My responsibility ends with the "how".

If you want to make the decisions, then take a management role. Simple as that. That is what MANAGERS are paid for...managing. There is such a thing as an engineering manager, by the way. That's part of what I do now. I make decisions for my departments every day but I also have another role where I provide information and make recommendations, but I don't make the decisions (which you would call engineering).

Managers (with or without an MBA) are paid to make decisions. Part of what they are supposed to do is gather facts and information in support of making those decisions. Their ability to make the best decisions is tied to their salaries and promotions. As an engineer, if you are accepting a supporting role, the best thing you can do is to learn how to be a political animal...learn how to best convince others to agree with your recommendations, or else jump ship and go into management.

Engineering is known to be cyclical. It does go through boom and bust cycles. I'm sure the cycles are different for various disciplines and even segments of industries.

I agree strongly there. In the short term, especially in commodity businesses (where I've spent a lot of my working career), profits have little to do with the internal structure of the companies. Fixed and variable costs are relatively constant. So the only factors that really make a difference are customer demand and raw materials costs (fuel and electricity included). The only place where a commodity business has flexibility is in the few non-essential costs that they have in support functions such as accounting, marketting, and of course R&D and engineering. So engineers are inherently affected by the cyclical nature of the business simply because they are non-essential functions. The place I work at has hired 2-4 engineers or engineers into non-engineering functions in every plant in the last year because they're on an upswing right now. I have no doubts about the stability of my job long term unless I can turn the costs of this place around substantially and move into a more non-engineering role. Last month we made $3MM. Last year, we made $3MM. So at least the numbers are headed in the right direction.
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The fact is that I have very good job security now

You work in a foundry making pipe? I'm guessing Ductile Iron. That's interesting, we're probably competitors. Your market share is decreasing every year as PVC and PE keep on gaining. It's hard to beat corrosion free, and Europe is almost exclusively PE. Do you ever think about that. Changes in technology can always zap your company.
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"The safest positions are production and maintenance."

I'll have to quibble with this one. The safest positions are in sales. Nothing happens until there is an order. Companies continue to need people to sit down with customers and keep them happy no matter where the product is made.

Yes, production is important. The people who are essential to getting the product out the door are safest. But that is true only so long as the plant is competitive. Outsourcing or manufacturing in newer or lower labor cost plants can be a factor (depending on shipping costs and other characteristics of the business).

In my experience, maintenance is easily made more efficient. It is always possible to outsource some or all of it. It is frequently possible to thin the ranks of higher paid more experienced people, replacing them with entry level people, or less well trained manpower headed by 10 yr professionals ready for promotion. Technology also makes possible fewer people with more responsibility.

"The only place where a commodity business has flexibility is in the few non-essential costs that they have in support functions such as accounting, marketting, and of course R&D and engineering. So engineers are inherently affected by the cyclical nature of the business simply because they are non-essential functions."

Yes, in commodity businesses its important to be a low cost producer. If you are not first or second in costs, you will operate at a loss while others break even. That cannot last for long.

I'm aware of companies who deliberately play the cycles. They hire in good times and then decide who to keep in bad times. Hence, new hires are in so many words probationary.

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And who is the pipe foundry that was on 60 Minutes (or was it Bill Moyer's Now)? Ghost plants (one in Mississippi, one in NJ) operated with absolute minimum staffing. Inexperienced operators getting killed by equipment with no one around to find them much less help them.

Sounds like this business can be very cut throat.
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And who is the pipe foundry that was on 60 Minutes (or was it Bill Moyer's Now)? Ghost plants (one in Mississippi, one in NJ) operated with absolute minimum staffing. Inexperienced operators getting killed by equipment with no one around to find them much less help them.

That was McWAne.

Sounds like this business can be very cut throat.


It is.
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You work in a foundry making pipe? I'm guessing Ductile Iron. That's interesting, we're probably competitors. Your market share is decreasing every year as PVC and PE keep on gaining. It's hard to beat corrosion free, and Europe is almost exclusively PE. Do you ever think about that. Changes in technology can always zap your company.

