South China Morning Post
Wed, December 20, 2023
On November 15, residents of Green Charter Township in Michigan assembled for a special meeting. At the gathering, chaired by the town's newly elected supervisor, many thanked God and the grit of their community of some 3,000 people for "bringing democracy back".
After months of protests, the occasion marked their first significant victory against an American subsidiary of a China-based company that plans to build an electric vehicle battery cell manufacturing plant in the rural township. A week earlier, five of seven local government officials were ousted in a recall election for approving the project. More than a thousand residents casted ballots; close to 60 per cent voted for change.
This month, the new township board rescinded a resolution of support for the facility the previous board had adopted last year, saying that it did not have sufficient time and legal expertise to go through the agreement and understand the project's details and scope.
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In the resolution the previous officials offered "strong support" for Gotion High-Tech to bring "technology and manufacturing" of products that will be "stamped Made in the USA" not imported from a foreign country, boosting the local economy and creating more than 2,500 jobs.
They had also called Gotion's entry into the community a "showcase for other manufacturers and businesses to know that we will welcome them and not scorn them and turn them away".
But both public and political protests gained momentum this year after several local conservative-leaning media outlets highlighted Gotion's Chinese origins and a company document that required its parent company to create an in-house Communist Party cell to operate in China.
In April, Michigan's legislature approved US$175 million in state funds for the project despite opposition. And it won clearance from the federal Committee on Foreign Investment in the United States (CFIUS), an inter-agency panel that reviews transactions involving foreign investments for possible national security threats. Gotion is estimated to receive about US$800 million in state incentives.
Now with the decision to flip the township's official stance on the project, the new board said it is taking another look at all matters related to the proposed plant, which has also received support from county officials, Governor Gretchen Whitmer and other state Democrats.
The township board has also revoked another resolution to extend water service to the project site.
Jason Kruse, Green Charter Township's new supervisor, has said that the board seeks more information about Gotion's plans for the site since his predecessor failed to address concerns raised by residents about its potential environmental impact, as well as regarding Gotion's links to the Chinese Communist Party.
"We have balloons flying over our country," he told Fox News, referring to the Chinese surveillance balloon incident from last winter. "We have Chinese trying to start their own police forces around the country, and we want to do business with these people? That's how we view this."
In a message to US President Joe Biden he said, "Get out of our local government," and also accused state officials of "overreach" in the "name of green energy deals".
Kruse did not respond to requests for comment from the South China Morning Post.
Gotion's sign and logo at its US headquarters in Fremont, California.
Gotion seems determined to proceed. Discussing the setbacks, Chuck Thelen, vice-president of Gotion North America, told the Post that the project was "not slowing nor is it changing scope".
When asked about the new board's review of the Gotion project, he said that he had met with Kruse for an "introductory conversation" for an hour.
The plant is expected to be built and start production by 2025 and become fully staffed by 2031. Gotion is in the process of finalising its site plans and has yet to submit environment-related permit applications with the state regulatory agency.
Gotion opponents and analysts predict tough times ahead for the Chinese manufacturer - not just in Michigan but also in nearby Illinois, where local officials are moving ahead with approvals for another of its proposed EV battery plants despite public concerns.
They contend that Green Charter's recall election and the ensuing developments reinforce the significance of grass roots opposition for national policies like the Inflation Reduction Act (IRA).
The 2022 legislation, considered a signature achievement for Biden, includes billions of dollars in incentives for boosting domestic energy production while promoting clean energy. Scrapping the Gotion project would not only put the US and state governments at loggerheads with more local control but also carries legal implications for the township's new board should Gotion take the matter to court.
Yet with the presidential election less than a year away, anti-Gotion voices led by Republican lawmakers in Washington have only amplified in recent months.
Pete Hoekstra, a former Republican representative from Michigan and a leading critic of the Gotion project, said the recall election had "fundamentally changed the dynamics" with new officials "rethinking and re-evaluating" whether to proceed.
He said Gotion would find it "very difficult [to] move into a community that does not want it", calling the new officials "more attuned to what the citizens of the township want".
Hoekstra contended that the new board's decision to review the township's support of the project had to be taken because of a lack of transparency on Gotion's part.
Peter Hoekstra, shown in 2018, said that Gotion would find it "very difficult [to] move into a community that does not want it".
When asked about the new board's review of the Gotion project, he said that he had met with Kruse for an "introductory conversation" for an hour.
The plant is expected to be built and start production by 2025 and become fully staffed by 2031. Gotion is in the process of finalising its site plans and has yet to submit environment-related permit applications with the state regulatory agency.
Gotion opponents and analysts predict tough times ahead for the Chinese manufacturer - not just in Michigan but also in nearby Illinois, where local officials are moving ahead with approvals for another of its proposed EV battery plants despite public concerns.
They contend that Green Charter's recall election and the ensuing developments reinforce the significance of grass roots opposition for national policies like the Inflation Reduction Act (IRA).
The 2022 legislation, considered a signature achievement for Biden, includes billions of dollars in incentives for boosting domestic energy production while promoting clean energy. Scrapping the Gotion project would not only put the US and state governments at loggerheads with more local control but also carries legal implications for the township's new board should Gotion take the matter to court.
