Ultium gets $13.8M tax credit from state
Credit based on job creation at Lordstown plant
LORDSTOWN — A next-gen manufacturing plant General Motors figures will be key in its plan to electrify its vehicle lineup was awarded a state credit that will save the automaker and its foreign partner approximately $13.8 million in payroll taxes.
On Monday, the Ohio Tax Credit Authority awarded Ultium Cells LLC — a joint venture between GM and South Korea’s LG Chem — a 1.95 percent, 15-year job creation tax credit on $45 million in new payroll.
The agreement requires the company to maintain operations in Lordstown for at least 18 years.
The company expects to create 1,000 jobs by December 2026 at the Tod Avenue $2.3 billion plant, under construction on 158 acres immediately adjacent to the automaker’s former assembly plant. The fixed asset investment is valued at $1.5 billion.
According to the state, Ohio was competing with Georgia and Tennessee for the proposed project.
“In order to generate an acceptable rate of return and give the Lordstown location a competitive advantage, this JCTC (job creation tax credit) is a major factor in the company’s decision to move forward in Ohio,” said Tony Ciambrone with JobsOhio, the state’s private economic development agency.
The $13.8 million credit is an estimated worth assuming GM meets the requirements of the agreement, said Lisa Colbert, spokeswoman with Ohio Development Services.
The credit is performance-based, so “the actual value of the tax credit is based on jobs created and new payroll tax generated, as verified,” she said.
GM is relying on the new battery plant to play a major role in its all-electric future with cells made there powering 11 of 13 vehicles it plans in the short-term future. Those cells also will be used in packs in two new electric vehicles GM and Honda are developing jointly for the Japanese automaker.
Production equipment installation will be phased in starting in the third quarter of 2021 with the start of production set for the third quarter of 2022.
The joint venture between GM and LG Chem, a technology and chemical company, is shared equally between the two.