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OEM’s (Furnace and Oven Manufacturers) Salary Guide

OEM’s (Furnace and Oven Manufacturers) Salary Guide. February 1, 2018.

Recently we provided a salary guide laying out compensation ranges for most functions within the commercial heat treat industry. Here, we will provide the same information as it relates to OEMs and specifically furnace and oven manufacturers. Although job descriptions can vary quite a bit between companies, and salaries are subject to regional adjustments, this should give you a reasonably accurate representation of the current market-value for most OEM positions. An important note: compensation packages in the heat treat industry have advanced rapidly over the past few years. As the labor market has tightened, companies have had to increase wages to attract the resources necessary to run a successful operation. In many cases, the employer is offering non-cash incentives as well, such as more vacation time, the ability to work from home and profit sharing or bonus programs.

Mechanical, Electrical and Project Engineers: These are typically degreed individuals who handle project management and will often act as the project lead regarding equipment design. Electrical engineers will generally not be the lead on a single project but will spread themselves out over several projects. Typical salary ranges for engineers can vary quite a bit depending on total number years of experience, but usually falls anywhere from $85k up to around $110k.

Designers, Draftsman, Detailers (both Mechanical and Electrical): These are typically non-degreed individuals who are the backbone of every Furnace/Oven Manufacturer. They are typically paid hourly and can earn anywhere from the mid – $20’s to $40/hour + OT.

Application Engineers: These positions can also be called proposal engineers, estimators, inside sales engineers, etc. Whatever you call them, these are the people who put together the quotes that get sent to prospective customers. Sometimes, the business development person will also handle quotes, but companies will benefit from having this function done in-house and thus allowing the sales engineer to be out in the field doing what they do best, SELLING.  Application engineers are usually compensated at around $65k on the low end, but they can earn up to six figures or more for those who have niche technical expertise and who also work closely with outside sales to close deals.

Field Service Engineers: FSEs are a unique breed of technical “road warriors,” who love to travel and spend days, weeks or months away from home. These hands-on engineers and technicians work on installations and start-ups of equipment all over the world. They are almost always non-exempt employees and a significant percentage of their income can come from OT and per diem. Good ones can often make over $100K in any given year, but they are usually earning a base rate in the $25-35/hour range. As this type of skills set and availability to travel is highly in demand, more and more companies are offering remote-work and other flexible schedule options to entice and retain experienced FSEs.

Sales Engineers: Two types of compensation plans are prevalent for sales. One type of plan is salary only, commensurate with experience. The other is salary plus commission or bonus. Generally, OEMs who have a very technical, custom designed product and a long sales cycle will incentivize their sales engineers mainly with base salary and perhaps a small incentive bonus. This works well for both parties since it can be hard to determine a commission percentage for a sale that might be years in the making. OEMs with a more standard product line, and therefore a shorter sales cycle, will often opt for a smaller base salary and more incentive in the form of commission or bonuses. Whatever mix of base and commission, most sales engineers are earning somewhere in the low to mid $100k’s, plus car allowance/company car/mileage. Compensation plans for sales can be complex and we will provide an in-depth analysis of how sales professionals are incentivized in a future article.

VP/Production/Other: This is obviously not an exhaustive list of positions within an OEM but covers most of the middle management roles. VPs were intentionally left out because compensation can differ so much at the higher levels depending on the company, region and equity or bonus packages. Hourly production workers are always in demand as well. However, typically companies don’t require much experience and are willing to hire at a lower rate and provide in-house training. 

If you have questions about any specific position, please feel free to contact us at info@ispards.com. For over 20 years, ISP has been the premier recruiting solution for the Heat Treat industry. The salary information provided is based on information gathered over that time and from interviewing 500+ industry professionals per year. If you’re hiring now, or exploring new opportunities for yourself, we are uniquely positioned to be your partner for success and would love to work with you. Please contact us at info@ispards.com or 619-465-9621.

Commercial Heat Treating Salary Guide

Commercial Heat Treating Salary Guide

Although job descriptions can vary quite a bit between companies and salaries are subject to regional adjustments, this should give a fairly accurate representation of the current market-value for most commercial heat treating positions. An important note: compensation packages in the heat treat industry have advanced rapidly over the past few years. As the labor market has tightened, companies have had to increase wages to attract the resources necessary to run a successful operation. In many cases, the employer is offering non-cash incentives as well, such as more vacation time, the ability to work from home and profit sharing or bonus programs.

General Manager: Some GMs have Plant Manager responsibilities as well, but for our purposes, we’ll assume not. The GM is more the outward “face” of the company and typically does not get overly concerned with tactical day-to-day issues in the plant. Rather, the GM focuses on dealing with customers, addressing any emergency issues that arise and is ultimately responsible for managing the P&L of the plant. A good GM is worth his proverbial weight in gold. Salaries for experienced GMs start at $110k minimum and can exceed $160k+. Sometimes, GMs are also incentivized with equity and/or performance bonuses.

Plant Manager: PMs are responsible for the day-to-day operation of the plant and oversee all employees, either directly or indirectly. The PM will usually not have P&L responsibility, but will manage and oversee all other functions of the plant. PM salaries range from $90k up to $125k or more and typically also offer performance bonuses.

Plant Metallurgist: Metallurgists will sometimes also act as the Quality Manager and/or Lab Manager. The Plant Metallurgist’s main responsibility is over the various processes within the plant. Compensation for metallurgists varies wildly depending on experience, but for a non-manager, salaries will usually fall in the $75-95k +/- range.

