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GM investing $12M in area

Part of settlement with state over broken job creation, retention tax credit deals

General Motors and the state have an agreement on how the automaker will invest $12 million into the Mahoning Valley, required as part of settlement with GM for breaking job creation and retention tax credit agreements it received to retool its former Lordstown assembly plant.

Announced Thursday, the division of funding invests in workforce development, education and infrastructure in a way that builds on the area’s rich history of manufacturing as it positions itself for growth in the automotive industry, specifically in electric vehicles.

GM has committed $5 million to Youngstown State University for workforce development in partnership with Eastern Gateway Community College and funding to create the YSU Energy Storage Innovation and Training Center.

“So as we are trying to build an entire new industry in the Mahoning Valley, we’re going to have a premier education and training center right there with Eastern Gateway and Youngstown State,” Lt. Gov. Jon Husted said. “That is great news, really helping to prepare the workforce of the Valley to take advantage of this entire new industry that is developing there.”

YSU and EGCC will partner to focus on talent recruitment, training and retention to meet the needs of local companies, including Ultium Cells LLC, the joint venture of GM and LG Chem to mass produce battery cells for electric vehicles; Lordstown Motors Corp., which plans to produce an electric fleet truck at GM’s former assembly plant starting this year; and TJX Companies Inc., which is building a regional distribution warehouse in Lordstown for its HomeGoods brand of off-price home decor.

Also in the agreement:

• Lordstown Village will receive $3 million for the design and construction of a new water tower to enhance service to Ultium Cells and add capacity for future growth;

• Eastgate Regional Council of Governments will receive $2.5 million for infrastructure improvements to prepare for economic growth and new jobs, including the development of a proposed Lordstown Smart Transit Corridor along state Route 45 into Warren.

The funding also will support battery, advanced energy and electric vehicle-charging technology, advancing the Voltage Valley strategic initiative and expanding broadband in the region.

“We will be working closely with regional economic development entities, as well as with our state and federal partners, to aggressively pursue regional economic diversification. Our near-term focus will be on enhanced infrastructure to support job growth and workforce development in the Lordstown region,” Jim Kinnick, Eastgate executive director, said.

• The Mahoning Valley Manufacturers Coalition will receive $1.5 million to support community workforce skills development in support industries that will develop as a result of investments. MVMC will partner with America Makes and BRITE Energy Innovators.

“We look forward to working with our partners to create professional development opportunities for career counselors, teachers, and advisers throughout the Mahoning Valley to help young people and career switchers make informed decisions about their career pathway,” Jessica Borza, coalition executive director, said.

SETTLEMENT

The investments are the result of a deal the Ohio Tax Credit Authority approved in September with GM. The settlement also required the automaker to repay $28 million in tax credits because it violated tax credit agreements from 2008 worth $60.3 million when it closed the plant in March 2019.

GM was awarded a 75 percent, 15-year job retention tax credit worth about $46.1 million to retain 3,700 workers through 2028.

It also was given a 75 percent, 15-year job creation tax credit worth about $14.2 million to create 200 new jobs at the facility by 2010. The company exceeded the commitment by creating 800 jobs, but did not maintain operations through 2037.

They were given so GM could upgrade the plant to make the second-generation Chevrolet Cruze.

It faced the prospect of having to repay the entire $60.3 million, but Gov. Mike DeWine and Husted were more interested in promoting job creation with GM rather than clawing back the full amount, and at the same time make sure taxpayers were protected.

“GM has a strong history in the Valley and we expect that to continue. I think that this agreement solidifies that for the future, protects taxpayer dollars and invests in this new industry, the electric vehicle industry,” Husted said.

GM is required to complete the $12 million investment and refund the $28 million by the end of 2022.

RESPONSE

Dan Flores, GM spokesman, said the automaker’s investments were “identified collaboratively to support Mahoning Valley’s growth as a major hub for technology and electric vehicle manufacturing.”

“We look forward to continuing to build our business relationship with the state of Ohio on issues that are important to the tate of Ohio, GM and our operations,” he said. “The new Ultium Cells LLC battery-cell manufacturing plant will play a critical role in GM’s commitment to an all-electric future.”

Ultium Cells is a joint GM / LG Chem investment of $2.3 billion in Lordstown that will supply battery cells for several GM electric vehicle models, including so far the GMC Hummer, Cadillac Lyriq and Cruise Origin — GM’s electric driverless vehicle.

The tax credit authority the same day it OK’d the settlement agreement awarded Ultium Cells a 1.95 percent, 15-year job creation tax credit worth about $13.8 million on new payroll of about $45 million.

rselak@tribtoday.com

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