GM will repay $28 million to Ohio in tax incentives after closing plant
General Motors Co will repay $28 million in state tax incentives to Ohio after the largest U.S. automaker came under heavy criticism for closing its Lordstown Assembly plant in March 2019. GM`s agreement with the Ohio Tax Credit Authority also requires the Detroit automaker to pay $12 million for "community support programs" in the Mahoning Valley
General Motors Co will repay $28 million in state tax incentives to Ohio after the largest U.S. automaker came under heavy criticism for closing its Lordstown Assembly plant in March 2019. GM`s agreement with the Ohio Tax Credit Authority also requires the Detroit automaker to pay $12 million for "community support programs" in the Mahoning Valley.
Ohio Attorney General Dave Yost had demanded that GM repay $60 million in state tax credits after it closed its Lordstown Assembly plant in March 2019 and failed to retain 3,700 jobs in exchange for the credits.
GM said in a statement the authority had recognized "GM’s substantial manufacturing presence across the state of Ohio."
GM and LG Chem <051910.KS> through the Ultium Cells LLC joint venture, are building a $2.3 billion battery cell manufacturing plant in Lordstown. The state said it awarded a 1.95%, 15-year Job Creation Tax Credit to the joint venture, which is expected to create 1,000 full-time positions, generating $45 million in new annual payroll.
GM also said it planned to announce new investments in Toledo and Defiance later on Monday.
GM announced its planned closure of the plant in Northeast Ohio in November 2018, drawing condemnation from U.S. President Donald Trump and many U.S. lawmakers.
GM sold the plant last year to start-up Lordstown Motors, which plans to hire 400 workers to build EV pickup trucks starting in 2021.
In August, GM agreed to invest $75 million in Lordstown Motors, which agreed to go public through a merger with DiamondPeak Holdings in a deal that valued Lordstown at $1.6 billion.
On Monday, Trump inspected a prototype Lordstown Motors pickup outside the White House. "It`s an incredible piece of science, technology. It`s going to happen now with more and more trucks,” Trump said.
The White House would not answer a question about the Ohio tax repayment issue.
Republican Senator Rob Portman said at the White House event the Lordstown Motors plant and the battery joint venture together would replace the 1,500 jobs lost in March 2019 when GM`s Lordstown plant closed ending the single remaining shift.
As recently as 2016, the GM plant employed 4,500 workers in three shifts.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.