Ohio Attorney General Dave Yost filed a court document urging that the Ohio Tax Credit Authority hold General Motors liable for $60 million in tax credits awarded to the company's Lordstown plant, according to a statement released Tuesday, June 30.
GM was awarded tax credits by the state tax authority in 2019 with a written agreement that the automaker maintain operations through 2028 and retain 3,700 jobs through 2040 at the plant in Mahoning County.
Yost's office argues the state is owed 100% of those taxes deferred from 2009 to 2019.
"It is important to note that repaying the tax credits will be at a cost to GM of one percent of its 2019 savings from closing the facility," the brief reads.
The plant, which since 1966 had been the home to one of GM's assembly facilities, was shuttered in 2019.
The Lordstown facility began manufacturing the Chevrolet Cruze in 2010, cut its third shift eliminating 1,200 jobs in 2017, and in 2018 cut the second shift, eliminating another 1,500 jobs and leaving only 1,500 jobs.
GM citing the lagging popularity of small cars when it closed the facility with no plans to manufacture any other vehicle or vehicle parts in Lordstown.
GM responded to the request for the $60 million in April with the argument that its "unilateral business decision" relieves the company of obligations to pay back the economic development tax credit.
GM is the 12th largest company in the United States. In 2019, it reported about $137 billion in gross revenues.
"The bottom line is that GM didn't do what it promised and for that reason it needs to repay the incentives it received," Yost's statement read. Should GM refuse to honor a demand by the tax authority, Yost is prepared to enforce the matter in court, he said.
A 2019 study by the Center for Economic Development at Cleveland State University estimated that GM's closure of the Lordstown facility ultimately caused the loss of nearly 8,000 jobs and more than $8 billion in economic activity regionally. The local school district lost $800,000, or 10% of the total budget, in annual property taxes from the Lordstown facility.
"The objective of the economic development awards is to encourage growth in business, in capital investments, and in workforce retention and creation. The Attorney General's Office has the responsibility to ensure that taxpayer dollars used to support these awards are used wisely and according to applicable laws," the statement read.
The Lordstown facility was purchased in 2020 and renamed Lordstown Motors Corp. The company, which designs and manufactures electric vehicles, unveiled its first all-electric pickup last week in an event attended by Vice President Mike Pence.
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July 01, 2020 at 02:19AM
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Ohio wants to recover economic development funds from General Motors - Crain's Cleveland Business
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