Ohio authority terminates $40M in tax credits for GM

A break room at the United Automobile Workers Local 1112 office in Warren, Ohio, near the General Motors plant in Lordstown, Nov. 27, 2018. In a region where the president vowed that manufacturing jobs were coming back, the idling of a Chevrolet plant and its 1,600 workers is a major blow. (Allison Farrand/The New York Times)

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A break room at the United Automobile Workers Local 1112 office in Warren, Ohio, near the General Motors plant in Lordstown, Nov. 27, 2018. In a region where the president vowed that manufacturing jobs were coming back, the idling of a Chevrolet plant and its 1,600 workers is a major blow. (Allison Farrand/The New York Times)

On same day, GM pledges to invest $71M into Ohio plants

The Ohio Tax Credit Authority Monday approved a recommendation by the Ohio Development Services Agency to terminate the state’s “job creation and retention” tax credits with General Motors, saying the automaker will be “required” to return a total of $40 million to Ohio and the Mahoning Valley.

After last year’s closure of its Lordstown plant near Youngstown, GM will be required to invest $12 million in the Mahoning Valley by the end of 2022, and refund $28 million in tax credits, the authority said.

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On the same day, GM said it will invest $71 million into two Ohio plants — including $39 million at its Toledo transmission plant and $32 million at its Defiance casting plant. Work will begin immediately at the two locations, GM said.

The investments will help the company protect 240 jobs at those plants, the automaker said.

In 2008, GM entered into an agreement with the state which resulted in the issuance of $60.3 million in tax credits.

GM was approved for a state tax credit in exchange for a commitment to retain 3,700 employees in Lordstown, the state said.

That didn’t happen. Instead, GM slated the plant for closure, affecting an estimated 4,000-plus jobs in and around the plant in total, beginning with 1,600 layoffs in March 2019.

“GM has been a major employer in the state of Ohio for decades, investing in both the economy and our workforce," Gov. Mike DeWine said in a statement. “While the decision to close the Lordstown plant was terrible news for workers and their families in the Mahoning Valley, today’s announcement will bring relief as well as investment by GM who has committed to investing $12 million in the local community for workforce, education, and infrastructure needs.”

He added: "GM has also committed to returning $28 million to the state for the job creation and retention credits they were awarded. GM remains involved in auto production in Lordstown to produce batteries for electric vehicles which is also good news for the future of the automotive industry.”

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“Today’s action protects taxpayer dollars, while also allowing for continued investment in the local community,” said Lydia Mihalik, director of development and chair of the Ohio Tax Credit Authority.

GM has other state incentives for its operations in Toledo and Defiance. The company is compliant with those agreements, the state said.

“Through these investments, GM continues to strengthen its significant manufacturing presence in Ohio,” Phil Kienle, GM vice president of North American manufacturing and labor relations, said in a statement, referring to the newly announced Ohio investments. “Our Toledo and Defiance teams continue to focus on building world-class products for our customers and these actions are an investment in their futures.”

GM co-owns with Isuzu the DMAX plant in Moraine, where about 800 workers continue to make the Duramax diesel truck engine.

In late 2008, GM closed its last significant standalone Dayton-area plant, the SUV assembly plant in Moraine, which once employed thousands of workers.

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