Chinese manufacturing meets Small Town, USA

0:00I'm Aisha Roscoe, and this is a Sunday Story, where we go beyond the news of the day to bring you one big story. Today, we're starting in a small town in western Michigan called Green Charter Township. It's a rural community surrounded by lush farmlands and forests. It's the place Jim Chapman called home. Jim wore lots of hats in the community. He was a police officer for decades, a Boy Scout troop leader, an EMT, and a volunteer firefighter. And then in his retirement, Jim became the township supervisor, basically the mayor, Which wasn't easy. The township sits in one of the poorest counties in Michigan.

0:41It's been losing jobs for decades. And Jim had seen a whole generation of young people leave in search of greener economic pastures. I watched the people I knew struggle trying to recruit companies. I saw other companies that were here close up and leave. I watched our downtown struggle to stay viable. And it's horrendous. But a few years ago, in the summer of 2022, Jim got word of an intriguing new economic opportunity. A major international battery manufacturer wanted to build a brand new factory in his town, an estimated$2.4 billion investment. The company expected it to create over 2 ,000 well-paying jobs.

1:27To Jim, the newly resurgent American dream of bringing manufacturing back to the U.S. seemed like a miracle arriving in his tiny corner of western Michigan. This was a once-in-generation opportunity. This community hasn't seen anything like this since they put dams across the Muskegon River and started building furniture for the Grand Rapids market. In other words, this was big. So Jim got to work doing everything he could to help make it a reality. But rather than creating growth, this project turned into something that tore the town apart. Nobody in their right mind ever thought that it would get this bad.

2:07You're not doing the will of the majority of the people. Traitors! You are a disgrace. All of you are a disgrace.

2:23This story and where it takes us comes from our friends at the Planet Money podcast. It explores something that's been in the headlines a lot lately. The Trump administration's push to bring manufacturing back to America. And it raises questions about what happens when a multinational company actually tries to set up shop in the U.S. And when the global economy meets small-town democracy.

2:52We'll be right back with that story after the break.

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4:22Download the latest episode and follow at schwab.com slash Washington Wise or wherever you listen. Here's Planet Money co-host Alexei Horowitz-Gazi. Not long after Jim Chapman learned that a big international company might be interested in setting up shop in the small Michigan town he was running, he was given another piece of information that would become key to this story. The company was the American subsidiary of a Chinese company called Goshen. They make car batteries for electric vehicles. Oh, okay, who? I never heard of them. Goshen's U.S. subsidiary was based in Silicon Valley. And though this would be one of their first factories here, there are many Chinese companies with manufacturing operations in the U.S.

5:08To get a sense of why this Chinese battery company was setting its sights on the Midwest, I called up a Chinese tech reporter named Viola Zhou, who recently wrote a great piece about this factory for the website Rest of World. I love factories. Because, like, things are made in China. A lot of things are made in China. Who doesn't love a good factory? Exactly. Viola went to school in Hangzhou, in the shadow of Alibaba and a lot of factories. And that is how she got interested in covering China's manufacturing boom. Lately, she's focused on one industry that has exploded over the last decade, the market for electric vehicles.

5:44The government decided early on that we wanted to be a global leader in that because it was already too late for us to catch up on the traditional cars. On fossil fuels. Yeah, because the American, German, Japanese car makers are already like way ahead of us. So back in the late 2000s, the Chinese government announced this massive new industrial policy geared at accelerating their domestic EV industry. And Viola says that given China's centralized government control, they were able to rapidly implement this new economic strategy. Under this very top-down industrial policy, the entire country just came together.

6:24The state-owned banks will give out loans to people who wanted to start EV-related companies. If you wanted to buy EV, you'd get a lot of subsidies. And one of the big beneficiaries of this push toward EVs was this company, Goshen. Goshen got their first big break producing batteries for some of the country's public bus systems. and they managed to grow into a multi-billion dollar company within just a few years. Next, Goshen wanted to go international, including selling their batteries to American EV companies. And to do that, and to avoid possible tariffs during the first Trump administration, Goshen came up with a new plan.

7:03Let's build a factory in America and we will become part of this Made in America boom. The U.S. had also set out to boost its own domestic EV industry, But Viola says it was a lot more piecemeal than China's unified industrial policy. The Biden administration passed tax credits to incentivize EV companies to manufacture their parts in the U.S. And some states around the country, including Michigan, put together their own incentives to compete for these new manufacturing opportunities. All of which is how the prospect of a multi-billion dollar battery factory landed on the doorstep of Green Charter Township Supervisor Jim Chapman back in 2022.

