General Motors announced plans Monday to invest $71 million into a pair of northwest Ohio manufacturing plants to retain jobs, while also paying back millions in tax credits for jobs it failed to keep elsewhere in the state.
The Toledo GM Powertrain plant will receive $39 million to upgrade and enhance the production of the eight-speed rear-wheel-drive transmission. The Defiance casting plant will receive $32 million to prepare for future engine casting components work.
GM says the moves allow the automaker to retain 240 jobs.
“Through these investments, GM continues to strengthen its significant manufacturing presence in Ohio,” said Phil Kienle, GM vice president of North American manufacturing and labor relations. “Our Toledo and Defiance teams continue to focus on building world-class products for our customers and these actions are an investment in their futures.”
GM also agreed to repay $28 million in state tax incentives as a result of closing the Lordstown Assembly plant in March, 2019, in Lordstown, Ohio.
The company is required to invest $12 million in the Mahoning Valley by the end of 2022, according to the agreement between the automaker and the Ohio Tax Credit Authority. Attorney General Dave Yost demanded GM repay all $60 million in tax credits after closing the plant and failing to retain 3,700 jobs.
The Toledo transmission plant employs over 1,700 workers represented by UAW Local 14. The plant provides transmissions to 10 GM facilities in North America.
President Tony Totty said the investment is a credit to UAW workers.
“It’s always good to have that size of an investment into your facility,” Mr. Totty said. “It speaks volumes to our work force and membership at our facility and the quality of work they do, and the trust the company has in our members to make a quality transmission.”
GM did not make anyone at the Toledo plant available for comment. A news release stated the $39 million will “upgrade and enhance” production of the eight-speed rear-wheel-drive, found in the Chevrolet Z06 Corvette and Camaro, and full-size trucks and sport utility vehicles.
Mr. Totty said GM has not outlined each investment yet, but he believes the money will improve quality and testing in the 8-speed and improve capabilities in the 6-speed.
Toledo mayor Wade Kapszukiewicz said the move is symbolic of the steady economic progress the city has seen in recent years.
“A global company like GM invests its resources anywhere in the world where it feels it can get the best bang for the buck,” Mayor Kapszukiewicz said. “The fact GM chose to invest in Toledo speaks volumes. This is a credit to the hard-working men and women at Powertrain, and it builds on the economic momentum our city has enjoyed over the last several years.”
U.S. Rep. Marcy Kaptur (D., Toledo), co-chair of the Congressional Auto Caucus, also lauded the move.
“Since the early 20th century, Toledo Transmission has been manufacturing among the highest quality drivetrain components available on the market,” Miss Kaptur said. “Continued investment in our workers, products, and facilities help to keep Ohio on the cutting edge of the worldwide automotive production market. Going forward, I will continue my fight to ensure that our workers receive the respect and dignity they deserve while helping our plants to thrive in a competitive market.”
Sen. Sherrod Brown (D., Ohio) is pleased with the investment, but hasn’t forgotten about Lordstown.
“Autoworkers in Ohio are among the best in the world at what they do, and any investment in Ohio workers is a smart investment,” Mr. Brown said. “At the same time, we know that GM could have saved the jobs of 4,500 workers at the Lordstown plant by bringing a new vehicle to the plant — and GM’s decision to pay back the tax breaks they received is an admission of their betrayal of Ohio’s workers.”
A spokesman for Sen. Rob Portman (R., Ohio) did not respond to a request for comment.
The company will not make up for the other $20.3 million in tax credits it received. The tax credit authority took into account “market conditions and GM’s other operations in Ohio,” when setting the refund amount, according to Todd Walker, an agency spokesman.
The company had received the $60.3 million under the terms of a 2008 deal with state officials.
In exchange, GM said it would retain 3,700 jobs there through 2028.
The company in a separate deal agreed in 2010 to hire 200 additional workers at the Lordstown plant before 2010, keeping them there through 2037.
But after cutting back its work force over two years, the company announced in November, 2018, it would close the Lordstown plant, laying off 1,600 remaining workers.
Lordstown used to build the Chevy Cruze, but the company has shifted its focus to building larger vehicles.
The following November, GM announced it had sold the Lordstown plant to an electric-vehicle start-up that is beginning to manufacture all-electric pickup trucks there.
The company plans to eventually hire 400 workers for an initial run of the truck.