Unraveling Project Elephant: A Comprehensive Look at Due Diligence Failures

Introduction: The development of the Gotion battery plant, known as Project Elephant, is mired in controversy, primarily due to a glaring lack of due diligence in various critical aspects. This comprehensive analysis explores the multifaceted nature of these oversights, ranging from national security to environmental impact.

National Security Concerns:

• The alarm raised by MI5 and the FBI in July 2022 about China’s business practices points to the national security risks inherent in the Gotion project. Despite these warnings, a CFIUS review has not been completed, largely due to Gotion’s failure to provide necessary information. The call from Ambassadors Hoekstra and Cella to investigate potential violations of the Foreign Agent Registration Act by Gotion Inc. and Michigan officials further underscores these concerns.

Gotion’s Operational Inexperience:

• As a subsidiary of Guaoxuan High-Tech, Gotion Inc.’s presence in the U.S. is limited to a small R&D facility in California. This raises questions about their capacity to independently operate a full-scale manufacturing plant in the U.S., suggesting a lack of proven performance in large-scale industrial endeavors.

Economic Impact Assessment:

• The project’s economic implications, including increased freight traffic, housing developments, service expansions, and changes in the cost of living and property taxes, require thorough evaluation. The correlation between these factors and the projected rise in local income has not been adequately assessed or communicated to the public.

Local Labor Market Realities:

• In contrast to the perceived need for jobs, the Big Rapids area currently has a significant number of unfilled positions. The local unemployment rate is relatively close to the national average, reflecting a community that values a balanced lifestyle over industrial employment growth.

Health and Safety Oversights:

• Gotion’s lack of transparency regarding health and safety risks is a major concern. There is an absence of detailed guidelines or emergency preparedness plans for plant workers, local residents, and firefighting services, leaving the community vulnerable and uninformed.

Environmental Impact Negligence:

• The absence of an Environmental Impact Study is perhaps the most glaring omission. Critical information about the effects on local wetlands, wildlife, aquifers, and the Muskegon River watershed remains undisclosed, raising serious environmental concerns.

Conclusion: Project Elephant, with its myriad of unresolved issues, stands as a testament to the failures in ensuring due diligence in large-scale development projects. The gaps in national security assessment, economic impact analysis, labor market consideration, health and safety planning, and environmental protection call for a re-evaluation of the project. It is imperative that these concerns be addressed comprehensively to safeguard the interests and well-being of the local community and the broader region.