$175M for Gotion project clears Senate Appropriations Committee

A Senate panel on Thursday narrowly approved $175 million in state funds for a $2.36 billion electric vehicle battery factory in Mecosta County that Gov. Gretchen Whitmer has called “the biggest ever economic development project in northern Michigan.” 

But the project has drawn concerns from some Democrats over salaries for the subsidized jobs and criticism from Republican legislators irate over its connections to China. 

The Senate Appropriations Committee voted 10-9 to approve a legislative transfer request from the State Budget Office to send the funding for the project from the state’s Strategic Outreach and Attraction Reserve (SOAR) Fund to the Michigan Strategic Fund (MSF). The MSF is the public funding arm of the quasi-governmental Michigan Economic Development Corporation (MEDC).

Amid GOP backlash to Gotion plant, exec rebukes conspiracy of ‘communist plot’ in Big Rapids

“My support today was ultimately about the transformative impact of this project: around 2,350 new Michigan jobs, which will average $52,000 per year, more than double the per-capita income in one of the poorest counties in the state,” said Sen. Sarah Anthony (D-Lansing), the chair of the Senate Appropriations Committee.

Three Democrats joined six Republicans to vote against the project from Gotion Inc., a California-based company that manufactures lithium-ion batteries used in electric vehicles. Gotion Inc.’s parent company, Guoxuan High-tech Co., is headquartered in China. This was the final approval needed from state lawmakers for the project to secure the $175 million.

The three Democrats who voted against the project were Sens. Rosemary Bayer (D-Beverly Hills), Jeff Irwin (D-Ann Arbor) and Sylvia Santana (D-Detroit). 

During an hour-long committee meeting on Thursday, proponents and opponents debated the merits of the project, which Democratic leaders, like Whitmer and Anthony, and Mecosta County officials touted as much-needed economic investment in a struggling area.

“This is a pivotal moment for Mecosta County residents, small businesses, and communities,” said Karen Hahn, Mecosta County Register of Deeds. “Final state approval for Gotion’s investment will bring economic vibrancy, electric vehicle battery component supply chains, and good-paying jobs to right here in Mecosta County.”

Other Democrats disagreed.

“I’m concerned about the pay and benefits of the jobs we are seeking to subsidize,” Irwin told the Advance on Friday, specifying that he believes the pay and benefits should be greater than they currently are. “I’m also concerned about the viability of the project and the capacity of the MSF to oversee and ensure accountability regarding the promises made by the company.”

In a statement issued Thursday, the MEDC said Gotion will partner with Ferris State University to “assist with the talent recruitment and training the company will need to place 2,350 well-paying jobs in Mecosta County. The average hourly wage for the Gotion project is $29.42, which is well above county ALICE target wage of $17.99.”

ALICE is a reference to a term from the United Way, which means “Asset Limited, Income Constrained, Employed.” Each year, the United Way issues an ALICE report, which details the challenges facing those who are working and living above the federal poverty line but are not earning enough to be able to afford basic needs like housing, rent, food and childcare.

Republican lawmakers at the state and federal level have claimed the project is part of a plot by the Chinese Communist Party to have financial and political influence in Michigan, something which Gotion Inc. officials have vehemently refuted. GOP legislators have also cited concerns over the environmental impact of the 3-million-square-foot factory.

“It is bad enough that Gotion has deep ties to and is directly influenced by the Chinese Communist Party,” said state Sen. Lana Theis (R-Brighton). “But that association only scratches the surface of the risks Gotion’s battery plant will bring to our state.

“A disaster at the plant would likely cause significant harm to water, land and air, which could cause mass evacuations and take years and many millions of dollars to clean up at taxpayer expense,” Theis continued.

Michigan has long had business relations with China, including Republican Governors John Engler and Rick Snyder launching trade missions to China. Between 1990 and 2020, there was an approximate $460 billion in direct foreign investment that flowed between China and Michigan, according to the Rhodium Group’s China Investment Monitor, which reports on Chinese investment by state.

Democrats who voted against the project emphasized they did not agree with their Republican colleagues’ criticism of the company’s connection to China, which comes at a time when GOP lawmakers across the country have ramped up their anti-China rhetoric that civil rights leaders and Democratic legislators have warned is fueling hate crimes and racism against Asian Americans.

“The xenophobic approach championed by the Michigan Republican Party … did not play into my no vote,” Irwin said. “I think Gov. Whitmer is wise to build bridges with people around the world, including China.”

Irwin went on to say that “it’s sad that the Republican party has transformed into a group that will say anything to get elected, even if it promotes and plays off of anti-Asian sentiment.”

Michigan Republican Party Chair Kristina Karamo, who recently netted nationwide criticism for linking the Holocaust to gun reform bills, framed the Gotion debate as a number of other Republican lawmakers have, as a matter of “us vs. them.”

“If you choose to give these funds to Gotion, you are a Benedict Arnold,” Karamo said during Thursday’s Appropriations Committee meeting. “You are a traitor to this republic.”

Green Charter Township Supervisor Jim Chapman, meanwhile, called the project a “once-in-a-lifetime opportunity” that “will make a substantial positive impact for our residents and small businesses for decades to come.

“Our restaurants will have more diners,” Chapman said. “Our grocery stores will have more shoppers. Our local businesses will have more customers. Our families will have more good-paying jobs.”