As automotive OEMs and their suppliers take a back seat, assemblers of high-tech products enjoy rapid growth.

It's amazing what a hit product can do. Just ask Apple Computer Inc. (Cupertino, CA). At the end of the 2002 fiscal year, Apple placed 70th on our list of the Top 50 manufacturers as ranked by gross revenue, some $3.5 billion behind the company at No. 50, Rolls-Royce plc (London).

Yet, just 4 years after Apple introduced the iPod digital music player in October 2001, the company debuts in our Top 50 at No. 41, up 18 spots from No. 63 in 2004. Apple's gross revenue increased 68 percent, from $8.3 billion in 2004 to $13.9 billion in 2005. That's the second straight year of double-digit revenue growth for Apple, and it's the largest revenue increase for any company since we began compiling our list in 2003.

In addition, Apple's net income quadrupled, from $276 million in 2004 to $1.1 billion in 2005. When manufacturers are sorted by income as a percentage of revenue-an indicator of profitability-Apple ranks 27th. In 2003 and 2004, the company wasn't even in the top 100.

The driving force behind that remarkable growth is the iPod. From 2002 to 2005, the company sold 28 million iPods. In 2003, the iPod accounted for just 5 percent of the company's gross revenue. In 2005, the device represented one-third of the company's total sales, and that does not include the extra revenue that the company earned from selling iPod peripherals and digital media.

Apple isn't resting on its laurels, either. It's devoting significant resources to finding the next hit product. R&D spending at the company has increased for the past 3 years, growing from $471 million in 2003 to $534 million in 2005.

And Rolls-Royce? Like a Silver Ghost, the manufacturer of jet engines, ship engines and gas turbines faded out of our Top 50, dropping from No. 50 in 2004 to No. 51 in 2005.

To determine the impact of product assembly on the U.S. economy, ASSEMBLY magazine ranked the top 50 publicly owned manufacturing companies by gross revenue. To qualify for our list, a company must derive a significant portion of its gross revenue from products that it assembles or that it designs and has assembled by another company. More importantly, a substantial amount of the design and assembly of their products, whether in-house or outsourced, must occur in the United States.

Though you can find both tragedies and triumphs in our Assembly Top 50, there's little doubt that these 50 companies have a significant impact on the global economy. All totaled, the Assembly Top 50 racked up $2.29 trillion in gross revenue in 2005, an increase of 3 percent over 2004. By our estimates, at least 80 percent of that revenue is directly attributable to assembled products.

Eight of the Assembly Top 50 marked their third straight year of double-digit revenue growth in 2005, and seven others enjoyed back-to-back years of double-digit sales increases. Even so, our rankings suggest that the manufacturing world is not entirely as sunny as it is in Cupertino. Yes, 15 of the Assembly Top 50 recorded double-digit revenue growth in 2005. But, 33 companies in our Top 50 did so in 2004, and 26 companies managed that feat in 2003. Moreover, 16 companies in the Top 50 reported less gross revenue in 2005 than in 2004. In comparison, none of the Top 50 posted less revenue in 2004 than they did in 2003, and only eight companies posted less revenue in 2003 than in 2002.

To be fair, the decrease in revenue for nine of the 16 can be attributed to a decline in the value of the dollar against the Japanese yen, British pound and European euro during 2005. When those companies tally their balance sheets in their home currencies, all nine show revenue gains in 2005, and two companies-No. 10 Nissan Motor Co. Ltd. (Tokyo) and No. 42 Schneider Electric (Rueil-Malmaison, France)-actually have double-digit revenue growth.

Unfortunately, the seven remaining companies with lower revenues in 2005 can't blame their troubles on currency fluctuations. Topping that list is the company that leads the Assembly Top 50, General Motors Corp. (Detroit).

GM's revenue was essentially stagnant last year, decreasing 0.5 percent from $193.5 billion in 2004 to $192.6 billion in 2005. In addition, the automaker was one of only seven companies in our Top 50 to post a net loss for the year. GM's net loss of $10.6 billion is the biggest loss for any company in our rankings since Lucent Technologies Inc. (Murray Hill, NJ) posted a loss of $11.7 billion in 2002. Lucent fell out of our Top 50 then, and has yet to return.

GM blamed the loss on global overcapacity, falling prices, rising healthcare costs, higher fuel prices, intense competition and the expense of benefits for tens of thousands of its retirees. Due in part to declines in sales of sport utility vehicles and midsize cars, GM's market share in the United States dropped from 27.2 percent in 2004 to 25.9 percent in 2005. As a result, the company announced plans to cease production at 12 U.S. plants by 2008 and reduce its manufacturing workforce by 30,000 people.

On the plus side, the Chevrolet HHR has become one of the best-selling vehicles in the United States. Significantly for GM, the HHR is attracting younger customers and selling well in markets where GM cars have typically underperformed, such as the West Coast and Texas. In 2005, Chevrolet regained the title as best-selling brand in the United States for the first time since 1986.

