When Chinese manufacturing met Small Town, USA
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The way Jim Chapman tells it, basically his whole life has been about heeding the call of duty in his tight-knit rural community. He was a cop for decades, a Boy Scout troop leader, a volunteer firefighter, and an EMT, all in small-town western Michigan where he's from. In his retirement, Jim became the deputy supervisor of Green Charter Township, basically the assistant mayor.

And then something happened that put him in charge of the town. And this will give you a sense of the scale of the place. It was actually while Jim was on shift as an EMT when he got a call from the dispatcher saying that someone had died. I got an address, and it's like you do. You drive to the address, and you turn onto the actual road and start looking for house numbers, and you go...

Holy crap, that's Bob's house. Bob was the town's supervisor, Jim's friend and his boss. When Jim arrived, other first responders told him that Bob had passed away peacefully in the night. And they told Jim they would take care of Bob's body so he wouldn't have to. I said, no, he needs a friend with him while we're doing this and I will be here. And I helped carry him out of the house.

I saw that as a moral duty. In the days that followed, the town board decided to make Jim the new township supervisor. I kind of got volunteered to finish out his term. But this new duty, making decisions about the future of his town, that would turn out to be much more fraught than anything Jim had done before.

Green Charter Township is a small rural community surrounded by lush farmlands and forests. There's a college nearby, but a lot of the kids don't stay because it's also in one of the poorest counties in Michigan. It's been losing jobs for decades. And Jim had seen a whole generation of young people leave in search of greener economic pastures.

But in the summer of 2022, Jim got word of an intriguing new economic opportunity that seemed like it could potentially help solve all that. At first, the details were thin. But over the next few months, Jim found out that a major international battery manufacturer wanted to build a brand new factory in his town, an estimated $2.4 billion investment, and that the company expected it to create over 2,000 well-paying jobs.

To Jim, the newly resurgent American dream of bringing manufacturing back to the U.S., it seemed to have miraculously arrived in his tiny corner of western Michigan. Did it feel like this could be the thing that might help economically save this place that you loved? 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 in his power to help make it a reality. But fate turned out to have something else in store. Did you have any sense that this project might turn into something that would end up tearing this town apart? Not a clue. Not a clue. Nobody in their right mind ever thought that it would get this bad.

Obviously, you're not doing the will of the majority of the people. Traitor! You are a disgrace. All of you are a disgrace. Hello and welcome to Planet Money. I'm Alexi Horowitz-Ghazi. Over the past decade, politicians from both parties have courted American voters with an enticing economic prospect. The dream of bringing manufacturing and manufacturing jobs back to America.

And they have pushed for that dream with tariffs and tax breaks and subsidies. But what happens when one multinational company actually responds to those incentives and tries to set up shop in small-town USA? Today on the show, how a battery factory ignited a political firestorm over what kinds of factories we actually want in our backyard. And what happens when the global economy meets small-town democracy?

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This message comes from Insperity, providing HR services and technology from payroll benefits and HR compliance to talent development. Learn more at Insperity.com slash HR matters. 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, yeah.

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. To 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.

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. The state-owned banks will give out loans to people who wanted to start EV-related companies. If you wanted to buy EV, you 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, Goshin 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, Goshin came up with a new plan. Let'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.

The 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 2350 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. Bringing 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, there's a cascading opportunities within the community that

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.

The 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 saying,

that said you better get to the township because really bad stuff is being told tonight. And if you hear anything about the environment, hear 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. It'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. Is she your guard donkey? She is my guard donkey. She is.

Lurie 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.

Though 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 them 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? Like, we 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 concerns.

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. Marjorie 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.

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. We 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. Yeah.

Jobs, jobs, jobs. Marjorie was skeptical of Jim's vision of the Goshen factory as this sort of golden economic ticket. Skeptical 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. Most 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. There are pockets of prosperity here.

But when you look throughout Mecosta County and our surrounding counties, it's not a good picture. 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. China, 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 horse breeder 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."

That 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. It 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. And 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-Go's for short, in opposition to the Pro-Go's. Pretty soon, Lori Brock and the No-Go's 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 outlandish

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. And 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 gonna get from this.

And I hope that money is real comforting in the grave. 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. Now,

National 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.

The 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 him. 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. Look.

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. Jim 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. Oh, it did. It worked for McCarthy. It worked again in Greentownship. You know, oh, we can stop communism. We need to stop communism. After the break, will Jim Chapman keep his job or will the no-goes 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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They even have small business specialists that work together with you to help your business reach its full potential. That's the power of us. Deposit products are offered by U.S. Bank National Association, member FDIC. 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 towns.

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.

