State must hold GM accountable
Ohio’s Tax Credit Authority is expected this month to assess whether General Motors should repay the state $60.3 million in tax incentives for its former assembly plant in Lordstown.
The authority should rule that GM must pay back the full amount it received in tax credits because it closed its former plant in Lordstown.
The Ohio Development Services Agency has informed GM it will recommend to the tax credit authority it terminate the tax incentive agreement with GM and seek a full refund of the tax credits because the company broke the agreement when it shuttered the Lordstown plant.
GM, however, contends it should be spared from repaying the state, arguing that doing so “would be inconsistent with the spirit of economic development and our significant manufacturing presence” in the state and the Mahoning Valley.
GM received $14.2 million in job creation tax credits and $46.1 million in job retention tax credits to be used to improve the Lordstown plant to support the production of a second-generation Chevrolet Cruze.
In January 2009, GM received a 75 percent, 15-year job retention tax credit for committing to retain 3,700 full-time workers in Lordstown and a 75 percent, 15-year job creation tax credit in exchange for committing to create 200 new full-time jobs and retain the existing 3,700.
Instead, the company closed the plant in March 2019 and sold it to Lordstown Motors Corp. to use to manufacture its all-electric full-size pickup truck for fleets.
GM now points to its large presence in Ohio, which includes several plants, nearly 4,000 hourly and salaried workers and investments of more than $3.3 billion since 2009. In addition, GM has joined with South Korea’s LG Chem to build a $2.3 billion electric vehicle battery-cell plant in Lordstown that when fully operational will employ upward of 1,100 people.
We have been disappointed in the weak response from Gov. Mike DeWine on this issue. In June DeWine said the state was “not actively pursuing the clawback” but instead would engage in discussions about what GM can instead do that would be helpful.
We were pleased, however, to see that Attorney General Dave Yost responded with calls for a payback from the Detroit-based automaker. Yost last month filed a legal brief with the tax credit authority demanding that GM repay “every last penny” of the tax credits. He noted the cost to GM would be 1 percent of its savings from closing the plant.
Yost called that a “small charge” from the auto giant that “could never be construed as punitive,” according to the brief.
DeWine must be more aggressive on this matter.
And we urge the Ohio Tax Credit Authority when it meets this month to hold General Motors accountable to pay back the $60 million in tax incentives.