RICHBURG, S.C. — A non-profit group and the United Steelworkers (USW) are blasting Giti Tire (USA) Ltd. over the acceptance of millions of dollars in federal COVID-19 relief, but the tire maker is pushing back while asserting the company fully qualified for the emergency cash.
A new report from Americans for Financial Reform Education Fund (AFREF) aims to prove Giti Tire is a prime example of misguided Paycheck Protection Program (PPP) funding.
Giti used words such as "outrageous, disappointing and misleading" in reacting to the allegations.
Central to the dust-up is nearly $8 million in federal PPP funding awarded to the company for the South Carolina site, which had to shutter for several weeks early in the pandemic last spring. Nearly $2 million more went to the company for operations in California, detractors said.
"As our country begins to emerge from this devastating pandemic, it is disappointing to see outside, third party organizations try to take advantage of the situation. The allegations against us are misleading and mischaracterize the situation," the company said in a statement.
Patrick Woodall, senior researcher and writer at AFREF, is author of the newly released report, "Where the Rubber Meets the Road — How a Global Tire Titan Got Millions in Pandemic Small Business Loans." He sees things much differently than Giti.
"We've been spending a lot of time thinking about the extent to which the COVID stimulus program has been benefiting larger firms and oftentimes at the expense of small businesses. And this is essentially true of the PPP program," Mr. Woodall said.
He paints a picture of small businesses, especially those owned by women and people of color, being squeezed out of PPP funding by large firms, especially early on when money went fast. By the time more PPP money came along, it was too late for some small businesses, Mr. Woodall said.
"Lots of Main Street businesses just have never had that kind of access to support."
The report claims the Giti plant, as part of a larger global tire company, should not have received PPP funding because it had the support of the larger corporation necessary to survive.
"We know that many, many independent small businesses that weren't affiliated with a global Singapore-based tire manufacturer with some 30,000 employees, they were not able to access the program," Mr. Woodall said. And that raises the question of "whether or not the small business credit was being provided equitably."
Giti asserted the company fairly received money from the PPP program, a move that allowed the company to bring workers back sooner than otherwise would have been possible.
"Giti Tire fully qualified for the PPP support, and those funds allowed us to bring back our employees starting in May 2020, much sooner than would have been possible without the PPP money," Giti said.
"As for our Giti Tire team, the sudden impact of the pandemic forced us to suspend operations and furlough employees in early April of 2020. Following the furlough, we applied for the PPP funds. Thankfully, we were able to use PPP money to begin bringing our team members back in May 2020, despite the uncertainty of market demand for tires due to widespread stay-at-home orders," the tire maker said.
"By the end of August 2020, all eligible furloughed employees were offered a job to return to work. Many of these employees rejoined us. Some employees voluntarily declined. Currently, we continue to recruit, hire and train qualified candidates for production and other positions," Giti said.
That's in direct conflict with allegations by the USW that "Giti still threw an estimated 100 workers out of their jobs."
The USW even created a separate website, www.greedygiti.com, to highlight the report issued by the AFREF.
"Giti's abuse of pandemic aid is appalling, though not surprising," USW District 9 Director Daniel Flippo said in a statement. "This company betrayed the public trust long before COVID-19."
"Giti accepted $60 million in tax breaks to build a plant and then broke its promise to create 1,700 jobs for the community. Giti never came close to that number, and when the pandemic hit, Giti permanently laid off many of the workers it did have despite taking the PPP funds," he alleged.
Tying the issue of PPP funding to the incentives to build the plant is a red herring, the company said.
"Economic development incentives do not have anything to do with the PPP money. Such incentives are given to qualifying companies when they choose to locate in a state and/or county. These are two separate topics," the company said.
The stakes in the PPP bout go far beyond the $8 million in funding received by Giti in South Carolina through the pandemic-related program.
Giti has invested $560 million in the tire plant with a promise to create new jobs in exchange for a package of financial incentives to locate in Richburg.
Giti, while pushing back against the criticism, indicated the company continues to work toward creating the necessary jobs.
"We are disappointed to see outside, third-party organizations make inaccurate allegations during this time of national crisis, but the facts support our operations," the company said. "Our $560 million investment has generated more than 500 jobs and with a goal to fulfill the job creation requirement by 2024."
The 1.7-million-sq.-ft. plant has been an economic shot in the arm to South Carolina, generating 5,000 direct and indirect jobs translating into a $1.2 billion impact in the region, the company said.
"With all of this positive impact and potential, it's even more important we stay focused on recovering from the pandemic and supporting our employees, producing high-quality tires and investing in our local communities," the company said.
The Giti passenger and light truck tire plant in Richburg started production in late 2017. Together with the adjacent Giti Tire R&D Center, the factory produces Giti- and GT Radial-branded tires for OE and replacement customers throughout North America.