Michigan project with $1.14B in taxpayer backing must adhere to Chinese communist rules

Gotion Inc.’s $2.3 billion “Project Elephant” electric vehicle battery materials processing plant proposed for construction in Mecosta County, Michigan is facing increasing backlash.

The latest setback for Gotion comes after this week’s revelations the company’s bylaws include articles requiring the company “perform its duties in accordance with the Constitution of the Communist Party of China and other Party Regulations….”

Gotion received state and local commitments of $1.14 billion when Project Elephant was announced last fall. Gotion says the taxpayer investment will yield 2,350 jobs in Big Rapids. Company Vice President of North American Manufacturing Chuck Thelen told the Michigan Senate Appropriations Committee this week that construction of the Big Rapids facility is scheduled to begin in the second quarter of this year, and production is anticipated to begin on the second quarter of 2025.

The committee met earlier this week to discuss whether to approve a $175 million taxpayer funded Strategic Outreach and Attraction Reserve appropriation.

The Center Square reported last month that Big Rapids Township voted for a federal review of Gotion’s bid to build on 115 acres in the township, citing concerns over the company’s Chinese ownership. Rather than respond to the township’s questions, Gotion refocused its siting plans to 408 acres in Mecosta County’s Green Township.

The inclusion of CCP fealty requirements were first reported by The Midwesterner News.

The specific requirements listed in Chapter VI Party Committee of Gotion’s Articles of Association include, “Ensure and supervise the implementation of the Party’s guidelines, principles and policies in the Company, and implement major strategic decisions of the CPC Central Committee and the State Council as well as relevant important work arrangements of the Party organization at the higher level.”

The second requirement states, “Strengthen leadership and control over the selection and appointment of personnel, regulate standards, procedures, inspections, recommendations and supervision, and adhere to the principle of the Party’s supervision of cadres, the board of directors' selection of managers and the managers’ exercise of the right to employ personnel in accordance with law.”

A third requirement relates to employee communications as well as concerns related to shareholder, board of directors, supervisor and senior management responsibilities to uphold the law.

The fourth requirement states, “Assume primary responsibility for comprehensively and strictly governing the Party; lead the ideological and political work, united front work, spiritual civilization construction, enterprise culture construction, labor union, Communist Youth League and other mass work of the Company; lead the construction of Party conduct and clean government, and support the Commission for Discipline Inspection in earnestly fulfilling its supervisory responsibilities.”

The fifth requirement calls for strengthening “the construction of Party organization and Party members at the grass-roots level of the Company, give full play to the role of the Party branch as a fighting fortress and the vanguard and exemplary role of Party members, unite and lead cadres and staff to actively participate in the reform and development of the Company….”

In response to questions about Gotion Inc.’s ownership from Sen. John Damoose, R-Harbor Springs, Thelen responded, “it is a publicly held company through two major locations in Switzerland and China so the ownership is the public.”

Thelen acknowledged Gotion Inc. is a wholly owned subsidiary of Gotion High-Tech, although Gotion Inc. has been headquartered in Fremont, Calif., since 2015. Majority voting rights on the company's board of directors are controlled by the founding shareholders in China.

Thelen said Volkswagen has acquired 26% of Gotion High-Tech since 2020. In a press statement, he said the CCP does not influence Gotion Inc.’s North American operations.