Human Rights Violations At Volkswagen's Downsized Xinjiang Plant Are Unfounded

Visit to a factory by the CEO of a vehicle manufacturer in China renews complaints about its presence there.

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Leaders in both nations hailed Volkswagen AG's commitment 11 years ago to develop a new auto plant in the remote Xinjiang area of northwest China as a boost to German-Sino economic relations.

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A subject of criticism in Germany for its presence in a region of China where Western human rights activists and politicians claim authorities utilize Muslim Uyghurs as forced labor, the project is currently a headache for the German automaker.

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The company's China chief, Ralf Brandstätter, visited the location in mid-February to try to allay worries. Last week, he claimed he noticed no abuses of human rights. During his visit, he also brought attention to Volkswagen's second issue with the plant: it hasn't lived up to the lofty expectations that the corporation and its combined partner, the Shanghai government-owned SAIC Motor Corp., 600104 0.13%increase; green up pointing triangle, had for it in the beginning.

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The facility in Urumqi, the provincial capital of Xinjiang, was the first passenger-car factory in China's northwest and was designed to produce up to 50,000 vehicles annually. It included body, paint, and final-assembly workshops that met German standards.

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In the past, it produced roughly 20,000 cars annually, but that number has subsequently dropped, according to Mr. Brandstätter's predecessor.

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VW stated that no vehicles are currently produced in the factory's car-assembly workshops. Instead, the Xinjiang facility receives up to 10,000 automobiles a year that have been built in eastern China for system testing, components inspection, and electrical inspection. Afterwards they are distributed locally for sale.

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The company strategy has altered. A Volkswagen top official visited the facility last week for the first time in nearly two years, but there is currently no production of our own, according to Mr. Brandstätter. The joint venture reduced its personnel by approximately two-thirds in recent years as a result of problems with chip supply and China's Covid-19 restraints.

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In China, VW has a lot on the line. Its largest single market is the nation. The group's annual report states that in 2021, the operating revenue from its joint ventures there accounted for almost 14% of the total. Three million vehicles produced from factories all throughout China were sold by the Chinese business.

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This week, Mr. Brandstätter claimed that throughout his visit, he had not observed any indication of abuses of human rights. Around 30% of the 240 employees there are racial or ethnic minorities, according to VW.

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At home, the visit sparked fresh criticism. To what extent the Urumqi plant spreads its ideals beyond the factory fence there must be made apparent, according to the VW works council, which represents employees on the company's supervisory board.

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Boris Mijatovic, the human rights spokesman for the German Green Party, said, "We request German firms to do a lot more than only look into the situation, but to react to it.

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Due to its lack of control over the 50-50 joint venture, VW is unable to independently make important choices pertaining to the facility, according to company executives this week.

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Mr. Brandstätter stated, "The question of whether we close the plant does not arise. "For starters, there is no foundation for negotiation with SAIC on this, and secondly, the closure would merely be a showy gesture with negative effects for the employees," the author argues.

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Volkswagen and SAIC must concur before a decision is made, he said. Notwithstanding this, Mr. Brandstätter added, VW takes its responsibilities for the factory very seriously and is committed to upholding moral standards and the law.

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An inquiry for comment from SAIC received no response.

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Volkswagen's former China director stated last year that SAIC and the firm made the decision to continue operating the plant for commercial reasons. He claimed that SAIC had warned Volkswagen that closing the factory for political reasons would be counterproductive.

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The Urumqi project by VW was designed to lead manufacturing in China's underdeveloped far west and create hundreds of jobs.

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In 2012, as executives signed the agreement at the German automaker's headquarters in Wolfsburg, Angela Merkel and Wen Jiabao, who were then the chancellor of Germany and the premier of China, respectively, grinned. The Urumqi facility opened for business in August of that year.

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In 2014, Volkswagen's joint venture donated to a university in Urumqi to jointly construct automation-related research labs as part of its commitment to promoting automotive expertise and technology in the area.

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Following a spike in deadly terrorist attacks across the nation in 2014 that authorities blamed on Xinjiang-based militants, the Chinese government's stance toward Xinjiang, which borders Central Asia and is home to millions of Turkic-speaking Uyghurs and other primarily Muslim minorities, started to tighten.

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China began to target the mainly Muslim ethnic minority of Xinjiang with mass-detention internment camps as part of a years-long program of forcible assimilation, in addition to significant police presence and extensive electronic monitoring surveillance throughout the province. Beijing has referred to the camps as centers for vocational training created to enhance livelihoods and prevent religious extremism.

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According to human rights organizations and Western academics, the authorities used so-called "labor-transfer programs" to compel Uyghurs and other Turkic Muslims from the area to work in factories across the nation. Human rights organizations put pressure on multinational corporations to cut forced labor out of their supply chains in China.

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Beijing has refuted allegations of forced labor. According to this, state-run transfers of Uyghur, Kazakh, and other predominantly Muslim minority workers are a component of initiatives to combat poverty.

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A government-backed think tank called Australian Strategic Policy Institute claimed in a paper from 2020 that a Chinese electronics manufacturer was hiring Uyghurs through a government scheme and that this company was connected to VW.

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According to Volkswagen, none of the businesses mentioned in the research were a direct supplier. It has also stated that it has not discovered any new evidence that its supply chain, joint ventures with SAIC and FAW Group Co., or any other aspect of its operations, involve the forced labor of Uyghurs.

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Mr. Brandstätter remarked, "There is unanimity that we do not accept human rights violations."

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