WASHINGTON (dpa-AFX) - China-based Gotion High-Tech Co. Ltd. has been declared in default on its obligations under a 2022 grant deal by the Michigan Strategic Fund, which has formally terminated its agreement with the company.
Plans for a $2.4 billion electric vehicle battery component factory in Mecosta County, which was once hailed as a significant victory for the state's green energy goals, are essentially put on hold by the ruling.
Michigan is attempting to recoup the $23.7 million that has already been spent on the project, and state officials confirmed that all subsidies have been suspended.
An executive from Michigan Economic Development Corp. told Crain's Detroit Business, 'I do not envision a world in which this project goes forward.'
The Gotion factory was marketed by the governor's administration as the source of 2,350 high-tech jobs, but the project was sued by Green Township and met with strong local opposition. The collapse of the factory was predictable, according to the Mackinac Center for Public Policy, which kept a close eye on the project.
In exchange for $175 million in subsidies, the state anticipated 2,350 jobs. Rather, taxpayers might lose almost $24 million,' stated James Hohman, director of fiscal policy at the center.
He went on to say that massive business subsidies rarely live up to expectations and urged policymakers to enhance the business environment generally rather than giving preference to certain businesses.
As a necessary admission of failure and a possible step toward accountability for Michigan taxpayers, the Mackinac Center applauded the project's termination.
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