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Preface
According to the South China Morning Post, a well-known Hong Kong media outlet, the site of a new factory in Greenchart, Michigan, was strongly opposed and ousted by residents of the town in the United States in November last year.
The main reason for the action was that after the five heads of the town government reviewed and approved the Chinese company's application to build a factory, it caused a strong dissatisfaction among the general public.
It is worth mentioning that the newly elected town leader recently issued a statement saying that he will revisit various matters related to the Gotion factory project in the coming weeks.
According to the results of the previous special meeting, a total of 60% of the citizens voted in favor of the removal of the five officials who had previously supported the project, and at the same time, the election of the members of the Autonomous Council was launched, and all the successors were Republicans.
As to why Gotion's overseas plans to build factories have encountered so much resistance, it is necessary to delve into the profound reasons behind them. First and foremost, the current social environment in the United States is undergoing an unprecedented phase of change, gradually entering the critical stage of the 2020 presidential election.
During this period, political forces competed for voter approval and support, leading some to interpret large-scale construction projects such as Guoxuan as a "bombshell" that could threaten the quality of the region's environment. As a result, many local authorities and the public have expressed such concerns, and have taken a series of necessary actions to deal with this complex situation.
The case of the collaboration between CATL and Ford
Let's take the cooperation between CATL and Ford as an example. Initially, the two companies had planned to set up a production line in the United States, but due to various policy restrictions, they had to regrettably suspend the relevant planning and deployment.
It is worth mentioning that Gotion Hi-Tech has also tried to invest in the construction of an expensive battery material manufacturing plant in Michigan, but this process can be described as arduous and tortuous. The company has invested hundreds of millions of dollars in the project, overcoming many difficulties in the approval process, but in the end, it still cannot avoid the end of being suspended.
Looking back at the various cases mentioned above, it is necessary for us to ponder a question in depth: What kind of factors is the US Government considering? There is no doubt that maintaining its competitive advantage in the competitive pattern of global market competition is undoubtedly one of the issues to which the US Government attaches the utmost importance.
Some analysts further pointed out that the U.S. government may be more worried about the increase in investment by Chinese companies in the U.S. market, which may have an impact on the local industrial chain, and then threaten the leading position of the U.S. in the global market.
This obstruction strategy has far-reaching implications. First, it could intensify the competition for foreign investment among state governments. Not to mention, investment can create jobs and tax revenues, two factors that are enough to impress every state government!
Second, if the U.S. government persistently obstructs foreign investors, especially foreign capital in the high-tech sector, it may gradually lose its competitiveness in the global auto market, or even fall into a situation of being eliminated.
The five former officials provide "strong support" to Gotion, a subsidiary of Gotion
According to the Michigan Bridge Newspaper, the residents of Greenchart held a special residents' meeting in November this year, and the results were unexpected, with as many as 60 percent of voters in favor of removing the five officials who adopted and actively promoted the Guoxuan factory construction plan, and successfully elected a new mayor from the same Republican faction and all town committee members.
The resolution adopted by the conference revealed that the five former officials had given their full support to Gotion, a subsidiary of Gotion at the time. They have publicly stated that the new factory is expected to be successfully completed and put into production and operation in 2025 AD, which will bring the scientific and technological achievements of urbanization and the unique local characteristics of manufacturing to this ancient town, and will also greatly promote local economic development and create at least 2,500 jobs for people to choose from.
Recently, the newly elected mayor Jason Kruse announced through the news media that he has decided to reverse a resolution passed by the previous government last year in support of the construction of the Guoxuan plant.
Kruse explained that since the past neighborhood committees were unable to effectively address residents' concerns about environmental issues and concerns about Gotion's shares, and did not make sufficient use of sufficient time to understand and apply laws and policies to conduct a thorough and careful review of the relevant contract terms, it was necessary for the current government to conduct a comprehensive review of all matters related to the new plant plan.
Despite the changes in the local government, Gotion has not significantly adjusted its investment plans. Chuck Thelen, vice president of North America at Gotion, a subsidiary of Gotion Beauty, has made it clear that they will continue to implement the original plan and will not change the location due to the change of sub-district office, and he also revealed that he has had an hour-long conversation with the new mayor Jason Kruse, and the two sides have discussed many topics in depth during the communication.
Thelen even issued a public statement to the Michigan Bridge Newspaper on a December date, emphasizing that they are currently busy developing, planning, and completing the site layout design.
The factory construction project is still being promoted
Less than 24 hours after the U.S. Department of Commerce recently announced economic sanctions against 13 Chinese corporate entities, Chinese companies in the U.S. market are facing another serious setback when the U.S. announced the termination of a leading Chinese battery manufacturer, Gotion Hi-Tech's U.S.-based subsidiary, to invest in a battery materials plant in Michigan.
According to information provided by the well-known media observer network, Gotion earlier decided to raise up to 2.4 billion US dollars (about 17.5 billion yuan) through investment in the construction of this battery material plant in Michigan, which is expected to be completed and put into production by the end of 2025, and is expected to bring more than 2,500 new jobs to the area.
After months of "national security" review, the proposed project was approved by both parties through negotiations between the U.S. Treasury Department and the Michigan government.
However, the local residents of Greenchart, Michigan, recently took a sudden action to remove five local officials elected by voters and expressed strong opposition to their approval of the plan to build the plant.