Yep. It's ductile iron, and competitors is probably right since it's down to American, McWane, Griffin, and U.S. Pipe. Of those, McWane is taking it on the chin in the regulation area but has deep pockets & protection from their owner (Walters Industries). U.S. Pipe is darned close to death and word has it they were weeks away from closing the doors during the recent price wars last summer/fall. The other two are pretty darned strong.

Yes, I'm aware of the status of ductile iron pipe. However, don't forget that the same situation is true in ALL commodity markets regardless of whether the market share is declining or not. I've seen the same thing in white pigments, pH increasing agents (lime/caustic soda/soda ash), desulfurization, taconite, copper, you name it. The situation repeats itself endlessly, regardless of whether product switching will occur or not.

PE is great stuff. Before working at a DI plant, in all heavy industrial operations I've worked at, my choices as an engineer usually settled on either PE or SS (PVC has almost no place in a heavy industrial plant). It is somewhat more difficult to install, which is where DI maintains an advantage. I have to say this last one somewhat tongue-in-cheek since I've run fusers pumping out hundreds of feet of pipe personally so I don't for a minute believe in the DI industry hype. But, there's no mass exodus from DI to PE or PVC. The trend is more gradual and steady than that. So I feel pretty safe.

In any case, in a commodity market, it's all about market share. You can't differentiate yourself on quality, service, etc. So the only thing you can change is price. Although sometimes market size is increasing, most of the time, it is a mature market which means that it is either flat or declining. Most of the time, there are just two choices to make. Either decrease the price (and the already slim profit margins) to gain market share or maintain the same price (and market share) but decrease costs. Usually the nature of the business is that things are so tight that decreasing prices is simply not an option so market shares don't usually fluctuate drastically without some sort of outside influence to upset the market dynamics.

Either way, it should be obvious that the key to long term survival as a company in this environment is by being the lowest cost producer no matter what the going market price is. If you can make it cheaper, you make more money. And in the long run, you can increase market share at the expense of your competitors.

The two keys to your continuing employment in that environment (ignoring the things that will affect you in any environment) are whether the company recognizes the value of your engineering talents (if can you deliver on substantial cost reduction initiatives year on year), and how easily they can avoid making short-term decisions (such as cutting all "nonessential" staff) in spite of inducing longer term damage.

If you think the market for ductile iron is bad, try industrial silica. The market is completely flat and there are really just two dominant players and a handful of minor niche companies. The only reason that you don't have competitive products is that with product pricing in the neighborhood of $5-$20/ton (depending on specifications), it is hard to imagine anything else with that kind of price level. With one plant at $2/ton profitability and sales of about 600K TPY with 26 employees, my leaving that plant increased profits by about $0.20/ton (a nice 10% profit increase for the year) that year over the short term, nicely making their cost reduction numbers for the year. Relatively speaking, the ductile iron pipe business is far safer.

On the other hand, from a career progression perspective, commodity markets are a good thing. Companies are playing the scale-up game to the hilt so you are dealing with extremely large players who don't normally quibble over penny-wise/pound-foolish decisions (how many pencils you use in a week for instance). You have relatively large flexibility when it comes to engineering decisions (million dollar projects are not out of reach). And by nature, they generally tend to avoid being top-heavy these days, so you have fewer players in the political game as compared with for instance the automotive or railroad industries. You also tend to get lots of resume material from a variety of projects which helps make you more marketable when or if the job turnover day comes.

In a lot of ways, I look at commodity businesses as "value plays" from a career perspective. There is no growth; nada, zip, zero, zilch, in the market. "Growth" means that you take away business from a competitor. In fact, there's nothing glamorous about them at all. Probably the most exciting thing about working in that kind of industry is that quite often they've been doing things the same way for decades or centuries so there is easily lots of opportunity for substantial change and improvement.

