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FreightCar America received $10M PPP loan before closing plant last September

Published: Jul. 2, 2021 at 8:08 AM CDT
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BARTON, Ala. (WAFF) - In September 2020, FreightCar America announced the closure of its plant in Barton. This week, our news partners at the Times Daily confirmed FreightCar America received a $10 million Paycheck Protection Program Loan during the pandemic before the business left town.

The $10 million amount was the maximum available under the pandemic relief program designed to keep industries’ doors open and keep workers employed, according to a report from ProPublica. The timing of the loan has lifted a few eyebrows, given how quickly the company closed down production and moved to Mexico in September 2020.

Kevin Jackson, President of the Shoals Economic Development Authority, said there is nothing local officials can do after hearing the news, but he hopes that federal authorities will go after the company to recover the money.

“We became aware of the PPP Loan when the news of this hit,” Jackson said. “I don’t think we were duped, but I hope the feds do go after them for repayment.”

News of the loan also raised eyebrows in Johnstown, Pennsylvania, where FreightCar American once was before moving its production facility to Colbert County.

State Rep. Frank Burns shared the story on his Facebook page Thursday.

“Every penny of that loan should be repaid immediately, then used to help companies that actually care about U.S. workers,” Burns said in his post.

U.S. Sen. Mo Brooks declined to comment when his office was contacted by the TimesDaily.

FreightCar America CEO Jim Meyer told ProPublica that he didn’t intend to shut down the plant upon receiving the PPP money. He said that the money allowed the firm to keep workers employed during 2020 when work orders had drastically dropped off.

The timing of the loan isn’t the only sticking point.

The PPP loans were intended for small businesses which had less than 500 employees.

Jackson said at one point FreightCar America employed up to 1,000 in the Colbert County plant before several rounds of layoffs.

He said there were approximately 500 employees at the plant in September when production moved to Castanos, Mexico.

Read the full story from our news partners at the Times Daily.

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