Wall Street Journal raises concerns about Illinois’ Gotion deal

CHICAGO – The Chinese company Gotion is moving forward in its plans to build a sizeable facility in Manteno, Illinois, 30 miles southwest of Chicago. The effort has drawn attention nationally, as federal and state tax dollars are reportedly being used to subsidize the $2 billion factory. 

The Wall Street Journal’s editorial board opined on the Gotion development in Illinois recently, with words that are raising concerns among locals, taxpayers and manufacturers in the area. 

Verbatim, from the Wall Street Journal’s October 21, 2023 editorial: 

It isn’t easy luring corporations to Illinois these days, so Gov. J.B. Pritzker celebrated when the state landed a big electric-vehicle battery plant in September. The real winner, however, is Gotion, the Chinese company that is collecting taxpayer financing to subsidize its EV manufacturing.

Mr. Pritzker boasted that the new $2 billion factory would bring 2,600 green jobs to the Land of Lincoln and represents “the most significant new manufacturing investment in Illinois in decades.” The company’s decision was helped by a $536 million Illinois subsidy package, including $213 million in tax benefits, a 30-year property tax freeze and $125 million from the state-lending program Invest in Illinois.

That’s about $200,000 per new job, but Mr. Pritzker was an easy mark. Companies like Citadel, Boeing and Caterpillar have fled the state’s high-crime, high-tax reality. Other recent green-energy projects have set up shop in Indiana, Tennessee and Michigan. Mr. Pritzker called Gotion’s arrival “the most recent proof that we are in a new paradigm. Illinois is on the rise, and we’re open for business.”

Maybe if the new paradigm is taxpayer funding for Chinese manufacturing. But that has some pitfalls. In a Sept. 13 letter to Treasury Secretary Janet Yellen, Reps. Mike Gallagher (R., Wis.) and John Moolenaar (R., Mich.) noted that Gotion “has direct ties to the CCP [Chinese Community Party] and state-owned financial institutions” and has been part of a Chinese program the FBI has flagged for “theft of trade secrets and economic espionage.”

That seems worth examining, but who will do it, if not Mr. Pritzker? The Committee on Foreign Investment in the United States (CFIUS) has said Gotion’s projects don’t fall under its jurisdiction.

In January 2023, Virginia Gov. Glenn Youngkin turned away a Ford factory that was partnering with Chinese battery maker CATL, on the grounds that the company was a “Trojan horse” for Beijing. It set up in Michigan instead, but on Sept. 25, Ford said it paused the project until it was “confident about our ability to competitively operate the plant.”

Gotion president Li Chen is a graduate of U.S. universities, but his ties to China are deep. His World Economic Forum bio says he “is a member of the CPPCC of Baohe District in Hefei City.” Gotion is a private company, but Chinese business executives know their enterprises at home and abroad answer to the Party. We called and emailed Gotion for comment but did not hear back.

The Illinois investment is one of several that Chinese companies have made in the U.S. lately, fueled by U.S. subsidies. Gotion has a $2.36 billion project near Big Rapids, Mich., which received some $872 million in tax breaks and incentives from the state, according to the Detroit News. Wirepoints has calculated that based on its projected capacity, Gotion’s Illinois plant could also be eligible for $1.5 billion a year for five years in federal subsidies.

Mr. Pritzker has waved off questions about Gotion’s deal as “xenophobia” and “MAGA Republicans” at work. Hmmm. Don’t Illinois taxpayers deserve to know who their tax dollars are funding?