U.S. won’t intervene in Michigan’s Gotion deal after company seeks review

• Gotion Inc. says its deal in Big Rapids for an EV battery component factory doesn’t fall under guidelines for federal review for national security threats
• The determination follows the U.S.-based company’s request for the review after concerns were raised about its Chinese ownership and potential ties to the Chinese Communist Party
• The company says it is proceeding with its factory, while critics continue to fight it

The company behind a controversial EV battery component factory near Big Rapids says it will continue planning to build a $2.3 billion facility after a federal security review — which it sought in response to backlash over its Chinese ownership — resulted in no action.

Gotion Inc., a U.S.-based subsidiary of Gotion High Tech, said on Tuesday that the committee charged with determining national security risks from foreign investments found that the project’s real estate deal does not fall within its jurisdiction.

“We voluntarily submitted all the needed documents to the U.S. Department of Treasury Committee on Foreign Investment in the U.S. (CFIUS) to be transparent and accountable and received the response that it is not a covered transaction,” Chuck Thelen, vice president of Gotion Inc. – North American Manufacturing, said in a statement.

Related:

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• Jobs v. China: How politics, communist ties roiled $2.3B Gotion plan in Michigan
• Amid Gotion furor over China, Michigan vows to change how it vets firms

Bridge Michigan requested a copy of the determination, but Gotion did not provide it on Tuesday.

The announcement from the company follows months of intense controversy over its plans to build on over 400 acres in Green Township, north of Big Rapids in Mecosta County.

The Gotion deal was announced in October, and the Senate Appropriations Committee narrowly approved $175 million in funding toward the project in April. In between, the initial excitement over Michigan landing another large-scale electric vehicle battery factory met a growing, bipartisan discomfort with promoting companies with ties to China. 

Critics warned of potential environmental damage from the 3-million-square-foot battery plant facility that will use a lot of water during production. They also feared national security threats due to Gotion Inc. parent company’s connections to the Chinese Communist Party, which is strengthening its hold on China’s businesses.

Activists are still battling the project in Mecosta County, where some are pursuing a recall of Green Township officials. 

Yet the state’s top economic developer has told Bridge he stands behind the project, saying it will be an “economic anchor” for a struggling community. 

Quentin Messer Jr., president and CEO of the Michigan Economic Development Corporation (MEDC), also said this spring that backlash to Gotion prompted his office to add more scrutiny to reviews of projects. 

MEDC, he told Bridge in April,  is now asking questions about international ownership connections “in a much more intentional and consistent manner … because of geopolitics changing” and the fraying of U.S.-China relations.

Thelen has maintained amid the controversy that 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 in an email in March, ahead of Gotion Inc.’s voluntary request for CFIUS to review its Michigan-based real estate deal. 

Joseph Cella, a former U.S. Ambassador to Fiji, collaborated with former Netherlands Ambassador Pete Hoekstra to form the Michigan-China Economic and Security Review Group over the Gotion Inc. issue.

Earlier this year, Cella called China “our greatest adversary” as he urged federal scrutiny about the deal. Among his concerns were the company's ties to EVs and their critical role in transportation infrastructure.

Late Tuesday, Cella released a statement saying he and Hoekstra remain concerned about the role of Gotion High Tech in the eventual Gotion Inc. development. 

“Without the public knowing what was submitted to CFIUS by Gotion and its attorneys and what was sent back, we are reserving judgment on the apparent response from the Department of Treasury,” he said.