GM Swerves Around the Issue in Ohio

Thom Weidlich 10.01.20


On Monday, when Ohio announced it would make General Motors return $28 million in tax credits because it shuttered a plant, the car company took an odd tack in a statement it put out: It didn’t mention the government action at all. And, much to our surprise, the approach seems to have worked.

GM was hit with negative publicity in March 2019 when it closed its Lordstown, Ohio, facility, which churned out the Chevrolet Cruze compact car (pictured). The company had received $60 million in tax breaks in return for promises to retain jobs and keep the factory humming until 2037. It didn’t do either.

The Ohio Tax Credit Authority on Sept. 28 said it would switch off those tax deals with GM, which would refund the $28 million and also invest $12 million in the Mahoning Valley “for workforce, education, and infrastructure needs.” In the authority’s press release, Ohio Gov. Mike DeWine was quoted as saying that GM agreed with the outcome (though he clearly sought to not offend the company).

But in its own press release, the biggest U.S. carmaker didn’t mention the government’s decision. Instead, it emphasized the positive, focusing on money it has poured, and will pour, into Ohio. The statement is littered with dollar signs, but none are attached to either “28 million” or “12 million.”

In the release, GM announced a plan to invest $71 million in two other Ohio plants, enabling it “to retain 240 good-paying U.S. manufacturing jobs.” It also reminded that it would build a new battery-cell factory in Lordstown with LG Chem and that it has invested $75 million in Lordstown Motors Corp., which — with GM’s help — bought the shut-down facility.

Taxable Wages

It also happened to mention that, since 2009, it’s invested $3.9 billion in the state, and that it has 3,800 employees in Ohio and paid more than $450 million in “taxable wages” there in 2019.

Though avoiding the issue at hand is usually not advised when confronted with a crisis, we can’t say that in this case it’s hurt GM — which makes it an approach for communicators to sometimes consider. You get the sense in reading the press release that GM wanted to move on from the tax-break issue and maintain goodwill in the state. Not a bad idea. Most of the articles we saw simply mentioned the authority’s news and quoted GM’s release about how committed it is to Ohio.

The absence did cause some enterprising journalists to ring the company and ask, “Eh, what about the tax-credit thing?” quoted an unnamed GM spokesperson’s statement as saying, “We appreciate the Ohio Tax Credit Authority recognizing GM’s substantial manufacturing presence across the State of Ohio.”

Like the more formal press release, the statement then went into detail about those investments.

Photo Credit: Chevrolet

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