A planned Big Rapids electric vehicle battery part plant received legislative approval for $175 million in state incentives Thursday.
The state Senate Appropriations Committee approved part of a legislative transfer request from the State Budget Office to send the funding from the Strategic Outreach and Attraction Reserve (SOAR) Fund to the Michigan Strategic Fund.
That frees up the dollars for use by the Michigan Economic Development Corporation, which oversees the pots of money.
The Gotion Inc. project has faced criticism because of Gotion’s position as a U.S.-headquartered subsidiary of a company based in China.
Opponents argue the project could pose a security threat due to a Chinese policy that could potentially require Gotion’s parent company to share data with the government.
Chuck Thelen is Gotion Inc.'s vice president of North American operations.
He assured lawmakers the company posed no security threat.
“We are a global company with locations in Singapore, India, Vietnam, Germany, United States, and, as well, obviously Japan and China. Yes, the company was founded by a Chinese entrepreneur,” Thelen told lawmakers. “It is now 27% owned by [Volkswagen].”
Thelen also told lawmakers the company already went through a review by the federal Committee on Foreign Investment in the United States (CFIUS) from a separate project in the south. He said he expects similar approval for the Michigan project.
Republicans on the panel and a string of public commenters that included state Republican Party Chair Kristina Karamowere not so easily assuaged.
During the hearing, SenatorLana Theis (R-Brighton) questioned whether Volkswagen planned to sell off its controlling stake and what would happen next.
Speaking afterward, she also raised concerns over the lithium battery component project’s environmental impact.
“We need to understand the full impact before we write a check from the citizens of Michigan to an organization that isn’t giving us complete answers or is at best misleading,” Theis said.
The Senate Appropriations Committee ended up approving the transfer request by a 10-9 vote Thursday, with three Democrats joining Republicans in voting against the approval.
A week earlier, the committee decided to take up transfers for other projects but left Gotion behind.
Committee chair Sarah Anthony (D-Lansing) said that delay was for members to receive more information from the state. She said that related to environmental impact and national security concerns.
“This project has been vetted through MEDC and the company did volunteer for a national and a federal review. So based on that information we received as of right now, I’m confident those checks have been made,” Anthony said.
She said the project would provide a major opportunity for economic growth in the Big Rapids area.
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