Ohio is ordering General Motors to pay back $28 million in tax credits after it failed to satisfy the terms of the 30-year agreement by shutting its Lordstown plant after 10 years.
GM has also been ordered to make an investment of $12 million for community development in the state, which has long struggled to regain its former manufacturing status.
In 2008, with gas prices increasing, GM got more than $60 million in tax credits for agreeing to keep 3,700 workers at the plant through 2028 under the Job Retention Tax Credit program and for agreeing to generate 200 new jobs under the Job Creation Tax Credit program if it maintained operations through 2037 to develop the fuel-efficient Chevrolet Cruze.
“The company did not maintain its commitment to retain the jobs,” said the Ohio Development Services Agency.
If Ohio had ordered the repayment of all of the $60.3 million in tax credits, it would have been among the largest tax credit clawbacks in U.S. history.
US President Donald Trump visited the region in 2016 and informed rallygoers, “Don’t move, don’t sell your house,” because the jobs that had left Ohio were “all coming back” if he was re-elected in 2020.
But in 2018, the company declared amid falling sales that it would stop production of the Cruze at the Lordstown plant and shut down operations, together with those of four other North American plants.
Construction of a GM joint-venture battery cell plant started this year on the site of the former facility with the promise of creating 1,100 new jobs. And a new company called Lordstown Motors, working with a financing deal with GM, started the production of electric pickup truck called Endurance, also on the former grounds.
Ohio Governor Mike DeWine said that GM had a long history as an employer in the state and that the decision to shut down the plant was “terrible news for workers and their families in the Mahoning Valley”.
Nonetheless, DeWine said the retention of an electric battery plant was “good news for the future of the automotive industry”.
State Attorney General Dave Yost praised the news, saying it was nice to hear that the automaker is going to 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,” Yost said.