Outside of North America, 2005 was a relatively good year for GM. Worldwide, the company sold 9.2 million vehicles last year. That's a 2 percent increase from 2004, and it represents 14.2 percent of the worldwide vehicle market. For the first time, more than half of GM's worldwide sales came from outside the United States. In China, the world's fastest growing vehicle market, GM and its joint-venture partner are the No. 1 car manufacturer.

GM isn't alone in its troubles, however. Of the seven companies that recorded net losses in 2005, five are in the automotive industry. One of those companies, No. 34 Visteon Corp. (Van Buren Township, MI), has posted a net loss for the past 4 years, while another, No. 24 Delphi Corp. (Troy, MI), has posted a net loss for 3 straight years.

Outside of the automotive industry, there's plenty to be bullish about in the Assembly Top 50. Here's some of what's going on at other companies on our list.

No. 11, Dell Inc., Round Rock, TX

Apple isn't the only successful computer manufacturer on our list. Dell inches up two notches, to No. 11, on our list. For the fiscal year ending Feb. 3, 2006, Dell posted a 14 percent increase in gross revenue and a 17 percent increase in net income. Remarkably, it's the fourth consecutive year that the company has recorded double-digit increases in both revenue and income.

Those figures are even more impressive considering that 91 percent of the company's revenue came from assembled products last year. In contrast, No. 6 IBM Corp. (Armonk, NY) derived just 27 percent of its income from assemblies in 2005, while No. 8 Hewlett-Packard Co. (Palo Alto, CA) obtained 80 percent of its revenue from assemblies.

In the past year, Dell opened or announced new facilities in Germany, Scotland, Ireland, India, El Salvador, Canada, Japan, China, the Philippines and the United States. These facilities include the company's largest to date: a state-of-the-art, $100 million assembly plant in Winston-Salem, NC. In China, where Dell's products are available in more than 2,000 cities, shipments increased 37 percent, and the company doubled its manufacturing capacity in Xiamen.

Shipments of Dell's PowerEdge servers increased 24 percent worldwide, while shipments of notebook computers increased 43 percent. Dell built one out of every three computer systems sold in the United States last year, and the company has become the No. 2 supplier of laser printers just 3 years after it began offering the product.

No. 15, United Technologies Corp., Hartford, CT

United Technologies Corp. (UTC) moves up two spots on our Assembly Top 50, earning $3.07 billion on sales of $42.7 billion in 2005. The manufacturer of elevators, air conditioners, aircraft engines, helicopters, fuel cells, refrigeration systems and security systems increased gross revenue by 10 percent in 2003, 21 percent in 2004 and 14 percent in 2005. Over those same 3 years, net income increased by 6 percent, 20 percent and 15 percent, respectively.

Productivity has been a key factor in that success. At the company's Carrier and Otis divisions, unit output increased 300 percent, even though the workforce at each division increased by only 8 percent and 23 percent, respectively. Sikorsky transformed a warehouse into an assembly plant for the S-76 and S-92 helicopters. The transformation enabled Sikorsky to produce more helicopters in less space. Re-engineering efforts at Pratt & Whitney Canada decreased assembly and test time for the PW600 jet engine from 8 days to 8 hours. At Hamilton Sundstrand, the manufacturing footprint for the Boeing 787 auxiliary power unit was cut in half.

UTC has also boosted the bottom line by paring energy costs. Since 1997, the company has reduced its energy consumption, as measured in kilowatts and BTUs, by 18 percent.

The company invests in its employees as much as its manufacturing facilities. UTC's Employee Scholar Program provides time away from work and pays all tuition and costs for employees who want to attend college. Common stock in the company is awarded to employees when they attain their degrees. Since the program's inception in 1996, UTC employees have earned 18,500 college and university degrees, and more than 4 million shares in the company, valued at $240 million, have been awarded.

No. 26, Cisco Systems Inc., San Jose, CA

When the companies in our Top 50 are sorted by income as a percentage of gross revenue, Cisco Systems comes out on top. Gross revenue grew from $22 billion in 2004 to $24.8 billion in 2005, an increase of 13 percent. That's the 8th largest increase of any company in our Top 50. Net income rose by 30 percent, from $4.4 billion in 2004 to $5.7 billion in 2005.

The key to long-term success in any high-tech industry is ongoing strategic investment and innovation, and the manufacturer of routing, networking and switching products has followed those principles. In 2005, Cisco invested more than $3.3 billion in research and development. This resulted in more than 50 product introductions and gained the company the No. 1 market share position in most of its product categories.

Cisco's six advanced technologies-enterprise IP communications, home networking, optical networking, security, storage area networking and wireless technology-showed the highest growth of any of the company's product groups. Revenue from advanced technologies increased 32 percent, year over year, to $4.4 billion.

A key competitive advantage for Cisco is how the company uses its own technology to drive productivity. As a result, annualized revenue per employee increased from approximately $450,000 in 2001 to $700,000 in 2005. This is significant, given that the company also increased headcount in 2005 by 12 percent, primarily in sales and R&D.

