You are the owner of this article.
You have permission to edit this article.
top story

SC tire manufacturer didn't pay contractor because of 'cash flow' problems

  • Updated
Giti Tire (web only) (copy)

Giti Tires was sued last week for not paying a contractor that supplied temp workers at its new factory in Chester County. Gov. Henry McMaster toured the manufacturing site when it opened in 2017. Provided

A Singapore-based tire manufacturer is being sued for failing to pay more than half a million dollars to a contractor that supplied temp workers at a plant in South Carolina.

A federal lawsuit filed last week alleges Giti Tire began missing payments for its contract employees as early as January 2018 — three months after it opened a 1.8 million-square-foot factory in Chester County.

And by August 2018, Giti allegedly owed more than $2 million to Reliable Management Solutions, the contractor that supplied forklift drivers and other contract workers at the site. 

Giti has since paid down that debt to $520,000, according to the lawsuit. But the complaint raises other questions about the plant's initial profitability.

During a meeting in 2018, an executive for Giti allegedly explained why the international tire manufacturer missed the monthly payments to Reliable Management Solutions. The contractor, meanwhile, continued to pay for the temp workers who made between $16 to $19 per hour.

Tim Fulton, Giti's chief operating officer at the plant, said the company was having a "cash flow problem," according to the lawsuit. 

Fulton, who has retired from Giti, forwarded questions about the lawsuit onto company officials. 

Greg Younghans, the president for Reliable Management Solutions, did not respond to a phone call seeking comment.

We're starting a weekly newsletter about the business stories that are shaping Charleston and South Carolina. Get ahead with us - it's free.

The lawsuit does not provide any evidence Giti is struggling financially in South Carolina. The complaint, however, opens a window into the startup and operations at one of the state's newest tire manufacturers. 

The plant was cheered by former Gov. Nikki Haley when the company chose South Carolina in 2014 as the site for its first factory in the United States. 

The South Carolina Department of Commerce provided a $39.9 million grant to Chester County to help pay for building the manufacturing site. The plant officially opened in October 2017.

And last year, the state's Coordinating Council for Economic Development — a panel of state officials led by Commerce Secretary Bobby Hitt — signed a new deal making Giti eligible for valuable tax credits. 

Those credits allow Giti to keep part of the withholding taxes the company's employees pay each month. In return, the company has to promise to create a set number of jobs and invest a specific amount of money in the plant. 

Alex Clark, a spokeswoman for the Department of Commerce, said Giti promised to spend $560 million and employ 1,700 people by 2024. Temp workers don't count towards that number, because they are  employed by the contractor. 

Giti's website says the company expected as many as 5 million tires to be manufactured in South Carolina as of last year. But it's not clear if the company hit that target.

South Carolina's tire industry — which also includes manufacturers Michelin, Bridgestone, Continental and Trelleborg — employs about 12,500 people and accounts for roughly one out of every four tires exported from the Port of Charleston.

Reach Andrew Brown at 843-708-1830 or follow him on Twitter @andy_ed_brown.

Get up-to-the-minute news sent straight to your device.


Breaking News

Columbia Breaking News

Greenville Breaking News

Myrtle Beach Breaking News

Aiken Breaking News