Volkswagen Under Pressure to Ditch Its China Joint Venture as U.S. Impounds Vehicles

An article from the Wall Street Journal cites research and comment from VOC’s Dr. Adrian Zenz, Senior Fellow and Director in China Studies at the Victims of Communism Memorial Foundation, on recent findings connecting Volkswagen to Uyghur forced labor.

As the article notes, “under pressure from investors and the German and U.S. governments, VW in December concluded an audit of the plant, and said it found no evidence of human-rights abuses. 

Then, this week, Adrian Zenz, director of China studies at the Washington-based Victims of Communism Memorial Foundation, said ‘new evidence directly implicates Volkswagen in forced labor’ in connection with a test track that is separate from the plant.

Zenz said documents and photographs about the construction showed that a subcontractor that worked on the track ’employed transferred Uyghur surplus laborers during the peak of the mass internments in 2017 and 2018.’

VW didn’t dispute the allegations but said it had no evidence of abuse, adding that it was pressing SAIC-Volkswagen for answers and that it was negotiating with the company ‘regarding the future direction of the JVs business activities in Xinjiang Province. Various scenarios are currently being examined intensively.’

In a sign of how toxic VW’s Xinjiang exposure was becoming for the carmaker, Janne Werning, head of ESG capital markets and stewardship for Union Investment, one of Germany’s largest public investment funds, said the ‘new dimension’ of allegations against VW ‘means that Volkswagen is now no longer investable for our sustainable public funds.’

This week’s impounding of U.S.-bound VW vehicles, meanwhile, shows VW’s reliance on China both as a market and as a manufacturing base could still come back to haunt it even if it exits Xinjiang.”

Read the full article in the Wall Street Journal.