Quality Manager: Sometimes a Metallurgist will fill this role, but more often it is a non-degreed person with hands-on experience who has risen through the ranks. They will typically supervise a staff of quality technicians and will run the quality department and usually oversee audits. Sometimes, they will also have lab responsibilities. Salaries for experienced Quality Managers are between $70 and $90k, but can easily creep into six-figures if they will be supervising a large staff or have extensive audit knowledge.

Sales Engineer: Two types of compensation plans are prevalent for sales. One type of plan is salary only, commensurate with experience. The other is salary plus commission or bonus. As is the case for OEMs, compensation depends on how collaborative a sales effort the company uses, if independent reps are involved and the philosophy and preference of the company. For a salaried Sales Engineer, you can expect base pay of $75-100k, plus car allowance/company car/mileage. For a commissioned Sales Engineer, the base may be closer to $55-75k + whatever commission is earned and car allowance/company car/mileage. Compensation plans for sales can be complex and we will provide an in-depth analysis of how sales professionals are incentivized in a future article.

Maintenance Supervisor: A case could be made that Maintenance is the most important role within any heat treat organization. Without a good preventative maintenance plan and good repair capability when furnaces do go down, a commercial heat treater is out of business. Most of the time, Maintenance Supervisors are non-degreed professionals who have worked their way up from an hourly position on the floor. Over the past 2-3 years, there has been an uptick in demand for qualified Maintenance Supervisors and salaries have risen as a result. Whereas 7-8 years ago, many Maintenance Supervisors were earning $40-50k, we now see salaries nearing six-figures, especially when overtime is considered.

VP/Furnace Operator/Other: This is obviously not an exhaustive list of positions within a commercial heat treater, but covers most of the middle management roles. VPs were intentionally left out because compensation can differ so much at the higher levels depending on the company, region and equity or bonus packages. Hourly Furnace Operators are always in demand, and while they sometimes don’t require much experience and are trained in-house, we often see knowledgeable furnace operators not only running equipment, but also providing quality control checks and resolving minor maintenance issues. Wages for furnace operators can be around $13-17/hour with overtime, but can stretch to $25/hour for someone with extensive experience and lead responsibilities.

If you have questions about any specific position, please feel free to contact us at info@ispards.com.

For over 20 years, ISP has been the premier recruiting solution for the Heat Treat industry. The salary information provided is based on information gathered over that time and from interviewing 500+ industry professionals per year. If you’re hiring now, or exploring new opportunities for yourself, we are uniquely positioned to be your partner for success and would love to work with you. Please contact us at info@ispards.com or 619-465-9621.

10 Largest North American Captive Heat Treaters

10 Largest North American Captive Heat Treaters

Before we get into the 10 Largest Captive North American Heat Treaters lets have a look at the size of the overall market. It is generally accepted that the total size of the heat treating market in the US for both captive and commercial heat treaters is in the neighbourhood of $20 Billion USD per year with commercial heat treating accounting for about 10% or $2 Billion per year. This compares to a worldwide estimate of $89 Billion USD by 2020 (Source Technavio research) with an estimated breakdown of 32% aerospace, 30% automotive, 15% industrial and others 21%. We stress that all of these numbers are at best educated guesses given the fact that most studies can’t even seem  to agree on what actually constitutes heat treating and at worst they are nothing more than a dart thrown against a wall.

However lets take these numbers as a given and look at the total size of the North American market. If the US market is $20 Billion per year the Canadian market is approximately 6% of this value or $1.2 Billion per year (and shrinking) and the Mexican market approximately 15% or $3 Billion per year for a total of $24.2 Billion USD per year (source WG Montgomery Ltd.).

Given this background and Technavio’s estimated market breakdown we can say that the largest captive heat treaters in North America will be found in the aerospace, automotive, heavy equipment or agricultural industries (before we go any further we should say that when we say heat treating this will include vacuum, atmosphere, induction and aluminum heat treating. It will also include all of a company’s locations in North America which have in house heat treating). GM, Ford and Chrysler would have generally been considered to be in this group but we do not believe this to still be the case. Granted GM has over 40 vacuum carburizing cells in their North American plants, Ford has a mammoth VC installation at their Sharonville, Ohio, Transmission plant and Chrysler’s transmission plants in Kokomo, Indiana are amongst the largest in-house heat treats under one roof in the world but by and large a large amount of the “Big Three’s” heat treating has been out sourced over the past 10 years. The heat treating was of course outsourced when their parts were outsourced, American Axle & Manufacturing, Magna, Linamar and Dana are all good examples of companies which has benefited from this outsourcing and correspondingly increased their heat treating capacity.

After considering a total of some 30 suggestions, the list of 10 below are those whom we would consider to have the largest in house heat treating capacity in North America.  (please note that while we give a brief indication of what type of heat treating each company does but this certainly does not mean that they are restricted to this type only). The first 9 are alphabetical with our suggestion for the largest in North America, heavy equipment manufacturer Caterpillar based in Deerfield, Illinois  in the final position.

American Axle & Manufacturing-atmosphere heat treating

Dana Incorporated-atmosphere, vacuum carburizing

John Deere-nitriding, atmosphere heat treating

Linamar-vacuum carburizing, induction, atmosphere

Pratt & Whitney-vacuum heat treating

Precision Cast Products Corp. (PCC)-vacuum heat treating, atmosphere

The Timken Company-atmosphere, induction

Schaeffler Group-vacuum, austempering, atmosphere

ZF Company-atmosphere, vacuum carburizing, austempering

Caterpillar– the worldwide manufacturer of heavy equipment is in our opinion the largest captive heat treater in North America with most types of heat treating processes being available in house.