Yet with the presidential election less than a year away, anti-Gotion voices led by Republican lawmakers in Washington have only amplified in recent months.
Pete Hoekstra, a former Republican representative from Michigan and a leading critic of the Gotion project, said the recall election had "fundamentally changed the dynamics" with new officials "rethinking and re-evaluating" whether to proceed.
He said Gotion would find it "very difficult [to] move into a community that does not want it", calling the new officials "more attuned to what the citizens of the township want".
Hoekstra contended that the new board's decision to review the township's support of the project had to be taken because of a lack of transparency on Gotion's part.
Peter Hoekstra, shown in 2018, said that Gotion would find it "very difficult [to] move into a community that does not want it".
"There are a lot of questions," he said, about the project's land use, the size of the project and its environmental impact.
Reflecting on recent conversations with the new township officials, Hoekstra said that it did not want a "long legal battle" with Gotion should they attempt to scrap the project. "But they will engage in a legal fight, from my perspective, if they believe that it's needed for them to get the information to make the right decisions", he said.
Jundai Liu, a fellow at the University of Michigan's International Institute, noted that at this point, no single layer of government could unilaterally make a final decision on the project.
"There's going to be the legal aspect, there's going to be local residents, there's going to be the newly elected board, there's going to be the county, there's going to be the state, and then maybe the federal government, everybody, and every part will have a say," she said.
A similar revolt against Gotion has been brewing in Manteno, Illinois. This month, amid shouts of "traitors" from incensed residents, officials of the rural community approved a resolution to let the company convert a warehouse site into a plant manufacturing EV battery parts. The US$2 billion project is expected to create more than 2,500 local jobs in a village of fewer than 10,000 residents.
Hoekstra, who has also been offering support to the anti-Gotion groups in Illinois, said that Manteno residents "will take inspiration from what is going on in Green Charter Township because it shows that you know, David can beat Goliath".
Chinese EV and battery companies have fixed their sights on the North America market, responding to the IRA incentives. However, with the geopolitical rivalry between Beijing and Washington, all Chinese investments in the US are being viewed with suspicion.
Last month, two Republican representatives, John Moolenaar of Michigan and Darin LaHood of Illinois introduced the No Gotion Act in the House. The bill proposes to prohibit companies "affiliated with" the Chinese Communist Party from receiving tax credits under the IRA.
A release by Moolenaar's office said the legislation was brought in response to Gotion's plans to build battery factories "which would likely qualify" for incentives under the IRA.
According to rules issued by the Treasury Department this month, EVs must be manufactured without any components from "foreign entities of concern" such as China, Russia and North Korea to qualify for up to $7,500 in tax credits.
US Representative John Moolenaar, a Michigan Republican, has co-sponsored a bill that would ban companies "affiliated with" the Chinese Communist Party from receiving Inflation Reduction Act-related tax credits. Photo: Bloomberg alt=US Representative John Moolenaar, a Michigan Republican, has co-sponsored a bill that would ban companies "affiliated with" the Chinese Communist Party from receiving Inflation Reduction Act-related tax credits.
Photo: Bloomberg>
But the rules for manufacturing tax credits do not include such restrictions for American subsidiaries of Chinese companies setting up factories in the US.
Criticising the discrepancy, Moolenaar, who serves on the House select committee on China, warned that Chinese companies "will take advantage of Treasury's new rules and potentially reap billions of dollars from the American people".
Other Republicans have picked up the theme. Senator Marco Rubio of Florida, and Representative Carol Miller of West Virginia introduced the Protecting American Advanced Manufacturing Act to ensure that nations "aiming to weaken the US, including Communist China", do not receive manufacturing tax credits.
But according to Liu at the University of Michigan, away from the "high politics" of Washington and Beijing, even rural America is now experiencing the US-China competition in its backyard.
"Now you truly have something that you care about deeply, emotionally, that's in front of your eyes every day. So you have a very concrete object to talk about what you feel, and what's your opinion," she said.
Copyright (c) 2023. South China Morning Post Publishers Ltd. All rights reserved.
But the rules for manufacturing tax credits do not include such restrictions for American subsidiaries of Chinese companies setting up factories in the US.
Criticising the discrepancy, Moolenaar, who serves on the House select committee on China, warned that Chinese companies "will take advantage of Treasury's new rules and potentially reap billions of dollars from the American people".
Other Republicans have picked up the theme. Senator Marco Rubio of Florida, and Representative Carol Miller of West Virginia introduced the Protecting American Advanced Manufacturing Act to ensure that nations "aiming to weaken the US, including Communist China", do not receive manufacturing tax credits.
But according to Liu at the University of Michigan, away from the "high politics" of Washington and Beijing, even rural America is now experiencing the US-China competition in its backyard.
"Now you truly have something that you care about deeply, emotionally, that's in front of your eyes every day. So you have a very concrete object to talk about what you feel, and what's your opinion," she said.
Copyright (c) 2023. South China Morning Post Publishers Ltd. All rights reserved.
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