A $2.3 billion project from General Motors and LG Chem that is expected to create 1,100 jobs in Northeast Ohio may be eligible for subsidies or tax incentives, but such incentives have not yet been agreed upon.
“Any assistance for the project has to go through the appropriate review and approvals before a final agreement can be executed,” Matt Englehart, a spokesperson for JobsOhio, told The Center Square in an email. “After final agreement is executed, assistance for the project will be made public.”
JobsOhio is a nonprofit that works closely with the state to promote economic development. It is funded through a contract with the Division of Liquor Control; its funding is derived from liquor sales, but not tax dollars directly.
On Thursday, the companies announced that they will establish a battery cell assembly plant for battery-powered vehicles on a manufacturing site near Lordstown in Northeast Ohio. According to the announcement, this plant will use the most advanced manufacturing processes available and will be capable of adapting to technological and material advances. The cells will be produced efficiently with little waste, the companies said.
As part of the agreement, GM and LG Chem also will work on advancing battery technology to produce batteries with the best cost per kilowatt-hour in the industry.
“With this investment, Ohio and its highly capable workforce will play a key role in our journey toward a world with zero emissions,” GM Chairman and CEO Mary Barra said in a news release. “Combining our manufacturing expertise with LG Chem’s leading battery-cell technology will help accelerate our pursuit of an all-electric future. We look forward to collaborating with LG Chem on future cell technologies that will continue to improve the value we deliver to our customers.”
Politicians in Ohio and even President Donald Trump had been urging GM to make investments in the region after it shuttered its previous manufacturing plant in Lordstown. Trump and Gov. Mike DeWine had both been in discussions with GM to keep jobs in the region. The former Lordstown plant was eventually sold to an electric automaker startup called Lordstown Motors.
On the morning of the announcement, Lt. Gov. Jon Husted traveled to Warren, Michigan, to witness the companies signing their deal.
“With electric vehicles changing automotive manufacturing, today's announcement is an important win for Ohio, because we are now positioned to play a larger role in the future of the automotive industry," Husted said in a news release. "After months of productive conversation, it was a proud moment to stand alongside General Motors and LG Chem today to officially announce this deal that will create a new generation of jobs for the people of Ohio."
Sen. Michael Rulli, R-Salem, who represents part of Northeast Ohio, said in a statement that the region is on the road to recovery.
"Northeast Ohio is on the rise,” Rulli said. “It didn’t happen overnight, but we are rebounding from tough times and our future looks bright. Today's announcement by GM and LG Chem to invest $2.3 billion in Ohio's automotive industry will surely boost our economy and the opportunities for Ohioans in the Mahoning Valley. This is an important milestone that shows Ohio's policies are working, and I appreciate the hard work and dedication of our state and local leaders.”
Englehart said the investment will support growth in the auto industry and shows confidence in Ohio’s automotive workforce.
Andrew Kidd, an economist at the free-market Buckeye Institute, told The Center Square via email that this announcement is good news, but that there are measures that Ohio can take to strengthen the economy further.
"Manufacturing in Ohio has taken a hit in 2019, with a loss of 3,700 jobs statewide so far," Kidd said. "Therefore any jobs created in Ohio, especially in this sector, is good news. But what policymakers should do to strengthen Ohio's economy and ensure robust job growth is to create a business- and worker-friendly tax environment by eliminating Ohio's commercial activity tax and reducing income taxes which will allow more Ohioans to keep more of their hard-earned money. Policymakers should also enact policies like the TechCred program that covers some of the training costs that get workers skills that align with what businesses need in their workforce."
Construction will begin mid-2020.