SRC Heavy Duty expands on Navistar contract

President Donald Trump has promised to expand manufacturing jobs in the United States, but it’s already happening in Springfield without help from Washington.

In March, one of Springfield’s largest manufacturers, Springfield ReManufacturing Corp., announced it signed a new contract with Chicago-area commercial truck manufacturer Navistar Inc. to remanufacture diesel engines at SRC’s Heavy Duty division in northwest Springfield, 650 N. Broadview Place. The contract is expected to bring in $90 million to $100 million over the next five years and has spurred hiring for 40 new full-time positions at SRC.

According to SRC Holdings Corp. CEO Jack Stack, this is just the beginning.

“We’re growing as the market expands,” he said. “In fact, we think they’ll be another 40 jobs over the next two or three years.”

Stack said the market for remanufactured diesel engines has grown because of the savings it can provide trucking companies.

“It’s more expensive to replace a blown engine than remanufacture it,” he said.

The new work at SRC arrives as area manufacturing companies indicate a greater need for hiring.

“Across the city of Springfield and the seven-county region, manufacturing is growing,” said Megan Short, communication coordinator for the city’s Department of Workforce Development. “Contracts like these help fight high poverty and unemployment in our area.”

According to the city’s 2017 State of the Workforce survey, 68 percent of the 55 manufacturer respondents plan to increase their workforce either significantly or slightly over the next 12 months. Within three to five years, 66 percent say they expect to continue adding employees.

The survey also identified manufacturers’ troubles in hiring skilled workers; 90 percent indicated difficulty within the past 12 months. The reason: A lack of relevant work experience and technical skills for the job. Among the most desirable job candidates for manufacturers are those with a four-year university degree or those who have graduated from a vocational or technical school, according to the survey.

At the nearly 270-employee SRC Heavy Duty plant, manager Chad Myers said the remanufacturer is about halfway through hiring the 40 new employees. He expects to be fully staffed by June or July. The average wage for the new positions is $12-$15 per hour, plus benefits. With work spread between two shifts – 7 a.m.-3 p.m. and 3-11 p.m. – the company is remanufacturing 12-13 diesel engines per day for customers, such as Bobcat and Sullair. Stack said the Navistar contract increases the volume to about 25 units per day and the goal is to reach 40 daily units. At that point, SRC would need to expand from its 160,000-square-foot plant.

Stack said SRC officials are considering building another plant or leasing additional space.

“We will have to expand – if not in Springfield, somewhere else,” he said. “We prefer to stay in Springfield. Most of our factories are in Springfield, and we’ve created great synergies with the community.”

The remanufactured engines SRC produces are installed in midrange diesel trucks throughout the United States and Canada. Myers said Heavy Duty was prepared for the increased volume of business due to prior planning aimed at acquiring new customers.

“We put a strategy in place to create a sustainable, competitive advantage,” Myers said. “We wanted to be a competitive supplier and partner with our customers and we wanted to be as good as anybody else out there.”

Officials with Navistar, which has worked with various SRC divisions since 1980, could not be reached for comment.

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