Volkswagen Pulls out of Controversial Chinese Factory Facing Forced Labor Claims

Embattled auto giant Volkswagen is acting to offset one potential headache over claims it is using forced labor, by pulling out of its most controversial Chinese production plant.

The automaker confirms that it and its state-owned joint-venture partner SAIC have agreed to sell, for an undisclosed figure, its Xinjiang facility, Reuters reports.

The factory has been the target of investor group pressure and human rights protesters claiming that forced labor from detention camps, including abuses against the state-persecuted Muslim Uyghur population, are being used as workers in constructing VW-branded vehicles.

The automaker has already cut worker numbers at the plant that used to assemble its Santana model as it sees sales in China slump amid fierce domestic producer price-cutting, leaving just 200 employees to conduct final quality checks and handing over vehicles to dealers in the region.

Both joint venture partners will sell the factory to the Shanghai Motor Vehicle Inspection Certification (SMVIC), a subsidiary of state-owned Shanghai Lingang Development Group, which will take on all existing employees.

Under the deal, SMVIC will also take over the joint venture’s test tracks in Turpan Xinjiang and Anting in Shanghai.