7:43The town had available land that could be repurposed for industry. There were some other small factories around. Plus, there was a local university offering vocational training. Jim says he wasn't too concerned about Goshen's Chinese parent company because the scale of the offer was just too big to pass up. I don't care if it's Goshen. I don't care if it's Elon Musk building teddy bears, all right? I want those 2 ,350 jobs. Jim is a lifelong Republican, and he says this was exactly what he understood to be President Trump's vision of bringing back manufacturing from places like China. Most of Jim's neighbors are also Republican, and he thought this promise of new growth was exactly what his constituents would want.

8:27Bringing this factory to town could do more than just bring jobs. It could reinvigorate the local economy, bring in new small businesses or national chains. The opportunities that I saw, the cascading opportunities within the community. And oh my God, the high that was. Oh, wow. By the spring of 2023, Jim had managed to help improve the town's infrastructure in preparation for the factory. Goshen was on track to receive hundreds of millions of dollars in potential state subsidies and tax breaks. And the factory was looking like it would soon be ready to break ground. But that is when Jim Chapman's vision of this once-in-a-generation economic opportunity turned into a political lightning rod.

9:12The trouble all started when people like local realtor and horse breeder Lori Brock found out they might be getting a hulking industrial new neighbor down the road. When was the first time that you heard that a battery manufacturing facility might be coming to town? That was when someone left me a note in my mailbox. It was just a little piece of paper that said, you better get to the township because really bad stuff is being told tonight. And if you care anything about the environment, care anything about our way of life, you better be there. I met up with Lori on her sprawling 150-acre farm where she breeds horses.

9:49It's filled with rolling grass and barns and paddocks. There are geese and pigs and rescued miniature donkeys wandering the grounds. We've been discovered. Yes, that's Chloe saying hello. She your guard donkey? She is my guard donkey. She is. Lori told me that like most of her neighbors, she'd never really thought about attending a township meeting until she got that anonymous flyer. But her interest was piqued. And when she arrived that night in the spring of 2023, she found the parking lot and all the surrounding roads overflowing with cars. Almost immediately, it became clear that a huge number of people in town had never heard about the battery factory at all.

10:29Though Jim Chapman says he and the township board had discussed it in public meetings. I listened to four hours of straight public comment ridiculing him, just screaming at the whole board, telling him how unethical they were and horrible people and how they're a disgrace. I mean, four hours of it. Just irate people. Dismay? Shock? Betrayal? A born and raised Michigander named Marjorie Steele had also shown up to the meeting after finding the same flyer in her mailbox. And she says a lot of her neighbors seemed personally offended at never having been consulted about the factory. What the f***, Jim?

11:06We know you. We have drinks with you. You're betraying me. Marjorie says it was at that spring meeting that you could hear the first grumblings that would grow into a roar over the following months. And they coalesced around three main concerns that would come to define the debate over Goshen's factory. The first was environmental. I visited Marjorie on the land her grandparents bought back in the 1970s, and we took a walk through a dense grove of silver beech and sugar maple trees. You see that? See that just monster of a tree canopying up there? Yeah, she's the matriarch. That's Mama Maple. She's the oldest tree in the property.

11:45Marjorie told me she was worried about the amount of water that would be required to run the Goshen plant. She says folks in Mecosta County, where Green Charter Township sits, were already battling a nearby Nestle plant over its water use. I have legitimate, serious concerns about my family's well water drying up, about not being able to make maple syrup because my trees are too thirsty, right? Marjorie and others had all sorts of environmental concerns. Like, what if the water runs out? What if the battery chemicals get into the local water supply? No one has done the long-term studies or research on this, by the way.

12:21We reached out to Goshen for an interview, and they declined. But they did send us a statement saying that the company is, quote, dedicated to engaging with communities and stakeholders to ensure our projects meet high standards for environmental responsibility and transparency as we move forward. And I just want to step back here and say that many of the arguments that both the residents of Mecosta County and Goshen have put forward are still contested. Arguments over environmental concerns, but also over the second issue Marjorie and others brought up. Yeah. Jobs, jobs, jobs. Marjorie was skeptical of Jim's vision of the Goshen factory as this sort of golden economic ticket.

