Ohio orders GM to pay $28 million for closing Lordstown plant
Ohio is ordering General Motors to pay back $28 million in tax credits after it failed to meet the terms of the 30-year agreement by closing its Lordstown plant after 10 years.
GM has also been ordered to invest an additional $12 million for community development in the state, which has long struggled to regain its former manufacturing swagger.
In 2008, with gas prices soaring, GM received more than $60 million in tax credits for agreeing to keep 3,700 employees at the plant through 2028 under the Job Retention Tax Credit program and for agreeing to create 200 new jobs under the Job Creation Tax Credit program if it maintained operations through 2037 to develop the fuel-efficient Chevy Cruze.
"The company did not maintain its commitment to retain the jobs," the Ohio Development Services Agency said in a news release.
If Ohio had ordered the repayment of all of the $60.3 million in tax credits, it would have been one of the largest tax credit clawbacks in U.S. history.
Presidential candidate Donald Trump traveled to the region in 2016 and told rallygoers, "Don't move, don't sell your house," because the jobs that had left Ohio were "all coming back" if he was elected.
But in 2018, the company announced amid declining sales that it would cease production of the Cruze at the Lordstown plant and shut down operations, along with those of four other North American plants.
Construction of a GM joint-venture battery cell plant began 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, began producing an electric pickup truck called Endurance, also on the former grounds.
Trump travels to Cleveland on Tuesday to appear in the first presidential debate. He posed Monday with the Endurance on the South Lawn of the White House and misleadingly took credit for helping bring in the new factories.
"It's a lie. I'm dumbfounded that people would even believe anything [Trump] says at this point," Dave Green, the former head of the local autoworkers union, said by telephone.
"He came into our community and told everybody what they wanted to hear and didn't do a damn thing," Green said. "Now he's taking credit for something he was putting the squash on the whole time."
Sen. Sherrod Brown, D-Ohio, told reporters that he had brought in the new business and that Trump hadn't lifted "a finger."
"We begged Trump to help. He did nothing," Brown said in a call with reporters afterward, Cleveland.com reported. "While we welcome Lordstown Motors and the battery plant, it's nothing close to what it should be and nothing close to what it would have been if the president stepped up three and four years ago."
Brown said claims by other representatives that the new plants would effectively replace the jobs lost by the plant's closing don't take into account all the jobs lost in the local supply chain that previously served the factory.
Ohio Gov. Mike DeWine said that GM had a long history as an employer in the state and that the decision to close the plant was "terrible news for workers and their families in the Mahoning Valley."
But he 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 good "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," he said.
In a statement, GM corporate spokesman Dan Flores told NBC News the automaker appreciated Ohio’s recognition of their manufacturing presence across the state and investments in the local area, including the new battery cell plant, in deciding on the tax credits and job creation incentives.
“Construction of the facility is well underway,” said Flores. “The new battery cell manufacturing plant will play a critical role in GM’s commitment to an all-electric future.”
