Originally published in the Detroit News on April 12, 2023
Michigan has a poor track record of business incentive programs. Typically, programs like the Michigan Economic Growth Authority (MEGA) and the Michigan Business Development Program have failed to live up to their promises. As taxpayers gave away billions of dollars to attract job creators, the assured jobs did not materialize, and the minimal jobs that were created failed to make up the cost.
Last year, lawmakers and the governor launched a new corporate welfare scheme, dubbed the Strategic Outreach and Attraction Reserve (SOAR) in another attempt to draw businesses and create jobs by giving away taxpayer-funded “incentives.”
As a matter of principle, I opposed these attempts to use corporate welfare as economic development.
One of the first projects that was proposed under the new law, and which has garnered significant local, state, and international headlines, is that of the Gotion battery plant, which is being planned near Big Rapids.
Gotion, a Chinese Communist Party (CCP)-affiliated battery manufacturer, is proposing a 3 million square foot facility across multiple buildings on 500 acres in rural northwest Michigan. Part of the contentious deal, which has largely been crafted in secret, includes the transfer of $175 million in SOAR funding, as well as hundreds of millions of dollars more in various incentives. All told, the project would receive over $800 million in combined cash and incentives.
Every aspect of the proposed Gotion battery plant is concerning, and Michigan residents and lawmakers should take heed of the many risks this proposal presents.
The first concern is for the health and safety of our fellow Michiganians. EV battery components are volatile, highly combustible, and toxic. A toxic event at the site would endanger residents, impacting the air, water, and land, and potentially causing mass evacuations, similar to those seen recently in Ohio and Indiana. The local population surrounding the plant lacks the ability to deal with the potential disasters that could occur, through no fault of their own. It would require many more resources, people, and equipment — all at a significant cost that local governments can’t afford. And Gotion won’t be required to pay local taxes to help support those efforts. An accident could be decimating.
The Gotion plant also presents a significant environmental risk to the greater Big Rapids area, and surrounding communities. With the proposed location of the plant along the Muskegon River, which serves as a source for many lakes and empties into Lake Michigan, any potential accident would risk contaminating a major water resource in the region, not to mention damage to natural landscapes and wildlife.
Gotion has not produced any documentation of its past environmental record, and lawmakers have not been presented with a completed environmental impact study for the site, which is typically conducted in these scenarios. Furthermore, I have seen no evidence that one has even been conducted.
Gotion is a national security threat. We shouldn’t be giving away land and our citizens’ tax dollars to a company that can take orders from the Chinese Communist Party. The national security threat is greater considering the looming potential conflict between the U.S. and China on the world stage. The idea that a company who explicitly states in its Articles of Incorporation that it will comply with the demands of the CCP means that our residents and our country become secondary to them in a time of conflict.
Each of these concerns on their own is reason enough to stop these payouts. But, beyond that, corporate welfare is not a winning strategy. It hasn’t worked in the past and there is no reason to believe it will work now. Furthermore, as Michigan continues to shrink in terms of population and job providers, this administration will only become more desperate, and thus less transparent and accountable, as the economic outlook grows more concerning. Look no further than this Gotion deal.
The fact remains, a potential disaster from this plant is too great a risk to ignore and, if this is approved, I believe Michigan will soon regret its decision. My only hope is it’s not too late.
I am convinced this is a bad deal for Michigan and as a member of the Senate Appropriations Committee, I will be voting no on the plan, should a vote be brought before us. I strongly encourage concerned residents to contact their elected officials and make their voices heard.
Sen. Lana Theis, R-Brighton, represents the 22nd District, covering Livingston County and parts of Genesee, Ingham, Oakland and Shiawassee counties.