Ohio OKs aid for GM plant growth

By Marc Kovac

The state also approved a low-interest loan for a Youngstown company’s expansion.

COLUMBUS — The state approved incentives of more than $80 million for an expansion of the General Motors Lordstown complex.

The Ohio Tax Credit Authority gave final approval Monday for separate incentives for the project, expected to create 200 jobs and retain an additional 3,700.

The authority is a five-member independent board consisting of taxation and economic development professionals who review and approve applications for state tax credit assistance.

A 75 percent Job Creation Tax Credit aimed at the new positions is expected to save the company more than $4.4 million over its 15-year term. A 75 percent Job Retention Tax Credit that would cover the current work force is expected to save the company some $77.7 million.

The incentives are refundable tax credits against what companies pay in corporate activity or income taxes, based on the state income taxes withheld on its new, full-time employees.

For example, a company paying $100 in state income tax withholdings for a new worker would be credited with $75 toward its other state tax obligations, based on a 75 percent credit.

The approval was among the last hurdles for the company in making a final decision on the $317 million expansion. Vehicle production would begin in 2010.

“This was a very important step in the process for building our business case, needless to say,” said Troy Kennedy, regional tax manager for GM, who traveled from Detroit to Columbus for the meeting. “[We’re] very excited about the outcome.”

He added, “We will take this information back to our senior leadership. They will review the information and will make a final determination. Optimistically, hopefully, we’ll be in a position to say something in the future here.”

The Lordstown expansion would come at a time when GM is cutting production at other plants, including one in southwestern Ohio. The restructuring is part of an effort to shift production to smaller, more fuel-efficient models, like its recently announced Chevrolet Cruze.

Lordstown would be the sole U.S. location for that vehicle, Kennedy said. Without the new model, the facility would be in danger of closure.

“The long-term viability of the plant was dependent on securing another product,” said Walt Good, director of economic development at the Regional Chamber, who made the trip to Columbus. “This is a huge project from the region’s perspective, with its current work force and new employees and new product. We can’t state strongly enough how important that this is, to not just [our area] but to northeast Ohio and the Ohio economy in general.”

The community is providing additional incentives, including assisting the company in assessing potential workers and, in some cases, providing direct cash payments to those who relocate.

On the latter, Good said up to 500 new GM workers who are relocating to the area and purchasing a home could receive up to $1,000 from the chamber, the cities of Warren and Niles and the Cafaro Co.

“We’ve never done it before,” Good said of the incentive payments. “[It’s] just a way to be creative and help the company.”

In another development involving a local business, the state OK’d a low-interest loan for a company planning an expansion in Youngstown.

The Ohio Development Financing Advisory Council signed off on the $500,000 incentive for Brilex Industries Inc. through its 166 Direct Loan Program.

The 10-year loan would carry an interest rate of 4 percent and would be used by the company to buy machinery and equipment. The funds would go toward a $1.6 million expansion that would create four jobs, retain 10 that are categorized as at-risk and maintain an additional 114, according to the Ohio Department of Development.

Brilex, located at 1201 Crescent St., designs and produces equipment used in manufacturing facilities.