US lawmakers urge VW to exit Xinjiang operations

WASHINGTON, (Reuters) – The chair of a U.S. House Committee on China and the top Democrat on the panel urged Volkswagen (VOWG_p.DE), opens new tab to halt operations in Xinjiang after thousands of vehicles with a small Chinese-made electronic component were held at U.S. ports.

Representative Mike Gallagher, a Republican, and Raja Krishnamoorthi wrote to VW CEO Oliver Blume raising “deep concern” about the reports that VW Group models were blocked from entry into the United States because the vehicles “contained parts made by forced labor in” China, according to a copy of the Feb. 21 letter reviewed by Reuters.

The Financial Times reported last week that about 1,000 Porsche vehicles, several hundred Bentleys and several thousand Audi vehicles were held at U.S. ports because a Chinese subcomponent breached anti-forced labor laws.

Volkswagen, which declined immediate comment on the letter, said Thursday it “promptly notified authorities as soon as we learned of the issue from our supplier and held the vehicles in port. We have begun to replace the unit containing the relevant component and are making shipments of conforming vehicles to our dealers.”

Volkswagen said last week it is in talks with its joint venture partner in China over its presence in Xinjiang, after a German newspaper reported what it said was evidence of the carmaker’s involvement in forced labor.

The report in business newspaper Handelsblatt said independent researcher Adrian Zenz found evidence of the use of forced labor in the construction of a test track in Turpan, Xinjiang, which is operated by a subsidiary of the joint venture of SAIC and VW.

The lawmakers’ letter said in “light of evidence of forced labor within Volkswagen’s supply chain as well as its continued operations in Xinjiang, we call on Volkswagen to immediately cease all operations in Xinjiang.”

The issue adds to pressure on Germany’s biggest corporations to rethink ties with China, specifically in the Xinjiang region, where rights groups have documented abuses including forced labor in detention camps. Beijing denies any such abuses.

VW said last week it takes allegations of human rights violations very seriously, and its investigations could result in the end of a supplier relationship if a serious violation is confirmed.

Reporting by David Shepardson Editing by Mark Potter