A Chinese company that has promised to invest billions of dollars to build an electric vehicle battery plant in west Michigan has sued the township where the factory is slated to be built. The lawsuit, filed Friday in federal court, comes after members of the township’s board, carried to electoral victories last fall by animosity toward the project, voted to reverse an agreement vital to the plant’s construction shortly after taking office.
In October 2022, Gov. Gretchen Whitmer and other state officials announced Gotion Inc. would build a $2.4 billion plant to make electric vehicle components, with the eventual planned location being in Green Charter Township, a town of around 3,200 in Mecosta County, about an hour north of Grand Rapids. In addition to the factory, which promised to create 2,350 jobs, Gotion planned to open an office for corporate employees in nearby Big Rapids, according to Crain’s Detroit Business.
But the project soon faced pushback — and last November, five members of Green Township’s board were recalled by voters for their support of local tax abatements for the plant’s construction. Two other members who supported the Gotion project resigned from their positions earlier in 2023.
Some scrutiny for the project has also centered on claims of the Chinese government having influence over Gotion, although the company has denied these claims. There has also been scrutiny for the way the project was planned, with critics saying the local communities weren’t engaged before the plant was announced.
Soon after the recalls, the Green Township board, filled with new members, voted 4-3 to rescind a previously approved plan to extend the city’s water supply to the location of the factory, meeting minutes show. In the lawsuit filed by Gotion, the company asks a federal judge to issue a preliminary injunction ordering the Green Township board to comply with contractual obligations previously agreed to by the former board.
“To prevent the Township’s sudden recalcitrance from unraveling an endeavor already years and millions of dollars in the making, this Court should order the Township to comply with its obligations under the parties’ agreement by, among other things, reinstating the resolution to approve the connection of the City’s water systems to Gotion’s project,” the complaint states.
Gotion also argues that any delays to the project will harm the region, as the plant would add thousands of jobs “that include health insurance and paid vacation and pay almost 150% of the region’s current average wage.”
Green Township Supervisor Jason Kruse, a vocal opponent of the Gotion project who was elected to his position last November, did not return a voicemail left for his office Monday afternoon.
In the lawsuit, lawyers for Gotion say the company has already invested millions into the project; including $24 million last August to buy 270 acres of land. The company has also committed $56 million in planned wages, the complaint states.
Water infrastructure is key to the project, the complaint states, as the factory could need up to 715,000 gallons of water per day to operate.
“Because of the sizeable water needs of the Project, Gotion must obtain water from a source with sufficient capacity to effectively service the Project,” the lawsuit states.
In December, Gotion had sent members of the township board a letter urging them to reverse their rescission of the water agreement, but attorneys for the board replied in February by stating it “considers the matter on any allegations of breaches asserted in Gotion’s December 8, 2023 communication closed.”
In the February letter, attorneys asked Gotion to answer a series of questions related to the project, including on potential environmental effects and whether the company would subject itself to a review by the Committee on Foreign Investment in the United States (CFIUS), a committed housed in the U.S. Treasury which probes foreign investment projects for potential national security risks. The letter also asked whether any findings from such a review would be presented to the public.
Gotion announced last June that it was not subject to a CFIUS review, after the U.S. Treasury determined the Green Township project was not a “covered transaction” under the agency’s jurisdiction, according to MLive. Some Republican lawmakers, including U.S. Reps. John Moolenaar, R-Caledonia, and Lisa McClain, R-Bruce Township, have also called for a CFIUS review.
On Friday, Green Township was issued a summons to respond to the lawsuit within 21 days. The case has been assigned to U.S. District Judge Jane Beckering, who is based in Grand Rapids.
In total, Gotion states it will invest $2.4 billion into the project to create thousands of jobs. In 2022, Whitmer and the Michigan Legislature, controlled by Republicans at the time, approved $715 million in state-backed incentives for the project, as part of a strategy to attract major projects to spark economic growth.
In addition to potential job creation, Whitmer has also hailed the Gotion project and others which have received state-backed incentives, for the production of key electric vehicle components, like batteries. Whitmer and other supporters of the electrification of the automotive industry point to electric vehicles being a key tool in stemming the effects of climate change.
Contact Arpan Lobo: alobo@freepress.com. Follow him on X (Twitter) @arpanlobo.
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