GM must fulfill promises to state, Valley
Ohio should hold General Motors accountable to pay back the $60 million in tax incentives it had received before shuttering the local assembly and stamping plants in Lordstown.
Ohio’s Development Services Agency is recommending that Ohio’s Tax Credit Authority terminate its agreement with the Detroit-based auto giant and demand a 100 percent refund.
No decision has yet been made, and the state’s tax credit authority could take up the matter at its next scheduled meeting July 27. The authority will determine whether a refund of the credits issued is required and, if so, how much.
GM disputes the demand and instead is asking to be spared from repaying the state in the “spirit of economic development” and the company’s “significant manufacturing presence” in the state and the Mahoning Valley.
In addition to arguing that the small-car market softened as consumer preference shifted to trucks and SUVs, GM also pointed out in a letter to the state its massive presence in Ohio, including several plants, nearly 4,000 hourly and salaried workers and investments of more than $3.3 billion since 2009.
Further, Troy D. Kennedy, GM’s U.S. Property Tax Manager, went on to highlight GM’s joint venture with South Korea’s LG Chem to build a new $2.3 billion electric vehicle battery-cell plant in Lordstown that when fully operational will employ upward of 1,100 people.
“GM continues its commitment to the state of Ohio and the Mahoning Valley,” Kennedy wrote in his letter.
Indeed, there can be no disputing that the promised new plant will be a welcomed investment in our Valley.
But as we see it — and we suggest the state of Ohio also should see it this way — this is a different project than the one from which GM walked away.
Certainly, new tax breaks may be sought on the battery plant. It already has sought considerable tax savings on the local level.
But let’s also consider this: According to Development Services, GM has received $14.2 million in job creation tax credits and $46.1 million in job retention tax credits. Those were used to improve the plant to support the production of the second-generation Chevrolet Cruze.
The state also indicates that on July 28, 2008, GM was approved by the tax credit authority for a 75 percent, 15-year job retention tax credit in exchange for GM committing to retain 3,700 full-time employees in Lordstown.
The same day, the authority approved a 75 percent, 15-year job creation tax credit in exchange for GM committing to create 200 new full-time employees and keep the existing 3,700 working. Both agreements were executed with the authority in January 2009.
So when GM closed the facility March 6, 2019, it defaulted on the agreements, according to the state.
Kennedy wrote GM was mindful of the impact GM’s closure had on the local community and Ohio and “moved with a sense of urgency” to find a solution to lessen the impact, including quickly selling the local complex to a startup electric pickup truck maker and agreeing to the joint venture battery plant to be built here in Lordstown.
While we respect those decisions, we believe repayment of the tax incentives would send an even clearer message of GM’s commitment to Ohio and the Mahoning Valley.
General Motors should concede to pay back the money to those taxpayers from Ohio and the Mahoning Valley.