WASHINGTON (Reuters) – General Motors Co will repay $28 million in state tax incentives to Ohio after the largest U.S. automaker came under heavy criticism for closing its Lordstown Assembly plant in March 2019.
GM announced its planned closure of the plant in Northeast Ohio in November 2018 along with three other U.S. plants, drawing condemnation from U.S. President Donald Trump and many U.S. lawmakers.
GM sold the plant last year to start-up Lordstown Motors, which plans to hire 400 workers to build EV pickup trucks starting in 2021.
On Monday, Trump inspected a prototype Lordstown Motors pickup outside the White House. “It’s an incredible piece of science, technology. It’s going to happen now with more and more trucks,” Trump said.
The unscheduled event came on the eve of the first presidential debate, scheduled for Cleveland, about 60 miles from Lordstown.
Democrats have seized on a July 2017 speech Trump made in Youngstown, Ohio near the Lordstown plant when he said jobs were “all coming back.” and told local residents: “Don’t move. Don’t sell your house.”
GM’s agreement with the Ohio Tax Credit Authority also requires the Detroit automaker to pay $12 million for “community support programs” in the Mahoning Valley.
Ohio Attorney General Dave Yost had demanded GM repay $60 million in state tax credits after it closed its Lordstown plant and failed to retain 3,700 jobs.
The White House declined to comment on the Ohio tax repayment.
GM and LG Chem through the Ultium Cells LLC joint venture, are building a $2.3 billion battery cell manufacturing plant in Lordstown.
The state said it awarded a 1.95%, 15-year Job Creation Tax Credit to the joint venture, which is expected to create 1,000 full-time positions, generating $45 million in new annual payroll. Ohio said the estimated value of the joint venture credit is $13.8 million if the venture meets the requirements.
The automaker said in a statement Ohio recognized “GM’s substantial manufacturing presence across the state of Ohio.”
GM also announced it is investing $71 million in two other Ohio manufacturing facilities in Toledo and Defiance.
In August, GM agreed to invest $75 million in Lordstown Motors, which agreed to go public through a merger with DiamondPeak Holdings in a deal that valued Lordstown at $1.6 billion.
GM’s investment includes sale of the Lordstown plant and production equipment.
Republican Senator Rob Portman said at the White House event the Lordstown Motors plant and the battery joint venture together would replace the 1,500 jobs lost in 2019 when GM’s Lordstown plant closed ending the single remaining shift.
As recently as 2016, the GM plant employed 4,500 workers in three shifts.
(Reporting by David Shepardson, Editing by Franklin Paul and David Gregorio)