After the results of the new mayoral election were announced, he made it clear that the new government would review all matters related to the plant's project, and now reversed the resolution passed last year that explicitly supported the plant's plan, because the current local government has not effectively addressed residents' demands for environmental impact and fears that Gotion Hi-Tech may have full control, and has not used sufficient time and legal expertise to analyze and study the cooperation agreement in depth.
The statement of the newly elected mayor can be said to effectively mean a complete halt to the construction of the Guoxuan Hi-Tech factory, and the possibility of restarting the project here in the future is almost remote.
As early as the same period last year, it was announced that it would invest US$2 billion (about 14.7 billion yuan) to set up a new plant in Illinois, which is known as the "most cutting-edge innovative technology" electric vehicle lithium battery manufacturer.
The plant is expected to open in 2024 and is expected to create up to 2,600 new local jobs during this period.
At the time, Illinois Governor Pritzker publicly praised the project as one of the most significant and impactful new manufacturing investments the state has received in recent years.
However, in the short term, the project also faces a lot of skepticism and resistance in the United States. The local conservative media has begun to hype up the factory's so-called "Chinese background", which has sparked widespread anxiety about the incident.
In addition, anti-China politician Rubio has joined forces with a number of other Republican lawmakers to send an open letter to US Treasury Secretary Janet Yellen, and at the same time drafted the so-called "opposition to the Guoxuan project", in an attempt to use isolationist extreme means to sabotage the progress of the factory construction project, which is still progressing steadily.
And the old beauty is tough
During this time, they have established new community leaders and leadership. Judging from the current situation, it is likely that a curbing action will be taken against the Gotion Hi-Tech plant established in the United States.
In the face of such changes, Gotion Hi-Tech does not seem to have any intention of adjusting its investment strategy, or even wavering in its determination to leave its manufacturing equipment in place, that is, it has decided to face this challenge bravely and resolutely defend its rights and interests.
On this issue, some observers have commented that the US government may be out of fear that Chinese companies like Gotion Hi-Tech will gradually dominate the EV battery industry, causing the US to lose market share.
In addition, they may be more concerned that if Chinese companies increase their investment in the U.S. market in the wave of desperate efforts to get rid of China's supply chains, many U.S. companies will not be able to easily break away from Chinese supply chains.
There is a considerable degree of legitimacy to this view. A look back at their past cases of heavy pressure on Chinese battery companies shows that they do concern that China's battery technology will become an important support for many American companies. In particular, this concern is more likely to be reflected in the context of their continued advocacy of the "security" of Chinese technology.
However, by taking these measures, they have further highlighted the significant advantages of Chinese technology. Moreover, this reversal without warning is very likely to trigger a series of negative effects.
If Gotion Hi-Tech's investment in the United States suffers a setback, or even a complete breakdown, then the disputes between various parts of the United States and between states will inevitably intensify, and this is undoubtedly not good news for the entire American society.
At the same time, the establishment of many production bases such as batteries by Chinese companies in the United States has always been the focus of great attention of local American companies.
Chinese companies were intercepted from building factories in the United States
Recently, we saw a real business case for a partnership between CATL, a Chinese electric vehicle manufacturer, and Ford, a major U.S. automaker.
At the heart of the partnership is Ford's generous investment of up to $3.5 billion to CATL, which in return on the investment in the form of a technology stake and an invitation to the Chinese company to build a factory in the U.S. market.
It is worth noting that at a time when the world is moving towards a new era of clean energy, the importance and economic value of power batteries required for electric drive equipment are particularly prominent. Especially when we think of those new energy vehicles and smart cars that have sprung up like mushrooms, all of them use this electric drive equipment to drive the vehicle.
Power batteries have a significant feature, I believe every car user will know a little bit about it, that is, its price is quite expensive. The power battery of a car will account for about 60%-70% of the cost of the whole vehicle, which undoubtedly brings unprecedented challenges to every car manufacturer.
For this reason, many car manufacturers have opted for partnerships with manufacturers of electric drive equipment in order to manufacture their own traction batteries.
Doing so not only improves product margins, but also gives you more control over your company's overall strategic planning. For example, Japan's Panasonic and American electric car maker Tesla are already jointly building a new factory in the United States, and South Korea's LG Chem and Geely Automobile are about to inaugurate a new factory.
In addition, a joint venture between CATL, a well-known Chinese power battery manufacturer, and Ford is also planning to expand in the United States. It is not only the effect of "countering" the development of American car companies, but also an important choice to protect the advanced technology projects of Chinese enterprises, after all, the field of power batteries is one of the world's leading technologies owned by the mainland, and the importance is self-evident.
Despite CATL's major technological breakthrough in China and its great success, their decision to partner and build a new factory in the U.S. was not all smooth sailing. The reason behind this is not difficult to understand, because the difficulties and obstacles encountered by Taiwan's semiconductor manufacturing giant TSMC in the process of investing in a new wafer foundry in the United States are a vivid example.
To be sure, such a decision would be an effective way to resist further development by U.S. automakers, and to protect China's advanced technology projects. Because it is obvious that the field of power battery technology is one of the world's leading scientific and technological achievements in the mainland, and its status and importance should not be underestimated.