The Ohio Tax Credit Authority has instructed General Motors Company GM to repay $28 million, an amount the company received in tax credits over the years.
What Happened: The government sanction is a direct result of GM’s decision to shut down its Lordstown plant last year, the Ohio Development Services Agency suggested in a statement.
The Ohio authority has also ordered GM to invest an additional $12 million towards the state’s community development and welfare initiatives.
In 2008, the Ohio state government granted incentives worth over $60 million to the automaker by way of tax credits, NBC News, which earlier reported the news, noted.
At the time, General Motors agreed to a 30-year agreement to keep the Lordstown unit active until 2037 under the Job Retention Tax Credit program. However, the Lordstown plant was the first to face the ax when the automaker cut 14,000 jobs last year in the U.S. and Canada, according to a CNBC report last year.
In November, Bloomberg reported that GM sold the Lordstown plant to electric vehicle startup Lordstown Motors. GM has a $75 million investment in Lordstown motor, which also includes in-kind consideration.
Why Does It Matter: A Bloomberg report in December said that GM planned to set up a battery plant in Lordstown, which could create around 1,100 jobs. The battery plant would receive a $2.3 billion joint investment from the automaker and LG Chem Ltd. However, battery plant employees would not be paid on par with GM assembly workers.
Price Action: GM shares traded 0.2% higher at $29.50 in the pre-market session Tuesday.
Photo courtesy: Baglieto via Wikimedia
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.