All 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 Thelen, 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. That'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. And I want you to drink it in front of us, like drink it. And then we want to sit and have a meeting for three hours. Oh, he never came to another meeting. These were the kind of antics that eventually made this battle legendary across the country. Donald Trump himself would eventually weigh in on the 2024 campaign trail and

And J.D. Vance would come all the way to Lori's horse farm, to her literal backyard, to accuse the Democrats of siding with the Chinese. But Kamala Harris not only wants to allow the Chinese Communist Party to build factories on American soil, she wants to pay them to do it with our tax money. But the real heart of this fight was less a disagreement between right and left than it was between the mostly conservative residents of this county.

A disagreement over what a manufacturing renaissance in the U.S. is actually supposed to look like. After Jim Chapman and his pro-go Republican colleagues were recalled, they were replaced by largely conservative no-go politicians. And those leaders did find a way to halt work on the plant by withholding the water access Goshen would need to build and operate.

Goshen responded by filing a lawsuit against the town. And now the fate of the factory is in this kind of limbo while the two sides battle it out in court.

Jim Chapman is still hopeful that the plant will open, because he still believes it'll bring the kind of economic growth that his county and this country needs. This is a once-in-a-generation opportunity, and it's all centered around this 200-acre plot. For her part, Lori Brock says she agrees with the goal of bringing manufacturing back to the U.S., but just not this factory, and not in her backyard.

Put industrial manufacturing in areas that are already contaminated. There is tons of contamination in Flint, Saginaw, Detroit area. Go there. Don't come up to pure Michigan up here. This is recreational land. This is where everybody comes to get away from the city.

I think a lot of people might hear that and say, because of things like the Flint water crisis, these are places where largely black and brown communities have kind of suffered the consequences of environmental harm from industrial production. That's true. That is very true. But they also are struggling really bad right now with no jobs. And they are begging for jobs.

It can be hard to tell in the swirl of everything that was said and done in Green Charter Township over the past three years which of the no-go's arguments was most pivotal in turning the tide, at least temporarily, against Goshen's factory. Whether this is the story of principled economic objections or xenophobic fears, or whether it's about a community that simply doesn't want to pay the costs of reshoring American manufacturing in their own backyard.

What is clear is that the people have had a real say about what happens in their town. It's the messy reality of small-town government that stalled the return of manufacturing to this county. And that power is the thing that really struck tech reporter Viola Zhou as someone who for a long time covered the growth of manufacturing in China. There's one way of doing business in China, which is

build a good relationship with the government. And the government is like kind of singular. It's this one power that's always there. You don't have to deal with like local oppositions as much as long as you are following the national strategy. But in America, it's like, who is the government? There are like so many politicians with influence in that area. And it's not just politicians who have this power.

Whether it's the local horse breeder or the town supervisor or the former and future president of the United States, the political ground can shift here in the States in a way that's hard to imagine in China. For Viola, this battle over a battery factory is a case study in how strangely entwined American economics and politics can be.

After my time in Green Charter Township, I drove about four hours to a town with a slightly different tangle of people and politics to see a sort of alternate path for what had played out in Michigan. It was another place Goshen chose to open a new factory. Mentino, Illinois is a small suburb of Chicago. When Goshen came calling here, it already had some small factories. There was a massive, mostly vacant warehouse that the company could adapt.

And unlike in Green Charter Township, they did not have a recall option. So when a no-go movement sprung up to try to stop the factory in Mentino, the mayor, Tim Nugent, was able to push for it without fear of being swept out of office. Tim is retired now, but he took me to visit the Goshen site, where they're still putting the finishing touches on the factory.

So this is Goshen's battery factory. Yep. This is what's caused all the consternation for everybody. This is what the commotion's all over? Yeah, yeah. This is it. Standing in the parking lot, Tim told me he was proud of having helped bring the factory to town. But since Goshen broke ground, no-go politicians have replaced Tim as mayor and won seats on the town board.

Tim told me several Goshen employees have decided not to move to Manteno for fear of being accosted in the supermarket or having their kids be bullied in school. And when I asked him to walk with me on Main Street, even he seemed nervous. Here, let's take a step out quickly. I'm not going to get out and walk around with a guy with a microphone because I'll have a crowd here in 10 minutes. Wow, really? Okay. Yeah.

So even though a Goshen factory now stands on the verge of opening in Manteno, even though their batteries seem likely to be powering American electric vehicles in the near future, just like Green Charter Township in Michigan, this small town is still reckoning with the particularly American challenges of getting something that used to be made in China made in the USA. ♪

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This episode of Planet Money was produced by Emma Peasley and Sylvie Douglas. It was edited by Marianne McCune and fact-checked by Sierra Juarez. It was engineered by Robert Rodriguez, and Alex Goldmark is our executive producer. Special thanks to Carleen Rose, Amanda Piker, and Kyle Jarris. I'm Alexi Horowitz-Ghazi. This is NPR. Thanks for listening.