Gotion High-Tech, a company closely linked to the Chinese Communist Party, has abandoned its plans to construct a factory near the Michigan National Guard base due to strong opposition from local residents. The company’s fully-owned subsidiary, Gotion Inc., had intended to build a factory valued at $2.4 billion for the production of key materials for electric vehicle batteries.
The Michigan Economic Development Corporation (MEDC) announced on Thursday (October 23) that Gotion Inc. has renounced the construction of the factory in the state. As a result, the $12.5 million grant that was allocated by the state government for the project will not be disbursed, and the company is required to repay all funds previously allocated, including a $23.6 million state-level subsidy for land acquisition.
The investment was initially announced in October 2022 with the projection of creating 2,350 job opportunities. However, due to Gotion High-Tech’s involvement with the Chinese Communist Party, its investments and operations in the United States have long been subject to criticism from Congress and state legislators, triggering strong backlash from local residents.
In September, the MEDC sent a letter to Gotion High-Tech, notifying them of the violation of the subsidy agreement because no construction had taken place or substantial progress had been made on the project site in over 120 days. The state provided Gotion High-Tech with a 30-day period to address the breach.
This 30-day deadline expired last week. The planned factory location is less than 160 kilometers from the Camp Grayling National Guard training base in the United States.
Gotion High-Tech, headquartered in Hefei, China, has its largest single shareholder as Volkswagen of Germany, holding approximately 30% of shares. However, U.S. lawmakers pointed out in September that the Chinese Communist Party still “effectively controls” the company through several individual shareholders.
John Moolenaar, the chairman of the House Committee on Communist China Issues and a Michigan native, collaborated with Green Township residents to oppose the project and urged the U.S. government to prohibit subsidies to Chinese battery companies associated with the Chinese Communist Party.
Gotion received qualification to build a factory in Greenville in August 2023 for the production of electric vehicle battery components. However, the project stirred controversy locally, with residents expressing concerns about Gotion’s relationship with the Chinese Communist Party and calling for the cancellation of the project by the Whitmer administration.
Local residents subsequently organized a recall action, leading to a successful outcome in early November 2023 with all township board members being removed from office.
In response, Gotion filed a lawsuit citing “breach of contract.” The residents’ defense of their homeland garnered support from congressional members.
Moolenaar’s statement highlighted that in federal documents, U.S. Gotion admitted to being “wholly owned and controlled” by its parent company, Gotion High-Tech, and acknowledged accepting subsidies from the Chinese government. Additionally, Gotion High-Tech employed hundreds of Chinese Communist Party members and conducted so-called “education activities” where employees pledged allegiance to the Chinese Communist Party.
Furthermore, the Committee on Communist China Issues found that Gotion’s supply chain relied on forced labor, which is part of the Chinese Communist Party’s ongoing genocide against the Uighur population in Xinjiang.
U.S. Gotion is headquartered in Santa Clara, California, in Silicon Valley. The company is responsible for business expansion and investment projects in North America for Gotion High-Tech, including the initially planned battery factories in Michigan and Illinois.
A lawyer representing the subsidiary companies of Gotion High-Tech stated in a letter obtained by Reuters that the accusations of the state government against the company for abandoning the project were “entirely wrong.”
The lawyer mentioned that due to “ongoing attacks on Gotion High-Tech at the site” and the opposition from Green Township, a more appropriate course of action would be to defer handling of the breach for six months to allow for open and honest discussions on the “feasibility of the project and long-term planning for the site.”
Volkswagen and the subsidiary companies of Gotion High-Tech have not issued any comments on the matter.