Gordon Benhard, President and CEO,Elpac Electronics Inc., Irvine, Calif.

Most of the eight or nine people in our engineering department at this [headquarters] location got raises last year, some as high as 10 percent. It feels to me like there's a vigorous demand for engineers in our product area — power engineering — and I find that a lot of young people just don't go into that. It's more exciting to go into digital design; that's the perception. It's hard to find good power engineers.

I'm satisfied that we're doing an adequate job here [in the United States] with education in a technology sense, but I don't think we provide the same incentives as the countries we compete against. I think we're falling behind in our production of engineering graduates. We graduate 60,000 or 70,000 engineers a year. China is three or four times ahead of that.

Twenty-five years ago, if you went in to an engineers' meeting to discuss products, 80 to 90 percent of them were Americans. Now 60 or 70 percent are foreign-born. There's nothing wrong with that, but somehow we're not making engineering as exciting or rewarding as other countries.

Our main manufacturing factory is in China. It's 56,000 square feet. We have about 120 Chinese nationals and one American, who happens to be fluent [in the dialect]. We've testified locally about penalizing companies that had the "audacity" to do that [move manufacturing offshore]. [But stopping the trend] is like stopping gravity. You can't do it.

We happen to be in a very competitive product area: power supplies. We determined in 2000 that we would define our own facility in China. It's proved enormously beneficial to us and our customers. We can manufacture cost-competitively with just about anyone internationally. I shudder to think what we'd do without that. From our point of view, it would be very difficult to be effective internationally.