SIC 3621 Motors and Generators
SIC 3621
This classification comprises establishments primarily engaged in manufacturing power generators, motor generator sets, and electric motors, excluding engine-starting motors. Also covered in this classification are establishments primarily involved in manufacturing railway motors and control equipment, as well as motors, generators, and control equipment for gasoline, electric, and oil-electric buses and trucks.
Establishments primarily engaged in manufacturing turbo generators are classified in SIC 3511: Steam, Gas, and Hydraulic Turbines, and Turbine Generator Set Units and those manufacturing starting motors and battery-charging generators for internal combustion engines are grouped in SIC 3694: Electric Equipment for Internal Combustion Engines. Establishments primarily engaged in manufacturing generators for welding equipment are classified in SIC 3548: Electric and Gas Welding and Soldering Equipment.
335312
Motor and Generator Manufacturing
The motor and generator industry recorded more than $7.55 billion in 2003 sales, down from $7.91 billion in 2002. The industry can be divided into four primary product groups: fractional horsepower motors, integral horsepower motors and generators, land prime mover generator sets, and parts and supplies for motors and generators. Other products manufactured by the industry included land transportation motors and fractional and integral motor generator sets.
Of these products, fractional horsepower motors represented 35 percent of the industry's shipments, followed by prime mover generator sets, which accounted for 28 percent. Integral horsepower motors and generators accounted for another 16 percent of shipments, while parts and supplies for motors and generators represented more than 7 percent. Electric motor-driven generator sets accounted for an additional 11 percent. Revenues were down 5 percent from 2002.
Motor and generator manufacturers are heavily dependent on the health of several industrial markets to sustain their growth. Fractional horsepower motors are used in various household appliances, including refrigerators, freezers, air conditioners, automatic dishwashers, and microwave ovens, as well as other products requiring a small horsepower motor, such as computer disk drives. Falling prices in electronics and stable economic conditions for consumers were a boon for this sector in the late 1990; however the value of shipments fell off sharply in this segment by 2003, falling from $4.76 billion in 1999 to $2.67 billion, a decline of 44 percent.
Integral horsepower motors are best suited for industrial uses, where greater horsepower is required. Integral motor power vehicles are used in large construction projects and provide the necessary power for many different types of manufacturing facilities. Any significant changes in nonresidential construction activity or capital expenditures in the industrial sector generally have parallel affects on integral motor production. Again, a strong economy helped bring about a 25 percent increase for this sector between 1992 and 1997. By 1999 shipment values totaled $1.8 billion, but then steadily declined over the next four years to $1.24 billion in 2003, a 31 percent decrease.
In addition to these market dependencies, motor and generator sales are affected by the vacillating costs of raw materials. Steel—an essential element in the production of motors, generators, and their related parts and supplies—is subject to pernicious price swings that could impinge on the industry's profit margin. Overall steel prices were elevated during the early and mid-2000s, causing price pressures and narrowing of profit margins. Other materials, such as wire and brushes used in the manufacturing of motors and generators, also demonstrate a propensity for erratic jumps in price that have an appreciable affect on the motor and generator industry. Government regulations requiring premium efficiency motors, rapid technological advancements, and intense foreign competition also were major factors affecting the motor and generator industry in the mid-2000s.
The revenues from the motor and generator industry is predominantly generated by medium and large-sized companies employing more than 100 people. Although small companies that employ less than 100 account for more than 75 percent of the nearly 600 establishments within the sector, they only generate approximately 15 percent of the industry's revenues. Accordingly, the largest companies accounted for 85 percent of the industry's income, and the top three companies—Emerson, General Electric, and AO Smith—account for nearly 80 percent of the entire industry's totals.
Geographically, motor and generator production occurred throughout much of the nation, according to the 2002 Economic Census, but was particularly concentrated in Wisconsin, Tennessee, Arkansas, Missouri, and New York.
The relatively expensive nature of conducting business in the motor and generator industry tends to discourage the entry of small manufacturing companies. Manufacturers frequently encounter expensive retooling costs—when a particular product becomes obsolete and is replaced by a new product, for example, or when a significant technological advancement dictates the implementation of a new production process. As a result many companies manufacture a diverse line of products, some of which are excluded from the boundaries of the SIC 3621 classification. This diversity helps to insulate companies from potentially deleterious financial conditions affecting the motor and generator industry.
The principle of the electric motor was first developed by Michael Faraday in 1821, but a diverse group of scientists and lay innovators quickly followed Faraday's lead and began experimenting with amended designs. Improvements on Faraday's design followed in quick succession, as inventors of the nineteenth century were swept up by the inspiring and momentous technological advancements that characterized the era. This work helped pave the way toward developing the type of electric motor that became an integral component in twentieth century factories, stores, and homes.
Sixteen years after Faraday first announced his discovery, Thomas Davenport, a blacksmith from Vermont, developed a motor that successfully powered a printing press. This invention marked one of the earliest uses of the electric motor for commercial purposes, and Davenport was granted Patent No. 132 for it. Not to be outdone, Moses Farmer, another Yankee pioneer in the development of the electric motor, created a miniature electric railway as an exhibit for country fairs. Charles G. Page used this application of the electric motor on a larger scale in 1857 when he made an experimental run with a full sized locomotive from Washington to Baltimore.
While these developments were encouraging and marked significant technological advancements, the design of these early motors limited the ways in which they could be used. Since they derived energy from large, expensive batteries...
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