13:04Skeptical that these jobs would in any way resemble the union jobs of the car industry's past. Automotive manufacturing, manufacturing jobs at large, are not good anymore. The pensions, the benefits, the overtime, the company cars, right? Like, they're all gone. Marjorie told me that she's an independent, but she and many of her Republican neighbors were expressing a concern that's showing up around the country. Many manufacturers aren't able to fill the open jobs they already have. The pay and benefits often aren't enough to attract people to this type of work. Unlike in China, where these kinds of jobs can be the only obvious step up the economic ladder, the people of Mecosta County felt like they could afford to make choices.

13:49Most folks around here, poor as we may be, don't want to not see the sun for five years while they're building seniority and making a below livable wage. And that's not even to mention the toxicity for the workers. These are, they're bad jobs. Now, it is worth mentioning the average manufacturing job in the United States pays well above the minimum wage. And according to Goshen, the average job in this factory would pay significantly more than the medium income in the county. In public meetings, the man Goshen had hired to open this factory, a Michigan native named Chuck Thalen, talked about the houses and trailers he saw as he drove around the community.

14:34There are pockets of prosperity, but when you look throughout Mecosia County and our surrounding counties, it's not a good thing. The vast majority of residents are currently living paycheck to paycheck. A vast majority. I want to help 2 ,000 strangers be able to pursue the financial stability that some of us have already been able to achieve. But when Chuck and other pro-Goshen folks took to the podium to make their arguments, they were disbelieved and sometimes booed. In part because of the third and most incendiary issue that flared up during that meeting in the spring of 2023. The fact that Goshen's parent company was Chinese.

15:14China, people argued, is one of our main geopolitical and economic adversaries in the U.S. So why should we be subsidizing them? And why should we believe them? The issue that seemed to really inspire outrage was the idea that Goshen might be a sort of Trojan horse for the Chinese Communist Party, or CCP. Some people were worried the Chinese Communist Party would try to infiltrate the local college's cybersecurity program to gain access to government satellites. And as realtor and horsebreeder Lori Brock discovered early on, Goshen's articles of incorporation in China include an agreement to, quote, ensure necessary conditions for carrying out party activities.

15:55That agreement is a pretty standard requirement of doing business in China. And Chuck Thelen made multiple statements assuring the public that Goshen's U.S. subsidiary was not affiliated with or under the control of the Chinese Communist Party. Still, to Lori, this factory seemed like one small part of China's overall strategy to supplant the U.S. in the world order. They don't hide it. They're very brazen and they're very bold about their plan to take over America. And it's like, we love America, where all these other countries don't have freedoms. They don't have the ability to say, no, I don't want to do that or whatever.

16:31It was this quintessentially American ability to say no that would call the future of Goshen's battery factory into question. In the weeks after the town meeting, Lori began organizing a resistance to the Goshen factory to push back in every way they could. She reached out to local and state politicians and decided to hold a rally at her farm. And to her surprise, she says hundreds of people heeded her call. It was a horrible, rainy, cold, miserable day. And I just remember standing on the stage looking out and there was somebody walking from way over there, old man, with an American flag. And it like choked me up because I'm going, oh my God, this old man is walking through a rainstorm to get here.

17:13And I think this moment captures something a bit unexpected about the political dynamic that was playing out in Green Charter Township. This was a rally held largely by Republicans who support President Trump and his stated goal of bringing manufacturing back to the U.S. but they were waving American flags in opposition to a factory that was supported by a township government made up of Republicans. Lori's first rally was kind of the snowball that would turn into an avalanche over the next few months. This coalition of anti-Goshen activists rallied around the slogan, Say No to Goshen. They started calling themselves the No-Gos for short, in opposition to the Pro-Gos.

17:52Pretty soon, Lori Brock and the No-Gos were plastering the town with anti-Goshen signs. You can see a bunch of them along the road in front of Lori's property. No Goshen. Goshen equals corruption. Keep the CCP out. There's one on there now that says the people have spoken. Sucks to be Goshen. It's like a little billboard alley. Oh, yeah. All against Goshen. The Green Charter Township board meetings quickly transformed from these sparsely attended bureaucratic snooze fests into hours long heated debates. Some people expressed how they felt ignored by their own elected officials. It's possible it could bring in thousands of jobs, but it is definitely going to affect our environment.

