GM to Pay Tax Breaks Back After Plant Closure

The automaker is set to return about half of the $60 million in incentives it received.

When General Motors idled its Lordstown, Ohio, assembly plant in 2019, it sent shockwaves through the state.

Nearly 1,700 workers were out of a job — despite promises that they were staying — and beyond that, state officials were pretty peeved. The state demanded GM pay back about $60 million it received in tax breaks that were part of an economic development deal contingent on the plant operating through 2027. Now, it appears the two parties have reached a compromise.

According to Reuters, the company will pay back $28 million in state tax incentives. As part of the agreement with the Ohio Tax Credit Authority, the company will also pay $12 million for "community support programs" in the Trumbull County.

While GM shuttered the assembly plant, it announced plans to build a $2.3 billion electric vehicle battery plant near the old facility as part of an Ultium Cells LLC joint venture with LG Chem. The joint venture projects to create about 1,100 new jobs. Ohio reportedly awarded the joint venture a 15-year Job Creation Tax Credit worth $13.8 million if the venture meets the requirements. The new jobs at Ultium are expected to generate $45 million in new annual payroll.

GM also sold the old plant to Lordstown Motors, an electric pickup truck startup, and agreed to  invest about $75 million in the new company, which included the plant and production equipment. Lordstown Motors plans to hire 400 workers starting in 2021.

According to Reuters, GM also announced a $71 million investment in manufacturing facilities in Toledo and Defiance, Ohio. 

In June, GM said “a repayment of the tax credits would be inconsistent with our significant manufacturing presence in Ohio."

Now that they have come to terms, the automaker changed its tune, saying in a statement that the state recognized "GM’s substantial manufacturing presence across the state of Ohio."


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