Tax agency considering GM credits
State board expected to discuss possible $60M clawback
The Ohio Tax Credit Authority when it meets today is again expected to take up whether General Motors should repay $60 million in tax credits the automaker received for its former assembly plant in Lordstown.
The board also is expected to consider tax incentives for GM’s joint venture with South Korea’s LG Chem, Ultium Cells LLC in Lordstown, a battery-cell manufacturing plant GM plans to rely heavily for its upcoming fleet of electric vehicles.
But the agenda can change at the last minute — as it did last month when on the morning of the Aug. 31 meeting, the two items abruptly were shelved.
Todd Walker, spokesman for Ohio Development Services Agency, confirmed last week the GM Lordstown clawback matter “is currently slated to be heard at this meeting” as remedial action.
The agenda also lists the Ultium Cells matter, though the tax incentive request hasn’t been made public. That is something that usually happens when the board considers the matter.
General Motors was awarded the tax credits in 2009 — $14.2 million for job creation tax credits and $46.1 million for job retention that were used to upgrade and retool the facility to support production of the second-generation Chevrolet Cruze.
In exchange for the 15-year, 75 percent credits, GM agreed to keep the plant open for at least the next 30 years from then, but closed it 10 years into the agreement and sold it to electric truck startup Lordstown Motors Corp.
The removal of the clawback in August left Attorney General Dave Yost scratching his head. Yost has advocated for GM to repay every cent of the incentive, saying the matter is one of accountability and not punitive.
Said Yost, “The matter is fairly clear: They made a promise in return for a truck load of money, they got a truck load (of money) and didn’t fulfill their promise.”
But the narrative from governor’s office is shifted although there’s really no question GM broke its agreement with the state, which Gov. Mike DeWine admits. Instead, talks with GM have been less about recouping the money and more about it making further investments in Ohio.
State lawmakers from the Mahoning Valley have told DeWine, according to the Republican last month, to try to work out a deal with GM.
“So we’re doing that,” he said. “We think it’s the right thing to do. We don’t know what that will be, but we hope it will be a win-win. A win for the people of the state of Ohio who are going to see more jobs created and a win for General Motors.
“If we can’t get an agreement, then we can’t get an agreement,” DeWine said. “We’ll have plenty of time to go after them in regard to the money. It would be best if we could work something out, and we’re going to try to do that.”
The board could determine whether GM has to repay all or a portion of the credits.
The state informed GM in March it would 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 contends it should be spared from repaying the state, arguing doing so “would be inconsistent with the spirit of economic development and our significant manufacturing presence” in the state and the Mahoning Valley.
The automaker 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.