- The state told EV battery maker Gotion Inc. that inaction on its planned factory put the company in default on its subsidy award.
- Now, Attorney General Dana Nessel is involved in the debt collection.
- Gotion has 90 days to repay nearly $24 million to Michigan’s economic development office.
Michigan is escalating its attempts to get nearly $24 million back from Gotion Inc., the embattled electric vehicle battery maker that had hoped to open a factory near Big Rapids.
Attorney General Dana Nessel’s office on Friday told the company in a letter that it was acting as debt collector to return the business subsidy to the Michigan Strategic Fund.
The fund “is now seeking the immediate repayment of $23,670,873.56,” assistant AG James Ziehmer wrote.
The letter opens a 90-day window for repayment without penalty, said Danielle Emerson, strategic fund spokesperson.
The request comes a week after Gotion threatened to seek “significant” monetary damages from Green Charter Township, where the company’s factory was to be located.
Related:
- Gotion: Green Township owes us ‘significant monetary damages’ for failed deal
- Gotion, tiny Michigan town square off in court over $2.6B battery factory
- Michigan: Gotion battery plant plan is dead after years of controversy
The subsidy money was funneled to Gotion through The Right Place economic development group based in Grand Rapids as a subsidy to pay for the land and development of a factory for the EV battery maker.
All told, the strategic fund board voted in 2022 to give Gotion $170 million from the now-unfunded Strategic Outreach and Attraction Reserve (SOAR) fund for big-ticket cash-for-jobs subsidies.
Gotion’s $2.4 billion factory was expected to employ 2,350 people by the end of the decade.
The deal turned controversial shortly after the award to the US-based subsidiary of China-based Gotion High Tech. Community opposition escalated as the US relationship with China soured and the deal became an issue in the 2022 governor’s race and 2024 presidential election.
While the state had funded Gotion’s land, the deal between the company and the state went into default in September. The strategic fund told Gotion that the state expected it to return the millions in subsidy funding that it had turned over to the company for its land purchases and site development.
Gotion challenged that request, saying work on the massive factory stalled due to litigation with Green Charter Township. The township had revoked a development agreement — authorized by an ousted township board — that would have allowed Gotion to pursue water lines to the factory property.
Gotion won a temporary injunction in the US District Court, saying the township had to honor the deal while the township appealed to a higher court. Yet still no work was done, prompting the state’s default decision.
Robby Dube, a Minneapolis-based attorney for the township, earlier this month asked an appeals judge to end the injunction and send the case back to be dismissed.
“This is the consequence of Gotion’s own inaction,” Dube said. “It obtained the preliminary injunction it sought, yet, after over 18 months, has not requested the township take a single action.”
However, trying to build would have been “futile,” Gotion attorney K. Scott Hamilton of Dickinson Wright in Detroit wrote to the appeals judge.
The state “took advantage of Gotion’s plight” by issuing the default notice, he added, “which has only confirmed Gotion’s fear for the viability of the project.”
Neither Hamilton nor Gotion’s Chuck Thelen responded to Bridge’s request for comment on Friday.
While Gotion owns the land funded by the state, the company “cannot sell or transfer the land without the approval” of the strategic fund, Emerson said.
Meanwhile, The Right Place is “awaiting the next steps from the state” regarding the remaining $26.4M balance paid to it for the Gotion deal, CEO Randy Thelen told Bridge.
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