The state of Ohio has delayed a meeting in which it plans to discuss whether or not General Motors should pay back the $60.3 million in tax breaks it was given for the Lordstown Assembly plant.
GM Lordstown plant in 2017lordstown
According to the Tribune Chronicle, the Ohio Tax Credit Authority has removed items from its upcoming meeting pertaining to the GM tax credit situation. It is not clear why the items were removed, but Ohio Development Services Agency spokesman Todd Walker apparently said this is a move that is “not uncommon.”
State officials in Ohio claim GM violated the terms of two state economic development agreements when it decided to shut down Lordstown Assembly in 2019 and want the automaker to repay the $60.3 million in subsidies it received. Public records indicate GM had pledged to maintain operations at the Lordstown Assembly plant until at least 2027, however it shut down the plant and sold it to Lordstown Motors last spring.
The final Chevrolet Cruze as it was being built at Lordstown
Potentially playing into GM’s favor is the fact the agreement also included a provision allowing state regulators to consider both market conditions and whether or not the company maintains a presence in the state when deliberating over whether GM is violation of the agreement. GM is currently building a $2.3 billion lithium-ion battery plant in partnership with LG Chem in the Lordstown area, operates a parts distribution center in Cincinnati and is building a new $175 million engine components plant in Brookville, Ohio, as well.
GM has asked the state to forgive the tax credits owed due to the importance of having cash on hand given the current market conditions surrounding the COVID-19 pandemic.
“We respectfully request your assistance to help us drive towards a full recovery by choosing not to require repayment of all, or a significant portion of, the tax credits,” Troy D. Kennedy, a property tax manager for GM, said previously.
The tax authority’s next meeting is on September 28th, however it’s not clear if either of the items related to GM’s tax credits will be ready by that time.
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Comments
GM did not comply with the terms of the credit….period. NEXT case.
Lordstown may just find the battery plant a greater blessing than the old oversized out dated production plant.
Now if GM pulled out with nothing in return then I could see a problem. But with several new and more current facilities coming on line it is a fair trade.
Companies have to adapt to market and production conditions.