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Result: SRC entered the Great Recession with a strong balance sheet and plenty of cash to buy out any departing employees. Two joint ventures with John Deere, for instance, were sold to Deere just prior to the last financial crisis. Of that latter group, several are still around-Newstream Enterprises, for example, which is a $100 million entrant in the packaging, kitting, and distribution business. Some failed some are still struggling but many have been wildly successful. SRC has developed or acquired more than 60 businesses over the years.
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Build a company and sell it, and you pocket a ton of money. As Stack and other company leaders tell it, the system rests on three fundamental insights.Ī business is more valuable than a product. Build a product and sell it, and you pocket a modest amount of money. The more successful the company, the greater this repurchase liability and the bigger the drain on the company’s cash.īut SRC seems to have overcome all these challenges at once, simultaneously developing a strategy for long-term survival and solving the repurchase conundrum. An ESOP company, of course, faces one additional difficulty, and it’s a big one: the need to buy the shares of retiring employees. It must survive the inevitable recessions. It must continue to attract and retain talented employees. It must adapt to changing markets and technologies. But given the company’s track record so far, would you really want to bet against it?Īny business that wants to survive and prosper over a century or more faces countless challenges. With 65 years still to go, that’s quite an ambition, and most of us won’t be around in 2083 to see whether SRC makes it. “We want to build a 100-year-old company,” he says. Its stock value has grown from 10 cents to a split-adjusted value of $612.īut Stack and his colleagues aren’t finished. Earnings are the best they’ve been in a long period of time.” SRC, which in 1983 was a struggling castoff of International Harvester with 116 employees and sales of $16 million, now employs 1,400 people, includes 12 business units, and generates more than $600 million a year in revenue. That money goes right back into the community.”Īnd SRC itself? “The company is worth $135 million. We have distributed close to $100 million to people who cashed out their stock. “We have created about 4,000 jobs over the years. The iconic CEO of an iconic employee-owned enterprise- SRC Holdings, formerly Springfield Remanufacturing Corp., always known to customers and fans as just SRC-is ticking off his company’s accomplishments.