The State of Ohio is potentially set to demand $60 million in tax breaks back from General Motors (GM  ) after the closure of the company's Lordstown plant. Ohio asserts that the early closure of the plant constitutes a breach of contract.

The tax breaks were initially gifted to GM in 2008 as part of a program to create jobs in Ohio amid the great recession. In exchange for considerable tax credits, GM agreed to create 200 new jobs at its Lordstown, Ohio plant, in addition to maintaining the 3,700 workers employed at the time. GM was required by the agreement to keep the plant open until 2028 for $46.1 million of the breaks, and 2037 for the remainder.

In 2019, GM closed its Lordstown plant, a decision that came rather suddenly and took local union leaders, workers, and the state by surprise. The closure was immediately followed by the sale of the plant to Lordstown Motors Corporation, a nascent auto manufacturer who intends to manufacture electric trucks at the former GM plant.

In a letter to GM, the State of Ohio has stated that GM's early closure of the plant constitutes a breach of contract. As such, the Ohio Office of Strategic Business Investments is seeking a full refund of the tax breaks back to the state, and the Ohio Department of Taxation may also seek to bill the company for interest on the breaks.

The matter is not as cut and dry as it may seem, however. Complicating matters are the plans by GM and LG to construct a plant on the site of the derelict factory as part of a partnership to manufacture batteries for electric vehicles. The battery plant, however, will only employ a fraction of the previous plant's workforce, which may be in violation of the agreement as well. Additionally, as part of its agreement with Lordstown Motors, GM reserves the right to buy the land back from the company, as well as use the land around it, such as the future location of the battery plant.