Volkswagen maintains production in the disputed Xinjiang region | News

Selina Cheng

HONG KONG (Dow Jones) – Volkswagen AG continues to manufacture vehicles in the western Xinjiang region of China. The German carmaker plans to continue operating its Xinjiang plant and is open to a visit to the factory by a recently appointed human rights expert from the company’s management, said Stephan Wllenstein, outgoing general manager of Volkswagen China. Western politicians, academics and human rights organizations accuse Beijing of brutal repression against ethnic minorities in the region.

Wllenstein said the decision to continue the plant’s operations was made after discussions with Volkswagen’s Chinese joint venture partner, the state-owned SAIC group. “We both concluded that it is very difficult to shut down a factory and then reopen it,” said Wllenstein, referring to a conversation with Chen Hong, chairman of SAIC based in Shanghai.

Chinese carmaker executives told Volkswagen that the company would do more harm than good if it closes the plant for political reasons, Wllenstein said. Volkswagen is under pressure in Germany to consider plant shutdown. In June, the German government refused to renew the risk coverage for Volkswagen’s operations in China, citing Beijing’s treatment of the Uyghur minority. The influential German metalworkers union also called on the company to reconsider its presence in Xinjiang.

In recent years, Xinjiang has become a geopolitical flashpoint for multinational companies. According to Western researchers, the Chinese government is detaining hundreds of thousands of people, mostly Muslim minorities, in a network of detention centers in Xinjiang as part of the campaign. US officials, some lawmakers in other Western countries, and some human rights activists said Beijing’s treatment of the Uighurs was a form of genocide. China has denied these allegations, saying its policy in the region is aimed at countering terrorism and protecting national security.

This week, Chinese President Xi Jinping visited Xinjiang for the first time in more than eight years. Volkswagen’s new human rights officer Kerstin Waltenberg will take up his post at the company’s Wolfsburg headquarters in August, the spokesman said. Waltenberg is to monitor the activities of the car manufacturer around the world, including in China, and create a team of specialists. From January, a new German law will mandate more due diligence against human rights violations in supply chains.

The Volkswagen factory in the capital of Xinjiang Province, Urumqi, was established in 2013. It used to produce around 20,000 vehicles a year, but production has declined since then, according to Wllenstein. The plant now produces two models of vehicles and employs about half of the workforce it once had, with over a quarter of the workforce coming from ethnic minorities. The company did not prioritize chip allocation for the plant when the industry was struggling as demand for vehicles produced there was low, the manager said.

All factory workers are employed directly, and the German car maker has not identified any forced labor at the factory, the manager said. Volkswagen carries out random checks at suppliers and bases them on their own declarations.

Under US law, which entered into force in June, all products manufactured in Xinjiang or by companies affiliated with the government there must be forced labor.

Contact the author: unternehmen.de@dowjones.com

DJG / DJN / jhe

(END) Dow Jones Newswires

Jul 17, 2022 01:14 ET (5:14 GMT)

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