SRC Responds to Bush Auto Bailout

The auto industry gets a big boost by the federal government.

Friday President Bush announced a rescue plan to make $13.4 billion in federal loans available immediately to General Motors and Chrysler.

This may sound like good news, but one Springfield company remains skeptical.

We first told you about Springfield Remanufacturing Company - or SRC - about a month ago.

A portion of the company remanufactures engines for General Motors.

SRC CEO Jack Stack says he listened to President Bush this morning, and thinks this is a patch, not solving any of his current problems.

"By giving the auto companies a chance to restructure we will shield the American people from a harsh economic blow.  A vulnerable time," says Bush.

A number of those people Bush is talking about are in Springfield, working at places like the Springfield Remanufacturing Company, but Stack isn't feeling saved by this rescue plan.

"What I couldn't figure out is how are they going to move the finished cars if people are afraid they wont be able to get warranties and parts," says Stack.

Last month, SRC moved many of its employees to short weeks, but now things are getting worse.

To prevent layoffs,  Stack is initiating “Operation: Save Jobs,” outlined in an internal e-mail sent out Friday.

“We've went out and asked for voluntary furloughs,” he says.  “We've asked people if they want to take a 13 week leave and we pay them $3,500 to $5,000 dollars to get them through a 13 week period.

54 people took the voluntary leave. The rest of the nearly 150 automotive workers are getting transferred to other departments in the company.

Stack says the SRC automotive department lost $250,000 in December and expects to lose the same in January.

If after the 13 weeks the demand for product doesn't  improve, layoffs are a painful option, and still his last resort.

"You have to figure out how to project hope," says Stack.

General Motors the company that SRC makes supplies for commented this morning that because of this rescue plan the future looks bright, it says a plan will be put together at this point which doesn't include bankruptcy.

Of course the waiting game continues for all of the manufacturing companies similar to SRC.