18:31And you never acknowledge that and in fact just say that we're fear mongers and we're unenlightened and we're stupid. Others accused Jim and his fellow board members of selling out the town to the Chinese Communist Party. Okay, you're all communists and you've all been bought. And I'd like to know how much y 'all think you're going to get from this. And I hope that money is real comforting and great. Pretty soon, this small fight playing out in local town hall meetings started to take on a much bigger significance. State-level Republican politicians rallied to the cause of the no-goes. In their quest to unseat the state's Democrat governor, Gretchen Whitmer, they called her out for giving hundreds of millions of taxpayer dollars to a Chinese-backed company in the form of subsidies and tax breaks.

19:19National news outlets started to run with the Chinese Communist Party angle. And the more the battle extended beyond the borders of this little township, the more momentum it gained inside the town itself. They stole my signs. I put more signs up. They stole those signs. I put double the signs up. They stole those. I put a freaking semi up. I literally had a semi that said Trump and no Goshen on it. And it's like, you want to keep stealing from me? Because I'll keep putting it and I'll make it bigger and worse. Every time you come after me, I'm going to make it worse. The debate quickly devolved into a war of name-calling, unofficial boycotts, rumors, and innuendo.

19:56The no-goes accused Jim Chapman and his fellow board members of taking bribes and kickbacks. Lori believes someone from the Progo camp went so far as to poison and kill one of her horses. Jim told me his opponents distributed his personal contact information. Did you dox folks in the Progo team as part of the campaign? Every one of them. We put it out there. We put their phone numbers out. You know, we didn't want any violence by any means, nothing like that. We were like, call them. Call and ask why. Jim Chapman started worrying that violence might break out anyway. He always carries a pistol, but he also started wearing a bulletproof vest while running the township meetings.

20:36Look, do I want to get shot? No. Do I think it's a possibility? Yes. I put a vest on. I happen to own one, so I put it on. By the end of the summer, the no-go movement had coalesced around one strategy in particular, both in order to stop the factory and to punish politicians like Jim, who they felt had continued to ignore their concerns. Here's another new word for you. Recall. Recall every one of you. By the fall, the no-goes managed to get a recall election for Jim Chapman and his fellow board members onto the ballot. Because if they could gain control of the local government, they might have a shot at stopping the factory from breaking ground.

21:19Jim says he did everything he could to push back. But he was up against this energized grassroots campaign. They were phone banking, going door to door. Plus, they had support from prominent Republican politicians. The no-go side even managed to publish slick video ads. China is buying up land across the country. Yeah. 175 million of taxpayer dollars to a Chinese-owned battery. I went and knocked on the door 600 houses trying to get our story out because I couldn't compete. They had a fantastic ground game. Credit where credit is due. So the Chinese Communist Party turned into a pretty potent boogeyman for whatever political purposes.

22:03It worked for McCarthy. It worked again in Greentownship. Oh, we can stop communism. We need to stop communism. After the break, will Jim Chapman keep his job or will the no-go sweep the local government? Will Goshen's battery factory ever open in Green Charter Township? And what does this all mean for the dream of returning manufacturing to the United States?

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24:03So pick up that Irish flute or those calligraphy pens or the daunting beef Wellington recipe card and leave the laundry to rinse. Rinse. It's time to be great. About six months after the political firestorm broke out over Goshen's proposed battery factory, the citizens of Green Charter Township went to the polls to vote on whether to recall town supervisor Jim Chapman and the entire leadership of the town. Jim says he remained hopeful even on election day that his constituents would support his vision of the economic future the factory might unlock. But when the votes were finally tallied, that is not the way things broke.

24:43All five members of the township board were voted out. People claim those in charge weren't listening to the community. So the recall succeeded. And now, without the support of the town leadership, Goshen had to make its appeal directly to the people, which was difficult given how much screaming and vitriol had taken over the town meetings. In the spring of 2024, Chuck Thalen, the Michigan man in charge of spearheading the Goshen factory, pulled a stunt that's become sort of notorious in Mecosta County. During a Green Charter Township meeting, Chuck pulled out a container of gray lithium iron phosphate powder.

25:19That's the main ingredient in Goshen's EV battery packs. He dipped his finger into the container. This is my finger. And he ostentatiously plopped it into his mouth. And that's how non-toxic this material is. So he takes his dry finger, dry, puts it in some powder and licks it. See, all better. There's no poison here. Realtor Lori Brock, who'd taken her first foray into local politics when she decided to help lead the fight against Goshen, she says she and the rest of the no-goes were not swayed. So I, of course, said, I bought my own lithium and I bought my own magnesium and cobalt and nickel and all this other stuff that you're trying to bring in here.