GM will have to pay back millions in tax credits after closing Lordstown plant

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The Ohio Tax Credit Authority approved a plan for General Motors to repay some of the original tax credits, then provide several millions more in community support

COLUMBUS, Ohio (WKBN) – The state of Ohio determined General Motors will have to pay back millions in tax credits after closing the Lordstown plant.

It started about 12 years ago when General Motors was granted millions in tax breaks to continue building cars in the Valley. Now, the automaker has to pay at least some of that back.

The Ohio Tax Credit Authority approved a forbearance plan to repay $28 million of the original tax credits.

Of the $60 million GM received in incentives, $28 million must now be paid back to the state. Another $12 million is being earmarked for what’s being called “community support,” including education and training programs and infrastructure to help with economic development. That money has to be invested by December 2022.

“We wanted to see and make sure that a good portion of that money that we are clawing back came to the Valley,” said Sen. Sean Obrien, D-62nd District.

Although most of GM’s employees from the complex were offered jobs at other facilities, local schools and governments lost millions in tax revenue.

Members of the Tax Authority admit the automaker is building another facility in the valley and has invested in the new Lordstown Motors but still wanted to hold GM accountable if it fails again.

The state will come up with a repayment schedule. Members said if GM’s plans locally fall into place, that’s good but if they fail, the tax credit authority will still be able to go after the rest of the original $60 million amount.

“I think it is a show of good faith, and I think it’s something we can really build on,” said Rep. Gil Blair, D-District 63.

GM was given the tax credits in 2009 as part of an agreement to keep the plant open for 30 years, but closed it 10 years later.

“Today’s action protects taxpayer dollars, while also allowing for continued investment in the local community,” said Lydia Mihalik, director of development and chair of the Ohio Tax Credit Authority.

Ohio Attorney General Dave Yost was happy to hear the decision.

“It’s good news to hear that GM will repay the financial incentives it was offered. Thanks to Governor DeWine and his team for staying on top of this business relationship and holding them accountable. I look forward to seeing the details and watching further business relations flourish in the state.”

GM also has other state incentives for facilities in Toledo and Defiance but is currently in compliance with those agreements.

The Ohio Tax Credit Authority also approved a 1.950%, 15-year job creation tax credit for Ultium Cells, LLC, which is building a plant off of Route 45 in Lordstown. The tax credit will go into effect in 2023.

The battery plant is expected to create 1,000 full-time jobs, generating $45 million in new annual payroll.

Ultium Cells is a joint venture between GM and LG Chem. The facility will manufacture lithium-ion batteries.

GM released the following statement to FOX 8 in Cleveland after the announcement:

“We appreciate the Ohio Tax Credit Authority recognizing GM’s substantial manufacturing presence across the State of Ohio, including our significant investments in the Mahoning Valley, when making a decision on the Lordstown tax credit issue and the Ultium Cells LLC job creation incentives application.

GM has invested more than $3.3 billion in Ohio since 2009. Separately, GM and LG Chem, via the Ultium Cells LLC joint venture, are building a more than $2.2 billion, state-of-the-art, battery cell manufacturing plant in Lordstown that will create more than 1,100 new jobs. Construction of the facility is well underway. The new battery cell manufacturing plant will play a critical role in GM’s commitment to an all-electric future.

We look forward to continuing to build our business relationship with the State of Ohio on issues that are important to the State of Ohio, GM and our operations.”

Youngstown State President Jim Tressel released the following statement:

“The announcement by the State of Ohio and General Motors is a significant step forward for the Mahoning Valley. In addition to the forbearance agreement, which includes a $12 million community investment to the Mahoning Valley, we welcome the State of Ohio’s support for Ultium Cells, LLC. The joint venture between GM and LG Chem is a $2.2 billion investment that has a tremendous ripple effect for our region.

Ohio’s workforce has a once-in-a-generation opportunity to power the future of advanced automotive manufacturing right here in the Mahoning Valley. At Youngstown State University, we want to be a part of the research, the workforce training and the development of 3D additive and subtractive manufacturing — anywhere we can contribute. We are already turning our attention to becoming part of the future by preparing our students and local workforce for the thousands of direct and indirect jobs this investment will bring.

The agreement seems to represent successful collaboration with the state, and also demonstrate General Motor’s ongoing commitment to invest and grow its presence in Ohio.”

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