Before General Motors decided to axe the Chevrolet Cruze from its portfolio and close the Lordstown Assembly plant, the automaker had pledged to the state of Ohio that it would maintain operations at the facility until 2040 in exchange for tens of millions of dollars in tax incentives. The automaker breached the terms of that agreement when it sold Lordstown Assembly, prompting the Ohio Tax Credit Authority to go after the automaker to the tune of $60 million.
Now, the automaker has agreed to pay a lesser sum of $28 million to the state of Ohio, Automotive News reports, though it will also be required to invest $12 million in the Mahoning Valley area between now and 2022 in exchange for receiving a break on the money it owed. The $12 million investment must go toward some sort of community support venture in the Mahoning Valley area, which was already facing economic hardship before GM decided to shutter its Lordstown plant. According to ProPublica, the money may go toward education and job training programs at Youngstown State University and other colleges in Ohio, or potentially infrastructure projects.
“Today’s action protects taxpayer dollars, while also allowing for continued investment in the local community,” said Lydia Mihalik, director of Ohio Development Services Agency and chairperson of the Ohio Tax Credit Authority. “Our team at Development is committed to ensuring taxpayers get a good return on their investments, supporting Ohio businesses and strengthening communities across the state.”
GM also announced this week that it would invest $71 million into its Toledo transmission and Defiance metal casting operations in Ohio – helping to retain 240 jobs in the state. At the same time, the automaker is constructing a new lithium-ion battery cell plant in the Mahoning Valley area through a joint venture with LG Chem, which is expected to create roughly 1,100 jobs.
GM sold the Lordstown Assembly plant to upstart electric vehicle maker Lordstown Motors last year. The company hopes to start production of its electric fleet truck, the Lordstown Endurance, by early 2021 and will employ roughly 400 UAW workers once the truck starts rolling off the line in larger numbers. U.S. President Donald Trump praised the Lordstown Endurance pickup as an “incredible piece of science, technology,” in an appearance earlier this week and said production of the truck is “going to happen now with more and more trucks.”