Gotion funding on hold in Michigan, amid uproar over China ties

• Michigan Senate Committee seeking ‘answers’ on Gotion plant
• Panel approves $210M in state incentives for other battery plants
• Critics fear Chinese communist influence, environmental impact

April 20: Michigan Senate narrowly clears $175 million for China-linked Gotion plant
April 19: Gotion controversy tests longstanding Michigan-China economic ties
April 13: Amid Gotion furor over China, Michigan vows to change how it vets firms

LANSING — A Michigan Senate committee on Wednesday gave final approval to $410 million in state incentives for two battery manufacturing plants but delayed action on a controversial Gotion facility amid an uproar over its ties to China.

The approved funding will support development of a new Ford battery facility in Marshall, which will utilize technology from a Chinese partner, and an Our New Energy plant in Wayne County expected to create a combined 4,612 jobs.

Lawmakers approved those incentives in a 15-4 vote backed by all Democrats and two of six Republicans on the Senate Appropriations Committee, which must approve transfers from the state’s Strategic Outreach Attraction Reserve fund.

Related:

• Jobs v. China: How politics, communist ties roiled $2.3B Gotion plan in Michigan
• Anti-China ‘propaganda' stokes fears as Michigan town weighs Gotion factory
• Chinese EV battery factory planned near Big Rapids faces renewed scrutiny

But the panel did not take up a separate $175 million incentive for a third project in Big Rapids, where Gotion Inc. wants to build a $2.3 billion battery component factory touted by Democratic Gov. Gretchen Whitmer.

The development has faced public criticism in rural Mecosta County and beyond, with critics raising security concerns because of ties between Gotion's parent company and the Chinese Community Party. Others have questioned the potential impacts on the environment and community.

"Our members still have some more questions," Senate Appropriations Chair Sarah Anthony, D-Lansing, told reporters after a brief meeting that lasted less than five minutes. "That's really the function of this committee — to ask the questions, to vet (projects) before we review.”

The plant could create 2,350 jobs, which local officials say will average $52,000 per year.  

But Anthony said she wants to know more about the potential wages and benefits. She suggested the panel could ask company officials to testify again, noting a previous Zoom meeting was limited by technological challenges. 

Gotion is in line for a total of more than $800 million in state incentives, and Whitmer has touted the project as a game changer for Michigan. But Wednesday's inaction raises questions over whether Democrats in the Legislature will give final sign off on the plan.

"Anything is possible," Anthony said after the hearing, telling reporters that lawmakers have not ruled out a future vote in the committee but were not prepared to do so Wednesday.

Anthony did not allow public testimony on the Gotion project during the hearing, citing the fact it was not officially on the committee agenda, which instead listed only unnamed "legislative transfers." 

The decision frustrated residents who had driven roughly two hours from the Big Rapids region in order to weigh in on a project that will directly impact their communities.

"I think they owe me 100 bucks for my time, labor and gas money for today," said Marjorie Steele, who lives in nearby Grant Township and told Bridge Michigan she is primarily concerned about the environmental impact of the sprawling battery component plant.

"This green energy initiative is dirty," said Steele, who says she twice voted for Whitmer for governor but now has her doubts. "It's full of dirty money. It's dirty for the environment. It's bad news bears.” 

Jason Krusc, who owns a veterinarian clinic in Green Township, said he's concerned the 3-million square foot facility would change the makeup of his community. 

"You’re talking almost 1 square mile," he told Bridge Michigan after the hearing. "You're putting a freaking city right there."

The Gotion project, and the jobs it could bring to the economically challenged region, initially sounded promising, Krusc said. "Then you start to find out, 'Oh yeah, they got ties to the Communist Party' and all that garbage."

Gotion Inc. is based in the U.S. and has operations in California and Ohio. But its parent company, Gotion High-Tech, is based in China, where the government requires it to detail communist party-building activities. 

Chuck Thelen, Gotion Inc.’s vice president of North America Manufacturing, has said there is no connection between the Chinese Communist Party and U.S. operations. The California-based company “does not, and never has, endorsed or supported any political affiliation,” he said last month.

Thelen has also said the company is also voluntarily submitting to a financial review through the Committee on Foreign Investment in the United States (CFIUS), an interagency committee led by the U.S. Department of Treasury that reviews foreign investments.

But there is still cause for concern, said Joseph Cella, a former U.S. Ambassador to Fiji and other countries who recently teamed with former Netherlands Ambassador Pete Hoekstra to form the Michigan-China Economic and Security Review Group.

"China is our greatest adversary," Cella said after Wednesday's committee hearing in Lansing, where he had hoped to testify on the project.

"They have for the last 15 years, in any number of ways — through the private sector, through education, through people just being here on visas — (attempted to) surveil, report and collect."

Several Republicans have criticized the Gotion project because of the parent company's ties to China. 

Sen. Roger Hauck, R-Union Township, said earlier Wednesday that he supports the development "with reservations," citing concerns over the communist ties but optimism over the jobs it would create.

"The majority of people in Mecosta County drive out of the county to go to work," Hauck said. "You're either driving an hour or two a day. So if this could keep families inside the county, that would be good."

Sen. Mallory McMorrow, a Royal Oak Democrat who serves on the appropriations committee, said she'd like to bring Gotoin officials back before the panel for a public hearing to answer additional questions about the project, especially given the taxpayer dollars in question.  

"From my standpoint, that's part of why this process is ongoing, because we hear all of the concerns," McMorrow told Bridge. 

"I think some of them are false and misplaced, and there's also certain groups taking advantage of concerns to rile up fears about the Chinese Community Party, but there's also a lot of legitimate questions in that, that I think deserve to be answered."