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GM To Repay $28 Mln Tax Credits To Ohio After Closing Lordstown Plant

gm sept29 lt

The state of Ohio ordered General Motors to repay $28 million in tax credits after closing the Lordstown plant, which was in agreement to be operated until 2040.

The Ohio Tax Credit Authority said the closure violated the terms of two economic development agreements signed by the company. It was ordered to pay back around half of more than $60 million tax benefits it received, and also to provide an additional $12 million in community support programs in the Mahoning Valley, where the plant was located.

The funds will be used for education and job training at Youngstown State University and other colleges, community programs and infrastructure projects.

The automaker last year closed the plant, which produced the compact Chevrolet Cruze, citing collapsing market for small cars, and failed to retain 3,700 jobs as per agreement.

GM sold the plant to start-up Lordstown Motors, which plans to build EV pickup trucks starting in 2021. Lordstown Motors is being acquired by DiamondPeak Holding Corp. GM is investing $75 million in the company, which includes the sale of the former Lordstown Assembly plant and production equipment.

Meanwhile, in Lordstown, GM has already started construction of a $2.3 billion battery cell plant in a joint venture with LG Chem through the Ultium Cells LLC JV. The JV has received a 1.95%, 15-year Job Creation Tax Credit from the state, and is expected to create 1,100 new jobs.

In separate development, GM announced it is investing $71 million in two other Ohio manufacturing facilities in Toledo and Defiance. These investments will enable GM to retain 240 good-paying U.S. manufacturing jobs.

The company said it continues to strengthen its significant manufacturing presence in Ohio with these investments. Since 2009, GM has invested more than $3.3 billion in Ohio, and currently has more than 3,800 employees in the state.

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