Ohio requires GM to refund tax credits, invest in Lordstown
The Ohio Tax Credit Authority is requiring General Motors Co. to invest $12 million in northeast Ohio where it closed a plant last year — and to refund $28 million in tax credits for not fulfilling its agreement to live up to the terms of those incentives.
GM closed its Lordstown, Ohio, assembly complex in March 2019, eliminating more than 4,000 jobs that the plant once had when it operated at three shifts to produce the now discontinued Chevrolet Cruze.
In 2008, the company had entered into Job Creation and Retention Tax Credit agreements which resulted in the issuance of $60.3 million in tax credits. Per those agreements, GM was supposed to retain 3,700 jobs through 2028. GM also received credits to create 200 new jobs at the Lordstown facility by 2010. The company exceeded its commitment by creating more than 800 jobs at Lordstown, but it did not maintain operations at the facility through 2037 as required by the agreement.
“While the decision to close the Lordstown plant was terrible news for workers and their families in the Mahoning Valley, today’s announcement will bring relief as well as investment by GM who has committed to investing $12 million in the local community for workforce, education and infrastructure needs,” Gov. Mike DeWine said in a statement.
GM is investing $2.3 billion with LG Chem to build a battery-cell manufacturing plant in Lordstown near its former plant. The battery-cell plant is expected to be complete by late 2021.
"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," spokesman Dan Flores said in a statement.
On the same day of the state's announcement, GM said it will invest $71 million into two Ohio manufacturing facilities: $39 million at its Toledo transmission plant and $32 million at its Defiance casting plant. The investments will retain 240 jobs, the automaker said.
The Toledo plant will be upgraded for production of GM’s eight-speed rear-wheel drive transmission. The Defiance plant will be prepared for future engine casting components work.
After closing the Lordstown plant, GM sold the complex to Lordstown Motors, an electric-vehicle startup that wants to deliver the first electric truck next year. Lordstown Motors recently said it has 40,000 orders for its Endurance pickup. Production of the truck will start in 2021, a delay from the 2020 timeframe the company originally expected prior to the COVID-19 pandemic.
The 6.2 million-square-foot facility once pumped out more than 400,000 Cruzes in a year, but Lordstown Motors CEO Steve Burns told The Detroit News in March he's shooting first for 20,000 units in 2021. He expects to be at 200,000 annually in under four years. During an event Monday on the South Lawn at the White House, Burns told President Donald Trump "we’ll make north of 100,000 once we get going."