Take for instance the exciting world of lime as a classic "value play" for engineering careers. They have been making lime for 2500 years. The market is totally flat. The three major customer groups are steel, water treatment, and flue gas desulfurization (FGD, aka power plants). In every one of those markets, there's a competing product that essentially locks the price down at a low level. So what to do? Well, many of those plants are and were running around 8-10 million BTU's per ton of product. It is easily possible (and practical) to cut that down to 4-6 million BTU's per ton, perhaps even lower with capital expenditures into other technologies. At 1/3 of the total operation costs and sales of around 1 million tons a year for some of the larger plants (I'm not sure what the size of the market is), we're talking about reductions in the trillions of BTU's and millions of dollars per year. I helped prove out that exact scenario a few years ago.


Let me summarize this way. Any time that somebody tells you that there is nothing more that can be done to improve a product/process, that should prick your ears up as an engineer. It means that somebody has thrown up an artificial wall and isn't looking hard enough. When I hear that, I smell opportunity. At one plant that declared this, I was involved in an engineering team that "helped" them. We found about $12MM annual savings that were implemented with virtually no capital in the first year and another $50MM that could be done over a couple years.
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Yep. It's ductile iron, and competitors is probably right since it's down to American, McWane, Griffin, and U.S. Pipe. Of those, McWane is taking it on the chin in the regulation area but has deep pockets & protection from their owner (Walters Industries). U.S. Pipe is darned close to death and word has it they were weeks away from closing the doors during the recent price wars last summer/fall. The other two are pretty darned strong.


McWane does have deep pockets and they are taking it on the chin, but they do deserve it. They are a crooked bunch. McWane is owned by the McWane family. Not to bad owning a 2B$ company. US Pipe is owned by Walter Industries, but they have somehow spun them off and combined them with Mueller to have a complete waterworks package. Lots of debt there though, so they may have a tough time pulling it off. Prices may suffer as they seek market share.

That leaves Griffin and ACIPCO. Perhaps we work for the same company. I'm on the sales and applications side.

Later

V

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US Pipe is owned by Walter Industries, but they have somehow spun them off and combined them with Mueller to have a complete waterworks package. Lots of debt there though, so they may have a tough time pulling it off. Prices may suffer as they seek market share.

McWane and Griffin (that I know of) have tried the same thing in the past (bundling fittings with pipe; owning a fittings operation). Both failed to make any ground with it. I predict that U.S. Pipe will do similarly.

Margins on fittings are even less than the pipe itself. The market is almost entirely price driven (mostly bidding on municipal contracts). So you can't get a boost in profitability by owning a higher margin product line, and you can't charge higher prices with a "bundling" deal on either fittings or pipe.

Gaining market share by reducing prices has been tried last year. Griffin picked up substantial market share for a short period of time by lowering prices (actually, raising prices slower as steel prices climbed). In the price war, it sounded like U.S. Pipe was the one that took it on the chin, so I doubt they'd want to attempt that one again, especially if they are taking on even more debt. McWane, Griffin, and ACIPCO have pretty deep pockets relative to U.S. Pipe.
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Here's the thing that bugs me: When an industry leader uses the press to decry the shortage of engineers and technology workers. Hey--what about supply and demand? If ya' paid more, had reasonable work schedules and fewer layoffs, college students would be more atracted to engineering. As it is, many bright students who could be happy in several different fields choose the rationale way--maximize happiness/satisfaction/leisure/income by chosing a major and career other than engineering.
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Don't get me wrong on this one, I went into engineering because math was my strong suit, but it seems I can't find a job where I get to use this skill.


If the engineering jobs you find dont require strong math skills, they are not engineering jobs.

They are masquerading as engineering jobs. IN fact they are most likely project management jobs best left to business majors with a minor in engineering, if there is such a thing.

The trouble with this country is the fact that the engineering jobs do not require strong math skills.

Because in China and India, they are training their engineers to have strong math skills.

And that is why they are kicking our ass.
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