No. 28, Abbott Laboratories, Abbott Park, IL

One could argue that Abbott Laboratories doesn't belong in the Assembly Top 50. After all, assembled products account for only 18 percent of the pharmaceutical giant's gross revenue. Then again, 18 percent of $22.3 billion is over $4 billion, which is more revenue from assemblies than was earned by No. 84 Qualcomm Inc. (San Diego), No. 102 Gateway Inc. (Irvine, CA), No. 105 Lennox International Inc. (Richardson, TX) and at least 48 other manufacturers we looked at for this project.

In fact, Abbott assembles a variety of medical devices, including blood glucose monitoring equipment, drug-eluting stents, clinical laboratory test equipment, point-of-care blood analyzers, artery-closure instruments and spinal implants. The company introduced several new medical devices during the past year, including Xact, a stent for the carotid artery; Prism, an automated blood screening instrument; and StarClose, an instrument for closing blood vessels after catheterization.

Abbott ranks third in the market for blood glucose monitoring equipment. The company tallied more than $1 million in sales of the devices worldwide in 2005, an increase of nearly 35 percent from 2004. Moreover, two products in the late stages of development could soon help the company increase its market share and significantly improve care for patients with diabetes. Awaiting FDA approval is the FreeStyle Navigator, a new continuous glucose monitoring system. Designed to measure patient glucose levels as frequently as once per minute, 24 hours per day, the device features a sensor worn on the body that wirelessly transmits readings every minute to a pager-like device kept in a pocket or purse. Also in development is a fully integrated blood glucose monitor that combines both test strips and lancing capabilities in one device, enabling simple, point-and-click testing.

With nearly 70,000 customers in more than 100 countries, Abbott has the world's largest installed base of diagnostic instruments-more than 80,000. In 2005 alone, the company sold more than 1,600 of its Architect analyzers.

A common theme among the Top 50 is investment in R&D, and Abbott is no exception. The company poured $1.8 billion into R&D in 2005, an all-time high. Abbott has increased its investment in R&D by $100 million annually for the past 2 years.



  • Paccar Inc., Bellevue, WA. The truck manufacturer jumped 11 spots, from No. 51 in 2004 to No. 40 in 2005.
  • Apple Computer Inc., Cupertino, CA. The maker of Macintosh computers and iPod digital music players debuts in our Top 50 at No. 41, up 18 spots from No. 63 in 2004.


  • Solectron Corp., Milpitas, CA. Although Solectron posted a positive net income for the first time in 3 years, the contract manufacturer tumbled out of our Top 50, falling from No. 49 in 2004 to No. 56 in 2005.
  • Rolls-Royce, London. Though the company is assembling jet engines for the Airbus 380 and the U.S. Air Force's new Joint Strike Fighter, Rolls-Royce slips out of our Top 50 by a notch, falling from No. 50 in 2005 to No. 51 in 2005. The company's gross revenue decreased 1 percent, from $11.4 billion in 2004 to $11.3 billion in 2005.


  • L-3 Communications Holdings Inc., New York. Given the company's portfolio of high-tech surveillance, communications and networking equipment, it's no surprise that L-3 Communications has risen 24 spots in our rankings during the past 4 years. Posting 3 consecutive years of revenue growth over 25 percent, the defense contractor has climbed from No. 86 in 2002 to No. 62 in 2005. At that rate, the company could break into the Assembly Top 50 as soon as next year.
  • Jabil Circuit Inc., St. Petersburg, FL. Unlike Flextronics, Sanmina, Solectron and Celestica, which saw their gross revenues shrink in 2005, Jabil Circuit posted gains in both gross revenue (20 percent) and net income (39 percent). The company has risen from No. 91 in 2002 to No. 70 in 2005.


1:Rank of General Motors in the Top 50. GM has held that position for 4 years.

2: Rank of Toyota Motor Co. in the Top 50. In 2002, the automaker ranked 5th.

3: Rank of GM when companies in the Top 50 are ranked solely according to the revenue they derive from assembled products.

13.5: Billions of dollars Toyota needs in gross revenue to surpass General Motors and take over No. 1 in our Top 50.

1: Position of General Electric when companies in the Top 50 are ranked by net income. GE has held that position for 4 years.

23: Percentage of gross revenue retained as net income by Cisco Systems. That's the best ratio of any company in the Top 50.

15,800: Percentage increase in net income reported by defense contractor BAE Systems, the largest increase posted by any company in the Top 50 in 3 years.

22: Number of spots Apple Computer rises in our rankings, the largest jump in 3 years.

7: Number of spots automotive supplier Valeo drops in our rankings, the biggest fall of any company in 2005.

16: Number of companies that reported less gross revenue in 2005 than in 2004. In comparison, no companies posted less revenue in 2004 than in 2003 and eight companies posted less revenue in 2003 than in 2002.