Pay Ohio $60.3M, state AG tells GM
After Lordstown plant closing, Yost wants tax credits returned of tax credits
LORDSTOWN — Attorney General Dave Yost wants General Motors to “pay back every last penny” of the $60.3 million it received in state tax credits for its former Lordstown assembly plant.
“Accountability is the key to good business and we’re holding GM accountable for not living up to its end of the contract,” Yost said Tuesday. “We demand the money that is rightfully owed to Ohio — no more, no less.”
The announcement comes in contrast to what Gov. Mike DeWine, a fellow Republican, said last Wednesday during a tour of Lordstown Motors, which was the former location of the GM complex.
DeWine said at the time: “We don’t necessarily have to get that cash back,” and “We’re not actively pursuing the clawback. What we are doing is having a very constructive discussion with General Motors about how we can turn that into things that are helpful to them, but also and more important to us, the state of Ohio.”
A letter from the state’s Development Services Agency reads it will recommend to the Ohio Tax Credit Authority it terminate the agreement with GM and seek a full refund of the $60.3 million in tax credits because the company broke the tax incentive agreements when it closed the Lordstown facility in March 2019.
The authority could determine whether GM has to repay all or a portion of the credits when it meets later this month.
Yost said he’s prepared to enforce the matter in court if GM doesn’t pay all the money back.
In his legal brief filed “on behalf of the citizens of the state of Ohio,” Yost wrote: “Government, it is often said, should run more like a business. Does any rational person believe that if the shoe were on the other foot, GM would shrug and walk away from $60 million it paid under a contract when the other party chose not to deliver? Ohio welcomes its long and continuing relationship with GM, but we want our money back. It’s just business.”
GM received $14.2 million in job creation tax credits and $46.1 million in job retention tax credits to be used to improve the Lordstown plant to support the production of a second-generation Chevrolet Cruze.
In January 2009, GM received a 75 percent, 15-year job retention tax credit for committing to retain 3,700 full-time workers in Lordstown and a 75 percent, 15-year job creation tax credit in exchange for committing to create 200 new full-time jobs and retain the existing 3,700.
Instead, the company closed the plant in March 2019 and sold it to Lordstown Motors for $20 million. Lordstown Motors is building an all-electric full-size pickup truck for fleets.
GM has a joint venture with South Korea’s LG Chem to build a $2.3 billion electric vehicle battery-cell plant in Lordstown that will employ up to 1,100 when fully operational.
GM spokesman Dan Flores said two weeks ago that “a repayment of the tax credits would be inconsistent with our significant manufacturing presence in Ohio and the Mahoning Valley.”
Yost wrote in the legal brief: “Should the authority accept GM’s argument that its unilateral business decision relieves it of its obligations, it will have no legitimate basis to clawback any other incentive ever. GM will have carte blanche to walk away from its other Ohio tax-incentivized operations. And so will every other business. The state’s agreements to retain and create jobs will be mere fiction, excused by the slightest inconvenience. Ohio may as well simply give the money away.”