VW shares give up: Despite indications of human rights violations, VW wants to hold on to the China plant in Xinjiang

“Of course we are aware of the critical reports, we take it very seriously,” said the manager, commenting on reports that there was systematic oppression of Muslim Uyghurs in the western province. “But we have no evidence of human rights violations in this plant – that hasn’t changed after my visit.”

Brandstätter traveled to the city of Ürümqi for two days in mid-February to look around the local factory. “I didn’t find any contradictions,” said Volkswagen’s China boss. “I have no reason to doubt the information and my impressions. Regardless of that, of course we’re still looking.”

A report by the UN High Commissioner for Human Rights last year spoke of serious violations in the area. “We are indeed deeply concerned by the finding in this report and have looked at it very carefully,” said VW’s head of external relations, Thomas Steg. “We have never ignored the situation or taken it lightly, but have repeatedly made it clear that the Volkswagen Group does not tolerate forced labor or other forms of discrimination.”

According to some non-governmental organizations, there are supposed to be re-education camps in Xinjiang. The VW works council in Wolfsburg emphasized that a formal lack of direct action on the processes in the plant “does not release the group from confronting the issues and actively positioning them”.

VW China board member Brandstätter sees no signs of human rights violations in his factory

According to China board member Ralf Brandstätter, Volkswagen has no indication of human rights violations at its factory in the Chinese Uyghur region of Xinjiang. During his visit on February 16 and 17, he got the impression that the management was trying to create a good working atmosphere. Integration and togetherness played an important role. He spoke at length with seven employees, including members of the Uyghur Muslim minority, which is oppressed in China. “In my discussions with the employees, I was told that they were happy to be able to work for SAIC VW, also because great importance is attached to qualifications.”

There is agreement with the Chinese partner SAIC that “we do not tolerate any violations of human rights in our plants”. He could only record the situation on site, said Brandstätter. He can talk to people, draw conclusions from them and try to verify the data. He did. “I found no contradictions.” He did not meet representatives of the regional government. “The focus was exclusively on visiting the plant and exchanging ideas with the employees.” Brandstätter announced further visits to the plant. In recent years, there have been repeated reports of forced labor and forced labor camps in Xinjiang Province.

Apparently, the people of Wolfsburg do not feel comfortable in the role of co-owner of a factory that is in the limelight of the global public. When the decision for the factory was made a good ten years ago, the world looked different, said VW chief lobbyist Thomas Steg at the press conference. At that time, VW had agreed the “Go West” strategy with the Chinese state-owned company SAIC in order to open up the west of the country for the automotive industry. That changed with attacks that China attributed to Uyghur Islamists. As a result, the government took a harder line. “Whereas the Chinese government previously focused primarily on economic development and integration, a much more repressive approach was added from 2015,” said Steg. The contracts for the plant run until the end of the decade. VW emphasized that although they hold half of the joint venture with SAIC, they have no direct influence on the plant. Due to the structure of the joint venture, a decision regarding the plant cannot be made unilaterally by Volkswagen.

The world’s largest car market, China, is of great importance to Volkswagen. The Lower Saxony have been active in the Middle Kingdom for almost 40 years and operate numerous factories there. The world’s second-largest car company finances a large part of its conversion to a software-based mobility provider from the profits generated in the People’s Republic. The question of a withdrawal does not therefore arise, emphasized Steg. “In a global company that wants to conclude contracts in new regions, you expect contract loyalty and reliability.” The Chinese perceive the international discussion about the human rights situation very closely. However, it would be a mistake to expect that the plant would be quiet. “We could complain, but in the end we have a situation that we just have to deal with,” said Steg. The work has a high symbolic importance for the Chinese government, since it stands for the development of the structurally weak region.

The Wolfsburg company opened the factory in Urumqi in Xinjiang province in 2012 with a capacity of 50,000 vehicles. During the corona pandemic and the supply bottlenecks, the workforce shrank by 65 percent to just under 240 employees. The assembly of cars from kits has been discontinued. Instead, fully assembled vehicles from other factories receive their final quality check there – driver assistance systems are adjusted and the cars tested before they are delivered to dealers in the region. This year, 10,000 vehicles are to be completed in Urumqi.

The VW share temporarily loses 0.84 percent via XETRA to 128.26 euros.

BEIJING/WOLFSBURG (dpa-AFX) /

Hamburg (Reuters)

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